How to develop a continuous improvement strategy – and why it’s important
The ability to evolve and adapt is a survival skill that all businesses need but not all have. A continuous improvement strategy helps manufacturers develop and implement the best practices they need to become world-class organizations unafraid of – and strengthened by – change.
The COVID-19 pandemic has left a lasting impact on the global market economy; not only has it reminded businesses that unforeseen and destabilizing events are constant possibilities, it has also changed how organizations prepare for uncertainty. Manufacturing organizations are pursuing sustainable business performance with more focus than ever before. However, stock standard, standalone improvement methodologies that address departments and functions separately are outdated and unable to achieve the desired world-class results. To unlock greatness at every level of the business, an organization needs its very own holistically driven continuous improvement strategy.
Continuous improvement (CI), when implemented and managed effectively, helps integrate all functions, processes and practices across the value chain. By uniting people within the organization, a continuous improvement culture enables greater collaboration to make incremental changes that improve overall productivity. When operational excellence and achievement are embedded into an organization’s DNA, and people are empowered to suggest and implement performance improvements, change is no longer avoided – it is pursued for its transformative benefits. A continuous improvement strategy that is designed in sync with an organization’s specific needs will help an organization build a sustainable competitive advantage to withstand future disruptions and difficulties.
What is continuous improvement strategy?
Continuous improvement strategy is an ongoing plan to improve an organization’s production and products, service and customer satisfaction. A culture of continuous improvement that is embedded in an organization empowers employees to constantly imagine how to improve and work smarter.
The link between a continuous improvement business strategy and world-class maturity
It is relatively easy – and expected – for most organizations to thrive in a growth market rather than during periods of economic instability. The issue, as the past 18+ months have so clearly demonstrated, is that “good times” can contribute to complacency and leave organizations vulnerable to a sudden shift in fortunes. However, a mature organization, one that has achieved sustainable and world-class performance whatever the weather, has the enviable advantage of being able to take change in its stride. It can respond to market changes with speed, agility and relevance, launching new and/or updated products and services within the blink of an eye to ensure no loss of revenue. Continuous improvement initiatives help a not-so mature organization achieve such world-class maturity by guiding its CI transformation across all business areas such as product innovation, practices and processes, and services and people.
The first step in any CI strategy development is understanding the organization in question’s existing maturity level. There are five stages of performance improvement maturity and each one refers to an organization’s people, processes and technologies. Once the organization has assessed and determined its stage of maturity, it can design a solid and specific continuous process improvement strategy based on that starting point and lead the organization to stage 5.
The five-stage journey of organizational maturity is broken down as follows:
|1.||Siloization – no improvement strategy in place yet||An organization at stage 1 is characterized by siloed thinking and doing. There is little to no synchronicity between functions and workflows that focus on supply, demand and product.|
|2.||Internal alignment – performance focused||At this stage, an organization is trying to improve its performance by aligning traditionally disparate strategies related to business, operations and the supply chain.|
|3.||Functional alignment – work becomes standardized||Stage 3 organizations have standardized output by successfully aligning their supply chain functions, boosting collaboration in product development and investing in relevant digital technologies.|
|4.||Value chain alignment – fully integrated||Stage 4 maturity is achieved when an organization has integrated best practices across its network of operations and initiated complex performance improvement projects (PIPs) with its priority partners and key stakeholders.|
|5.||Network alignment – the demand-driven value network (DDVN)||The final stage of maturity is realized when best practices are embedded across the manufacturing network. This enables clear alignment and transparent integration with employees, suppliers and customers to create a demand-driven value network (DDVN).|
How to develop a continuous improvement strategy
The benefit of a maturity assessment is that it highlights an organization’s baseline strengths and weaknesses, the gaps in its armor and the skills it perhaps did not even know it had. Thus informed, an organization’s CI strategy can begin to take shape, based in the concepts and teachings of kaizen, Six Sigma, Lean and others.
To develop a clear strategy of continuous improvement that is simultaneously market-based and fit for purpose requires a two-pronged approach – and good leadership:
|1.||Improve competitiveness:||Understand and clarify the organization’s success factors (how it earns and keeps customers) in order to boost its competitiveness in these key areas.|
|2.||Measure performance:||Develop an appropriate way to measure the organization’s performance against those key success factors.|
Good leadership underpins the successful development of any CI strategy. A unified and committed body of leaders works together to identify their organization’s skills gaps and ensures that focus is given to the multidisciplinary teams required at all levels to deliver continuous improvement. A world-class mature organization is easily recognized by its consistent investment in talent to build a culture that emphasizes and rewards continuous improvement. This needs to form a central part of the strategy. Leaders who embody the organization’s pursuit of best practice integration are also best suited to sit on the CI strategy’s steering committee which needs to carefully manage development and implementation to ensure a seamless transition.
How to execute your continuous improvement strategy
As mentioned above, people are key to CI strategy development and implementation. World-class production practices are only achieved when the right teams are in place, the best leaders are in charge and all employees have bought into the organization’s new objectives. Communication is thus a vital component. If changes are suddenly implemented to production processes without including everyone, employees will very likely disengage and approach the CI strategy with suspicion. An inclusive approach to employee involvement; not only does this speed up and streamline the implementation of new best practices, it empowers employees to continually improve the organization’s performance.
Change, even when done in people’s best interests, is not always easy to embrace. By linking the improvement of its practices to the improvement of overall performance – and communicating this vital link across all levels – an organization will gain rather than lose support during its CI strategy implementation phase. A key focus during execution is to entrench best practices as quickly as possible. This embeds CI in the organization, protecting the world-class culture from an external disruption such as a pandemic or internal upheavals such as a changeover in personnel.
To change is to continuously improve
“The most dangerous phrase in our language is ‘we’ve always done it this way.’”
– Grace Hopper
It is important to note that even the most carefully crafted CI strategies can – and do – fail when it comes to implementation. Failure often comes down to an organization’s inability or unwillingness to use an inclusive and holistic approach to implementing change. The ability and willingness to change is crucial when it comes to developing and driving an organizational constant improvement strategy. If an organization is unable to change, it is unable to improve which means it is unable to grow. The foundational concept of continuous improvement is that a steady stream of small changes results in a better working environment, a more productive business and crucially, a stronger position from which to navigate uncertainties and pursue opportunities. This is a key consideration for any continuous improvement management strategy.
The right continuous improvement strategies and support can help an organization improve its ability to change and, thereby, optimize its potential for sustainable success. A manufacturer with world-class best practices embedded into its DNA, engaged and committed people at its helm and a culture of continuous improvement ensuring consistent work process improvements, will not only survive a present-day downturn, it will thrive well into the future – no matter what the world throws next.
What is the kaizen process?
A kaizen strategy instils a culture of ongoing, small-scale incremental improvements within the workplace, with the objective of optimizing resource efficiency, project management and quality improvement to improve a company’s bottom line.