Continuous improvement is like learning to drive, according to Professor John Bessant of the University of Brighton’s Centre for Research in Innovation Management (Centrim).
Driving is a simple concept to grasp. It looks easy. But actually learning to do it requires a whole range of skills – operating the controls, coordinating gear lever and clutch, and so on – which have to become automatic before you can get on with the real business of becoming a good driver.
It is a similar situation with continuous improvement. Of all the Japanese ideas with which UK industry has sought to improve its performance, it is perhaps the most powerful and widely applicable. It is a simple concept: a sustained process across the whole organisation, seeking to make small innovations which add up to a big improvement in overall performance, in which the whole workforce is encouraged to come up with ideas. Where problems arise is in the implementation.
Many UK firms have tried to introduce continuous improvement and failed, stumbled, or got stuck. But it is important to persevere, says Bessant. It marks the latest stage of evolution of the production process from the labour intensive pattern satirised in Charlie Chaplin’s Modern Times, to a system which values people and their knowledge: the realisation that, as one manager put it, `with every pair of hands you get a free brain’.
At Centrim, a five-year research project sponsored by the DTI and the Engineering and Physical Sciences Research Council to find out more about the effectiveness of continuous improvement, how it fits into firms’ strategic plans, and the problems encountered, is drawing to a close.
The Circa (continuous improvement research for competitive advantage) project identified five distinct levels of development in continuous improvement practice (see box). The final report may add a sixth, a preparatory level of gaining enough confidence to begin.
Most companies get stuck after the first two levels partly because, says Bessant, this is more comfortable and there is a lot of guidance available. At these levels continuous improvement may be embraced more enthusiastically by some parts of the organisation than others, and though the ideas generated may make life easier for the workforce, there will be little impact on profitability, for example.
To get beyond that, improvement has to be linked to an overall strategy. `With strategic targets for three years and the workforce on your side you can achieve 10% cost savings,’ says Bessant. The idea is that `each little suggestion is geared to the strategic target’. Management needs skills in policy deployment: communicating the strategy so that the organisation gets behind it, breaking the big tasks into small chunks. Studies show that a lot of small increments have greater power than a big change, whereas in the UK there seems to be a preference for a big hit.
At level four, `you’re seriously thinking about what kind of company you’re going to be’. A high level of responsibility is devolved to problem-solving teams but the strategy is still driven from the top. A Circa company which exemplifies this state is Veeder-Root, the UK subsidiary of a US firm making electronic gauging equipment for fuel stations. Extensive training is increasingly needed to give staff down to shopfloor level the ability to take responsibility for problem solving.
At level five, the strategy is understood throughout the organisation, and groups are trusted to get on with implementing ideas on their own within these parameters.
There is a risk of making mistakes but there should be a mechanism for capturing and passing on the lessons learned: `the crime is making the same mistake twice’.
Through the Circa studies Centrim has devised a way of determining the level a firm has reached by studying to what extent it exhibits certain types of behaviour. Centrim offers a consultancy service to diagnose firms. A toolbox (or `Hitch-Hiker’s Guide’, as Bessant describes it) will help firms do the same thing for themselves.
The service will include case studies and examples of common obstacles, together with `enablers’ to get past these. The aim is to publish a handbook and a CD-ROM. Centrim will submit a prototype manual and CD-ROM to EPSRC next month.
Bessant says the potential of continuous improvement has so far hardly been tapped, staying mainly on the shopfloor. But there is no reason why it should not apply equally effectively to professional activities such as product development or reducing time to market.
For the future, Bessant says there is resounding enthusiasm for the Circa network, now comprising 70 firms, to continue its work of disseminating companies’ experiences through seminars.
Centrim also wants to expand its Teaching Company Scheme activity with local firms – it has successfully placed graduates with local electronics and telecoms components maker Hosiden Besson to assist with implementation.
Perhaps most important, Centrim is applying for EPSRC funding to look at agile manufacturing, the next logical development, in which the business becomes highly flexible and is constantly being `tuned’ to meet market pressures.
Levels of continuous improvement practice:
1. `Natural’ or background CI -takes place in bursts, with no formal structure and no strategic impact.
2. Structured CI – with formal attempts to create and sustain it, basic training to encourage the workforce to participate, and a structured system for managing ideas.
3. Goal oriented CI: linked to formally stated strategic goals, with the contribution of CI monitored and measured against them.
4. Active or empowered CI – as 3, but with a high degree of autonomy devolved to problem-solving units.
5. Full CI – the `Learning Organisation’, with everyone actively involved, and systems to capture and share learning automatically.