manufacturing articles
Stale Dated: Does your Process Improvement Program Need Refreshing?
Author: Carlo Mariglia and Joseph Gipp
Date: July 2011
Publication: Canadian PLANT
The management team was perplexed. The process improvement program they had put into place two years ago to reduce inefficiencies in their food manufacturing company had generated outstanding cost savings for the past year. Lately, however, progress had abated. Employees were slow in submitting improvement ideas and the suggestions were no longer especially innovative or valuable. Was a brief one-year period all the company could expect from its major investment in process improvements?
This type of situation is not an aberration; in fact it’s not uncommon for small/mid-size manufacturers that embark on new business process improvement projects. Consider that large manufacturing operations typically have long-established continuous quality improvement cultures where every day trained managers develop and guide cutting edge improvements throughout the organization. Smaller companies, by contrast, generally rely on external consultants, on a temporary basis, to devise and launch improvement initiatives. Once a program is underway, the company typically assumes responsibility to keep it going.
Once the novelty recedes however, no matter what type of improvement program may be in place – ISO 9000 Quality Standards, Total Quality Management, Just-in-Time, Lean Thinking, Six Sigma, Theory of Constraints, Benchmarking – sometimes there can be a dip in the quantity and quality of improvements. Thus for small/mid-size manufacturers, the challenge inevitably shifts from “how do we start improving” to “how can we sustain the benefits of this program for the long term?”
For the most part, rather than abandoning an improvement program and starting over, there are a number of steps management can take to refresh effectiveness. First, it may help to know some of the main causes of process improvement program sluggishness.
- Improvements lead to more work for participating employees
Employees sometimes find the improvements they identify added to their own personal list of responsibilities. As their “to dos” increase, their enthusiasm for improvements tends to wane. In such cases it’s important to find ways to reengage people in seeking improvements and to offer rewards for doing so.
- Turnover of key personnel slows momentum
When original project leaders or enthusiastic participants are promoted, transferred or depart from a company, the momentum of an improvement project can slow. In these instances, finding new leaders for the initiative may inject energy.
- Improvement opportunities dwindle
When process improvement programs are implemented, they tend to focus on a particular area of an operation such as eliminating waste in production or reducing costs in purchasing. After a program has been in place for several months, the company may have identified and acted on the most beneficial improvements and subsequent suggestions deliver increasingly lower value. In these cases, the focus of the program may require adjustment.
For manufacturers considering the implementation of any new process improvement program or wishing to revitalize one that is fatigued, following are some steps the senior management team should consider to ensure sustainability and avoid “stale dating.”
- At least annually, step back to revisit the big picture. Review the company’s goals and identify the benefits (cost reductions, product quality, profitability, customer service, etc.) that are most important to the organization in achieving these goals. What are the key performance areas requiring improvement?
Determine whether the current program is delivering these priority benefits. If not, consider how the program may need to be adjusted. It may be necessary to change focus, reengage employees or rebuild the business improvement team. If opportunities for adjustments are not clearly evident, it may be worthwhile to consult an experienced process improvement specialist for an objective assessment. A fresh perspective can often uncover missed opportunities, determine whether new objectives may be necessary, or even ascertain whether a different type of improvement method may be required.
- Consider whether the refreshed improvement initiative is feasible and sustainable; outline the necessary steps and the people that would be involved.
- Link the program directly to the company’s goals and objectives.
- Communicate the importance of the program throughout the organization and continually support the efforts of managers and employees.
- Create a supportive culture by empowering employees and regularly recognizing and rewarding those who contribute. Anticipate that employees will want to know “what’s in this for me?” and ask for input regarding their reward preferences related to compensation, performance appraisals or recognition.
- Be careful not to overload people by allocating responsibility for new initiatives only to those employees who suggest these ideas. Also, when a company implements new improvement processes, it’s important to consider where redundant procedures may subsequently be eliminated.
- Regularly assess the progress of the improvement program and watch for new opportunities. Question whether the company is focused on the right areas. Ask employees what is and isn’t working well. Gather their input regarding where they believe the company can best achieve improvements.
All process improvement programs rely on management and employees believing there is value in doing them. By regularly assessing progress, asking for input, creating a supportive culture and making adjustments as needed, your company’s improvement efforts can deliver value for a very long time.
Carlo Mariglia (416-369-3078, CMariglia@bdo.ca), CA, CPA, CISA, CIA, is a Toronto-based partner in the national advisory services practice of BDO Canada LLP (www.bdo.ca) and Joseph Gipp (416-369-3091, JGipp@bdo.ca), CA, is a partner and national advisory leader of BDO’s manufacturing industry practice.
