Few days ago I closed the first wave of projects in Sweden as part of a continuous improvement program. You can wonder “what’s that?”
I do not think that one morning the CEO of a company wakes up and says “Let’s start a continuous improvement project”. Maybe I am wrong, so please share with me your experience.Anyway, in my vocabulary continuous improvement is when there is no end to the company’s effort in doing things better than before but the questions are…
• How can you achieve that?
• Who is responsible for these efforts?
• Why would you do this?
To answer these questions I take the example of the Swedish company I mentioned before. The reason we started continuous improvement program there is because the profitability was in danger: company had a very good track record of profit year after year but it started declining. The profit ratio was not satisfactory but still… it made a nice profit.
To change the downward trend, the company’s managing director decided to start a continuous improvement program– although it is not called like that. He wants to reduce costs – mainly manufacturing costs – not by simply cutting headcount but by improving processes, reducing non-value-added steps, reducing wastes and reworks.
Although I am very happy to facilitate this program, the continuous improvement efforts will not happen by an external person like me. It has to be continuous so it must come from the company employees themselves.
How will you achieve it? You know: “first you have to learn walking before you can run…” so the company will have to learn to work on projects with dedicated teams to improve part of the process. These projects will be supported and monitored by me and by the managing team (so-called Steering Committee) to make sure: projects will be successfully finished within 4-6 month time, saving significant of costs and improving (part) of the business process.
After the first round of continuous improvement projects are completed, new projects will be assigned to new teams, depending on the highest priorities of the company (apply Pareto-law!). These projects will yield again significant costs savings and efficiency improvements.
After 3-4 years of working in such structured project assignments, the organization will learn – as a way of life – how to solve problems in a structured way, reducing costs, making less and less mistakes and taking mature, data based decisions. They will not need to run official projects anymore, they will do it “by nature”.
Then they have not only learn how to WALK the way of continuous improvement but now they are able to RUN.
PS: What is your opinion and experience about continuous improvements? How do you do it in your company?