This is a series on Supply Chain Basics looking at the discipline from the Society of Operations Management perspective. Supply chain is also essential to project management as PMs are typically trained in world class contracting. For example, my Masters program had several courses involving contracting and the Defense Acquisition Workforce Improvement Act, DAWIA, certification highlights the combination of project management and supply chain. In this post, we will explore continuous improvement issues adding some additional support as well.
Continuous Improvement
Projects come in a variety of shapes and sizes. The PMI model is the most popular with start and stop dates. Agile projects are iterative and spiral inward towards higher quality and more features. Mega-projects are very large with complex supply chain relationships and sub-projects. Continuous improvement projects are most associated with Six Sigma efforts to reduce varitability but can arise from other efforts to lean out waste.
APICS approaches continuous improvement in supply chains based on a detailed set of instructions on how to proceed without disrupting, destroying, or diminishing supply chain performance. According to APICS, continuous improvement is about changing complex human systems one step at a time. Continuous improvement is also known as continuous process improvement (CPI) which is a central concept to Total Quality Management (TQM). APICS states that TQM is a management approach to long-term success through customer satisfaction as an outcome of participation of all members in an organization by improving processes, goods, services, and the culture in which they work. The APICS Dictionary 13th edition defines continuous improvement as a never ending process to expose and eliminate root causes of problems; small step improvements as opposed to big step improvements. Further discussion follows on the key points:
Process: This is about ways to improve that bring value to the customer. The effort approaches improvement from a holistic perspective. Continuous improvement is about the whole process which is compatible with supply chain thinking.
Never Ending: The search for perfection has no endpoint. The idea is to make incremental improvements and keep raising the bar. There is no stable state and the circumstances and situation in the business environment change over time. Hence, the need to continuously improve.
Root Causes: Skepticism about quick judgements is built into continuous improvement. The idea is to pin point trouble spots and then discern the origin of the symptoms, the root cause. There are numerous methods to get at the root cause collectively referred to as root cause analysis.
Small Step Improvements: Continuous improvement is evolutionary and not revolutionary. Goals may be set high and slowly achieved through incremental changes.
Kaizen is cross-referenced with continuous process improvement in the APICS dictionary which defines the process as continuing improvement involving everyone. In manufacturing kaizen relates to finding and eliminating waste everywhere. Everyone in the organization contributes to improvement and this is an international philosophy.
The Purpose
A single purpose for continuous improvement is difficult pinpoint given its broad swath across an organization. There are numerous reasons, goals, and methods to reach many different purposes. For example, Just In Time diminishes queues, Six Sigma seeks to reduce variability, leans seeks to reduce waste, etc... Continuous improvement applies increasingly to service operations as well as manufacturing. In general, the purpose is to improve processes involved in producing and delivering goods and services. Some common purposes behind continuous improvement are:
- To improve the processes of manufacturing or services, not focus solely on quality.
- To incorporate improvement considers into the processes themselves for ongoing sustainment
- To define achievable goals and develop quantitative measures to chart progress
- To increase productivity
- To improve workforce satisfaction, safety, and quality of life
- To train employees to identify waste and participate in eliminating waste
In summary, continuous improvement's purpose is to create a culture of improvement throughout the organization affecting all aspects of the operations.
The Model
While there are many models for continuous improvement, APICS uses those which build upon supply chain management. APICS divides continuous improvement into several stages that are consistent with classic operations management paradigms:
- Process Analysis: This is taking a hard look at the supply chain internal and external processes in an end-to-end perspective. Processes can be mapped in flowcharts and process charts such as Supplier-input-process-output-customer (SIPOC) diagram.
- Process Assessment: Involves comparison of the process performance to determine progress and the amount of improvement necessary. Typical methods include benchmarking and the use of KPI's such as the SCOR metrics. Linkages can be achieved between organizations when benchmarking to determine relative postures.
- Project Planning: Project management is and has been a subset of the operations management discipline. Designing a roadmap or plan to move towards a goal or benchmark is the underpinning of project management. The small steps are an outcome of a work breakdown structure from which realistic schedules are built.
- Implementation and Change Management: Once the schedule is built then implementation begins. This requires identification of supply chain partners who are stakeholders in the process. The implementation can send shock waves through the organization and rattle the supply chain. It takes hard leadership and commitment from the employees to achieve successful implementation.
Continuous improvement is an extension of lean manufacturing method that results in a full-scale assault on waste. Of specific interest is Six Sigma, Just-in-Time, and lean supply chain management. In future posts we will look into these aspects.
Reasons for Adopting Continuous Improvement
The reasons for adopting continuous improvement follows:
- SCM is process oriented. The basic element of the supply chain is the processes that flow align the chain.
- Supply Chain are dynamic. Supply chains evolve requiring constant reengineering and process improvement.
- Supply Chain evolve. Supply chains transition from cross-functional towards global networks requiring process improvement.
- Continuous improvement can reduce the costs of poor quality result from; internal failure costs, external failure costs, appraisal costs, and prevention costs.
Continuous improvement should be a cultural trait within the supply chain that seeks to improve performance.
Comment: A major challenge in many 'project organizations' is the lack of overarching organizational management methods emplaced to manage tasks. Many organizations 'wing it' making management of schedules nearly impossible. In proper organizational design and good leadership, work centers are well defined having clear sets of processes they perform and information requirements. These work centers then can be loaded with work packages, tracked, and set with priorities. In many organizations processes are not easily mapped to work centers and may be erratically spread across several groups who perform the similar tasks under different conditions. This is especially true when there is a hodge-podge of numerous applications and systems emplaced. The root cause of this problem is often an outcome of a matrix organization that has run away having little guidance from top leadership. Matrices almost always collapse into hierarchal structures as management turns over or problems arise. I am a strong proponent of the complex adaptive organization which is a supervised architecture that allow work centers freedom to manage themselves and self-organize under emergent conditions.
Reference:
(2011). APICS Certified Supply Chain Professional Learning System. (2011 ed.). Version 2.2.
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