Strategy-Train
Small Enterprise Strategic
Development Training
Module V
Implementation Strategy
Unit 10
Quality Control and Quality Assurance
Author
Ioanna Garefi, Andy Syrianoy
(ATLANTIS)
Training Material online
www.strategy-train.eu
This project has been funded with support from the European Commission. This
publication reflects the views only of the author, and the Commission cannot be held
responsible for any use which may be made of the information contained therein.
Table of Contents
Module V. Implementation Strategy
Unit 10
: Quality Control and Quality Assurance
Entrance.......................................................................................................................... 3
Keywords ...................................................................................................................... 3
Learning Objective........................................................................................................ 3
Estimated Time............................................................................................................. 3
Introduction ..................................................................................................................... 3
10.1 Enterprise Resource Planning (ERP) .................................................................... 4
10.1.1
What is ERP? ................................................................................................ 4
10.1.2
Why use ERP? .............................................................................................. 4
10.1.3
Where can I find information on ERP software?............................................ 5
10.1.4
How can I determine if ERP software is needed in my company? ................ 5
10.1.5
Best Practice – Intel ...................................................................................... 6
10.2 Total Quality Management .................................................................................... 6
10.2.1
What is Total Quality Management? ............................................................. 6
10.2.2
Why adopt TQM in your company? ............................................................... 6
10.2.3
Total Quality Management resources............................................................ 7
10.2.4
How can I apply a TQM-based philosophy in my company? ......................... 7
10.2.5
Best Practice – FedEx ................................................................................... 7
10.3 Six Sigma .............................................................................................................. 8
10.3.1
What is the Six Sigma approach? ................................................................. 8
10.3.2
Why use the Six Sigma approach? ............................................................... 8
10.3.3
Information sources on Six Sigma................................................................. 8
10.3.4
How can SMEs take advantage of the Six Sigma approach?........................ 9
10.3.5
Best Practice – Motorola ............................................................................... 9
10.4 Reliability, Maintainability and Safety .................................................................... 9
10.4.1
What do the terms stand for? ........................................................................ 9
10.4.2
Why use RAMS standards on your control systems?.................................. 10
10.4.3
Where can you find more information on RAMS? ....................................... 10
10.4.4
How is it possible to adopt RAMS standards?............................................. 10
10.4.5
Case Study – European CENELEC Railway Standards CENELEC............ 10
10.5 Business Process Reengineering (BPR) ............................................................. 11
10.5.1
What is Business Process Reengineering?................................................. 11
10.5.2
Why implement BPR? ................................................................................. 11
10.5.3
Where is BPR applicable?........................................................................... 11
10.5.4
How is BPR applicable on SME level? ........................................................ 12
10.6 Continuous improvement (CI) through Monitoring, Evaluation and Feedback
Cycles ........................................................................................................................... 13
10.6.1
What is Continuous Improvement? ............................................................. 13
10.6.2
Why aim for CI?........................................................................................... 13
10.6.3
Where is CI Applicable in an enterprise? .................................................... 14
10.6.4
How can I apply CI in my enterprise? .......................................................... 14
10.6.5
Best Practice - The Kaizen Application at Toyota........................................ 15
Summary of Key Points................................................................................................. 15
Bibliography .................................................................................................................. 16
Books/Articles ............................................................................................................. 16
Websites..................................................................................................................... 17
Module V – Unit 10
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Module V. Implementation Strategy
Unit 10
: Quality Control and Quality Assurance
Entrance
Keywords
quality control, quality management, quality control planning, customer satisfaction,
waste reduction, continuous improvement, enterprise resource planning, information
flow, data management, six sigma, RAMS, business process reengineering
Learning Objective
This module will give you insight into the most important aspects of Quality
Control (QC) and Quality Assurance (QA). In the following units practical
solutions and concepts such as Enterprise Resource Planning (ERP) will be
discussed and some of the most important quality assurance methods which are
specifically suitable for SMEs will be demonstrated (total quality management, Six
Sigma, Business Process Engineering (BPR) etc.). Lastly this module will show you
how evaluation, monitoring and feedback cycles can be employed towards the
continuous improvement of your company. After finishing this module you will be able to
comprehend the concepts of QC and QA, through the extensive presentations of
selected concepts and techniques which will prove fruitful for your company.
Estimated Time
The approximate time to go through this module is 45 minutes.
Introduction
The best way to build credibility, ensure effective management and coordinate actions
in your company is to implement a quality control plan, which will guarantee that
products and services provided to customers meet the standard quality requirements
through quality assurance.
The term quality control covers all the operational activities and actions that
need to be followed in order to control the quality of the products or services
provided by the respective company. This implies that all company activities
are constantly supervised by experienced personnel and that everything runs
correctly (i.e. in accordance with the designated set of preset operational activities).
The term quality assurance is in short, a step beyond quality control as it
defines the set of actions which are followed in order to ensure that quality
control is run properly. Quality assurance involves constant and regular testing
of the company activities and the provision of regular feedback and reviews to provide
insight into company operations. Quality assurance also indicates which activities need
to be developed and what needs to be done to improve the quality of products and
services, whilst aiming at exceeding customer expectations.
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Before taking action it is essential to select which activities and techniques can
be employed for the benefit of your company and build your strategy
accordingly. The following sections will provide insight into the most important
elements of Quality Control and Quality Assurance.
10.1 Enterprise Resource Planning (ERP)
10.1.1 What is ERP?
ERP software was born in the 1990s, as a combination of the MRP software
(Material Requirements Planning) initially developed by IBM, which over the
years evolved into MRP II software (Manufacturing Resource Planning) and
basic accounting software. The software has gradually evolved over the years and the
term ERP now covers practically any software that manages multiple aspects of the
company.1
ERP facilitates the flow of information among different functions within a
company, as it combines all business processes and management activities of
the enterprise. It provides decision makers with a comprehensive view of the
company, whilst covering all its aspects and units, regardless of geographical location
and divisions.2
10.1.2 Why use ERP?
The need for ERP software is detected when companies encounter business problems
relating to the flow of information. Inability to gain instant access to information can
considerably affect the decision process and lead to wrong management decisions.3
ERP software can considerably improve the way your company is run in the following
manners:
1. It will provide you a comprehensive view of your company and access to its
classified data (financial data, inventory, personnel info and so on), whenever you
need it and however you need it
2. It will improve visibility of your company functions
3. It can lead to cost reductions
4. The software can also lead to a dramatic increase in productivity
5. It can aid the improvement of your strategy
6. It will help your personnel work in a more organized manner
1
Tom Bellinson, BPTrends (2009), The ERP software promise.
ERP Overview, January 2000. By Haim Mendelson, Graduate School of Business, Stanford University,
Stanford, CA 94305-5015, email haim@stanford.edu. Research assistance by Korhan Gurkan and Anne
Korin is gratefully acknowledged.
3
"Selling" restructuring to SMEs through ERP implementation, Igor Nazor Centar za strucne studije
Sveucilišta u Splituinazor@oss.unist.hr.
2
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Keep in mind that the installation of ERP software can bear hidden costs and it
may take some time to see it pay off. Some companies may need months, due
to the fact that data conversion and adjustment is a time-consuming process
and personnel may have to be trained to integrate the software into their daily activities.
Adoption of ERP requires commitment, to constantly test, adapt it and invest company
resources towards its development.
10.1.3 Where can I find information on ERP software?
1. ERP Central (www.erpcentral.com): provides insight into the software available and
its implications.
2. SAP (www.sap.com): The leader in business management software applications is
SAP, a company founded in 1972, located in Germany. As a market leader and a
pioneer, SAP developed vertical industry-specific business solutions for 19
industries.4
10.1.4 How can I determine if ERP software is needed in my company?
The process of selecting the right ERP software depends on the exact objectives and
the complexity of the selected applications.
If your company has been demonstrating a rapid development, then that is
the right time for you to get rid of manual business processes and proceed to a
complete overhaul of your systems.
Is ERP software applicable to large companies only? The answer is no; ERP
software is not an exclusive benefit to large businesses.5 Lately SMEs seem to
be the most popular choice among ERP vendors, due to the current trends
which led to an increase in ERP awareness.
However it is important to keep in mind that ERP systems mean loss of
flexibility and adherence to rules. As it is well known, SMEs operate in a
different competitive environment than large companies, due to the fact that
SMEs can carry out their tasks more freely and don’t have to stick to strict regulations,
which practically means that they can have their own unique way of doing business.6 So
take some time to think about what makes your company unique and whether the roles
of your staff are clearly defined within your operational framework, as standardisation
and adherence to rules may lead to loss of your competitive advantage in the market.
4
ERP Overview, January 2000. By Haim Mendelson, Graduate School of Business, Stanford University,
Stanford, CA 94305-5015, email haim@stanford.edu. Research assistance by Korhan Gurkan and Anne
Korin is gratefully acknowledged.
5
Discussing ERP's intervention in small and Medium Enterprises <http://www.erpwire.com/erparticles/erp-for-small-business.htm> Viewed September 2009.
6
ERP implementation and actual work practice in SMEs: a dialectic Perspective, Dimitris Nathanae,L Bill
Papantoniou, Dimitris Papageorgiou.
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10.1.5 Best Practice – Intel
Intel is a multinational company that serves as a successful example of ERP
implementation, their software supports more than 10,000 active users and the
environment runs on approximately 250 servers. Intel follows a decentralized ERP
strategy, the sales and marketing group was the first to implement the software in order
to support its operations. Consequently other groups followed similar approaches and
today Intel has implemented ERP for its finances, management of materials, warehouse
management and other functions.7
10.2 Total Quality Management
10.2.1 What is Total Quality Management?
Total Quality Management (TQM) is a continuous improvement process,
which can also be characterized as a management philosophy. TQM implies
doing business, through striving for constant improvement of a company’s
quality and services. The main idea behind TQM is to ensure product and service
quality, through the application of a wide range of management tasks (such as human
resource management and managing the entire business process), instead of running
statistical processes.8
TQM relies on cost reduction philosophy, emphasizing specifically on the
reduction of waste, whilst helping suppliers provide quality products and
services in order to achieve maximum customer satisfaction and gain a
competitive edge in the market.9
10.2.2 Why adopt TQM in your company?
TQM can provide direct benefits to your organization:
1. It will give you direct insight into your company and personnel data
2. It is an effective means of improving communication
3. It can lead to the improvement of productivity and efficiency
4. It can help you identify all the priorities and actions that need to be taken
5. It will point out your company weaknesses
6. It will make your company staff more active, with regards the daily activities of your
company
7. It will help everyone in your company adopt a quality-driven approach for all tasks,
regardless of their complexity
7
IT@Intel White Paper <www.intel.com/IT>, Viewed September 2009.
Total Quality Management: A continuous improvement process 4 (1996), PHCC Educational
Foundation.
9
Total Quality Management <http://www.school-for-champions.com/competition/tqm.htm> Viewed
September 2009.
8
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10.2.3 Total Quality Management resources
1. The EFQM: A nonprofit membership foundation, which in the past 20 years has
been sharing useful information on strategy implementation to its members.
(http://ww1.efqm.org)
2. EUN TQM: The European Universities Network for Total Quality Management has
been created to give European Students and Professors opportunities to explore the
aspects of the principles and methodologies behind TQM.
(http://mbatqm.unipi.gr//index.php?option=com_content&task=view&id=60&Itemid=5
3)
10.2.4 How can I apply a TQM-based philosophy in my company?
Before applying a TQM system in your company it is important to identify the
basic steps which will be followed. Once the goals are set, a principle for
commitment to quality and continuous improvement must be adopted. The
steps will involve: identification of stages, establishment of responsibility in the
workplace, setting a point of reference, planning accordingly and regarding each project
as a cycle and lastly, inform all staff on their responsibilities.10
Seamus Mc Nulty identified ten key steps to TQM11, which are presented in the
following table:
The 10 steps to TQM12:
1. Pursue New Strategic Thinking
2. Get to know your Customers
3. Set True Customer Requirements
4. Concentrate on Prevention, Not Correction
5. Reduce Chronic Waste
6. Pursue a Continuous Improvement Strategy
7. Use Structured Methodology for Process Improvement
8. Reduce Variation
9. Use a Balanced Approach
10. Apply to all functions of your business
10.2.5 Best Practice – FedEx
FedEx serves as a successful example of TQM application, the delivery of high valued
inputs at the right time was made possible through the services offered by the express
industry, originally started by FedEx, in the mid 70s.13
10
Total Quality Management: A continuous improvement process 4, © 1996 PHCC Educational
Foundation.
11
Total Quality Management
http://www.thetroubleshooter.ie/Customer%20Satisfaction%20&%20Competitiveness.pdf, Viewed
September 2009.
12
Ibid.
13
Global Impacts of FedEx in the New Economy
http://www.sri.com/policy/csted/reports/economics/fedex/, Viewed September 2009.
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10.3 Six Sigma
10.3.1 What is the Six Sigma approach?
The Six Sigma approach was introduced and developed by Motorola in the
early 90s and later on adopted by General Electric and Allied Signal. Jack
Welsh CEO of GE claims that Six Sigma was the most challenging and
potentially rewarding strategy that General Electric has ever adopted.14
Six Sigma is an inclusive management framework which has evolved from a
focus on process improvements through the use of statistical tools into a
complete and inclusive framework for effective business management. In
practice Six Sigma has two definitions: (1) a set of tools for the improvement of
processes and products and, (2) an approach for the improvement of processes and
business performance. In other words, it is a means of developing leadership and
bringing about radical changes in management skills.15
According to Daniel L. Quinn “Six Sigma has become a synonym for improving
quality, reducing cost, improving customer loyalty, and achieving bottom-line
results.”
10.3.2 Why use the Six Sigma approach?
In its annual report in 2000 General Electric stated that “Six Sigma has turned
the Company's focus from inside to outside, changed the way we think and
train our future leaders and moved us toward becoming a truly customerfocused organization.” 16
The adoption of the Six Sigma approach implies great returns to a company and it can
serve as a means of training for leadership, since top leadership positions usually
require a comprehensive knowledge of the Six Sigma philosophy.17
10.3.3 Information sources on Six Sigma
1. i Six Sigma Europe: Six Sigma Quality Resources for European Companies.
(http://www.isixsigma.com/)
2. ASQ’s Lean and Six Sigma Conference: a conference dedicated to delivering the
latest Six Sigma tools, methodologies and solutions to improve one’s business.
(http://www.asq.org/conferences/six-sigma/index.html)
3. The Lean Six Sigma Institute in Paris (http://www.lean-six-sigma.pro)
14
Quality & Productivity Journal, September 2000, The Six Sigma Approach. Hemant Urdhwareshe,
General Manager, Supplier Quality Assurance, Cummins India Ltd.
15
Rath & Strong's six sigma leadership handbook, AON Management consulting, p. 1-2.
16
http://www.ge.com/annual00/letter/index.html.
17
Rath & Strong's six sigma leadership handbook, p. 14.
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10.3.4 How can SMEs take advantage of the Six Sigma approach?
There are many considerations that a company must take into account before
embarking on the Six Sigma approach. It has been reported to be extremely
useful for larger companies but seems to be discouraging for smaller
companies, as it requires extensive training, it bears high investment costs, full time
efforts, routine work and implies the use of complicated statistics.18
Runchana Sinthavalai proposes a number of solutions for the implementation of Six
Sigma in SMEs, such as avoiding a complicated system through the provision of simple
terms, the adoption of certain parts and tools of the approach, adopting a self-training
approach rather than hiring external consultants. She also suggests the integration of
the Six Sigma activities as part of the company’s regular activities.19
10.3.5 Best Practice – Motorola
Motorola serves as the pioneer in the Six Sigma approach; they have an impressive
track record of millions of dollars saved through business improvement.
Motorola also offer training and certification not only in the US but also in
Europe, through the Motorola University.
http://www.motorola.com/motorolauniversity.jsp
10.4 Reliability, Maintainability and Safety
10.4.1 What do the terms stand for?
The term often referred to as RAMS (Reliability, Availability, Maintainability
and Safety) refers to the standards that any Total Quality Control system
should have. This set of requirements will ensure that the system will be able to
perform its functions under any given conditions (reliability), it will be able to be
restored to its original state when maintenance occurs and it will be able to perform its
required activities without losses for its entire life cycle (maintainability) without bearing
any risk (safety). Availability is often omitted as it is a simple function of Reliability and
Maintainability.20
RAMS analyses can be performed for the review of any system, regardless of
its nature. Sectors that have been reported to be in need of RAMS analyses
include the energy sector, medicine and communications. The aforementioned
business sectors are in need of constant checking in order to be up-to-date with
developments and guarantee prevention from possible system failures and risks. For
example in the energy sector it is imperative to have stable and reliable systems, as
many other business sectors depend upon it and it is characterized by interdependent
activities, often having to do with human lives. Wherever such risks are present,
18
Special Issue of the International Journal of the Computer, the Internet and Management, Vol. 14
No.SP1, August, 2006, A Methodology to Support Six Sigma Implementation in SMEs as eLearning,
Runchana Sinthavalai (p. 23.1).
19
(ibid p. 23.2).
20
Wikipedia Entry on Safety, Last Viewed September 2009.
Module V – Unit 10
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scientific reliability, maintainability and safety of the operating systems should be the
rule and not the exception.
RAMS standards clearly determine that the quality of any task and any deficits
in any of the fields they represent (reliability, maintainability, availability and
safety) will result in extra costs (which will be much higher than the original cost
of system testing through these standards). This is where good management skills are
of the essence, so as to minimize possible extra costs.21
10.4.2 Why use RAMS standards on your control systems?
As systems, products and relations between sectors are getting more and more
advanced and complex, RAMS standards form a necessity that can reduce the amount
of required resources. These standards are best for industries that involve more
advanced scientific goods/ services, such as transportation, space industries etc,
whereby matters of safety and accuracy are of great importance. These specifications
are an integral part of total quality control and they are extremely complicated.
10.4.3 Where can you find more information on RAMS?
1. The TÜV Rheinland Group being one of the leading providers of technical services
worldwide, offer services for the achievement of safety and quality. Among these
services they offer RAMS analyses, especially to sectors whereby it is absolutely
essential, such as the railway sector. (http://www.tuv.com/de/en/rams.html)
2. The annual Reliability and Maintainability Symposium is also a good source of
information and a way to keep in touch with the latest developments in RAMS.
Researchers are invited to present and share their research findings on a theoretical
and practical level, be it success stories, or lessons learned from the application of
their Reliability and Maintainability knowledge. (http://www.rams.org/)
10.4.4 How is it possible to adopt RAMS standards?
If you think that your company is classified in any of the aforementioned sectors, such
as communications and medicine and thus involves risk and requires safety, then it
would be a good idea to invest a part of your capital and bring these standards into
effect, either through hiring an external company which can offer such service, or
through hiring an expert.
10.4.5 Case Study – European CENELEC Railway Standards CENELEC
An example of successful implementation of RAMS standards is the case of
CENELEC 22 (Comité Européen de Normalisation Électrotechnique) railway
standards. CENELEC have integrated RAMS standards and they have been
successfully implemented at practically every new international rail technology project.
These standards do not apply to heavy rail systems only, as their heading "Railway
applications" may imply, but also to light rail and urban mass transportation, including
people-mover systems.
21
22
Wikipedia Entry on Total Quality Management, Last Viewed September 2009.
Cenelec Railway Standards at TUV website, Last Viewed September 2009.
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10.5 Business Process Reengineering (BPR)
10.5.1 What is Business Process Reengineering?
In the early 1900’s Henri Fayol, the “father” of management theory, originated
the concept of engineering: “To conduct the undertaking toward its objectives
by seeking to derive optimum advantage from all available resources.”23
According to Hammer M. Champy: “Reengineering is the fundamental
rethinking and radical redesign of business processes to achieve dramatic
improvements in critical, contemporary measures of performance such as cost,
quality, service and speed”24
So what does BPR imply for your company? The term covers all the drastic
changes which may be implemented on your management system, the
company’s structure, personnel management and so on. BPR deals with all
changes that can affect the manner in which business is conducted.25
10.5.2 Why implement BPR?
Frederick Taylor in the 1880s stated that reengineering must be done in order
to “make all your processes the best-in-class”.26
If the desired goal is to make your company stand out against market competition and
survive through the constant changes in the market, then BPR is the answer.
Successfully conducted BPR can lead to improvements in the quality of your products
and services. It can not only maximise customer satisfaction, but it can also have a
considerably positive impact on your finances.
BPR processes can transform problematic organisations into effective
competitors and guarantee a good place in the market against their
competitors.27
10.5.3 Where is BPR applicable?
According to experts, reengineering should focus more on the processes of an
organisation and not the organisation itself. Once you identify and record the
processes in need of change, then you must decide which of them need to be
23
Lloyd, Tom, Giant with Feet of Clay/ Tom Lloyd Offers a Contrasting View.
of Business Process Reengineering, Financial Times, December 5, 1994; Pg. 8.
24
Hammer,M., Champy.J., (1993), Reengineering the Corporation: A Manifesto for Business Revolution.,
Harper Collins, London.
25
Successfully Performing BPR, By Michael Covert, Visible Systems Corporation, Copyright © 1997,
Visible Systems Corporation. Pp1.
26
Business Process Reengineering Analysis and Recommendations, Maureen Weicher, William W. Chu,
Wan Ching Lin, Van Le, Dominic Yu, December, 1995., pg. 1.
27
Ibid., pg. 4.
Module V – Unit 10
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reengineered and prioritise them on the basis of their function, level of influence and
feasibility.28
The success of BPR processes requires support from the top management,
especially when resistance is detected. In such case, a skilled manager can
provide guidance and drive the group towards change and also enforce (if
necessary) actions which will benefit the company that is being reorganised. The
aforementioned manager should possess the right skills to convince the company’s
personnel that change will not only benefit the company they work for, but their position
too, no matter how reluctant they may seem and work with them to achieve realisation
of company goals.29
10.5.4 How is BPR applicable on SME level?
BPR is of vital importance for SMEs in particular, especially in Europe, whereby
continuous improvement is becoming the rule.30 As most SMEs are mainly peopledriven (due to the fact that their daily functions are highly dependent on their staff and
relations between management and staff are clearer) many of them focus on
organisational operations such as ERP. The small-scale operational frame of SMEs
should not discourage a company from undergoing change. A better organisation and
the adoption of newer processes can be beneficial towards any company, regardless of
the size factor.
Here’s how BPR can aid your company on a long-tem basis:
1. Customer service improvement
2. Better allocation of tasks
3. Workflow optimisation
4. Efficient use of company resources
5. Increase in profit
6. Reduction of cost and waste
However, there is a risk that smaller scale companies may be faced with
obstacles due to the limited number of staff and hence limited capital and
resources which are necessary prerequisites for the adoption and
implementation of radical changes. Nonetheless, it is necessary to apply BPR if your
strategy is focussed on long-term success and survival in the market as opposed to
making quick profit.
The success of organisational restructuring in SMEs depends on whether the
leader of the company has the determination to implement it and if it will be
applied at the appropriate time in order to minimise the risk of failure. This
28
Business Process Reengineering: A Consolidated Methodology, Subramanian Muthu, Larry Whitman,
and S. Hossein Cheraghi, Dept. of Industrial and Manufacturing Engineering Wichita State University
Wichita, KS-67260 0035, USA, 1999, p. 2.
29
Successfully Performing BPR, By Michael Covert, Visible Systems Corporation, Copyright © 1997,
Visible Systems Corporation. P2.
30
Achieving Business Process Improvement in SMEs Using Open Source Content Management Systems
Nikolaos A. Panayiotou, Sotiris P. Gayιalis and Stavros T. Ponis, 2005, p. 1.
Module V – Unit 10
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process is clearly up to the company’s manager and he/ she must be the one who will
direct the entire process from step one.31 Therefore, success is not only dependent on
the availability of resources and skills but is a function of the determination of the
leadership, so clearly it is up to you as a leader to guide the process.
10.5.5 Case Study – IBM’s Line of Visibility Engineering Methodology
IBM developed a framework for understanding Business Processes i.e. a methodology
for BPR, known as “IBM’S Line of Visibility Engineering Methodology”. In this context a
manual was assembled presenting all IBM technologies and BPR development
techniques which would be useful for the application of BPR.32
You can download this manual through IBM’s website here
(http://www.redbooks.ibm.com/abstracts/sg242590.html)
10.6 Continuous improvement (CI) through Monitoring, Evaluation
and Feedback Cycles
10.6.1 What is Continuous Improvement?
Continuous Improvement Process (otherwise known as CIP or CI) is a
management process whereby delivery processes (customer valued) are being
constantly checked, evaluated and improved accordingly, with regards to
efficiency, their level of effectiveness and flexibility.33 The term alone implies that the
process is ongoing. CI is focused on human-centered management and thus, a capable
SME manager should be able to identify the need to continuously improve an
enterprise’s competitiveness to ensure growth, profit and secure its place in the market.
In TQM, CI stands for the core activities through which an enterprise can maintain a
competitive edge.34
10.6.2 Why aim for CI?
There are various reasons supporting the application of the CI philosophy in an
enterprise, the first and most important one being the mobilization of all your personnel.
CI is a step further from TQM, as it envelops all the advancements on the standards of
the enterprise. The standardized processes which are constantly evolved and improved
in the long run will lead to innovative changes within your company, which will of course
require less effort and cost.35
CI will have a positive impact on all organizational processes and areas36:
• Business processes: Better performance, More efficient planning
• Finances: Increased profit, Better use of resources
31
Business Process Reengineering in small Companies, p. 24.
Business Process Reengineering and Beyond, An IBM Redbooks publication, 1995.
33
Wikipedia, Continuous Improvement, Viewed September 2009.
34
ISO9000 based advanced quality approach, for continuous improvement of manufacturing processes,
Deeb Salah – Iung Benoît, p. 1.
35
Continuous Improvement Tools, viewed September 2009.
36
http://www.constructingexcellence.org.uk/resources/themes/internal/improvement.jsp.
32
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•
•
•
Human resources: Improved staff morale, Higher rate of satisfaction of staff,
improved recruitment
Suppliers: Improved relations between you and your suppliers
Customers: Increased customer satisfaction and overall communication
10.6.3 Where is CI Applicable in an enterprise?
CI should be applied in all processes that support your company. Keep in mind
that focus must be placed on the nature of these processes rather than on the
final results.
10.6.4 How can I apply CI in my enterprise?
10.6.4.1 Essential Factors
Before moving on to the implementation of CI in your enterprise, there are
certain prerequisites and factors which must be fulfilled in order to ensure that
the processes are run correctly. These essential factors are: commitment from
senior management, participation of all employees and opportunities to contribute,
management of the performance and contribution of staff, good communication in your
enterprise, introduction of training activities for your staff and incorporation of such
activities into your company strategy, official certification for recognised quality
management systems and standards, measuring and evaluation of progress with
regards to key indicators and preset benchmarks.37
10.6.4.2 The Kaizen Approach
A popular CI method that can radically help an enterprise evolve is the Kaizen
Approach (Kai stands for “change” and “Zen” stands for “good” in Japanese).
The philosophy behind Kaizen is that everything can be improved and
therefore organisations that work under this principle, leave room for improvement on all
processes, regardless of their status (i.e. whether it’s financially stable or running well
etc.).38 Kaizen also presupposes that people from all levels should participate in the
process of continuous improvement and that efforts towards improvement must not be
relaxed.
10.6.4.3 Core activities of CI
The three core elements of CI are monitoring, evaluation and feedback cycles:
1. Monitoring is the main component of CI. CI-based Monitoring is characterised by 3
steps: (1) Recognition of the problem through running checks, (2) Evaluation of the
situation, through studying the results of the audits and (3) Continuous Improvement
processes and optimisation.
2. Evaluation is intertwined with all monitoring processes. It does not simply comprise
of complex data collection tools and staff training as evaluators may even have to
help towards the creation of a workplace culture which promotes inquiry and critical
self-review, whilst offering support and fostering change.39 Evaluation procedures
37
http://www.constructingexcellence.org.uk/resources/themes/internal/improvement.jsp.
http://www.mindtools.com/pages/article/newSTR_97.htm.
39
The evaluation exchange, A periodical on emerging strategies in evaluating child and family services,
2002. pp. 2.
38
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require planning, setting the roles of everyone involved, long implementation time
and encouraging staff involvement.
3. Feedback Cycles with regards to CI are basically derived from evaluation
procedures. They are periodic reviews and can focus on products or services. These
reviews can be used for staff training and feedback collected can contribute to
further experience and avoidance of mistakes.
EXERCISE: Now it’s your turn to think if your company is run under a CI
philosophy and if so take some time to record how activities are carried out
with regards to it and of course if all your company staff are involved in it.
10.6.5 Best Practice - The Kaizen Application at Toyota
Toyota constitutes a splendid and representative example of Kaizen management, due
to the fact that it had the most systematic and strongest cost management system,
under which all kaizen activities were organized.40
Summary of Key Points
The main aim of this unit was to familiarize the reader with the most important
aspects of Quality Control and Quality Assurance. It is suggested, after reading
this course once, to go through the main practical solutions which can ensure
the quality of your services and products and reconsider them in terms of your own
company in order to select those that are more applicable in practice. Take some time
to note down any problems that may arise from poor quality management in your
company and link them to possible solutions. For example if you are experiencing
problems in accessing your company data, or if you are lagging behind in human
resource management and finances, then it would be wise to consider installing an ERP
system which could not only give you insight into all company data but it could also
provide you with access into aggregated data, whenever you want it, and in whatever
format you require.
40
Transforming Kaizen at Toyota, Koichi Shimizu, Okayama University.
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Total Quality Management: A continuous improvement process 4 (1996), PHCC
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