How do I implement continuous improvement in my business?

The foundation of continuous improvement is Deming’s plan-do-check-act cycle.

This method consists of four steps coming one after the other with the aim of creating a virtuous cycle of continuous improvement.

The plan-do-check-act cycle

1. Plan

Define key performance metrics

The first step in a continuous improvement journey is to define how you will compete in the market. This strategy is key as it will define the metrics you need to optimise to be successful. If your strategy is to compete on cost or value, then you will need metrics that demonstrate your performance against those attributes.

Some examples of key performance metrics for a company competing on cost or value include:

·      labour efficiency

·      defect rate

·      on time delivery

·      product reliability

Having the right metrics ensures that your continuous improvement efforts are directly focused on creating value for the customer, making you more competitive.

Set targets

The next step in the cycle is to set a target for each KPI. When setting targets, entrepreneurs should consider the following:

·      benchmarking competitor performance to identify targets

·      reviewing your historical performance and looking at periods of high performance:

·      historical average performance is not a continuous improvement target

·      watch out for seasonal outperformance driven by external factors

·      ensuring that targets are both ambitious and realistic:

·      you won’t win by underperforming your competitors

·      unachievable targets will demotivate the team and negatively impact results

·      Create a plan to achieve your targets

Once you know what you want to achieve, you need to determine how you will get there. This is a crucial step that is often missed in organizations.

Incremental increase in targets, year over year, without a plan to achieve them is not a recipe for success.

As part of the business planning process, ask the following question to each department.

What initiatives are required to achieve the targets?

Remember to include what resources the team will need to complete the initiative.

It is common for companies to enlist the support of an internal or external specialist, such as a Lean Six Sigma Black Belt or external consultant, to facilitate kaisens or other initiatives that team members don’t have the experience or time to complete in addition to their day-to-day responsibilities.

2. Do

Execute on your plan

Execution is key to success. The phrase “a poor strategy well executed is better than a good strategy poorly executed” is well known and, for good reason. All of the work to this point will not make a difference if you don’t execute with excellence.

Ensure that your team has the resources that it needs to execute on the initiatives. In the next phase we will check in early and often and make adjustments as needed.

3. Check

Measure your success

The hard work defining the right metrics will enable your success here. Monthly meetings to review the status of the initiatives, and key performance metrics vs. targets, will provide valuable feedback to the team on what initiatives are working, and which ones are not.

4. Act

Refine the approach

The final step in the plan is to take the required action to improve the results. Has the team struggled in implementing their initiatives? What skills or resources do they need to enable success? The key is to problem solve where necessary and take action to ensure that planned results are being achieved.

Want to know more? Head on over to the full article here for more ideas and perspective. Afterwards, why not drop me an email to share your thoughts at robert@vicleaders.com.au; or call me on 0467 749 378.

Thanks,

Robert