Lecture 10: "Getting Better all the Time" - Process improvement

An important theme within operations management is the combined need both to

 Need to manage and to improve quality and other aspects of performance.
 Role of performance measurement: starting point.
 Concept of quality and ways defined
 Perception-expectation view of quality.
 Explore core values that underpin a 'total quality' approach before looking at
statistical process control and some of the numerous quality
frameworks/methodologies that businesses have adopted, including total quality
management (TQM).
 Modern quality management approaches incorporate a commitment to continuous
improvement
 Alternative improvement paths and different improvement methodologies including
Six Sigma, lean management and business process re-engineering (BPR).
 Look at 'digitalisation' and examples of how digital technology is being used to
change and improve processes and operations.

 Explain the role and limitations of performance measurement in operations and

processes
 Define quality and quality management
 Define lean management
 Understand the five steps of lean
 Select and apply key quality and improvement methodologies and tools
 Evaluate improvement pathways and recognise their strengths and weaknesses

1.MEASURING PERFORMANCE: How are we doing?

activity of measuring and assessing the various aspects of a process or whole operation’s
performance’ Slack and Brandon-Jones (2019: 718)
Developing a performance measurement system:
Defining quality:
1. The characteristics of a product or service that bear on its ability to satisfy stated or implied
[customer] needs
2. A product or service free
of deficiencies (ASQ
(http://asq.org/glossary/q.ht
ml)
Yield: percentage of defect free products processed (Equation)
Improving quality will also improve revenue: customer word of mouth encourage other
customers to go to this restaurant for example.
Hellsten and Klefsjö (2000)
methods are ways of basically embedding
into the organization a way of
continuously improving and approaching
quality as a philosophy rather than
something you have to do reactively
(TQM)

Customer or employee driven? Co-op has

a little box where employees can write
suggestions as to how to improve and the
co-op will show how they are trying to
make these improvements,

MANAGING QUALITY: TOOLS

Ishikawa (Cause-and-Effect) Diagram (Fish bone diagram, how it allows us to get to the root
cause)
Apply the 5 M’s to
understand what the
causes are…
Choose categories of
cause appropriate to the
situation. The 5 Ms are
sometimes used as a
starting point: Materials.
Why-why-why analysis:
You keep asking why until you
cant progress further. Then you
arrive at the root cause.

MANAGING QUALITY:
quality methodologies
Lean thinking: approach that focuses on reducing waste and increasing efficiency in
processes. Based on the principles of the Toyota Production System, which was developed by
the Japanese automaker Toyota in the 1950s and 1960s.
In practice, lean thinking involves a variety of tools and techniques, such as process mapping,
value stream analysis, 5S (sort, set in order, shine, standardize, and sustain), and Just-in-Time
(JIT) production.
JIT underpinned lean thinking.
Defining lean:

Just because we have a lot of tools available and they're related to eliminating waste or have
the ability to eliminate waste, doesn't mean we should just go and apply them. Choose the
right ones.
Womack and Jones’ Five Lean Principles
1. Value can be defined by the
ultimate customer. the
 inherent worth of a product as judged by the customer and reflected in its selling price
and market demand.

Seven wastes:

Waste in Practice: Medical Care

1. Overproduction
For example, duplicating patient information across differentservices or teams
2. Inventory
For example, ordering excess medical equipment because the supply is unreliable
3. Waiting
For example, waiting for results/prescriptions/medicines prior to discharging a patient
4. Transport
For example, moving a patient to an inpatient bed for review at post-op ward round and then
to another ward for discharge
5. Defects or errors
For example, an inaccurate patient history of the incorrect recording of a blood test
6. Staff movement
For example, separate sites for outpatient clinics or large distances between clinically related
areas
7. Unnecessary processing
Using complex equipment or processesto undertake simple tasks. For example, a referral to a
specialistservice that involves having to
be reviewed by several different people before acceptance
Causes of waste:
Muda: any activity that consumes resources without creating value for the customer
Mura: unevenness or lack of consistency in operations (variability)
Muri: overburdening of equipment or operators
IDENTIFY THE VALUE STREAM: Value stream mapping
How items flow through the process and create value for the customer. actions currently
required to bring a product through the main flows essential to every product.
Lead Time (L/T)
Time for one piece to move all the way through the process/value stream
Value-creating Time (VCT)
Time of those work elements that actually transform the product in a way the customer is
willing to pay for.
Value Stream Mapping: a pencil and paper tool that helps you to see and understand the flow
of material and information as a product makes it way through the value stream Rother and
Shook (2009: 4)
Advantages:
- Visualises the flow (flow is really important to the lean method)
- Shows linkages between information and materials flow
-where mura ect might exist
-allows everyone to engage

2. Make value flow

The focus of lean is to achieve a flow of materials, information, or customers that delivers
exactly what the customers want, in exact quantities, exactly when needed, exactly where
required, and that the lowest possible cost
Traditional: making sure our resources are being used as often as possible
Focus on flow: making to order and producing things when the customer needs it. No
inventory will build up.
Lean approaches to reducing variability
Demand variability
– Reduce demand variation
Process variability
– Reduce set-up time (Single Minute Exchange of Dies – SMED)
– Small-scale and simple process technology
– Total Productive Maintenance (TPM)
– Level production/delivery schedules (heijunka)
– Mixed model scheduling
Letting the customer pull: Just-in-Time and Kanban control
JIT: A system for producing the right items at the right time in the right amounts
(Womack and Jones 2003: 349)
Essentially Making to order
Pull: A system of cascading production and delivery instructions from downstream to
upstream activities in which nothing is produced by the upstream supplier until the
downstream customer signals a need.
Kanban: card/ signal used to convey instructions from a downstream stage to the upstream
stage to supply (move/produce/deliver) items
May be a card, plastic tag, digital signal, or a marked space/bin (don’t build up inventory)
Seek perfection: continuous improvement (kaizen)
5S ‘Housekeeping’
1. Sort (Seiri) – Throw out what is not needed and keep what is needed
2. Straighten (Seiton) – Put things in the best place where they can be easily reached
whenever they are needed
3. Shine (Seiso) – Keep things clean and tidy; no rubbish or dirt in the work area
4. Standardise (Seiketsu) – Standardise layouts and procedures
5. Sustain (Shitsuke) – Develop a commitment and pride in keeping to standards

Gemba walks: refers to the place where work is done, usually the shop floor.
- A Gemba Walk is a ‘management practice for grasping the current situation through direct
observation and inquiry before taking action’ (https://www.lean.org)
• Can include:
– Visits to problem sites
– Identification of barriers or obstacles to improvement
– Discussions on actions taken/needed, while showing respect for operators
– Follow-up on progress and next-steps Bicheno and Holweg (2016)

Evaluating Lean: A critical view of Lean

Operations Improvement
Performance improvement is the ultimate objective of operations and process management
Slack and Brandon-Jones (2018)
• Continuous or breakthrough improvement?
• Maintaining momentum (may lose this)
• Approaches to improvement
Improvement approaches: