Management Decision

An overview of cont inuous improvement : f rom t he past t o t he present

Nadia Bhuiyan Amit Baghel
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Overview of
An overview of continuous continuous
improvement: from the past to the improvement
present
761
Nadia Bhuiyan and Amit Baghel
Mechanical and Industrial Engineering, Concordia University,
Montreal, Canada

Abstract
Purpose – To provide an overview of the history, evolution, and existing research on continuous
improvement.
Design/methodology/approach – Extensive review of the literature.
Findings – This paper provides an overview of continuous improvement, its inception, how it
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evolved into sophisticated methodologies used in organizations today, and existing research in this
field in the literature.
Research limitations/implications – It does not provide an exhaustive review of the existing
literature, or an exhaustive list of all continuous improvement programs, only the most well known.
Originality/value – This paper traces how organizations have used various tools and techniques to
address the need for improvement on various levels. The paper also presents research conducted in
this field. It should be of value to practitioners of continuous improvement programs and to academics
who are interested in how continuous improvement has evolved, and where it is today. To the authors’
knowledge, no recent papers have provided an historical perspective of continuous improvement.
Furthermore, our paper also discusses the existing research in this field.
Keywords Continuous improvement, Quality, Lean production, Six sigma, Total quality management,
Evolution
Paper type General review

Introduction
Continuous improvement (CI) is a philosophy that Deming described simply as
consisting of “Improvement initiatives that increase successes and reduce failures”
(Juergensen, 2000). Another definition of CI is “a company-wide process of focused and
continuous incremental innovation” (Bessant et al., 1994). Yet others view CI as either
as an offshoot of existing quality initiatives like total quality management (TQM) or as
a completely new approach of enhancing creativity and achieving competitive
excellence in today’s market (Oakland, 1999; Caffyn, 1999; Gallagher et al., 1997).
According to Kossoff (1993), total quality can be achieved by constantly pursuing CI
through the involvement of people from all organizational levels.
We define CI more generally as a culture of sustained improvement targeting the
elimination of waste in all systems and processes of an organization. It involves
everyone working together to make improvements without necessarily making huge
capital investments. CI can occur through evolutionary improvement, in which case Management Decision
Vol. 43 No. 5, 2005
improvements are incremental, or though radical changes that take place as a result of pp. 761-771
an innovative idea or new technology. Often, major improvements take place over time q Emerald Group Publishing Limited
0025-1747
as a result of numerous incremental improvements. On any scale, improvement is DOI 10.1108/00251740510597761
 MD achieved through the use of a number of tools and techniques dedicated to searching
43,5 for sources of problems, waste, and variation, and finding ways to minimize them.
Over the past decades, CI has been studied from many perspectives. In this paper,
our objective is to present the history and evolution of CI, from its early beginnings to
sophisticated CI methodologies that are widely used in practice in quality management
programs today. We start by discussing the origins of CI, followed by a description of
762 the methodologies that have evolved over the years, and we trace how organizations
have used various tools and techniques to address the need for improvement on
various levels. The paper also presents research conducted in this field. Through a
literature review, we describe the existing research on CI in order to gain an
understanding of how the use of CI has had an impact on organizations, the tools and
techniques that are needed to achieve an ongoing cycle of improvement, and the
relation of CI to quality and the organization.

History and evolution of CI

The roots of modern improvement programs can be traced back to initiatives
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undertaken in several companies in the 1800s, where management encouraged

employee-driven improvements, and incentive programs were set in place to reward
employees that brought about positive changes in the organization (Schroeder and
Robinson, 1991). In 1894, National Cash Register’s program included reward schemes,
employee development opportunities, and improving labour-management
relationships. During the late 1800s and early 1900s, much attention was given to
scientific management; this involved developing methods to help managers analyze
and solve production problems using scientific methods based on tightly controlled
time-trials to achieve proper piece rates and labour standards. The US government
then set up the “Training Within Industry” service during the Second World War to
enhance the industrial output on a national scale. This included job method training, a
program designed to educate supervisors on the importance and techniques of CI
methods. This program was later introduced in Japan by management experts like
Deming, Juran, and Gilbreth, and by the US forces present there after the end of the
Second World War (Robinson, 1990). Eventually, the Japanese developed their own
ideas, and quality control, which was used initially in the manufacturing process, had
evolved into a much broader term, growing into a management tool for ongoing
improvement involving everyone in an organization (Imai, 1986).
While CI initiatives in the past reflected the use of various principles related to work
improvement, modern day CI is associated with organized and comprehensive
methodologies. These CI programs, in which typically the overall organization, or a
large part of it, is involved in change, are also more popularly associated with the
introduction of the TQM movement, which also gained leverage in Japan thanks to
Edward Deming.

CI methodologies
Over the decades, as the need to continuously improve on a larger scale within the
organization became an imperative, a number of CI methodologies have developed
based on a basic concept of quality or process improvement, or both, in order to reduce
waste, simplify the production line and improve quality. The best known of them are:
lean manufacturing, six sigma, the balanced scorecard, and lean six sigma.
 Lean manufacturing Overview of
Henry Ford systemized lean manufacturing during the early nineteenth century when continuous
he established the concept of mass production in his factories. The Japanese adopted
lean manufacturing and improved it. This methodology is a systematic approach to improvement
identifying and eliminating waste through CI by following the product at the pull of the
customer in pursuit of perfection.
In the 1950s, the Toyota Motor Company first implemented Quality Circles within 763
the production process itself. As the Second World War came to an end, Taiichi Ohno,
former executive vice president of Toyota, was given the task of developing an efficient
production system for the manufacture of automobiles in Japan. Learning a great deal
from Henry Ford’s assembly lines, and customizing a production process to suit the
needs of the Japanese markets, which called for lower volumes of cars, Ohno pioneered
and developed the world renowned Toyota production system (TPS), also known as
lean manufacturing and now used throughout the world (Womack et al., 1990). The
methodology is designed to maintain a continuous flow of products in factories in order
to flexibly adjust to changes in demand. The basis of such a flow is called just-in-time
(JIT) production, where, through systematic techniques designed to minimize scrap
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and inventory, and essentially, all forms of waste, quality and productivity are
increased, and costs are decreased.
The aim of lean manufacturing is the elimination of waste in every area of
production and includes customer relations, product design, supplier networks, and
factory management. Womack and Jones (1996) describe lean thinking as the
“antidote” to muda, the Japanese term for waste. Its goal is to incorporate less human
effort, less inventory, less time to develop products, and less space in order to become
highly responsive to customer demand while producing top quality products in the
most efficient and economical manner possible. Waste is defined as anything for which
the customer is not willing to pay. Lean manufacturing, if applied correctly, results in
the ability of an organization to learn. Mistakes in the organization are not generally
repeated because this in itself is a form of waste that the lean philosophy seeks to
eliminate (Robinson, 1990). The lean toolbox is used to eliminate anything that does not
add value to a process. According to the $US5 million study done by Womack and
Jones, the Japanese manufacturers were twice as effective as their US and other
Western counterparts. They determined that the three principles of lean
manufacturing are: improve flow of material and information across business
function; focus on pull by the customer; commitment of organizations to CI (Womack
et al., 1990; Womack and Jones, 1996).

Six sigma
More recently, six sigma began to gain popularity in the USA in 1986, when Motorola
Inc. introduced it as a means of measuring process quality using statistical process
control. Motorola went about on a mission to improve its services and products
considerably in a span of five years, and to achieve its goal, the six sigma program was
launched in 1987. Six sigma has been defined as “an organized and systematic method
for strategic process improvement and new product and service development that
relies on statistical methods and the scientific method to make dramatic reductions in
the customer defined defect rates” (Linderman et al., 2003). Minimizing defects to the
level of accepting close to zero was at the heart of the methodology, and focuses on
 MD reducing variation in all the processes of the organization. To achieve this, the DMAIC
43,5 model was developed, i.e. define opportunities, measure performance, analyze
opportunities, improve performance, and control performance. Six sigma provides
quality measurement that can be used throughout an organization – not only in
manufacturing but also in design, administrative, and service areas.
Motorola achieved amazing results through the application of six sigma, from 1987
764 to 1997, achieving a total savings of $US14 billion while sales enjoyed a fivefold
growth during the same period (Klefsjö et al., 2001). Investing in six sigma programs is
increasingly considered a mission-critical best practice, even among mid-sized and
smaller firms. After the evolution of lean manufacturing, other pioneers have used the
six-sigma process to achieve their company’s unprecedented goal of a hundred-fold
improvement in quality within five years. Top organizations such as GE, ABB,
Honeywell, Sony, Honda, and Ford have followed Motorola’s lead and have been using
six sigma to achieve business excellence.

Balanced scorecard
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In the early 1990s, Robert Kaplan and David Norton developed a methodology that
translates the objectives of the organizations into measures, goals and initiatives in
four different perspectives, namely financial, customer, internal business process and
learning and growth. This methodology came to be known as the balanced scorecard.
A balanced scorecard is generally used to clarify and update the business strategy, link
the objectives of the organization to the annual budgets, allow organizational change,
and increase the understanding of the company vision and mission statements across
the organization. A balanced scorecard can be used to translate an organization’s
mission and vision statements into a broad set of objectives and performance measures
that can be quantified and appraised, and measures whether management is achieving
desired results. About 50 per cent of the Fortune 1,000 companies have a balanced
scorecard system in place (Kaplan and Norton, 1996). Niven (2002) refers to the
balanced scorecard as a combination of a measurement system, a strategic
management system, and a communication tool:
.
Measurement system. The balanced scorecard helps the organization translate its
vision and strategy through the objectives and measures defined rather than
stressing on financial measures which provide little guidance. According to
Gaplin (1997) “measurable goals and objectives” is one of the most important
factors to a successful strategy.
.
Strategic management system. The balanced scorecard helps organizations align
short-term actions with their strategy and thus removes barriers towards
organizations strategic implementation in the long term.
.
Communication tool. The balanced scorecard describes the organizations
strategy clarifies and brings it to the average employee. Employees, once aware
of the organizations strategies, can contribute towards the overall goal (Niven,
2002).
Deming believed that traditional quality assurance methods, such as product
inspection after manufacture, were inefficient at finding the source of variations, which
occurred throughout the production process. He pointed out that all business processes
had to be considered and that they all needed feedback loops in order to improve. The
 balanced scorecard considers feedback not only in process outputs, but also in business Overview of
strategy outputs. Rather than improving the performance of existing processes, the continuous
emphasis needs to be placed on processes that must be executed successfully for an
organization’s strategy to succeed. A balanced scorecard consists of managerial tools improvement
used for performance evaluation and the types of feedback it considers provide the
guidance needed to continuously improve.
765
Hybrid methodology
While individual CI programs help to improve organizational operations in many
aspects, they are not necessarily effective at solving all issues. To overcome the
weaknesses of one program or another, more recently, a number of companies have
merged different CI initiatives together, resulting in a combined CI program that is
more far reaching than any one individually. Lean six sigma is the most well-known
hybrid methodology, a combination of six sigma and lean manufacturing. The
evolution of this hybrid has taken place since maintaining high production rates and
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high quality, or producing less waste, simply does not address enough areas that
require improvement. For example, lean cannot bring a process under statistical
control and six sigma alone cannot dramatically improve process speed or reduce
invested capital. So the benefits of both six sigma and lean manufacturing were
combined. As another example, TQM was being used as the primary quality initiative
by the manufacturing organizations, but with TQM there is no clear way of prioritizing
which quality project should receive the highest priority, and projects are carried out
irrespective of the cost to the corporation. This was one of the reasons for the advent of
six sigma. Six sigma is quite explicit about the financial benefits expected from each
and every effort. According to six sigma, each and every black belt and champion are
expected to contribute between $100,000 and $250,000 of incremental profit every year
(George, 2002). However, Tatham and Mackertich (2003) state that while six sigma can
be beneficial, it is not appropriate for widespread use.
Lean six sigma. After the apparent benefits of lean and six sigma were brought to
the attention of the business world, there were a number of big conglomerates that had
implemented both lean and six sigma to attain business excellence. To get a bigger
share of the market, they developed a new methodology called lean six sigma. Since
lean six sigma is a relatively new methodology, and as such, has not been studied in
great detail. Some organizations have been using both methodologies in parallel to
each other for years, while some have focused on just lean six sigma as a single
methodology for improvement. Lean manufacturing and six sigma individually cannot
achieve the required improvements at the rate at which lean six sigma can. Lean six
sigma maximizes shareholders value by achieving the fastest rate of improvement in
customer satisfaction, cost, quality, process speed and invested capital (George, 2002).
Using a combination of lean and six sigma, greater value to the customer can be
provided. While lean seeks to eliminate waste, six sigma seeks to reduce variation. By
combining the two, waste is first removed, which then allows for variations to be
spotted more easily. Lean six sigma also addresses important issues that are
overlooked by six sigma and lean manufacturing individually: the steps in the process
that should be first tackled; the order in which they should be applied and to what
extent and the ways in which significant improvements can be made in terms of cost,
 MD quality and lead times. The fusion of the two helps organizations maximize their
43,5 potential for improvement.

Existing research
The literature shows that there exists no theoretical basis for CI (Savolainen, 1998). CI
tends to be used as a general term that has acquired many of its attributes from other
766 quality initiatives such as TQM and lean manufacturing. While valuable research has
been conducted on CI (Bessant et al., 1994; Bessant and Caffyn, 1997), more
perspectives are required (Gilmore, 1999).
Lillrank and Kano (1989) refer to CI, or kaizen, the Japanese term for CI, as the
“principle of improvement”; however, the Japanese Union for Scientists and Engineers
(JUSE) literature does not clearly define kaizen, but uses it to define other concepts.
While the term kaizen is often considered synonymous with CI, Imai (1986) proposes
that there exist at least three types of kaizen: management-, group-, and
individual-oriented kaizen. Management-oriented kaizen is considered to be the most
important one as it focuses on the company strategy and involves everyone in the
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company. Group-oriented kaizen is best represented by quality circles, which require

employees to form a team or a circle with the goal of finding and solving problems
faced during their day-to-day work without any interference from management.
Individual-oriented kaizen is derived from the concept of bottom-up design, in which
the worker makes a recommendation to the problem faced. This has been very
successful in the Japanese industry since it is the worker who is on the shop floor and
typically knows the best solution to an existing problem. Certain industries even have
incentive programs where, depending on the problem and the solution provided, the
worker is rewarded, thus encouraging the workers to concentrate on problem areas and
find the best solution.
Jha et al. (1996) have found that there exists a close link between CI and quality in
their survey of the literature. Imai (1986) defines total quality control (TQC) as
“organized kaizen activities involving everyone in a company- managers and workers,
in a totally integrated effort toward improving performance at every level”. The link
between CI and quality has been expressed by Berger (1996), who asserts that CI
“should rightfully be regarded as a general development perspective, applicable with
or without the context of TQM”. However, from the large number of researchers who
associate CI with quality, and from the mere implication that CI seeks to improve, it
appears that there exists a link between the two, in some form or another.
CI programs were initially developed in organizations with product-focused
processes or repetitive processes, i.e. with relatively high standardization of products
and processes. Special teams were organized to work on improvement tasks, which
were separate from their typical organizational tasks. Berger (1997) suggests that
improvement tasks can be integrated into the regular work of individual employees,
and that depending on product design and process choice, CI must be adapted to the
degree of standardization involved. The implication is that CI programs can be applied
to different types of work environments. The author presents a typology of
organizational designs for CI based on two dimensions: basic task design (where the
two forms of this dimension are individual vs group tasks), and improvement task
(parallel vs integrated). Basic task design is reliant on the work process and product
standardization: within this dimension, group tasks are more common in places with a
 low degree of standardization whereas individual tasks are prevalent in places that Overview of
have high product standardization systems. In a highly standardized production continuous
system, the improvement task is the responsibility of an individual who might be a
professional from engineering, quality, etc., and is qualified and trained in the improvement
improvement activities. In the case of production systems with a low degree of
standardization, there is no resident expert who takes care of improvement, but teams
consisting of ordinary employees try to carry out improvement activities within their 767
work groups. An improvement task deals with the different levels of integration in
which improvement activities are separated from ordinary work and they run parallel
to each other, also known as parallel tasks. An integrated task is one in which
improvement activities are embedded as part of the everyday activities of the
employee.
Berger’s typology presents five organizational designs based on the two
dimensions:
(1) Quality control circles: a group of people in the staff who meet regularly to
discuss problems and issues related to quality so that they may examine them
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and come up with solutions.

(2) Wide-focus CI: a blend of organic CI and expert task force CI (described below).
It is used for temporary operations and for CI in self-managed work groups by
combining continuous improvement process teams.
(3) Organic CI: multifunctional work groups are integrated with improvement
activities. Organic CI is different from other CI models since the improvement
activities are not left to the experts for design and planning and the
decision-making is not left to the authorities outside the group.
(4) Expert task force CI: this form of CI is based on the reliance on temporary expert
task force consisting of professional from quality, engineering and maintenance
and therefore the span of improvement tasks requires considerable time and
investment.
(5) Individual CI: improvements are set off by individuals and generally organized
in the form of a suggestion system. Individuals come up with ideas and the
implementation of the ideas is left to the specialists.
Lindberg and Berger (1997) have studied the applicability of CI in various types of
organizations. The authors found that a number of Swedish organizations with a
relatively low degree of standardization of products and processes had successfully
integrated CI in work teams. The main thrust of the study was to emphasize the fact
that in the traditional Japanese industries, kaizen improvements were being achieved
by running the kaizen activities parallel to the regular work of the employees, which
was in total contrast to the concept followed by organizations in Sweden, where CI was
integrated into the regular work routines. The parallel structure does have some
advantage as it leads to interdepartmental collaboration but it also leads to higher
administrative costs (Krishnan et al., 1993).
The CI capability model (Bessant and Caffyn, 1997), developed at CENTRIM at the
University of Brighton in the UK, provides a powerful outline and arrangement for
evaluating the usefulness of CI implementation. The authors present a framework with
suggested routines and behaviours needed to successfully implement CI, and the
 MD characteristics needed by companies to develop CI capability. According to Caffyn
43,5 (1999), CI capability can be defined as “the ability of an organization to gain strategic
advantage by extending involvement in innovation to a significant proportion of its
members”. It comprises a set of ten generic CI behaviours that are seen as essential
fundamentals in organizations of all types and sizes:
(1) employee demonstrates awareness and understanding of the organization’s
768 aims and objectives;
(2) individual groups use the organization’s strategic goals and objectives to focus
and prioritize their improvement activity;
(3) the enabling mechanisms (e.g. training, teamwork) used to encourage
involvement in CI are monitored and developed;
(4) ongoing assessment ensures that the organization’s structure, systems and
procedures, and the approach and mechanism used to develop CI, constantly
reinforce and support each other;
(5) managers at all levels display active commitment to, and leadership of, CI;
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(6) throughout the organization people engage proactively in incremental

improvement;
(7) there is effective working across internal and external boundaries at all levels;
(8) people learn from their own and from other’s experience, both positive and
negative;
(9) the learning of individuals and groups is captured and deployed; and
(10) people are guided by a shared set of cultural value underpinning CI as they go
about their everyday work.
It has been found that some of these behaviours might be difficult to practice because
firms might find it difficult to break the traditional mindset and encourage their
employees to adapt to these new mindsets. However, in order to sustain such behaviour
amongst all employees, this model identifies the requirements for a set of CI enablers
such as facilitators, recognition systems or company procedures and company policies,
which are meant to advance the required CI behaviour, but need to be monitored and
developed over a period of time.
Jha et al. (1996) state that a better understanding of how CI contributes to an
organization’s mission and strategy will increase the chances of success. They have
also found that there exist distinct elements of CI that revolve around problem solving
and make use of problem-solving tools, namely work processes, work simplification,
and performance monitoring.
Finally, with respect to comprehensive CI methodologies, Khusrow (2001) proposed
a framework comparing improvement programs and found that lean manufacturing
was the CI program of choice in the industries surveyed. However, his comparison was
done specifically for the aerospace industry. If other industries are to be considered, the
results would likely vary since the mandates of each organization is typically different.

Discussion
Continuous improvement programs have evolved from traditional manufacturing-
focused systems that concentrate on the production line to reduce waste and improve
 the product quality, into comprehensive, systematic methodologies that focus on the Overview of
entire organization, from top management to the workers on the shop floor. More continuous
recently, large organizations are developing their own CI methodologies to fit their
specific needs by encompassing the various tools and techniques of individual improvement
methodologies. This signals the need for hybrid methodologies. While CI has evolved
over the decades, the basic underlying factor driving this change has been the endless
pursuit of organizations to improve. 769
Research in this field has been mainly focused on defining the nature of CI, its tools,
organizational issues required to support CI initiatives, its applicability to various
types of organizations, implementation issues, and critical success factors. The
literature extols the many virtues of CI, but researchers have found that a more critical
analysis of CI is required as is a more rigorous theoretical basis for conducting research
in the field.
Research shows that CI can take place at three different levels within the
organization: at the management, group, and individual levels. At the management
level, the implications of CI are on the organization’s strategy. Group level CI involves
problem-solving tasks at a broad level, while individual level CI deals with
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improvement on a micro scale, i.e. on low level, day-to-day tasks. In order to reap
maximum benefits from a CI program, managers must implement CI at each of these
levels. CI programs can be applied to different types of work environments. Managers
need to evaluate the product design, process choice, and the degree of standardization
involved in the organization, and can then decide upon the appropriate methods to use
to best implement improvement practices. Managers can evaluate the usefulness of CI
programs by monitoring a set of routines and behaviours that are seen as being
essential to organizations of all types for CI implementation. It is clear that CI does not
come without hardships and struggles; without the active involvement of everyone in
the organization, and the required resources and support from top management, CI in
any organization cannot be successful.

Conclusion
In this paper, we have traced the evolution of CI from its early roots in manufacturing,
to the more sophisticated methodologies that can be used in any organization, and that
comprise an extensive toolbox for continuous performance improvement. The
literature, while extolling the many virtues of CI programs, also makes it clear that
achieving the expected results of modern day CI programs is quite challenging as it
involves organizational changes on many levels. It is also generally agreed that CI and
quality management programs go hand in hand as they seek to achieve excellence
through improvement.
Our paper will be of value to practitioners by providing guidance in implementing a
CI program or methodology. Practitioners will find useful principles, methods, tools,
and techniques used in CI programs. It should also be useful to academics who are
interested in how CI has evolved, and where it is today.
Although much research has been conducted on the individual CI methodologies
and assessment tools have been developed to determine the progress of the CI
initiative, to the author’s knowledge, little focus has been directed towards developing
a framework or model that would enable an organization to identify the CI
methodology that best suits its needs, given a certain budget for such programs. Thus,
 MD an interesting topic to pursue in the field of CI is how to determine the appropriate CI
43,5 methodology for an organization to implement and what are the tools and techniques
that need to be deployed to achieve successful implementation. Furthermore, there is
also a need for research in the field of the hybrid CI methodologies that have been
developed in the recent past and to determine their applicability and to various
organizations.
770

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