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So companies use continuous improvement initiatives.

So total quality management, Six Sigma, lean, these different initiatives.

But if you think about the common elements across each of these initiatives,

each of these different initiatives,

you can boil it down to what you can see in this picture.

The idea that there are going to be operational processes that need to be

changed.

They need be changed because you're trying to make an improvement or

they need to be changed because conditions have changed.

So operational processes are being modified.

And typically each of this programs are like Six Sigma and

lean, they modified this operational processes to improvement projects.

So you start with the objective of the project and

you try to achieve it through some kind of cross-functional team project

that is aimed at getting their objective of that improvement.

These improvement projects are typically

handled by an office of project implementation.

So there's a program deployment, there's an initiative deployment

that is being done at the organization level at the company level.

And finally, this deployment has to be funded by resources.

There has to be time given to it.

There has to be an infrastructure in place in terms of people who

are experts in these deployments and who have different roles in this deployment.

So there's a superimposed infrastructure.

There's a superimposed organizational structure dealing with the program

like Six Sigma or lean superimposed on top of the normal organizational chart.

So you have the normal organizational chart and

then you have this organizational chart that is focusing on Six Sigma or lean.

Or whatever continuous improvement initiative is being used in that company.

So this seems to be a common way of

how continuous improvement initiatives get implemented in large organizations.

So if you can look through each of these,

if you can study each of these continuous improvement initiatives.

What you'll also find is that there are some common elements that they're trying

to achieve.

They may achieve it to different degrees of perfection,

but they're trying to achieve these elements.

And I've divided these up into organizational elements, things that

need to be done at organizational level and then the employee elements.

What do elements, what are the different things that employee need to do?

So from an organizational perspective, leadership that is committed

to the idea of quality improvement, of maintaining quality of improving quality.

The idea of the cross-functional view,

the horizontal view that incorporates the process that

is serving goods and services to customers.

That is producing the goods or providing the services to customers and

the cross-functional view focusing on the customer.

The total systems perspective,

not each function focusing on their own particular performance.

Not just purchasing, focusing on reducing the costs of the things that

they're purchasing but thinking about it from a total perspective,

from a total cost perspective.

If you're talking about purchasing, thinking about well,

if we buy products that are just focusing on lower cost,

how are they going to impact the quality of production?

How are they going to impact what the customer ultimately gets?

The idea of supplier involvement is common across

different quality improvement initiatives.

The idea that you need to move beyond your organizational boundary and

not select your suppliers based on something other than cost.

And then keep communicating with them about your quality improvement initiative.

Emphasizing the fact that you focus on quality.

Working with them on quality on their end.

Measurement is an important aspect of any process improvement initiative without

getting the metrics, without knowing a baseline that you can depend on.

You cannot think about making an improvement.

Where do you start from if you do not have a good baseline?

Reduction in process variation seems to be a common theme.

Although Six Sigma is the one program that

specifically focuses on reduction in variation, it's not a new idea.

It's not an idea that came up with Six Sigma.

These things have been talked about in quality management initiatives,

quality improvement initiatives since the time of total quality management,

since the time of quality circles.

Since after the Second World War when Japan started looking at

quality management and quality improvement in a serious way.

Now let's look at the other side.

The elements that deal with involving employees.

So you can think of this as being bottom-up and

the organizational elements that we saw were top-down.

So there's a top-down sense to quality improvement and then there's a bottom-up.

Setting goals for employees based on the metrics, giving them particular goals.

How do what they do a day-to-day basis?

How does that translate into good quality and good performance for the company?

Giving them training, giving them the idea that they

need to do this in addition to their day-to-day work.

So as they're doing their day-to-day work,

they have to think about continuous improvement.

They have to think about learning from their iterations of doing their day-to-day

work and participate in a systematic way of continuous improvement.

So that becomes,

that seems to be a common element of continuous improvement programs.

A frontline empowerment.

Giving employees the autonomy to make

some changes in terms of how they're delivering things to customers.

Not to say that they're to make ad hoc changes to the entire process,

but giving them some sense of ownership of their work.

Giving them some kind of flexibility in how they

take that last step off delivering the goods and services to customers.

And what also seems to be common across

different continuous improvement initiatives is this idea of teamwork.

That there's not one expert in any particular way of doing work,

in any particular are of doing work.

That it should be a team that gets together that you get all the perspective

of all the different functions, as well as you are able to get buy in from that team.

Because that team is going to be made up of people who are in some way connected to

whatever work is being improved, whatever process is being improved.

Now let's take a look at this perspective of cost of quality

that was popularized by this quality philosopher named Joseph Juran.

And he talked about cost of quality is being divided into

two different categories.

The cost of good quality.

Those are the costs that deal with companies taking a proactive stance,

so prevention costs and appraisal costs.

So within cost of good quality, there are prevention and appraisal costs.

And cost of poor quality.

So those are the costs that a company

incurs as a result of their being poor quality.

So poor quality has already happened and

these are the costs that are being incurred as a result of that.

So those are more the reactive costs and

the costs of good quality are the proactive costs.

Those are things that companies are doing on purpose.

4-1.4a Common Elements

Operations Management

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