Results-Based Systematic Improvement Planning

Improvement in business is an operation in its own right. For this reason, a systematic approach ensures maximum benefit from improvement attempts. Results-based systematic improvement planning (SIP) is a structured approach to improvement. It draws on proven industrial engineering and quality improvement techniques, along with some of its own, and enables people to make positive changes. SIP is designed to help meet goals, solve problems, and implement ideas.

The aim of systematic strategic planning is to detect and minimize non-value-added processes and to provide a systematic procedure for continuous and satisfactory improvements. In other words, the purpose of this method is to provide teams with solutions to chronic and complex problems by

  • • Using a systematic approach
  • • Referencing problems into their root causes
  • • Selecting appropriate techniques for the problems encountered
  • • Developing alternative solutions
  • • Transferring the solutions into actions
  • • Tracking the financial and technical outcomes
  • • Standardizing solutions

In short, it can be defined as a broad and comprehensive method to help a business capture profitability and retain it permanently.

SIP can produce solutions to the following types of problems or expectations:

  • • Difficulty in meeting the demands of customers
  • • Ineffective and inefficient management of production planning and control processes
  • • Inability to measure the current production capacity properly
  • • Excessive time in the manufacturing process
  • • Low capacity utilization rates
  • • Low machine and labor productivities
  • • Inability to identify and/or eliminate non-value-added activities
  • • Inability to evaluate the current situation growth and investment fields and to set targets accordingly

SIP can be effective if

  • • There is a desire to consistently rank at the top on various productivity and cost metrics
  • • There is a desire to take a hard look at service operations, flow, equipment, and capacity. Although physical change is difficult and potentially costly, you would like to know to what extent the facility may limit your performance and opportunities to improve.
  • • Top management desires world-class performance, irrespective of rankings on current metrics. Defining “what is world class” may even redefine what services the firm should perform or cease to perform, and how it should perform them.
  • • Top management desires sustained and fundamental culture change—as a means to ongoing improvement, innovation, and world-class performance. This marks a significant departure from inherited existing culture of fuzzy adherence to established procedures.

Rather than focusing on strategic and organizational issues, it can be applied to operational problems, as illustrated in Figure 2.1, and in this way it can maximize the impact of efforts to

  • • Decrease non-value-added processes or materials
  • • Decrease business loss time
  • • Increase machine and facility utilization rates
  • • Decrease machine setups
  • • Improve customer due dates
  • • Decrease defect rates
  • • Decrease costs
The SIP methodology focuses on operational improvements

Figure 2.1 The SIP methodology focuses on operational improvements.

  • • Increase machine and labor productivities
  • • Decrease cycle times
  • • Initiate cultural change

By this method, the systematic and ongoing planning and development basis of a business will be established. As a result, a sustainable profitability and a stable competitiveness will be achieved. Table 2.1 shows real-life examples of the benefits of SIP. Monetary gains to be acquired may remain below intangible gains as a value, for example, increased confidence among employees, acquisition of new skills and greater energy.

The following are the basic advantages of SIP over other methods:

  • • Among all levels of business, it uses the same financial language for setting targets and tracking and evaluating successes.
  • • Selection of improvement techniques and implementation fields is based on financial losses within the business typology.
  • • Key performance indicators (which are related to financial gains) are used as indicators of the success of the implemented techniques, without incurring losses.
  • • By integrating implementations into daily activities and business processes, SIP is perceived as a set of routine activities by employees.
  • • SIP focuses not only on productivity and profitability improvement but also on eliminating root causes (losses).

Table 2.1 Examples of Results-Based SIP Benefits




Lot size

2 weeks

1 week

Number of flow points



Total distribution distance (mt.)



Annual total distance (km.)



Trans. from Inventory (no. of parts)

The system pays for itself in six months




Lot size




$ 30.000


Total distance moved (mt.)



Total cycle time

4 weeks

2.5 hours

Scrap (monthly $)



Labor productivity




Labor productivity



Number of workers



Throughput time

2 days

1 hour

Decrease in inventory:

Raw materials

6 days

1 day


1.4 days

1 day

Finished goods

4 days

1 day

On-time delivery



Other improvements:

Decrease in product cost


Decrease in materials trans.


Decrease in space


Source: Hales, H. L., and Andersen, B., Systematic planning of manufacturing cells. Dearborn, MI: Society of Manufacturing Engineers, 2002.

However, the success of SIP especially depends on

  • • Commitment of the management
  • • Acceptance of program targets
  • • Involvement of all management levels and employees
  • • Systematic control of implementation
  • • Responsibility for implementation at the management level
  • • Integration of project implementation in day-to-day business

Although SIP is used mainly on the shop floor of manufacturing companies, it can also be used to an even greater extent in many organizations outside the manufacturing realm: professional firms, sheltered workshops, hospitals, retail stores, and schools, to name a few—in other words, wherever people have a desire to get meaningful improvement results.

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