Kaizen (continuous improvement) has its place
Kaizen (kai = change and zen = good) means 'good change' and refers to any sort of improvement - one off, continuous, breakthrough or small. However, Kaizen has come to stand for continuous improvement or philosophy of improvement following the way the label has been used widely in Japan and by pioneers of the movement. Kaizen is described by Imai (1986) as the 'the key to Japan's competitive success'.
Kaizen is a philosophy centred around continuous improvement of processes in manufacturing, engineering and business management and seeks to involve the entire business as well as the supply chain (Imai, 1986). Kaizen seeks to improve standardized activities and processes as well as eliminating waste and integral to the concept is the idea of nurturing human resources and having those involved participate in driving continuous improvement. This could be a formal large team improvement initiative or simple approaches where those involved in a process or delivery are encouraged to make suggestions for improvement.
Continuous improvement is frequently cited as the same as or originating from Kaizen, which is true in part however the concept is also found in work from other pioneers such as W Edwards Deming, where principles of continuous improvement are embedded within a system to improve towards goals informed by ongoing feedback from customers and form the process.
Continuous improvement with suppliers is therefore an ongoing effort to improve products, services, performance, capabilities or processes through incremental improvements over time or breakthrough (all at once).
Adopting a multi-step process such as DMAIC, Juran or Kotter
It seems there is an improvement process of one sort or another for every possible occasion. Search on 'improvement process' and you will be spoilt for choice. Many of these are processes created or adapted for a particular industry or group of people with steps modulated to the area in question: five steps to improve healthcare outcomes, six step high school improvement process, 10 steps for automotive process improvement and so on. The point here is it seems the process of driving improvement needs to be designed with the purpose in mind. Across all of these the underlying steps are generally common but modulated differently to purpose and number of steps. In fact, after more than 70 years, it is still hard to question the utility and elegance of Deming's Plan-Do-Check-Act approach that, as I said earlier, can be seen behind most improvement processes out there. Three notable and perhaps the most common are DMAIC, Juran's six steps, the 8D's and Kotter's eight steps.
DMAIC - (pronounced Duh-May-ick) is a data driven problem-solving and improvement tool from the world of Six Sigma. Motorola recognized that there was a pattern to improvement (and use of data and process tools) that could naturally be divided into five phases of problem solving (George, 2002) as follows:
1 Define - the problem, goal, scope, available resources and any time constraints. Typically this would be captured within a Team or Project Charter.
2 Measure - using facts and data to establish and measure the current position to give a base line and identify the gap between current position and the goal.
3 Analyse - identify the root cause of the problem, what is constraining or preventing improvements or what would need to change to enable improvements.
4 Improve - determine, plan and implement the required improvement.
5 Control - sustain and monitor the improvement and embed as needed.
DMAIC is useful as it expands Deming's plan step much more to be clear about what we are setting out to do, to analyse the current position, to identify root causes or constraints before planning what we are going to do. This is a crucial sequence of activities for supplier improvement as it guides our intervention so as to respond directly to what needs to be improved, perhaps based upon our KPIs, business or relationship requirements.
Juran's Six Steps - Juran's six steps of problem solving originate from the world of quality improvement and is typically applied as part of a quality improvement project within an organizational culture that supports such an approach. Success demands the use of effective cross-functional team working to deploy the approach and adopting a 'breakthrough attitude', two key factors in SRM and supplier improvement as well as in category management. Juran's six steps are (Juran Institute Inc, 2013):
1 Identify project - adopting a breakthrough attitude.
2 Establish the project - set and verify a clear goal, form a cross-functional team.
3 Diagnose the cause - analyse symptoms, confirm the goal and establish root cause of the problem.
4 Remedy the cause - identify options then select, design and implement new arrangements so to eliminate, reduce or neutralize the root cause.
5 Hold the gains - introduce controls to maintain process and new arrangements.
6 Replicate and nominate - apply the results and learnings more broadly.
The 8Ds - an improvement cycle commonly used and probably originating from Ford (Bicheno and Holweg, 2009) is the 8Ds or Disciplines:
1 Form a team.
2 Contain the symptom.
3 Describe the problem.
4 Find the root cause.
5 Verify the root cause and select the corrective action.
6 Implement permanent corrective action.
7 Prevent reoccurrence, make the solution standard.
8 Congratulate and celebrate.
Kotter's 8 Steps - finally, driving improvement of any kind involves change. Poor change management and specifically failing to understand and reduce the impact of resistance to change is one of the leading reasons why projects fail. John Kotter's 8 steps for leading change (Kotter, 2012) focus on how organizations need to link with individuals, groups for change to be successful. The Kotter 8-step model therefore provides the steps for effective change management with an emphasis on acceptance and preparedness for change.
1 Establish a sense of urgency.
2 Create a guiding coalition.
3 Develop a clear shared vision.
4 Communicate the vision.
5 Empowering people to act on the vision.
6 Create short-term wins.
7 Consolidate and build on the gains.
8 Make it stick - institutionalize the change.
This process is very different from that used to solve problems as it can help create a shared vision with the momentum to realize it between a firm and a supplier, and between purchasing and its stakeholders. Effective change management is therefore an essential component for supplier improvements and indeed supplier developments beyond basic corrective actions.
So where does this leave us?
Supplier improvement and development (SI&D) needs a process to drive it effectively. Any one of the approaches above would work; however there can be limitations when some of these are applied to suppliers. Many are overly process focused due to their manufacturing origin and so not immediately suited to aspects of developing supplier relationships. All have been developed either for improvement or problem solving, yet across the literature architects of these processes or commentators seem to use both terms interchangeably, however for suppliers there is a need to be clear about what we are trying to achieve; to solve a problem or make something good into something better. It seems in fact that the differences across the various methodologies out there are where we start, what is important, who is involved and what sort of outcome we need. Therefore utilizing established improvement processes requires some interpretation and adaptation for the supply base.
Alternatively we can use a new improvement process and one that takes advantage of and builds upon that which has been proven to be effective within the established approaches but also provides for the nuances of SI&D with individual suppliers and throughout a supply chain, specifically:
• adaptability - relevant for fixing simple problems or helping achieve dramatic step change improvement;
• preserving the end customer focus through business and relationship requirements;
• making it a business-wide concern with cross-functional contribution;
• adopting Juran's breakthrough attitude;
• incorporating sound change management principles; and
• simple and accessible for those of us who are not experts and something that can be deployed without the need for a black belt in something that sounds Japanese.
The STPDR process (Figure 7.7) seeks to incorporate these success factors based upon what is proven to be effective and this is explored in full in the next chapter.
FIGURE 7.7 Introducing the STPDR process
