Continuous Improvement as a Business Strategy

Continuous profit as a Business StrategyThe case study focuses on Corus, Europes second largest leaf blade manufacturing comp some(prenominal) and their efforts in following the path of Continuous Improvement to produce quality product in a timely manner by streamlining their playes and trim the wastage of resources. Corus is a subsidiary of Tata Steel, one of worlds top ten steelmakers.In their own words, Corus aspires to be the worlds steel constancy benchmark for value creation and corporate citi loony toonsship. Corus is a leading supplier to most of the demanding markets around the world including construction, automotives, packaging, mechanical and electrical engineering, metal goods, and oil gas. With innovation and continuous improvement at the heart of its business organization coifance, Corus aims to create value by offering a differentiated product range supported by unrivalled customer service. 1The challenge that Corus faces in differentiating its products from t hat of its rivals is that, steel is a relatively inexpensive product and in major building projects, the greet of steel can be as little as 5% of the overall cost of the project. It is also a contest task to meet the rising demand for steel, at increasing levels of quality and to comply with challenging delivery requirements. While it would be an easy task to meet these challenges using brand-new facilities, an investment of more than 300 million Pounds to build a Greenfield come out steel mill is an impediment. Therefore, Corus decided to focus on the path of Continuous Improvement, commonly known as CI, at its steel plate manufacturing mill in Scunthorpe, to achieve emergence efficiency, quality and delivery improvements with its animate manufacturing pin downup.What is Continuous Improvement?Continuous improvement, with respect to organizational quality and performance, focuses on improving customer merriment through continuous and incremental improvement processes, removi ng or minimizing unnecessary activities and delays in product delivery and also minimizing defects in the products being delivered. Several organizations have gained a competitive edge by implementing Kaizen, commonly known as continuous improvement (CI).The philosophy of Kaizen was spearheaded by Masaaki Imai, and is constituted of two words, kai which means change and zen which means good as well as wisdom. Hence we can conclude that Kaizen implies changes for the discover and covers all processes in an organization manage Engineering, Information Technology, Finance, procurement and Supply, Customer Service and Manufacturing.CI can be initiated either at Top Management level or at Process level found on effective feedback system. The most important factor is that, all employees should be responsible to make improvements and must elaborate together to identify the steps un rid ofable to improve the efficiency of the overall process, in an iterative manner. This requires thor ough supervision, flexible work overstretch and technology to improve business efficiency.When an established organization like Corus attempts to differentiate its products or services from its competitors in the industry, CI can be the Differentiation or Focus competitive strategies which can sponsor the organization grow.Corus has use CI of flow where the products be pulled through a carefully planned production process from the supply of raw steel to the finished steel plate. The process is paced and scheduled to control the amount of product in each stage of the process, to keep bottlenecks to a minimum and to maintain high quality.A part of the CI process involves the mea currentment of improvements to gauge, whether the improvements have resulted in benefits. These results can be reducing waste time, saving money and efforts, or better utilization of available resources. These are the tangible benefits of the implementation of a CI process. The intangible benefits volitio n include great staff motivation and increased job satisfaction3.In Corus, improvement is gauged with the help of a set of new Key Performance Indicators (KPIs) focused on shock customer deadlines, such as zero backlog of customer orders and meeting targets for rolling steel plate in its allotted week.Thus benchmark level can be set and attempts can be made to better that level in an iterative manner.When Why CI need to be implemented?It is human nature to feel secure in ones comfortable surroundings of a CASH COW organization and therefore people are hesitant towards big changes. Some of the most common excuses that people give to avoid changes at workplace are1) Its been done in this way for a long time2) We know theres a better way but theres not lavish time to fix things3) I dont get paid extra to think4) Its not my problem but someone elses problemHowever, a key aspect of implementing CI is the fact that it does not deal with big changes, but with smaller ones that outcom e less time to implement at minimal cost. Also, an arouse aspect would be that it gradually transforms and brings about what one can call a big change without people being hesitant and overcoming their apprehensions. The objective is to minimize cost by leveraging the existing knowledge pool and gradually implementing changes.The key of effectively implementing CI is that it has to become a part of the organizations culture and gain consensus from the work force and stake holders. Like in the Corus case, moving from Tonnage, the traditional key measure of productivity to the smooth paced process of CI involved a significant work culture change for the employees.Initiation and integration of CI1. Collect feedback from the horses mouth It is imperative to understand the operations at the ground level from the people who perform the tasks on a regular basis. By asking for ideas and by listening to those that know how the job is currently performed you will achieve a much greater buy- in from your teams2. Place checks and implement improvement process cycle Not jumping to conclusions is the key here. Put into practice the steps of Plan, Do, Check and Act known as PDCA ModelPDCA a simple model for CI implementationPlan the plan phase constitutes of setting objectives and goals that would form the guiding path for the entire process of improvement.Do the Do phase requires the testing of possible alternatives and arriving at a solution that would comply with best practices and industry benchmarksCheck In this phase, the effectiveness of the action phase is evaluated to hold back the success of the plans and also to see if any negative consequences have arisen.Act The act phase is to implement the tried and tested processes and form the new standards. If the processes are unsuccessful, then(prenominal) the cycle is repeated till the time desirable results are attained.Even after the process has been established, the implementation of CI is not over. The goal o f CI is to set newer and more efficient benchmarks. This philosophy has to become a part of the organizations culture.For example, in the Scunthorpe plant of Corus, a CI manager co-ordinates the process and 40 CI coaches elect from the workforce received training to quicken improvements. A toolbox of techniques has been put together to help managers, employees and operators understand where and how they can improve their work and come up with new ideas to change processes for better. Scunthorpe plate mill has set out a 5-year vision improvement plan which will help in the process of develop a CI culture for the business and has held workshops for employees to understand the vision and change since it was recognized that people might be resistant and cling to old shipway of working. The 5 year-plan, established a timeline for the thorough acceptance and implementation of the CI culture among employees so that by the end of the 5-year period, the team and individuals are empowered to take responsibility and make decisions for themselves.Tradeoffs in implementing Continuous ImprovementAlthough several companies have benefitted from implementing CI, its quite interesting to see that something this innovative and cost effective could also jump the organization from its path to success or even create a new bottleneck in the entire process.At times CI may lead to a trade-off between self-management and discipline 5. Over engagement and a lack of prioritization in implementing new wave CI manufacturing strategies by wait line managers and operations staff has actually led to a tradeoff between their core operations related work and CI related activities. Often, CI strategies led by an over-enthusiastic HR has caused them to over strategize which is a new bottle neck in itself and often goes unnoticed. Thus it is quite important to make sure that less than 7% of the total work time may be spent by such key operational personnel on CI oriented dodge development so that their core operational responsibilities may not be diluted beyond an acceptable limit.Another very interesting drawback that has been noticed is the invert effect of over emphasis on the implementation of CI Practices on the expense v/s quality competitive strategy model 6. In her study, Barbara Flynn has very effectively shown that an uninterrupted iteration of CI programs for the reduction of cost price would ultimately result in increasing price since perfection always comes at a premium. Secondly it was also observed that in the quest to achieve the goal of CI within its tropeated time period, the labyrinthine untested assumptions about the relation between process and outcome are often deliberately not studied in depth. Managers prematurely conclude that any detrimental effects of implementing the new plan would be taken care of in subsequent CI programs 7. Thus such complacency could result in mission failure at the nth hour.But still, careful and well planned implemen tation of CI strategy is effective because it keeps production processes under control, promptly trains production personnel to effectively manage production and possesses the flexibility to slot improvements into production schedules with minimum disruptions and at least effective cost. 8Continuous Improvement in action at FORD India (A firsthand account) 9Cost Reduction activity has become one of the major activities in any industry especially in Automobile field with ever increasing competition.The following is a firsthand account of Continuous Improvement initiate undertaken at traverse India for Cost Reduction.The Front End Module of the car is a plastic molded steel reinforced part, supplied to Ford by a Vendor X. The stimulant weight of the steel portion in that is 4.0 Kg and its output weight is 1.0 Kg. With 25% yield, Ford saw the scope for cost reduction in the preceding(prenominal) module.Normally for any steel part, yield of at least 40 to 50% is expected. Hence, the only way to reduce the cost would by reducing the stimulant weight. After several discussions with technical department, Ford decided to optimize the design to reduce the input weight and proposed the modified design to the vendor. Various trials were conducted and accordingly the design was altered without compromising on the quality of the final part. After several iterations, the new design was approved by the quality team. Minor modifications were made to existing tools in order to work with new design.This Continuous Improvement initiative not only reduced cost but also reduced the conflict content and process time.Suggestions for CorusCorus has implemented lean manufacturing method of CI, which has really improved its deliveries and quality but only in an internal manner. Yet another place which can be facilitated through external feedback is available in the form of WOWing the customer. What we feel is that, Corus should start to simultaneously work upon gaining better cu stomer feedback to facilitate continued product design improvement. This combined effort will enable them to suggest improvements in the product demanded by the customers which may exceed the customers expectation and will make them feel that they are getting a value for money preposition. Thus this would add to their customer satisfaction, retention and self sustainable associations which would be mutually beneficial.References and Bibliographyhttp//www.corusgroup.com/en/company/about_corus/http//en.wikipedia.org/wiki/Kaizenhttp//www.helium.com/items/558484-what-is-a-continuous-improvement-plan?page=3http//www.helium.com/items/558484-what-is-a-continuous-improvement-plan?page=2Continuous improvement the trade-off between self-management and discipline Author(s)Alan Harrison JournalIntegrated Manufacturing Systems6, 7, 8- Achieving simultaneous cost and differentiation competitive advantages through continuous Publication Journal of Managerial Issues by Flynn, Barbara B.9. From act ual work experience of Santhosh Srinivasan