Manufacturing Strategy for Window Fabricators 17 - Continuous improvement

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Quality management is not simply a cost and a burden. It can be a real method of increasing profits but only when it is used correctly.

 
A review of the basics by Robin Kent of Tangram Technology.

  Download Adobe Acrobat file of complete series to date

The basics

Many fabricators think of quality as a cost instead of thinking of it as a potential tool for cost reduction. The reality is that quality is a cost only if you let it be, it is only a cost if it is used simply as a badge to complete the set of 'Logoland' badges. Quality can be the most effective tool available for cost reduction but only if it is used rather than treated as an on-cost and then ignored.

Many fabricators have a Quality Management System to ISO 9001 or similar but how many have made recent changes to the system to reduce costs and save money? These are not the changes that are made for compliance with the standard, these are the changes to the system that are made to reduce the paperwork, to simplify the product and to reduce costs, this is about using the quality management system as a tool for continuous improvement and continuous cost reduction.

Continuous improvement is so important that when ISO 9001 was changed in 2000 it was modified to include continuous improvement as part of the new requirements. The current standard is explicit in requiring continuous improvement as an essential part of the quality management system.

The quality system that was first put into the company should have changed dramatically by now, especially if the system has been in existence for more than two years. Quality systems are not engraved in stone; the systems should change as your operations change and as the systems should act as a driving force for change instead of a sea anchor. Documenting the processes for the quality management makes redundant processes, complex systems and redundant paperwork very visible: if you are not using the system to remove processes, simplify systems and remove paperwork then the system simply isn't working or you have the wrong system (or both).

Hands up those who haven't changed their quality system recently.

The initial gains from continuous improvement can be spectacular and in most cases are essentially free. Not only that but using the quality system to lock the gains into place results in the gains being retained and achieved every year - these are not one time savings but permanent cost reductions to the operating base of the company. 

Typical savings that can be made are shown in the table below:

 

Area/Activity 

Potential Savings

Waste minimisation improvements

2 - 3% of turnover

Energy efficiency improvements

1 - 2% of turnover

Quality system improvements

5 - 6% of turnover

Business process improvements

5 - 6% of turnover

Total

13 - 17% of turnover


These are typical possible savings based on our experience for an average firm. Individual firms may differ depending on the exact situation.

These savings are much greater than the profits of most fabricators - imagine doubling profits or reducing prices to increase business whilst still retaining good margins!

What is it about?

Continuous improvement is not about directly improving the features of the product; it is about improving the processes used to make the product. Controlling and improving the process always leads to improvements in the cost, reliability and control of the product.

Control of the process through continuous improvement automatically leads to control of the product; equally a lack of control of the process automatically leads to a lack of control of the product. End-of-line inspectors do not add to the control of the process and therefore do not add to the control of the product, they are after the event. If you have to have end-of-line inspectors then you do not have control of the process and are paying the inevitable price.

How do we do it?

The first part of continuous improvement is to find out what to improve. This might seem basic but it is very important not to rush off and 'improve' the first thing you see or the first thing you think off.
One of the worst mistakes is 'coincidental correlation' where people think that because Event A happens before Event B then Event A must have caused Event B (this is often which is expressed in Latin as 'post hoc ergo propter hoc' or 'after this therefore because of this'). An example of this might be 'I took this cold remedy and after two days my cold got better, therefore the cold remedy cured me'; in reality the cold was going to get better in two days anyway. Don't let your only exercise be jumping to conclusions!

The secret to the decision about what to improve is information, information and more information. Information is not the same thing as data - data is simply numbers but information is power. Two of the best techniques for rapid analysis of data to provide information are:

Above all, continuous improvement relies on the Action Cycle (Measure, Record, Analyse and Act) shown below, follow this ruthlessly and you cannot go far wrong.


If you have no idea where to start then Cause and Effect Analysis (Fishbone Diagrams) will give you a range of ideas about where to start.

For details of these and other important techniques see GI-Toolkit-1.html as a starter.

Two secrets

There are two simple secrets to continuous improvement:

You have got to want to do it - Unless you actually want to improve then you will never improve the way you do things. This might seem self-evident but the majority of people don't really want to change things and would rather continue doing what they have always done. You (and the rest of the employees) have got to be prepared with the discomfort of changing the way you do things. Most 'managers' don't want to manage, a process that involves constant change, they want to administrate, a process that involves keep things constant for as long as possible. Real management and important changes always involve a discomfort factor that gets higher the more important the change.

You've got to measure how you are doing both before and after the changes - Changes should always be tested and measured to assess their effectiveness before full roll out and those that do not deliver the results should be dropped. Not all changes will be a success but that is OK, do we expect every sales visit to result in an order? Fast failure and a quick recovery is better than a slow descent into chaos.

Change is the only constant

Some people get excited about 'quality' but in reality it is pretty boring. The thing to get excited about is how you can use the existing quality system to increase profits. The opportunity and system are there - you simply have to use them.

To answer the question at the start of the article: Are we there yet?, the answer is simple: 'No', and the reason is also simple. Continuous improvement is not a destination, it is a process that never really ends, it is a constant effort to improve the business processes to reduce costs, save money and improve profitability - these are activities that can never end if you really want to survive.

'Manufacturing Strategy' Series.

The 'Manufacturing Strategy' series is designed to give window fabricators a set of ideas for managing production. The series is being published in Fenestra on a monthly basis and published here after the Fenestra publication. The series is:

Part 1: The Essential Part 
Part 2: The Systems
 
Part 3: Just-in-Time

Part 4: Optimised Production Technology

Part 5: Work Cells

Part 6: Machines
Part 7: Machines (2)

Part 8: Scheduling

Part 9: Waste (Methods)

Part 10: Waste (Materials)

Part 11: Supply Chain

Part 12: Measurement
Part 13: Things to do NOW!
Part 14: The Cost of Quality

Part 15: The Hidden costs of inventory

Part 16: Environmental management

Part 17: Continuous Improvement

Last edited: 11/03/10

© Tangram Technology Ltd. 2005

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