World-Class, Lean Performance in the SMEs - Small and Medium Enterprises - by Carlo Scodanibbio, Industrial & Business Consultant - Lean Management Consultant

Carlo Scodanibbio
Industrial & Business Consultant
Lean Management Consultant

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Performance Management - 3
Performance Improvement

The starting point is known. The direction is now identified. The distance to the target is known. The road is there, wide open....
Now it's time to get there.

Still, things are not really easy. The road can be very tricky....
There are a couple of points to be taken into due consideration and to be clearly verified before embarking in the trip:

  • The one involves a final check of the direction.
    Yes, in spite of all benchmarking initiatives undertaken, and in spite of the good homework made by people, it is always recommended to do a final check of the priorities.
    Real and solid Performance Improvement is always addressed, as a rule, to improve all critical, core processes of the enterprise.
    All the rest may be spurious, fictitious improvement.
    This final check prevents the "toilet paper mistake" from happening. Yes, it's a real, extreme case, that I have seen: some 8 people doing by-the-book, according to the best rules, a 2 hours creative team-work aiming at improve/rationalise the toilet paper distribution system within the enterprise... an enterprise needing well different type of improvement....

    This can only happen when directions are not clearly set and understood. This may happen when, spontaneously and naively, people are trapped in the "improvement syndrome", and disperse their time and best energies at 360 degrees, enthusiastically playing with continuous improvement tools like children play with new toys....

    Performance Improvement needs a strategy based on directions; a plan; a strong driving guide.
  • The other concerns the improvement style.
    There are two main ways (and all possible combinations in between) of improving things, corresponding to 2 different styles.

    The one way is kairyo style.
    The Japanese word kairyo means (liberally adapted) large-size technological upgrade. Or, approaching improvement: via large-size expenditure for large-size technological revamping - in a short time - filling the performance gap with a well defined and planned "jump" from the present status to a superior-performing status.

    The other way is kaizen style.
    The Japanese word kaizen means (liberally adapted) step-by-step, continuous improvement. Or, approaching improvement: via a regular, systematic process in little steps - as inexpensively as possible in terms of capital expenditure associated to improvement - in a longer time - filling gradually the performance gap from the present status to a better performing status which is a "moving target" (....the sky is the limit....).

    The difference between the two styles is obvious: they are different in terms of time, money, risk and approach.

    The kaizen style, revised to face the challenges of the years 2000 and adapted to fit western industrial cultures is the most suited to the SME aiming at real improvement in its overall performance.

this topic is now available in an e-course!!
The topic: Creative approach to Improvement Kaizen style is dealt with in Carlo Scodanibbio e-course
Creativity: the ultimate, lean resource for the years 2000
See full details of this e-course - click here

Making things happen in a "revised" kaizen style implies following certain principles and adopting certain tools. The following are the main features of the years 2000 approach to Performance Improvement:

  • Team-work. This is an essential condition for achieving good levels of performance improvement.
    The principle is simple: "...the Pope and the Peasant together know more than the Pope alone....".
    Well organised and co-ordinated teams have a global "power" far superior to the sum of each team-member individual power.
    Co-ordination is essential. However, in the SME, a team co-ordinator is not to be confused with a "chairman". Things must be as informal (but still disciplined) as possible.
    All rules of good, efficient and effective team-work apply.
  • Poor-man approach. This is another essential condition for a kaizen approach to performance improvement.
    Jumping to improvement by means of spending money is more appropriate in a kairyo approach. In a kaizen approach the focus is on clever, smart, inexpensive ways of achieving improvement.
    Since the poor man has no money to throw at things, he rather uses his brain. This, in the medium-long term, generates more wealth than the "money" approach, and lots of wisdom and cultural energy for the team members.
  • Brain-power. Yes, this is the real power of kaizen.
    Solid, systematic, well-targeted creative thinking. The main "lever" of the new-world enterprise.
    Team thinking "channelled" not only to solve problems, but also and mainly to eliminate them once and forever. Thinking for spotting and developing opportunities. Thinking for identifying process improvement ideas.
    All rules of Creative Thinking in Team including the De Bono "6 thinking hats" approach apply.
  • Intelligent use of tools and techniques. There are dozens of them available (more »).
    Selecting the right technique/tool for a certain improvement action is fundamental.
    Available tools include (but are not limited to):
    • Pareto Diagram and ABC Analysis. To understand and quantify phenomena.
    • All Creative Problem Solving techniques, from Kepner & Tregoe methods, to Brainstorming, to TPS - Total Problem Solver
    • All old and new Quality Tools, including Control Charts, various Diagrams, the Cause and Effect (Ishikawa) Diagram, the Relations Diagram, the Affinity Diagram, Matrix Diagrams, etc.
    • The P-M Analysis
    • CEDAC (Cause and Effect Diagram with the Addition of Cards)
    • and many others
    Tools are only tools. They are necessary to produce one or more alternative solutions or paths to improvement.
    The mature Team knows which tool is the most appropriate in every situation.
  • Decision-making. Essential to enable a Team to decide on the most appropriate course of action when several alternatives have been identified.
    Some decision-making tools are very helpful at this stage.
  • Planning the implementation. To transform a decision into a practical course of action.
    Project Management abilities and Planning Tools are essential to enable the Improvement Team to set an efficient and effective plan of action that will generate the wanted improvement results.
  • Monitoring and controlling. Essential to ensure that the Improvement plan of action is actually implemented as planned (time - cost - effectiveness parameters).
  • Assuring steadiness. Preventing the achieved improvement to dissolve like mist in the sun....

It's very important to note that Performance Improvement is always "global". Improving quality at the expense of lower productivity (or vice-versa) is not improvement, but just re-shuffling waste.
Improvement is improvement in process' performance. As such, all factors of performance should increase simultaneously. When that is not possible, it is essential to ensure that no performance parameter will worsen as a side-effect of the improvement action.

The conclusion: today's Kaizen should be Lean Kaizen, Kaizen targeting at the lean direction, Kaizen structured along healthy principles of Lean Thinking (more »).

Definitely, the best practical way to set Lean Kaizen Projects is through the deployment of the Value Stream Mapping discipline (more »).

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