Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

18.2.8 Project Management, Continual Improvement, and Reengineering

Intended learning outcomes: Differentiate between continual process improvement and (business) process reengineering.

Responsibility for projects in quality management can be assigned to everyone involved in the process, the “process team.” It is advantageous to define a “process owner” as a coordinator. Well-oiled teams of persons are preferable to individual specialists. The observation is generally valid that defects arise particularly if a process is beset with interfaces, where the process is handed over from one person to another person who acts independently of the first. Experience has shown that even if the interface is defined as specifically as possible, errors occur here, only because of the tendency of people to close themselves off from other organizational units.

The proponents of Six Sigma recognized early on that for successful project management for quality improvement, people must be trained and awarded special certification. Names that were chosen for the different levels of certification acknowledge Japanese origins: Green Belts, Black Belts, Master Black Belts. The first Black Belts acquired certification in the early 1990s, thus marking the beginnings of formalization that led to accredited certification programs in Six Sigma methods.

Because in Europe for a long time the Deming cycle did not catch on as an advantageous method, a new term was sought that would express an understanding of the Deming cycle as a permanent task. For this, the term CPI was coined.

Continual process improvement (CPI), or simply continual improvement, is a never-ending effort, a culture, in which improvement — usually in small steps — becomes the guiding principle: The journey is the objective!

With the introduction of CPI, the Deming cycle, once understood in a more static way, was made into a dynamic circle. Ultimately, the greatest potential can be set free only through influencing the behavior of the collaborating persons. Organizational measures can promote collaborative behavior, such as the collecting of proposals and suggestions in the firm, quality circles of employees, periodical goal and measures planning, campaigns, and so on. However, implementing the concept of CPI and the culture connected with it is difficult.

As customer needs change sooner or later, products and processes must change over time. Each change, however, entails the risk of errors. While quality control and quality assurance promote stability in the company, they are a priori hostile to change and therefore also hostile to improvement. The compromise solution may be to continuously improve performance through continuous incremental changes, without having to take too great a risk. For this, the Japanese use the term Kaizen [Imai94]. Here, the focus is not on achieving a specific level of quality, but rather a certain degree of continual improvement of quality.

Continual improvement as a whole is a continuous task and it does not have the character of a project. The individual incremental improve­ment measures as such, however, are usually carried out in the form of projects. For example, a project of this kind may attempt to:

  • Increase customer benefit. The additional expenditure has to be able to be covered by either higher prices or lower costs. Higher prices can usually be realized only if customer satisfaction can also be improved in a durable way.
  • Reduce the defect rate. The expenditure for the project and the connected investments must be covered by continuous cost savings created by fewer defects.

In contrast to CPI, what happens in new development is innovation on a grand scale.

Reengineering means fundamentally rethinking the company’s options for designing products and processes.

Business process reengineering (BPR) is improvement of business processes in big steps by fundamentally redesigning the processes.

Improvement in big steps through radical changes is then the task of quality planning in the first iteration of the corresponding Deming cycle. In the course of the further product and process life cycle, continuous incremental changes serve to improve company performance.

Course section 18.2: Subsections and their intended learning outcomes

  • 18.2 Quality Management Tasks at the Operations Level

    Intended learning outcomes: Produce an overview on the Deming Cycle (PDCA Cycle) and the Shewhart Cycle as well as the Six Sigma Phases. Present the phases of quality planning, control, assurance, and activation of the Deming Cycle. Describe the Six-Sigma phases of define, measure, analyze, improve, and control. Differentiate between continual improvement and reengineering.

  • 18.2.1 The Deming Cycle (PDCA Cycle) and the Shewhart Cycle

    Intended learning outcomes: Produce an overview on The Shewhart cycle developed in statistical quality control. Present the Deming cycle. Describe quality management tasks in the Deming cycle.

  • 18.2.2 DMAIC — The Six Sigma Phases

    Intended learning outcomes: Present DMAIC, the Six Sigma phases. Describe the tasks in the Six Sigma phases. Differentiate between DMAIC, RDMAIC, DMAICT, and DMADV.

  • 18.2.3 Quality Planning: PDCA Plan Phase — DMAIC Define Phase

    Intended learning outcomes: Identify the cause of differences between stakeholders’ expectations and actual product or process characteristics.