Continuous improvement in British manufacturing

Technovurion. 13(4) (1993) 241-254

Continuous improvement manufacturing*

in British

John Bessant, Jane Burnell, Rebecca Harding and Stephen Webb Brig&m

Business

School, University of Brighton, Falmec Brighton BNI 9PH, UK

Abstract Continuous improvement (Cl) - sustained, focused, company-wide incremental innovation - is increasingly recognized us a powe~ul potential source of competitive advantage. Experience particularly but not exclusively in Japan - suggests that major gains in quality, ~~ibili~ and cost saving can result from Cl programmes and as a result there is increasing interest in adopting this approach. However, although simple in concept, CI is dtf$cult to implement and maintain since it requires extensive o~anizational change and d~e~opment. This paper reviews experience with CI and outlines some of the key areas in which effective ma~agem~t of such innovations needs to be concentrated.

1.

Introduction

Achieving competitive advantage through a constant stream of incremental improvements in product quality and process efficiency has become an increasingiy important issue for many Western manufac~~~ during the lass decade. The attraction of continuous improvement is that it offers a low capital cost route which enables production to take piace at lowest possible costs and with greatest possible emphasis on quality. Recent attention has focused on the way in which Japanese manufacturers have been able to exploit this advantage, and the extent to which it might be possible to emulate this experience [l]. There are two issues emerging from this rather sweeping view of achieving competitiveness that *Any queriesconcerning the CIRCA project should he addressed to either John Gilheri or Sarah Caffyn. who are current research fetlows.

Technovation Volume 13 No 4

0166-4972/93/$06.00

this paper, and the wider research project it represents, seeks to address. First. the strongly ‘Japanese’ nature of these alternative approaches to manufacturing organization and management is now being challenged. Continuous improvement (CI) is not a new phenomenon. Examples can be found of the approach back in the 19th century, and it was clearly an important factor during the Second World War in mobilizing the energies, enthusiasm and creativity of factory workers towards solving the urgent problems of high quality, high output production for the war effort (2j. Manyofthe core tools and techniques involved in ‘just-in-time’ or ‘total quality management’ evolved in the West during the early part of this century, and, whilst they have undoubtedly undergone significant development and refinement within Japanese industry, are likely to be transferable to other non-Japanese locations. Strong evidence for this can already been seen in the case of the car industry, where some of the best plants in

Q 1993

Elsevier Science Publishers

Ltd

241

J. Bessant et al.

the world are now outside Japan [3]. For example. according to a recent survey, some of the best productivity and quality levels in the industry are now being achieved in Mexico where alternative ‘lean‘ production management systems have been transplanted. often to plants with relatively low levels of automation or sophisticated equipment 141. CI is a simple concept which can be applied to improvements across many dimensions of manufacturing; for example, it has been used to demonstrable benefit in improving quality, flexibility, delivery performance. service performance, product development cycles and inventory management. As such it can find applicability in all types of organization and across the entire spectrum of industrial sectors. It is also an attractive concept because it is low in capital intensity: it depends for its success not on expensive machinery but on harnessing the creativity and enthusiasm latent in all employees of the organization: for this reason it has particular potential for small- and mediumsized enterprises (SMEs). and for many firms in developing countries. A second major issue surrounds CI in that it is not necessarily easy to implement. It requires a radically different organizational culture to the one which prevails in most manufactu~ng sites and a commitment to a process of continuous change. It often leads. in the short term, to a decrease in organizational effectiveness as the firm has to learn to do things in a different way. Even in those cases where CI has been successfully established. it appears that the momentum and effectiveness of such programmes diminishes over time and poses a problem of long-term maintenance. The very nature of CI makes it a concept which involves new approaches to manufacturing based on constant and incremental changes in technology and organization rather than once and for all ‘step’ changes. There is thus a need for gradual organizational adaptation to change and a need for learning and development at all levels in the organization. This represents a long-term investment in the human resource base of the company. and a shift in the overall approach to its management.

242

Our paper explores some of the emerging challenges to Human Relations Management (HRM) practice which are posed by CL and offers an outline framework for further discussion in this area.

2.

Incremental

innovation

in context

Before we look at the human resource-related issues in CI, it will be useful to place it in context. CI is essentially about continuous incremental innovation, and so we need to examine the underlying literature and theory of innovation and its management within firms. Most studies of the innovation process have been concerned with major, discrete changes - not least because of the difficulties involved in researching continuous incremental change over a sustained period of time. In the practice of innovation management. most presc~ptions and recipes for success derive from analysis of such cases and from success/ failure studies of major innovations such as Project SAPPHO and its many replications [S. 61. Despite the difficulties of studying incremental innovation. there are several powerful arguments for giving it closer attention. First, its cumulative effects are often more significant than those due to discrete but occasional innovative leaps. For example, studies of the sources of improved productivity in DuPont rayon plants [7]. and of continuing improvements in petroleum refining performance associated with incremental innovation of catalysts IS]. provide powerful evidence for this effect, Similarly, the extensive literature on learning and experience curves [9] is primarily describing a process of continuous incremental innovation. Recent studies of Japanese industry suggests that the major improvements in quality. flexibility and other manufacturing performance dimensions are strongly associated with a consistent improvement pattern of kaizen - continuous through incremental innovations and problem solving [3, lo]. Second, despite its importance over the longterm, CI has been relatively under-researched and

Technovation

Volume

13 No 4

Continuous improvement

there are still gaps in our knowledge about the process and its successful management. Although there is an extensive literature on experience and learning curves. this can be criticized for giving the impression that these effects are automatic. whereas, as Bell and Scott-Kemmis ]I I] point out, this is rarely the case. There is clearly a need for purposive management input to create and sustain the conditions under which such learning takes place (continuous improvement through incremental innovation), but we do not yet have a clear idea of what forms that action might take. Some for creating a suitable genera1 prescriptions environment and establishing an innovative culture can be found in several studies [ 12-141, but there is, as yet. little systematic research on the specific requirements for continuous improvement, nor on how these might vary with different organizational circumstances. Third, there is a need to improve our understanding about the operational mechanisms whereby innovation can be managed successfully. Lessons about successful management of innovation have proved remarkably robust ]6] in that similar factors consistently emerge from a variety of studies - of product. process and service innovations, in different economic sectors. and even in different national environments. One reason for this may be that although valuable as general management precepts. they lack the specificity needed to operationalize them for particular circumstances. Different firms, for example, have widely differing mechanisms for establishing close communication through networks of internal and external linkages. Studying such tirms highlights the importance of having such close communication in creating the conditions for innovative success. but rarely gives enough guidance on the detailed ways in which such close communication can be achieved. Innovation studies need to move to a deeper level ofdetail. uncovering the kinds of firm-specific behaviour patterns - or routines as Nelson and Winter [15} term them - which contribute to success. and the different circumstances under which they are more or less effective. This is particularly true of incremental innovation which

Technovation

Volume 13 No 4

in British manufacturing

is much more closely tied up with the day-to-day pattern of organizational life, and which is likely to be strongly influenced by the underlying culture. Whilst there may be local environments within the for example. in R&D - where an ftrm innovative climate exists and where innovative behaviours can flourish, establishing such conditions across the whole organization and sustaining them for an extended period of time is much more difficult. The analogy might be drawn between glaciers and storm rivers: both have a profound effect on the geological environment. but do so in different timescales and in different ways. Managing occasional bursts of high intensity innovative activity, often narrowly focused on a few key functional areas or specialist groups. is likely to require different routines to those required for continuous incremental change across a broad front. As indicated earlier, most attention in studying routines for innovation has concentrated on the former, and there is a need to develop our understanding of the routines associated with creating and sustaining incremental innovation. 3. Experiences with continuous improvement To provide a focus for our discussion of human resource implications, it will be useful to review experiences in a number of case examples of continuous improvement. From this we can begin to identify common features and. in particular. highlight key human resource management questions. Continuous improvement is often wrongly assumed to be a Japanese invention. In fact, the process of actively encouraging employees to participate in the continuing incremental improvement of products and processes can be traced back at least to the Industrial Revolution, and one ofthe first documented examples refers to the Dumba~on shipbuilding firm of W. Denny and Bros. in 1871. The rules of this scheme provided for a reward to any employee who improved tools. machinery or

243

J. Bessant et al.

working methods or “. . that he has made any change by which work is rendered either superior in quality or more economical in cost”. Other early examples include the National Cash Register Corporation in the USA, which began its CI activities as far back as 1894. By the 1940s the company was receiving an average of 3000 suggestions per year, reflecting the power of mobilizing what the founder John Patterson called ‘the hundred headed brain’ 121.CI principles were a key feature of Western factories during the Second World War, where the mobilization of commitment behind a clear common purpose led to significant improvements in productivity, flexibility and quality. Subsequently, the impetus was lost, and several authors characterize the post-war period as one of relaxation and slackness, typified by the approach to quality which talked of ‘acceptable quality levels’, implying that it was sufficient to tolerate a certain level of failure providing this was not too high. The effects of this slackening off can be seen in the gradual decline of performance standards in manufacturing: Garvin [ 161comments, for example, that by the 1950s only 30% of the US Navy’s electronics devices were working properly at any given time! Nor was this a problem of increasing complexity in manufacturing: in the same book, Garvin mentions the case of the Martin Corporation which managed to supply a defectfree Pershing missile one month ahead of schedule in 1961. This achievement - remarkable in a context in which customers accepted delays and defects as inevitable - resulted from a refocussing of everyone’s attention on solving the problems barring the way to ‘zero defects’ production. As the company management reflected. ‘the reason behind the lack of perfection was simply that perfection had not been expected’. Although isolated pockets of CI can be found in post-war Western manufacturing. it is clear that the major (and highly successful) application of this concept until recently has been in Japan. In a society constrained by both a lack of natural resources and by the severe shortages of the postwar period, it is perhaps not entirely surprising that some attempt should be made to use what was

244

available more efficiently. Equally, the dominance of incremental improvement innovations could be explained by the shortage of investment capital and the limited access to technology confronting Japanese manufacturers in the late 1940s. What is harder to explain is the way in which CI has been sustained in Japan over a period of40 years - yet it is this continued application of the principles which has contributed so strongly to the impressive overall performance of manufacturing. To understand this we must look a little more closely at how some Japanese firms have organized their CI systems. The Toyota Production System has as its foundation ‘Improvement activities by small groups’ [ 171.Continuous Incremental innovation is seen as the common philosophy which enables techniques such as just-in-time manufacturing, Kanban and setup time reduction, to be used. The primary vehicle for Continuous Improvement. or ‘Kaizen’. at Toyota is the Suggestion Scheme, and through its 41 years ofoperation, the scheme has captured over 20 million ideas from employees in all spheres. The scheme has emphasized employee involvement. cost reduction and innovation. These on-going improvements underpin the Toyota Production System which seeks to drive out waste in all forms from the organization. At Sumitomo Electric the Continuous Improvement theme began in the mid-1970s. The company sought to develop a comprehensive incremental improvement approach that would harness the power of the workforce for solving problems. This approach, called CEDAC or Continuous Systematic Improvement. has been adopted by other organizations since, and continues to provide a generic and systematic framework for incremental innovation. The special features of CEDAC are described by Fukada [lS]: “Application of the CEDAC system vitalises improvement activities and promotes steady progress towards positive results. The CEDAC system establishes an atmosphere of continuous improvement. It enables people to make full use of their accumulated knowledge

Technovation

Volume 13 No 4

Continuous improvement

and experience. It eliminates a ‘shopping around’ environment, where people pursue one new management technique after another without perfecting any. The CEDAC system does not replace existing techniques but integrates and supplements them. The system changes organisational culture. Needed most in this change is day to day leadership in improvement activities by group leaders, foremen, supervisors, managers and senior managers.” Canon is another company which has evolved a comprehensive framework for Continuous Improvement. In 1975, Canon lost money for the first time in its 26 year history, and the Canon Production System was developed in response to this circumstance. The system aims to instil a habit of improvement by making improvement activity an inseparable part of everyone’s daily work. A variety of activities provide the vehicles for improvement from small group activities to company wide waste elimination programmes. Like Toyota, a suggestion programme is used. With 326 Ooo proposals made in 1982, the scheme grew nearly threefold by 1985 to 893 000 suggestions. However, this only put Canon in 13th place compared to the other top Japanese companies. The top company in 1984 was Matsushita Electric Industries. with 6.5 million suggestions [ 191. Historically, Matsushita did not attempt to be first to the market place, preferring to follow a strategy of promoting quality and price. and keeping manufacturing costs to a minimum. To enable this strategy a divisional organization was created which aimed to provide clarity, control and flexibility, advantages that are to be gained with smaller companies. To facilitate effective communication and co-ordination between divisions, four key functions were centralized - accounting, a corporate bank, and the personnel and training functions. People were highlighted as the company’s major asset. The founder and chairman. Konosuke Matsushita, has repeatedly expressed his aim as being to ‘instil an entrepreneurial spirit’ in the whole organization:

Technovation Volume 13 No 4

in British manufacturing

at the heart of our style is to get to the problem and fix it. Problems are expected to be isolated at the level where they occur. . . This is not a company where detailed remedies flow down from above.” ‘I

.

.

.

‘Acceptance time’ is a concept that is used to give people ‘time to accustom themselves to new ways of thinking about things.. .’ and is built into the ‘Matsushita way’ of doing business. At Matsushita there is also an employees’ creed which states that: “Progress and development can be realised only through the combined efforts and cooperation of each member of our company. Each of us, therefore, shall keep this idea constantly in mind as we devote ourselves to the continuous improvement of our company.‘* [ 191 Matsushita (the chairman) works on the philosophy that ‘a lot of little brains are superior to a few big brains when it comes to making organizations work properly’. So employee recommendations are actively encouraged, with an ‘open door’ to management. They are regarded as key to ‘making improvements on the shop floor and in the market place’. Some divisions obtained over 60 suggestions per employee. Each suggestion is ranked on a scale of 1 to 9. Rewards are given to about 90% of the suggestions. The best get companywide recognition. and there are various special awards and presidential prizes. In addition, two competitions are held annually with a substantial cash reward. The message given to employees is ‘Think about your job; develop yourself and help us improve the company’. A record is kept on the quantity and quality of suggestions, also providing a measure on employee morale. This highlights a fundamental difference between suggestion schemes in Japan and the US. Whereas US schemes tend to concentrate on those suggestions that have the potential to provide the biggest effect on business and the bottom line, the Japanese approach aims at getting as many employees involved as possible, and accepting many more of

245

the suggestions made. It has been said that the success of these schemes in Japan is due to their ‘belief in the need to endlessly make small improvements in everything’ (201. Another factor in success is that of making ‘tacit knowledge’ explicit so that it becomes available for incorporation into not only new technologies and products, but also becomes ‘internalized by members of the organization who are using this knowledge to enrich their personal tacit knowledge’ 1211. There have been a number of examples of successful transfer of this ‘organizational technology’ from Japan to other locations. In the early 1970s Matsushita bought the US manufacturer Motorola, which at the time was suffering problems of low productivity and poor quality. Three years after takeover by Matsushita, productivity increased by 30% and defect reduced from 150 per 100 sets to only four per 100 sets 1221.Ishikure [23] reports on a similar turnaround of an ailing US tyre manufacturer when taken over by the Japanese firm Bridgestone. On initial inspection, Bridgestone personnel decided that the low producti~~ and output were fundamentally related to poor quality performance. Surveys on image research confirmed this perception: amongst a wide sample of customers the company’s tyres were rated at a low level, and it was clear that this perception grew out of experience of poor quality and reliability. The result was that targets were set to improve quality such that within four years a fourfold increase in output and sales would be achieved. The slogan supporting this was ‘quality today will result in quantity tomorrow’. First steps were associated with simple improvements like housekeeping and awareness-raising about causes of quality problems. A major programme was then launched based on what the company termed the 4M approach - machinery, methods. manpower and material. Over a two year period. improvements or changes were made to 530 items covered under these headings. Amongst other changes was a shift from repair to preventive maintenance. and a move towards source inspection at every stage. However. as Ishikure points out, ‘Manpower proved to be the most difficult problem.

246

The improvement of machines, materials and methods was not enough to produce high quality tyres. It was also essential to instil the concept of quality in the minds of all employees. To achieve this we had to alter past behaviour patterns’. Considerable efforts were expended in changing the culture of the company away from ‘us and them’ divisions between different levels in the hierarchy and towards team-building and shared ownership of the quality problem. This was backed up by extensive training in the principles of quality management, and especially the ideas of statistical process control. As with many quality programmes, the cycle of ‘Plan-do-check-action’ was established as the responsibility of every member of the company rather than separated out into planning by management, action by workers, checking by supervisors, and so on. Quality circles were established to build upon the growing contributions made by employees to identifying and solving problems in the quality area. Significantly, a major culture shift was in the value that it is a good thing to report problems. Under the old system mistakes and errors were rarely reported because of the dominant fear amongst employees of being reprimanded for making mistakes. In the new system. reporting of mistakes was actively encouraged. such that by 1983 around 30 incidents per month were being reported. Each of these provided a valuable clue about where to focus problem-solving attention. The results of the programme were impressive; by 1985 tyre quality was at a comparable level with Bridgestone tyres produced in Japanese plants, and the US market were rating the product as the best quality in the field (an accolade which was also achieved for the following three years). Production volume increased 3-fold with a corresponding increase in sales. Productivity doubled and percentage defects were reduced by 50%. Many UK companies have also organized for continuous improvement. and it will be useful to examine the experience of two typical organizations. In 1980, recognition of the need to create a more product/customer-oriented company, switched emphasis from what were referred to as ‘technical’

Technovation

Volume 13 No 4

Continuous

solutions to ‘methodological’ solutions within a major automotive components supplier. This took a variety of forms; at one plant it led to the development of Process Improvement Groups (PIGS) which provided a primary vehicle for developing continuous improvement. Some of the tangible benefits gained from the PIG activities include reduced variability, shorter lead times, improved productivity, and other benefits include a better satisfied customer base and improved operator awareness. Methodological changes are on-going, and a major focus is gaining the desired attitude to improve things rather than just handing over tools that can be utilised. The view is that if employees have the right attitude then management can give the skills necessary to enable and empower. Projects for process improvement are mainly identified by management, although some come through the employee suggestion scheme. Analysis, involving PIG members and management, is initially carried out to decide on which projects to concentrate. A Process Mapping tool, QMAP, is then used for setting out procedures; what has become very important in this process is that the project definition is clear and that strict boundaries are drawn up. A PIG is then selected and each member of that group is taught the seven tools of quality. Process improvement projects usually last between six and nine months and about l-2 hours a week meeting. A direct product of this process is an Improvement Guide which is constantly updated. Efforts are recognized through a reward structure, and members of the team are presented with certificates and a folder on completion of the project. Since July 1989. 26 projects commenced and from these 15 have been completed with a resulting f1/2 million saving. The results and learning from these projects are often communicated to other sites in the group. Another UK company in the computer manufacturing business has a long history of both radical and incremental innovation. the latter promoted through a series of initiatives such as quality circles and suggestion schemes. In 1988 they found themselves in the unfamiliarposition of

Technovation

Volume

13 No 4

improvement

in British

manufacturing

having fallen behind in the market place, and a new initiative was introduced which required that all products and processes have improvement in place. The improvement project scheme is essentially an offshoot of quality circles. An average 60% of employee involvement was achieved through 350 improvement projects in 1991. More specifically. the CI improvement projects under the scheme have 80% employee involvement, which is seen as a fair indicator as to the culture and commitment of the site. As one senior process architect explained, ‘It is the dedication of people, the commitment ofpeople that is the key to CT. The message is strongly reinforced throughout the site: for example, the in-house magazine carried the message: ‘Continuous improvement is primarily a pride or survival issue. It means that everyone in the organization saying however good we are now, we can still do better’. Quality training is given such as SPC, department quality measures, quality tools, Taguchi, Ishikawa, etc., and quality improvement procedures are available on-line and also as courses. There are similarities between both companies; for example. both have a reward/incentive mechanism, including team awards and a merit pay plan. Both have employee suggestion schemes, and whilst involvement is a good morale booster. it has been recognised that more careful deflinirion of problems is required. It is important that problems (or opportunities) are seen as achievable, that realistic targets are set and that the velocity of improvement is considered.

4.

Characteristics

of Cl programmes

From this brief review of a few examples it is possible to distil some common features and characteristics of CI programmes. First, they need to be supported and promoted at a strategic level; to use the jargon of current programmes, there needs to be a ‘vision’. and this needs to be clearly communicated throughout the organization. But,

247

J. Bessant et al.

as Tranfield and colleagues point out [24], vision is not sufficient; there also needs to be employee participation and commitment, and there needs to be a set of tools and processes to enable continuous improvement to function. Second, there appear to be two distinct phases in CI programmes: a short-term intensive activity around achieving significant improvements followed by a longer-term process of more gradual change. This cycle of ‘sprints and ratchets’ [24] implies the need for a regular input of strategic direction to maintain the momentum of CI programmes. Establishing a cycle (such as the famous Deming wheel of ‘plan-do-check-action’) still requires that the wheel is given a push from time to time to keep it moving. Implementation of suggestions is also a critical area; as Hoffman and Kaplinsky [25] report, it is not simply that Toyota (and other companies) obtain hundreds of thousands of suggestions every year, but that the vast majority of these (96% in 1985) are implemented by management. Once again, this appears to be of central importance to the question of maintaining momentum; there is a clear, almost Skinnerian, pattern at work which requires that employees are encouraged to submit suggestions and motivated to repeat the behaviour because of the changes which they see resulting from their suggestions. Without such reinforcement. it is likely that the attitudes and behaviour patterns established during the initial phases of a CI programme will quickly decay and the organization will revert to more traditional patterns. Central to all the CI programmes reviewed is the concept of training not as a cost but as an investment in developing a key business resource. This implies a mixture of training in tools and techniques (such as statistical process control or the ‘seven tools’ of quality management), and also a training in more general awareness of the business. the strategic environment. and of how even smallscale contributions can make a difference. Variations on this form of training include promoting customer contact with employees, and providing opportunities for employees to understand and identify more

24%

closely with the product or service which they are involved in producing. It is not clear to what extent formal reward and incentive schemes play a part in the success of CI programmes. Whilst some companies operate a suggestion scheme which returns a direct proportion of the benefits obtained from an idea to the employee(s) who came up with them, in others the relationship is less clear. In several cases, the rewards are symbolic rather than financial - for example, public recognition of their contribution or a small celebration to mark the success of an idea. The argument can also be made that providing too strong a financial link between the rewards offered and the original suggestion will militate against small scale improvement but whose cumulative effect over time and across the employee population can still be significant. A further distinction emerges between those organizations which reward the individual and those which prefer to reward the group, and so encourage closer team working and participation in CI. 5. Human resources and continuous improvement Continuous

improvement is essentially an although many of the artefacts produced by it represent incremental innovations in products or processes. Consequently, it needs to be managed as a central pillar of organizational development/HRM strategy, and attention needs to be paid to developing supporting structures, processes and an underlying culture whose values are consistent with those of CI. This is likely to be a far from trivial task, given the scale of change required. One approach to the analysis and comparison of CI experiences is to consider four interrelated dimensions which provide a framework for reviewing the human resource management implications. These dimensions involve the strategic and philosophical underpinnings of CI programmes, the organizational framework in which they are located, the processes whereby they operate, and organizational innovation,

Technovation

Volume 13 No 4

Continuous improvement

the tools which are used to identify and effect improvements. In the following discussion we will use this analytical scheme to highlight some of the areas where change is required and towards which HRM and OD programmes might be targeted.

5.1.

Strategy and philosophy

CI is clearly a desirable goal for all organizations, but it runs the risk of becoming a meaningless ‘motherhood statement* reflecting vague and general aspirations rather than specific targetted actions within a framework of clear and shared values and purpose. There is a great deal of lip service paid to the concept at present, (along with similar expressions of commitment to ‘total quality’ and ‘customer service’). Reviewing the experience of successful practitioners suggests that the underlying philosophy is one of long-term step-by-step progress towards an ideal of perfection - expressed, for example, in the notion of ‘zero defects’ in the quality area. Unfortunately, such a step-by-step approach is at odds with the conventional UK pattern in several respects. First, the tradition is to view innovation as a discontinuous activity, occurring occasionally and followed by periods of adaptation around a new norm - rather than a regular process which may take smaller steps but is essentially c~~ti~~~~~ in nature. (The analogy of the tortoise and the hare ‘slow and steady wins the race’ - is often cited as a good illustration of this difference in approach.) Embedded in this pattern is also the notion of innovation being the province of specialists, rather than the result of tidespread creativity amongst all those involved. (Studies of creative styles (behaviour patterns) suggest that there are differences between individuals in their preferred approach to creative problem-solving. but that effective problem-solving requires a balance between what Kit-ton [26] calls ‘adaptors and innovators’.) This emphasis on specialists as the only source of problem-solving can be traced back to the early days of scientific management. where Taylor and his colleagues were preoccupied in fine-tuning a

Technovation

Volume 13 No 4

in British manufacturing

complete system, and saw the introduction of new ideas or imp~vemen~ as detrimental to that process: *‘Under our system the worker is told minutely just what he is to do and how he is to do it; and any improvement which he makes upon the orders given to him is fatal to success.” [27]. Significantly, Henry Gantt, one of Taylor’s assistants, recognized the limitations of this approach and argued for the ‘re-involvement’ of the worker in the improvement process: ‘I

although the results (of scientific management) are very far in excess of that anticipated, the writer does not feel that we have yet taken advantage of all our opportunities.. . the system is one of education with prizes for those who learn; but the prizes have so far been awarded for learning and doing only what our experts already knew. The next and most obvious step is to make it in the interest of the men to learn more . . . the compensation should be sufficiently liberal not only to induce him to part with what information he may have but to use his ingenuity to devise better methods” (Gantt, cited in Schroeder and Robinson [2]). .

.

.

A further problem arises because of what might be termed the ‘plateau’ effect. Innovation is often seen as an occasional piece of radical change, during which period considerable shifts take place and efforts are mobilized towards achieving new levels of performance. Once achieved, there is a strong tendency to relax effort and to stabilize performance around this new level. By contrast, CI involves smaller increments of change but on a continuing upward improvement path without the periodic plateaux. Smith and Tranfield 124) term these two approaches ‘sprint’ and ‘ratchet’, and suggest that effective strategic change requires a combination of both. Arguably, the two approaches require different management styles and organizational infrastructures, but in the UK most ’ experience in managing change is of the ‘sprint’ variety. It may be relatively easy to create the conditions for success when change is visible and

249

J. Bessant

et al.

exciting; it is more difficult to institutionalize a process of continuing, albeit slower, change. A further mismatch between the ideas of CI and the traditional UK approach is the role CI can play as a strategic resource. There are still many smaller firms which have no explicit strategies, and for whom product and process innovation is a largely random or intuitive process [9]. But even amongst those which try to match and develop competences through strategies, there tends to be an overemphasis on innovation through embodied technology and discontinuous change - for example, buying in high technology equipment as a substitute for internal development of existing resources. Hayes et al. [28] make the important distinction between innovations in structure - the buildings, plant, equipment, layout, etc. - of manufacturing and infrastructure - the less tangible, but nevertheless influential components such as workforce skills, training and human resource development systems, systems for assurance and control of quality, production management, etc. Their point is that the infrastructural perspective is often limited or lacking - yet it is here that significant improvements can often be generated. Rather than try and buy strategic competence - for example, trying to develop greater flexibility through the purchase of a flexible manufacturing system - firms should seek to develop such capabilities by innovations in the infrastructure as well as the structure. CI represents a key resource in developing the infrastructure, but it is often neglected in a culture which places greater weight on innovation through discontinuous structural change. The implication here for organizational development concerns the ways in which strategic vision is created and the need to extend the organization’s perspective on innovation to include the less dramatic (but nonetheless powerful) aspects of incremental change in infrastructural areas.

5.2.

Organizational framework for Cl

The concept of CI is predicated upon a different model of factory organization to that which grew

250

up in the mass production environment ofthe early part of the twentieth century. It requires a high degree of employee participation and the flexibility in structure and operating processes to adapt and change on a continuing basis. Where early models tended to emphasize specialization, division of labour and reduction in individual autonomy and responsibility, the demands of CI are for at least a partial reversal of this trend. Thus there is likely to be a serious challenge to the status quo if CI pmgrammes are introduced - and, not surprisingly, there have been many failures resulting from a mismatch between CI principles and prevailing organization structures and processes. The ‘blueprint’ for CI supportive organization designs is widely discussed elsewhere (see, for example, Bessant ti al. [29]), and it has close affinities with a number of models being proposed for organization designs more suited to the technoeconomic environment of the late 1990s [30-321. There is growing evidence from studies of Japanese manufacturing that a distinctive organizational model is in place which places greater stress on factors like multi-task flexibility, teamworking and continuing education and training. (See, for example, Womacketal. (31.)Research suggests that considerable experimentation with such new models is now taking place in a variety of firms (for a review, see Smith et al. [24]), but much of this activity is confined to changes at the shop-floor and work organization level. Whilst it may be possible to effect changes in the formal structures and operating processes to bring them more closely in line with CI needs, the major obstacle is likely to be in the intangible area of organizational culture - ‘the way we do things round here’, a collection of shared values, norms, beliefs and behaviour patterns. Creating such an organization is likely to be a lengthy process, and one with a high risk of failure. Experience with ‘piecemeal’ applications which change part of the structure and process of the organization without fundamentally shifting the cultural base (such as quality circles in the 1970s) provides strong evidence to support this view [l]. As Trantield et al. (391point out, there are several

Technovation

Volume 13 No 4

Continuous improvement

different perspectives or paradigms surrounding the idea of culture change related to total quality management and similar organization-wide innovations. These include the ‘visionary model’, the ‘planning model’ and the ‘learning model’, and each contains elements which help and elements which hinder successful implementation of change. For example, the visionary model is essentially a top-down, mission-oriented approach which is then cascaded down the organization; its main weakness is that it may not provide a strong enough mechanism for ensuring commitment and involvement from those lower down the organization. The view taken is of ‘people as programmable pawns’; without adequate attention to securing some degree of ‘ownership’ of CI objectives such a strategy is unlikely to succeed. The planning model is often driven by specialists towards a specific target, such as the achievement of external quality or productivity standards like BS 5750 or IS0 9000. Implementation here involves extensive training in the use of tools and techniques towards achieving these objectives - for example, through problem finding and solving methods such as SPC, Ishikawa and brainstorming. The weakness in this approach is that it is driven from the middle and is task focused; it lacks the strategic perspective and support from the top, and can become too concerned with short-term improvement targets and measurements. The learning model has its roots in the human relations tradition and aims to create a different, more participative culture which empowers and motivates the individual employee. Activities here include the elimination of structural differences (such as in pay scales. job gradings, etc.), the harmonization of working conditions (single status canteen and car parking, for example) and an emphasis on team working with facilitating support rather than direct control. Emphasis is placed upon individual development and growth, and these conditions provide the environment for encouraging commitment and creativity amongst employees. However, the weakness here is often that there is a lack of focus to these activities, and the possibility exists of creating a working culture

Technovation

Volume

13 No 4

in British manufacturing

with a better quality of life but one which is, nonetheless. ineffective. Each of these models describes a starting point for embarking on a process of strategic change and each can be effective in the short-term. The challenge in ensuring long-term continuity and development is to integrate the different perspectives, and to develop the ability to move between them, emphasizing different aspects as circumstances require. This raises the question of developing an adaptive, learning capability within the organization - a theme which is receiving considerable attention at present 113, 33). An emphasis on organizational learning and on a developmental process in establishing CI is supported by a number of other writers, and evidenced in several successful cases [ 12, 341. Melcher er al. [35] suggest an important distinction between what they term standard-maintaining systems (SMS) and continuous improvement systems (CIS), which moves the debate helpfully beyond loose generalizations of the ‘Japan versus Western manufacturers’ type and towards a consideration of organizational characteristics and behaviours associated with each. Their ‘thermostatic control’ model of SMS equates well with what Argyris and Schon [36] term ‘single loop’ learning, whilst the CIS model of open systems control corresponds to ‘double loop’ learning.

5.3.

Cl processes

and tools

Establishing the structural and cultural conditions to enable such double loop learning to operate is thus a prime task for organizational development. It can be supported by development and application of a variety of processes and tools which facilitate continuous improvement, but these will only assist if there is adequate training and development of the human resources who will be involved with them. Such training clearly needs to move beyond the simple ‘know-how’ of their operation and include a component of broader awareness - the ‘know-why’ element - about their underlying purpose.

251

J. Bessant et al.

The range of available CI tools and processes is wide and research is currently underway to try to collate and organize these different approaches into a usable ‘toolbox’ of resources to support CI programmes [37]. They range from basic process structures such as the ‘Deming Wheel’ (a Plan-DoCheck-Action cycle of problem solving activity, described in Deming [38]) and problem-solving circles to a wide range of tools for specific tasks in problem identification, analysis and solving. The major problem at this level is that processes and tools to support continuous improvement can become confused with the concept itself. Thus, organizations may set up quality circles or introduce statistical process control in the belief that they are introducing continuous improvement. Yet without addressing the broader requirements of strategy, philosophy or organizational framework, such tools and processes are likely to be limited in their effectiveness and their use may well fall away over time - as was the experience with early generations of quality circles, for example. Developing and sustaining continuous improvement requires a much higher degree of commitment on behalf of the organization, and an investment in training, reorganization and culture change. Although there are already a number of welltried and proven tools. we suggest that there is still a need for further work to create a toolset suitable for supporting CI, especially in the context of the smaller firm. Most of the CI tools currently in use grew out of large company experience and may need developing further to meet the often different requirements of the smaller organization; in addition, we feel that there are several areas in which the process of CI is not yet fully supported. Some examples of such needs are for: l

developing problem-finding and -focusing tools. At the operational level CI programmes need to have robust mechanisms to enable shop-floor level groups to find and prioritize the problems on which they will work. This becomes increasingly important as the ‘obvious’ problems are dealt with and the momentum of the CI project begins to tail off. There are a variety of

252

l

l

l

6.

simple tools already available for problem finding and focusing: there is a need to evaluate these, and to develop and test additional tools to support this activity. developing effective communication mechanisms for use within CI programmes. Communication is essential to the success of CI programmes, both in terms of providing a mechanism for the sharing and building of commitment to strategic goals, and at the level of experience and knowledge sharing between continuous improvement groups. developing mechanisms for maintaining CI in the longer-term. A major reported difficulty with CI programmes is the loss of momentum over time. Whilst it is relatively easy to create enthusiasm and commitment to a CI project, the evidence suggests that after a short ‘honeymoon’ period in which considerable improvements can be made, the energy and commitment to the concept falls off. Thus there is a need for closer research into the causes of this and the development of tools to support the ‘re-ignition’ of CI programmes on a regular basis. developing an effective and useable process for capturing organizational learning from CI activities. There is a risk in large scale CI programmes involving many problem-solving groups that there will be duplication of effort and ‘Reinvention of the wheel’. For CI to make its full contribution, there is a need to develop mechanisms to capture learning for the organization as a whole, so that problems of a similar nature to those already solved elsewhere can benefit from the prior experience. Research is needed here to explore and evaluate the range of mechanisms to facilitate such learning capture.

Conclusions

Continuous improvement represents a significant opportunity for industry. Its low capital cost characteristics, allied to its widespread application potential, mean that many of the challenges emerging from the new manufacturing environment Technovation

Volume 13 No 4

Continuous improvement

of the 1990s - the need for greater quality, flexibility, speed to market, customer service and overall responsiveness - can be met without necessarily investing in advanced technology. Although it has undoubtedly played a major role in the development of competitiveness within Japanese enterprises, CI is still a largely untapped resource in Europe. At its heart it is an extremely simple concept; it depends only on recognizing that, as one manager put it, ‘with every pair of hands, you get a free brain’. Harnessing and using the creative potential latent in every organization is not, however, a simple process, and there is much for European companies to learn about creating the conditions for successfully implementing CI and sustaining its development in the long term.

References 1 J. Bessant, Managing Advanced Manufacturing nology:

The Challenge

of the Fifth

Wave.

TechNCC-

Blackwell, Manchester, 1991. 2 D. Schroeder and A Robinson, America’s most successful export to Japan -continuous improvement programmes. Sloan Management Review. 32(3) (1991) 67-81. 3 J. Worna& D. Jones and D. Roos. The Machine that Changed the World. Rawson Associates, New York. 1991. 4 Business Week, 9 March 1992. 5 Lilien & Yoon. Success and failure in innovation -a review of the literature. IEEE Transactions on Engineering Management, 36(l) (1989) 3-10. 6 R Rothwell. The fifth generation innovation process. In M. Sharp (ed.). 25th Anniversary Conference. Science Policy Research Unit, University of Sussex. 1991. 7 S. Hollander, The Sources of Increased Eflciency: A Study ofDupont Rayon Plants. MIT Press. Cambridge, MA 1965. 8 J. Enos. Petroleum Progress and Projits: A History of Process Innovarion. MIT Press, Cambridge. MA 1962. 9 T. Hill, Manufacturing Strategy. Macmillan. London, 1984. 10 K Imai, Kaizen. Random House. New York 1987. 11 R.M. Bell and D. Scott-Kemmis, The Mvthology of

Technovation

Volume

13 No 4

in British manufacturing

Learning-by-Doing in World War 2 Aiflrame and Ship Production. Science Policy Research Unit, Sussex

University (mimeo), 1990. 12 R Kanter, The Change Masters. Unwin. London. 1984. 13 P. Senge, The Fifth Discipline. Doubleday, New York, 1990. 14 B. Tiviss and M. Goodridge, Management Development and Innovation. Pitman, London. 1988. 15 R Nelson and S. Winter, An Evolutionary Theory of Economic Change. Harvard University Press. Cambridge, MA, 1982. 16 D. Garvin, Managing Quality. Free Press, New York 1988. 17 Y. Monden, The Toyota Production System. Productivity Press. Cambridge, MA 1983. 18 R. Fukada. CEDAC -A toolfor continuous systematic improvement. Productivity Press, Cambridge. MA 1990. 19 A. Robinson, Continuous Improvement in Operations. Productivity Press, Cambridge, MA, 1991. 20 D. Kilbum. How suggestive workers nudge profits skywards. Financial Times, (11 March 1988). 21 I. Nonaka, The knowledge creating company. Harvard Business Review, (November-December 1991). 22 S. Wheelwright, Japan -where operations really are strategic. Harvard Business Review, (July-August, 1981). 23 K Ishikure, Achieving Japanese productivity and quality levels at a US plant. Long Range Planning, 21(5) (1988) 10-17.

24 S. Smith and D. Tranfield, Managing Change. Kempston: IFS Publications. 25 K Hoffman and R. Kaplinsky, Driving Force. United Nations Centre forTransnational Studies, NewYork, 1987. 26 M. Kit-ton. Adaptors and innovators. Human Relations. 3 (1980) 213-224.

27 F. Taylor. The Principles of Scientljic innovation. New York, Harper and Row (1906: reprinted 1947). 28 R. Hayes. S. Wheelwright and K_ Clark, Dynamic Manufactun’ng:

Creating

the Learning

Organisation.

Free Press, New York. 1988. 29 J. Bessant et al.. Organization design for factory 2000. International Journal of Human Factors in Manufacturing, 2(2) (1992) 95-125. 30 K. Starkey and A. McKinley, Organisationalinnovation.

Avebury, Aldershot. 1988. 31 P. Clark and N. Staunton. Innovation and Technology in Organisations. Routledge, London. 1989.

253

J. Bessant et al.

32 M. Piore and C. Sahel, The Second Industrial

Divide.

Basic Books, NY. 1982. 33 M. Dodgson. Technological Collaboration and Organisational Learning. Working Paper, Science Policy Research Unit, University of Sussex. mimeo. 1991. 34 H. Sirkin and G. Stalk. Fix the process. not the problem. Harvard Business Review (July/August 1990) 26-33. and con35 A. Melcher et al.. Standard maintaining tinuous improvement systems; experiences and comparisons. Inre&ces. 20(3) (1990) 24-40. 36 C. Argyris and D. Schon. Organizational Learning. Addison Wesley. Reading, MA. 1970. 37 J. Bessant. J. Bumell and S. Webb, Helping UK industry achieve competitive advantage through continuous improvement. Industry and Higher Education (September 1992) 185- 189. 38 W. Deming. Quality, Productivity and Competitive Position. MIT Press. Cambridge, MA 1982. 39 D. Trantield. S. Whittle. S. Smith and M. Foster. Total quality and change management: Integrating approaches for organisation design. In Factory 2OW. Institution of Electrical and Electronic Engineers. London. 1992. Professor John Bessant is a former chemical engineer and research fellow at the

Technology

Policy

was employed at

the Centre for Business University of Research. Brighton Business School. as a Research Fellow on the CIRCA (Continuous Improvement: Research for Competitive Advantage) project under the DTI’s MOPS initiative until June 1992. Currently she is working in a project management system hevelopment team fo; the UK Information Technology Department. Lloyds Bank Plc.

Dr Rebecca Harding is currently a senior lecturer in Business Economics at the University of Brighton. UK Her research background is in technology strategy and innovation management. particularly within a European comparative context. Publications include Conrinuiry and Change (de Gruyter. forthcoming) and An Introduction to Economics for Busines.s (Routledge. forthcoming).

Unit.

Aston University. He has been working in the area of innovation and technology management for the past 15 years. He is the author of six books and over 40 articles in this field. and has been involved in lecturing and consultancy work in over 20 countries. Professor Bessant is currently Deputy Head of the Centre for Business Research University of Brighton Business School. where he was instrumental in developing and running the industry-based MSc programme in the Management of Technology. He also acts as Project Leader on the CIRCA continuous improvement project.

254

Jane Burnell

Stephen Webb was employed at the Centre for Business University of Research. Brighton Business School. as Fellow on a Research the CIRCA (Continuous Improvement: Research for Competitive Advantage) project under the DTl’s MOPS initiative until November 1992.Currently he is working in the area of continuous within improvement the systems planning department of Opel in Germany.

Technovation

Volume

13 No 4