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Kaizen (Continuous Improvement) & Quality Circles

This forms part of the ‘Japanese’ approach to management, or ‘Lean Production’.

Kaizen , or ‘Continuous Improvement’ is a policy of constantly introducing small incremental changes in a business in
order to improve quality and/or efficiency. This approach assumes that employees are the best people to identify room
for improvement, since they see the processes in action all the time. A firm that uses this approach therefore has to
have a culture that encourages and rewards employees for their contribution to the process.

Kaizen can operate at the level of an individual, or through Kaizen Groups or Quality Circles which are groups
specifically brought together to identify potential improvements. This approach would also be compatible with Team
working or Cell Production, as improvements could form an important part of the team’s aims.

Key features of Kaizen:

• Improvements are based on many, small changes rather than the radical changes that might arise from
Research and Development
• As the ideas come from the workers themselves, they are less likely to be radically different, and therefore
easier to implement
• Small improvements are less likely to require major capital investment than major process changes
• The ideas come from the talents of the existing workforce, as opposed to using R&D, consultants or
equipment – any of which could be very expensive
• All employees should continually be seeking ways to improve their own performance
• It helps encourage workers to take ownership for their work, and can help reinforce team working, thereby
improving worker motivation

As Kaizen is characterised by many, small improvements over time, it contrasts with the major leaps seen in industry
when radical new technology or production methods have been introduced. Over the years, the sheer volume of Kaizen
improvements can lead to major advances for a firm, but managers cannot afford to overlook the need for radical
change from time to time. For example, many UK manufacturers and service companies have found it necessary to
outsource processes to cheaper centres such as India and China – these changes would be unlikely to arise from Kaizen.

Whilst staff suggestions can help to enrich the work for many employees, Kaizen can be seen as an unrelenting process.
Some firms set targets for individuals or for teams to come up with a minimum number of ideas in a period of time.
Employees can find this to be an unwelcome pressure, as it becomes increasingly difficult to find further scope for
improvement. Some firms, especially Japanese-owned, conduct quality improvement sessions in the workers’ own
time, which can lead to resentment unless there is appropriate recognition and reward for suggestions.

For Kaizen to be effective there has to be a culture of trust between staff and managers, supported by a democratic
structure and a Theory Y view of employees. Good two-way communications and a de-layered organisation would also
support this approach. Nevertheless, some workers might see the demands as an extra burden rather than an
opportunity and it can take time to embed Kaizen successfully into an organisation’s culture.

Quality Improvement

Quality Management

See the revision note ‘Quality – introduction’ for a summary of what determines the quality of a product or service,
and why it is important to firms. This revision note looks at ways of controlling and improving quality.

Quality control

This method checks the quality of completed products for faults. Quality inspectors measure or test every product,
samples from each batch, or random samples – as appropriate to the kind of product produced.

• Advantages - inspection is intended to prevent faulty products reaching the customer. This approach means
having specially trained inspectors, rather than every individual being responsible for his or her own work.
Furthermore, it is thought that inspectors may be better placed to find widespread problems across an
organisation.
• Disadvantages – individuals are not necessarily encouraged to take responsibility for the quality of their own
work. Giving workers responsibility for their own work helps to improve motivation by increasing the interest
and variety in the job, so quality assurance tends to be preferred for this reason as well. Other approaches to
quality (such as TQM, see below) mean that there is much less need for quality control if the whole process is
geared towards ‘zero defects’ or getting it right first time.

Rejected product is expensive for a firm as it has incurred the full costs of production but cannot be sold as the
manufacturer does not want its name associated with substandard product. Some rejected product can be re-worked,
but in many industries it has to be scrapped – either way rejects incur more costs,

A quality control approach can be highly effective at preventing defective products from reaching the customer.
However, if defect levels are very high, the company’s profitability will suffer unless steps are taken to tackle the root
causes of the failures.

Quality Assurance

This is an approach that aims to achieve quality by organising every process to get the product ‘right first time’ and
prevent mistakes ever happening. This is also known as a ‘zero defect’ approach.

In quality assurance, there is more emphasis on ‘self-checking’, rather than checking by inspectors. Advantages
include:

• Costs are reduced because there is less wastage and re-working of faulty products as the product is checked
at every stage.
• It can help improve worker motivation as workers have more ownership and recognition for their work (see
Herzberg).
• It can help break down ‘us and them’ barriers between workers and managers as it eliminates the feeling of
being checked up on.
• With all staff responsible for quality, this can help the firm gain marketing advantages arising from its
consistent level of quality.

Total Quality Management (TQM)

This is a specific approach to quality assurance that aims to develop a quality culture throughout the firm. In TQM,
organisations consist of ‘quality chains’ in which each person or team treats the receiver of their work as if they were
an external customer and adopts a target of ‘right first time’ or zero defects.

Although the philosophy was developed by Japanese companies, it was originally put forward by an American, Edward
Deming whose 14-point plan applies to management in general, but is especially useful in respect of quality.

Quality Benchmarking

Benchmarking is a general approach to business improvement based on best practice in the industry, or in another
similar industry. It can provide a useful quality improvement target for a business.

This can be a helpful approach for services as well as for products – for example a fast food business selling fish and
chips could decide that it wanted to aim to equal McDonalds’ speed of meeting customer orders for takeaway food. A
financial services firm might want its call centre staff to answer 95% of telephone calls within six rings, if this is the
practice of the best in the industry.

In some cases, firms can use internal benchmarking in which best practice may be set with reference to another
department, or by a similar factory in a different location.

BS5750/ISO 9000

BS5750 is a British Standard for quality assurance and ISO 9000 is the international equivalent. This approach requires
that firms set out and follow clear procedures for all business processes - see separate revision note for more detail.

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