PDCA cycle

KAIZEN & GQS

Kaizen involves every employee in making change—in most cases small, incremental changes. It focuses on
identifying problems at their source, solving them at their source, and changing standards to ensure the
problem stays solved. It's not unusual for Kaizen to result in 25 to 30 suggestions per employee, per year, and
to have over 90% of those implemented.

For example, Toyota is well-known as one of the leaders in using Kaizen. In 1999 at one U.S. plant, 7,000 Toyota
employees submitted over 75,000 suggestions, of which 99% were implemented.

These continual small improvements add up to major benefits. They result in improved productivity, improved
quality, better safety, faster delivery, lower costs, and greater customer satisfaction. On top of these benefits to
the company, employees working in Kaizen-based companies generally find work to be easier and more
enjoyable—resulting in higher employee moral and job satisfaction, and lower turn-over.

With every employee looking for ways to make improvements, you can expect results such as:

Kaizen Reduces Waste in areas such as inventory, waiting times, transportation, worker motion, employee
skills, over production, excess quality and in processes.

Kaizen Improves space utilization, product quality, use of capital, communications, production capacity and
employee retention.

Kaizen Provides immediate results. Instead of focusing on large, capital intensive improvements, Kaizen
focuses on creative investments that continually solve large numbers of small problems. Large, capital projects
and major changes will still be needed, and Kaizen will also improve the capital projects process, but the real
power of Kaizen is in the on-going process of continually making small improvements that improve processes
and reduce waste.

Concept of Kaizen:
Kaizen is the practice of continuous improvement. Kaizen was originally introduced to the West by Masaaki
Imai in his book Kaizen: The Key to Japan’s Competitive Success in 1986. Today Kaizen is recognized worldwide
as an important pillar of an organization’s long-term competitive strategy. Kaizen is continuous improvement
that is based on certain guiding principles:
 Good processes bring good results
 Go see for yourself to grasp the current situation
 Speak with data, manage by facts
 Take action to contain and correct root causes of problems
 Work as a team
 Kaizen is everybody’s business
 And much more!

One of the most notable features of kaizen is that big results come from many small changes accumulated over
time. However this has been misunderstood to mean that kaizen equals small changes. In fact, kaizen means
everyone involved in making improvements. While the majority of changes may be small, the greatest impact
may be kaizens that are led by senior management as transformational projects, or by cross-functional teams as
kaizen events.

Process of Kaizen

1. Define the problem

2. Document the current situation
3. Visualize the ideal situation
4. Define measurement targets
5. Brainstorm solutions to the problem
6. Develop Kaizen plan
7. Implement plan
8. Measure, record and compare results to targets
9. Prepare summary documents
10. Create short term action plan, on-going standards and sustaining plan

Procedure of Kaizen
The term "kaizen," the Japanese word for improvement, is used by businesses to describe a technique of
continuous improvement that eliminates waste, improves efficiency and involves all employees in the
organization. To practice kaizen and gain the benefits of continuous improvement, companies follow specific
steps to identify areas for improvement, develop solutions and determine success.

 Standardize the Process

The first step in kaizen is to standardize and describe the current process. For example, a manufacturing
organization may create a flowchart of a production process to illustrate how products move through the
process. This provides team members with an understanding of the entire process as it exists before any
improvements are made. Standardizing the process can apply to any area of business, such as purchasing or
warehousing.
 Measure the Process as It Currently Exists
Measurements are an essential element in the kaizen process. Organizations can collect data on the process
cycle time, defect rates and machine uptime before improvements. The team measures the collected data
against the requirements or desired results from the process. For example, companies may measure the actual
cycle time for a process and compare it with the required or desired time. The beginning measurement
provides the information the team needs to determine the success of an improvement.
 Identify Areas for Improvement
The measurements uncover areas for improvement in the process. For example, if the company requires 100
units produced per day, but the current process produces 50, increasing the efficiency and speed of the
production line is the identifiable goal for the company. Incremental improvements can bring the business
closer to its goal over time. Kaizen focuses on small improvements that add up to big changes in the efficiency
and quality of a process or procedure.

 Develop, Implement and Measure Improvements

The improvement team next develops methods to improve the current process. For example, an improvement
team may determine that a rearrangement of workstations in a production line can eliminate the steps a
worker must take to complete a task, which reduces the cycle time of the process. Teams may implement the
new process or conduct experiments to determine the success of the project. The same measurements that
were used in the early stage must be taken for an accurate comparison.
 Standardize the New Process
When measurements determine an improvement project is a success, the team must standardize the process,
monitor it and adjust it as necessary. After the process is standardized, the team moves on to another
improvement area.
Way of Thinking:

Empowering Process Change: Additionally, it is imperative that the participants in the event be empowered
to implement any changes. This is a key to success otherwise the new processes or process changes will be
short lived and the people doing the work on a day-to-day basis will quickly revert back to the old methods.
There are also key people that need to be present in a Kaizen event: the subject matter expert, the process
owner, one or two of the front-line workers (those people that experience the process on a regular basis) and
an outside novice (someone unfamiliar with the process). However, none of these positions should be filled by
the facilitator. I’d suggest that you use a facilitator from outside the area to prevent that individual from
unconsciously steering the event in a particular direction, or, even worse, consciously steering the event in a
particular direction.

Timing is Key: The difference between Kaizen and other events is timing. Kaizen by definition is small changes
for the better. Today, Kaizen events are known to have the results implemented before the conclusion of the
event. This just-in-time process improvement capability also hinges on all of the participants buying-in to
consensus that the changes are correct and beneficial. This also leads to an inherent pride of ownership in the
changes (also a factor in ensuring sustainability).
As you can expect, there are always exceptions to the rule, and some things can not be changed during an event.
If your organization is regulated, then you may not be able to instantaneously change processes or procedures.
Keep in mind that anytime this is an issue, the topic may be too complex for a Kaizen. For some of these items,
the Kaizen sponsor should oversee the completion of a 30-day action plan. This plan should be tightly
monitored and reviewed on a weekly basis to ensure that the items on the list are being addressed
appropriately.
Some examples of the 30-day action items are updating procedures, printing out new brochures, distributing
new forms to users and reconfiguring offices (in a manufacturing environment this may be a simple task that
can be easily completed in the event; however, in a services organization it may require vendor support and
purchasing and facilities coordination).

Identifying Topics for Kaizen

Here are some common themes that may be addressed for Kaizen:
 Improving customer forms received in good order.
 Improving first time call resolution in a call center.
 Streamlining the order to payment process in purchasing.
 Streamlining the reporting of hours worked to payroll.
 Reducing time to hire and onboard new employees.
 Reducing the submission to completion cycle time for facilities requests.
 Co-designing forms or content (for a web application) with the largest single user (this may be an
external Kaizen with great partnering opportunities).

Why Kaizen Can Work for Your Organization

Kaizen is an excellent way to formalize some simple improvement activities that are not always run in an
optimal format. Kaizen also avoids the stigma of a formalized project that may be drawn out over several weeks
or months. Most importantly, Kaizen provides just-in-time process improvements. By using the above 10-step
methodology, ensuring the relevant parties are participating and empowered, and that those steps not able to
be completed in the event are completed within 30 days, Kaizen can enable significant and sustainable
improvements to any organization.

SIX SIGMA:

Six Sigma at many organizations simply means a measure of quality that strives for near perfection. Six Sigma is
a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard
deviations between the mean and the nearest specification limit) in any process – from manufacturing to
transactional and from product to service.
The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six
Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is
defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of
chances for a defect. Process sigma can easily be calculated using a Six Sigma calculator.
The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based
strategy that focuses on process improvement and variation reduction through the application of Six Sigma
improvement projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and
DMADV. The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement
system for existing processes falling below specification and looking for incremental improvement. The Six
Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop
new processes or products at Six Sigma quality levels. It can also be employed if a current process requires
more than just incremental improvement. Both Six Sigma processes are executed by Six Sigma Green Belts and
Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts.

Philosophy— The philosophical perspective views all work as processes that can be defined, measured,
analyzed, improved and controlled. Processes require inputs (x) and produce outputs (y). If you control the
inputs, you will control the outputs. This is generally expressed as y = f(x).

Set of tools— The Six Sigma expert uses qualitative and quantitative techniques to drive process improvement.
A few such tools include statistical process control (SPC), control charts, failure mode and effects analysis, and
process mapping. Six Sigma professionals do not totally agree as to exactly which tools constitute the set.

Methodology— This view of Six Sigma recognizes the underlying and rigorous approach known as DMAIC
(define, measure, analyze, improve and control). DMAIC defines the steps a Six Sigma practitioner is expected
to follow, starting with identifying the problem and ending with the implementation of long-lasting solutions.
While DMAIC is not the only Six Sigma methodology in use, it is certainly the most widely adopted and
recognized.

Metrics – In simple terms, Six Sigma quality performance means 3.4 defects per million opportunities
(accounting for a 1.5-sigma shift in the mean).

Definition: Six Sigma is a management philosophy developed by Motorola that emphasizes setting extremely
high objectives, collecting data, and analyzing results to a fine degree as a way to reduce defects in products and
services. The Greek letter sigma is sometimes used to denote variation from a standard.

Stages of Six Sigma Implementation:

1. Process improvement: In order to stay competitive, organizations need to continuously improve their
processes. The purpose of this book is to provide the practitioner with the necessary tools and techniques with
which to implement a systematic approach to process improvement initiatives using the Six Sigma
methodology. Process Improvement is the proactive task of identifying, analyzing and improving upon existing
business processes within an organization for optimization and to meet new quotas or standards of quality. It
often involves a systematic approach which follows a specific methodology but there are different approaches
to be considered. Some examples are benchmarking or lean manufacturing, each of which each focuses on
different areas of improvement and uses different methods to achieve the best results. Processes can either be
modified or complemented with sub-processes or even eliminated for the ultimate goal of improvement.

Process Improvement is an ongoing practice and should always be followed up with the analysis of tangible
areas of improvement. When implemented successfully, the results can be measured in the enhancement of
product quality, customer satisfaction, customer loyalty, increased productivity, development of the skills of
employees, efficiency and increased profit resulting in higher and faster return on investment (ROI).

2. Product & Service Improvement: Improving a product or service is different than adding value. When you
improve a product, you use only the idea from the previous product, but improve on it to create a completely
new item. When you add value, you purchase a product to use it as a base for your additions or changes.
An existing product or service can be improved by:
 enhancing the quality;
 reducing the cost of production;
 reducing the cost to the consumer;
 improving durability;
 increasing power;
 making it larger or smaller;
  making it more convenient to use;
 making it more comprehensive; or
 Updating processes, materials or technology.

3. Investors Relations: Investor Relations (IR) is a strategic management responsibility that is capable of
integrating finance, communication, marketing and securities law compliance to enable the most effective two-
way communication between a company, the financial community, and other constituencies, which ultimately
contributes to a company's securities achieving fair valuation. In some companies, investor relations are
managed by the public relations or corporate communications departments, and can also be referred to as
"financial public relations" or "financial communications".
 Predict market movements and shareholder reaction accurately for better business management and
communication.
 Perform well in a new role where communicating with investors is critical.
 Issue powerful and clear strategy statements.
 Work effectively with all investors.
 Use valuation ratios to identify the key management and strategic issues facing your company.
 Operate in the corporate finance and strategy debate with insight.

4. Design Methodology: Design methodology refers to the development of a system or method for a unique
situation. Today, the term is most often applied to technological fields in reference to web design, software or
information systems design. The key to design methodology is finding the best solution for each design
situation, whether it be in industrial design, architecture or technology. Design methodology stresses the use of
brainstorming to encourage innovative ideas and collaborative thinking to work through each proposed idea
and arrive at the best solution. Meeting the needs and wants of the end user is the most critical concern. Design
methodology also employs basic research methods, such as analysis and testing.
 Divergence – Exploring possibilities and constraints of inherited situations by applying critical
thinking through qualitative and quantitative research methods to create new understanding (problem
space) toward better design solutions
 Transformation – Redefining specifications of design solutions which can lead to better guidelines for
traditional and contemporary design activities (architecture, graphic, industrial, information,
interaction, etc.) and/or multidisciplinary response
 Convergence – Prototyping possible scenarios for better design solutions that incrementally or
significantly improve the originally inherited situation
 Sustainability – Managing the process of exploring, redefining and prototyping of design solutions
continually over time
 Articulation - the visual relationship between the parts and the whole.

5. Supplier Improvement: Supplier’s Improvement related to suppliers performance management is a

business practice that is used to measure, analyze, and manage the performance of a supplier in an effort to cut
costs, minimize risks, and drive continuous improvement. The ultimate intent is to identify potential issues and
their root causes so that they can be resolved to everyone’s benefit as early as possible. A company that deploys
effective supplier performance management ensures that a supplier’s performance meets the expectations
defined in the contract and against market norms. It includes the management of actual performance,
identification of performance gaps and agreement of actions to achieve desired performance levels.

6. Recruitment and Training: Recruitment takes place from the point when a business decides that it needs to
employ somebody up to the point where a pile of completed application forms has arrived in the post. Selection
then involves choosing an appropriate candidate through a range of ways of sorting out suitable candidates
leading to interviews and other tests. Training involves providing a range of planned activities that enable an
employee to develop the skills, attitudes and knowledge required by the organisation and the work required.
QC Tools

Ishikawa Diagram:

A fishbone diagram, also called a cause and effect diagram or Ishikawa diagram, is a visualization tool for
categorizing the potential causes of a problem in order to identify its root causes. Dr. Kaoru Ishikawa, a
Japanese quality control expert, is credited with inventing the fishbone diagram to help employees avoid
solutions that merely address the symptoms of a much larger problem.

A fishbone diagram is useful in brainstorming sessions to focus conversation. After the group has brainstormed
all the possible causes for a problem, the facilitator helps the group to rate the potential causes according to
their level of importance and diagram a hierarchy. The design of the diagram looks much like a skeleton of a
fish. Fishbone diagrams are typically worked right to left, with each large "bone" of the fish branching out to
include smaller bones containing more detail. Fishbone diagrams are used in the "analyze" phase of SixSigma's
DMAIC (define, measure, analyze, improve, control) approach to problem solving.

How to create a fish diagram:

 Create a head, which lists the problem or issue to be studied.

 Create a backbone for the fish (straight line which leads to the head).
 Identify at least four “causes” that contribute to the problem. Connect these four causes with arrows
to the spine. These will create the first bones of the fish.
 Brainstorm around each “cause” to document those things that contributed to the cause. Use the 5
Whys or another questioning process such as the 4P’s (Policies, Procedures, People and Plant) to
keep the conversation focused.
 Continue breaking down each cause until the root causes have been identified.

Checksheet: The check sheet is a form (document) used to collect data in real time at the location where the
data is generated. The data it captures can be quantitative or qualitative. When the information is quantitative,
the check sheet is sometimes called a tally sheet
Function

 To assess the shape of a process's probability distribution

 For defect type
 For defect location
 For defect cause
 Checklist

Control Chart:

The control chart is a graph used to study how a process changes over time. Data are plotted in time order. A
control chart always has a central line for the average, an upper line for the upper control limit and a lower line
for the lower control limit. These lines are determined from historical data. By comparing current data to these
lines, you can draw conclusions about whether the process variation is consistent (in control) or is
unpredictable (out of control, affected by special causes of variation).

Control charts for variable data are used in pairs. The top chart monitors the average, or the centering of the
distribution of data from the process. The bottom chart monitors the range, or the width of the distribution. If
your data were shots in target practice, the average is where the shots are clustering, and the range is how
tightly they are clustered. Control charts for attribute data are used singly.

When to Use a Control Chart

 When controlling ongoing processes by finding and correcting problems as they occur.
 When predicting the expected range of outcomes from a process.
 When determining whether a process is stable (in statistical control).
 When analyzing patterns of process variation from special causes (non-routine events) or common
causes (built into the process).
 When determining whether your quality improvement project should aim to prevent specific problems
or to make fundamental changes to the process.
Histogram:

A histogram is an accurate representation of the distribution of numerical data. It is an estimate of the

probability distribution of a continuous variable (quantitative variable) and was first introduced by Karl
Pearson. It is a kind of bar graph. To construct a histogram, the first step is to "bin" the range of values—that is,
divide the entire range of values into a series of intervals—and then count how many values fall into each
interval. The bins are usually specified as consecutive, non-overlapping intervals of a variable. The bins
(intervals) must be adjacent, and are often (but are not required to be) of equal size. Histograms give a rough
sense of the density of the underlying distribution of the data, and often for density estimation: estimating the
probability density function of the underlying variable. It is to roughly assess the probability distribution of a
given variable by depicting the frequencies of observations occurring in certain ranges of values.

Pareto Chart: A Pareto chart, named after Vilfredo Pareto, is a type of chart that contains both bars and a line
graph, where individual values are represented in descending order by bars, and the cumulative total is
represented by the line.The left vertical axis is the frequency of occurrence, but it can alternatively represent
cost or another important unit of measure. The right vertical axis is the cumulative percentage of the total
number of occurrences, total cost, or total of the particular unit of measure. Because the reasons are in
decreasing order, the cumulative function is a concave function. To take the example below, in order to lower
the amount of late arrivals by 78%, it is sufficient to solve the first three issues.

The purpose of the Pareto chart is to highlight the most important among a (typically large) set of factors. In
quality control, it often represents the most common sources of defects, the highest occurring type of defect, or
the most frequent reasons for customer complaints, and so on. Wilkinson (2006) devised an algorithm for
producing statistically based acceptance limits (similar to confidence intervals) for each bar in the Pareto chart.
These charts can be generated by simple spreadsheet programs, such as Apache OpenOffice/LibreOffice Calc
and Microsoft Excel, visualization tools such as ThoughtSpot or Tableau Software, specialized statistical
software tools, and online quality charts generators. The Pareto chart is one of the seven basic tools of quality
control.

Scatter Diagram:

The scatter diagram is known by many names, such as scatter plot, scatter graph, and correlation chart. This
diagram is drawn with two variables, usually the first variable is independent and the second variable is
dependent on the first variable.
The scatter diagram is used to find the correlation between these two variables. This diagram helps you
determine how closely the two variables are related. After determining the correlation between the variables,
you can then predict the behavior of the dependent variable based on the measure of the independent variable.
This chart is very useful when one variable is easy to measure and the other is not.

When to Use a Scatter Diagram

 When you have paired numerical data.

 When your dependent variable may have multiple values for each value of your independent variable.
 When trying to determine whether the two variables are related, such as…
o When trying to identify potential root causes of problems.
o After brainstorming causes and effects using a fishbone diagram, to determine objectively
whether a particular cause and effect are related.
o When determining whether two effects that appear to be related both occur with the same
cause.
o When testing for autocorrelation before constructing a control chart.

Stratification:

1. Classification of a mass of data (obtained from research or survey) into categories and sub-categories on the
basis of one or more chosen criteria.

2. Hierarchical arrangement of a society into different layers (strata) on the basis of a distinguishing
characteristic such as age, gender, life style, race, status.

Stratification is used mostly in the define stage of a six sigma project. When to use the stratification technique is
still on the decision of the people involved in the project. However fairly good cues are given by the fact that the
spread of the data is too large. If the points are scattered all over the curve then it is probable that the sample
being taken is wrong.

A good sample ensures that most of the points lie within close proximity of the mean. This is not always the
case, but attempts should be made to ensure that this stage is reached. This is because meaningful conclusions
are likely to be made in this stage only.

Hence if the Six Sigma project team observes the following phenomena in their projects they must consider
using Stratification:

 Results are too broad or general to draw any specific conclusion

 There are a large number of exceptions to the statistical conclusions that are being drawn

The stratification process can be used either while the sampling is done, if the project team suspects that the
results will be too broad or they can be implemented after the results have been obtained and found to be
unhelpful.