change management

1. Rogelio R. Corpuz M.M.E Presenter/Discussant Prof. Jo B. Bitonio ME 215 Management of Change & Transition

3. Kaizen Continuous Improvement in All Business Areas Kaizen, a Japanese term for continuous improvement, is the strategy for making continuous improvements in all business areas. Striving for excellence, always looking for ways to improve what already exists, and believing that one can impact change, is at the heart of the Kaizen spirit. The Kaizen Strategy calls for never-ending efforts for improvement involving everyone in the organization. When the strategy is fully utilized, everyone in the organization participates in making improvement in quality in all business areas. Reductions in cycle times, costs, and wastes, along with improved throughput, productivity and quality are achievable outcomes.

4. Kaizen Continuous Improvement in All Business Areas Kaizen , Japanese for "improvement" or "change for the better", refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, supporting business processes, and management. It has been applied in healthcare, psychotherapy, life-coaching, government, banking, and many other industries. When used in the business sense and applied to the workplace, kaizen refers to activities that continually improve all functions, and involves all employees from the CEO to the assembly line workers. It also applies to processes, such as purchasing and logistics, that cross organizational boundaries into the supply chain. By improving standardized activities and processes, kaizen aims to eliminate waste (see lean manufacturing). Kaizen was first implemented in several Japanese businesses after the Second World War, influenced in part by American business and quality management teachers who visited the country. It has since spread throughout the world and is now being implemented in many other venues besides just business and productivity.

5. Kaizen Continuous Improvement in All Business Areas Kaizen is a daily process, the purpose of which goes beyond simple productivity improvement. It is also a process that, when done correctly, humanizes the workplace, eliminates overly hard work , and teaches people how to perform experiments on their work using the scientific method and how to learn to spot and eliminate waste in business processes. In all, the process suggests a humanized approach to workers and to increasing productivity:

6. "The idea is to nurture the company's human resources as much as it is to praise and encourage participation in kaizen activities."Successful implementation requires "the participation of workers in the improvement.“ People at all levels of an organization participate in kaizen, from the CEO down to janitorial staff, as well as external stakeholders when applicable. The format for kaizen can be individual, suggestion system, small group, or large group. At Toyota, it is usually a local improvement within a workstation or local area and involves a small group in improving their own work environment and productivity. This group is often guided through the kaizen process by a line supervisor; sometimes this is the line supervisor's key role. Kaizen on a broad, cross-departmental scale in companies, generates total quality management, and frees human efforts through improving productivity using machines and computing power.[citation needed]

7. "The idea is to nurture the company's human resources as much as it is to praise and encourage participation in kaizen activities."Successful implementation requires "the participation of workers in the improvement.“ People at all levels of an organization participate in kaizen, from the CEO down to janitorial staff, as well as external stakeholders when applicable. The format for kaizen can be individual, suggestion system, small group, or large group. At Toyota, it is usually a local improvement within a workstation or local area and involves a small group in improving their own work environment and productivity. This group is often guided through the kaizen process by a line supervisor; sometimes this is the line supervisor's key role. Kaizen on a broad, cross-departmental scale in companies, generates total quality management, and frees human efforts through improving productivity using machines and computing power.[citation needed]

8. There are many different Kaizen (continuous improvement) methodologies. Some of the most common Kaizen (continuous improvement) methodologies include: * Lean * Six Sigma * Lean Six Sigma * TQM (Total Quality Management) * PDCA (Plan, Do, Check, Act) Cycle (also known as Deming Cycle, Deming Wheel and Shewhart Cycle)

9. Kaizen Strategy Benefits * Reduces waste or non value add activities * Reduces cycle times * Improves quality * Improves productivity * Reduces cost of operations * Improves throughput * Improves customer satisfaction * Improves profits

10. IMPLEMENTATION The Toyota Production System is known for kaizen, where all line personnel are expected to stop their moving production line in case of any abnormality and, along with their supervisor, suggest an improvement to resolve the abnormality which may initiate a kaizen. The cycle of kaizen activity can be defined as: * Standardize an operation * Measure the standardized operation (find cycle time and amount of in-process inventory) * Gauge measurements against requirements * Innovate to meet requirements and increase productivity * Standardize the new, improved operations * Continue cycle ad infinitum This is also known as the Shewhart cycle, Deming cycle, or PDCA. Masaaki Imai made the term famous in his book Kaizen: The Key to Japan's Competitive Success.

11. Apart from business applications of the method, both Anthony Robbins and Robert Maurer, PhD have popularized the kaizen principles into personal development principles. In his book, One Small Step Can Change Your life: The Kaizen Way and his eight CD set, The Kaizen Way to Success, Dr. Maurer looks at both personal and professional success using the kaizen approach. In their book The Toyota Way Fieldbook, Jeffrey Liker, and David Meier discuss the kaizen blitz and kaizen burst (or kaizen event) approaches to continuous improvement. A kaizen blitz, or rapid improvement, is a focused activity on a particular process or activity. The basic concept is to identify and quickly remove waste. Another approach is that of the kaizen burst, a specific kaizen activity on a particular process in the value stream.

12. WebKaizen Events, written by Kate Cornell, condenses the philosophies of kaizen events into a one-day, problem solving method that leads to prioritized solutions. This method combines Kaizen Event tools with PMP concepts. It introduces the Focused Affinity Matrix and the Cascading Impact Analysis. The Impact/Constraint Diagram and the Dual Constraint Diagram are tools used in this method. Key elements of kaizen are quality, effort, and involvement of all employees, willingness to change, and communication.

13. FIVE MAIN ELEMENTS OF KAIZEN * Teamwork * Personal discipline * Improved morale * Quality circles * Suggestions for improvement

14. 7 Principles of Toyota Production System (TPS) 1. Reduced Setup Times: All setup practices are wasteful because they add no value and they tie up labor and equipment. By organizing procedures, using carts, and training workers to do their own setups, Toyota managed to slash setup times from months to hours and sometimes even minutes. 2. Small-Lot Production: Producing things in large batches results in huge setup costs, high capital cost of high-speed dedicated machinery, larger inventories, extended lead times, and larger defect costs. Because Toyota has found the way to make setups short and inexpensive, it became possible for them to economically produce a variety of things in small quantities.

15. 7 Principles of Toyota Production System (TPS) 3 . Employee Involvement and Empowerment: Toyota organized their workers by forming team and gave them the responsibility and training to do many specialized tasks. Teams are also given responsibility for housekeeping and minor equipment repair. Each team has a leader who also works as one of them on the line. 4. Quality at the Source: To eliminate product defects, they must be discovered and corrected as soon as possible. Since workers are at the best position to discover a defect and to immediately fix it, they are assigned this responsibility. If a defect cannot be readily fixed, any worker can halt the entire line by pulling a cord (called Jidoka ).

16. 7 Principles of Toyota Production System (TPS) 5. Equipment Maintenance: Toyota operators are assigned primary responsibility for basic maintenance since they are in the best position to defect signs of malfunctions. Maintenance specialists diagnose and fix only complex problems, improve the performance of equipment, and train workers in maintenance. 6. Pull Production: To reduce inventory holding costs and lead times, Toyota developed the pull production method wherein the quantity of work performed at each stage of the process is dictated solely by demand for materials from the immediate next stage. The Kamban scheme coordinates the flow of small containers of materials between stages. This is where the term Just-in-Time (JIT) originated.

17. 7 Principles of Toyota Production System (TPS) 7. Supplier Involvement: Toyota treats its suppliers as partners, as integral elements of Toyota Production System (TPS). Suppliers are trained in ways to reduce setup times, inventories, defects, machine breakdowns etc., and take responsibility to deliver their best possible parts.

18. Kaizen, also known as continuous improvement, is a long-term approach to work that systematically seeks to achieve small, incremental changes in processes in order to improve efficiency and quality. Kaizen can be applied to any kind of work, but it is perhaps best known for being used in lean manufacturing and lean programming. If a work environment practices kaizen, continuous improvement is the responsibility of every worker, not just a selected few.

19. Kaizen can be roughly translated from Japanese to mean "good change." The philosophy behind kaizen is often credited to Dr. W. Edwards Deming. Dr. Deming was invited by Japanese industrial leaders and engineers to help rebuild Japan after World War II. He was honored for his contributions by Emperor Hirohito and the Japanese Union of Scientists and Engineers.

20. In his book "Out of the Crisis," Dr. Deming shared his philosophy of continuous improvement: 1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business and to provide jobs. 2. Adopt the new philosophy. 3. Eliminate the need for inspection on a mass basis by building quality into the product in the first place. 4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. 5. Improve constantly and forever the system of production and service to improve quality and productivity and thus constantly decrease costs.

21. 6. Institute training on the job. 7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. 8. Drive out fear so that everyone may work effectively for the company. 9. Break down barriers between departments. People in research, design, sales and production must work as a team to foresee problems of production and use of the product or service.

22. 10. Eliminate asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force. 11. Remove barriers that rob the hourly worker of his right to pride of workmanship. 12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. 13. Institute a vigorous program of education and self-improvement.

23. 14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job. In Western civilization, kaizen is often broken down into four steps: assess, plan, implement and evaluate. In Western workplaces, a "kaizen blitz" is synonymous with a concentrated effort to make quick changes that will help achieve a short-term goal.

25. PLAN. Establish the objectives and processes necessary to deliver results in accordance with the expected output. By making the expected output the focus, it differs from other techniques in that the completeness and accuracy of the specification is also part of the improvement. DO. Implement the new processes. Often on a small scale if possible. CHECK . Measure the new processes and compare the results against the expected results to ascertain any differences. ACT. Analyze the differences to determine their cause. Each will be part of either one or more of the P-D-C-A steps. Determine where to apply changes that will include improvement. When a pass through these four steps does not result in the need to improve, refine the scope to which PDCA is applied until there is a plan that involves improvement.

26. ABOUT PDCA PDCA was made popular by Dr. W. Edwards Deming , who is considered by many to be the father of modern quality control; however he always referred to it as the "Shewhart cycle". Later in Deming's career, he modified PDCA to "Plan, Do, Study, Act" (PDSA) so as to better describe his recommendations.[citation needed] The concept of PDCA is based on the scientific method, as developed from the work of Francis Bacon (Novum Organum, 1620). The scientific method can be written as "hypothesis"–"experiment"–"evaluation" or plan, do and check. Shewhart described manufacture under "control"—under statistical control—as a three step process of specification, production, and inspection. He also specifically related this to the scientific method of hypothesis, experiment, and evaluation.

27. ABOUT PDCA . Shewhart says that the statistician "must help to change the demand [for goods] by showing [...] how to close up the tolerance range and to improve the quality of goods". Clearly, Shewhart intended the analyst to take action based on the conclusions of the evaluation. According to Deming, during his lectures in Japan in the early 1950s, the Japanese participants shortened the steps to the now traditional plan, do, check, act. Deming preferred plan, do, study, act because "study" has connotations in English closer to Shewhart's intent than "check".

28. PDSA should be repeatedly implemented in spirals of increasing knowledge of the system that converge on the ultimate goal, each cycle closer than the previous. One can envision an open coil spring, with each loop being one cycle of the scientific method - PDSA, and each complete cycle indicating an increase in our knowledge of the system under study. This approach is based on the belief that our knowledge and skills are limited, but improving. Especially at the start of a project, key information may not be known; the PDSA—scientific method—provides feedback to justify our guesses (hypotheses) and increase our knowledge. Rather than enter "analysis paralysis" to get it perfect the first time, it is better to be approximately right than exactly wrong. With the improved knowledge, we may choose to refine or alter the goal (ideal state). Certainly, the PDSA approach can bring us closer to whatever goal we choose.

29. Rate of change, that is, rate of improvement, is a key competitive factor in today's world. PDSA allows for major 'jumps' in performance ('breakthroughs' often desired in a Western approach), as well as Kaizen (frequent small improvements associated with an Eastern approach). In the United States a PDSA approach is usually associated with a sizable project involving numerous people's time, and thus managers want to see large 'breakthrough' improvements to justify the effort expended. However, the scientific method and PDSA apply to all sorts of projects and improvement activities.

30. A fundamental principle of the scientific method and PDSA is iteration—once a hypothesis is confirmed (or negated), executing the cycle again will extend the knowledge further. Repeating the PDSA cycle can bring us closer to the goal, usually a perfect operation and output. In Six Sigma programs, the PDSA cycle is called "define, measure, analyze, improve, control" (DMAIC). The iterative nature of the cycle must be explicitly added to the DMAIC procedure. The power of Deming's concept lies in its apparent simplicity. The concept of feedback in the scientific method, in the abstract sense, is today firmly rooted in education. While apparently easy to understand, it is often difficult to accomplish on an on-going basis due to the intellectual difficulty of judging one's proposals (hypotheses) on the basis of measured results. Many people have an emotional fear of being shown "wrong", even by objective measurements. To avoid such comparisons, we may instead cite complacency, distractions, loss of focus, lack of commitment, re-assigned priorities, lack of resources, etc.

31. William Edwards Deming (October 14, 1900 – December 20, 1993) was an American statistician, professor, author, lecturer, and consultant. He is perhaps best known for his work in Japan. There, from 1950 onward, he taught top management how to improve design (and thus service), product quality, testing and sales through various methods, including the application of statistical methods. Deming made a significant contribution to Japan's later reputation for innovative high-quality products and its economic power. He is regarded as having had more impact upon Japanese manufacturing and business than any other individual not of Japanese heritage. Despite being considered something of a hero in Japan, he was only just beginning to win widespread recognition in the U.S. at the time of his death.

32. the U.S. at the time of his death. The philosophy of W. Edwards Deming has been summarized as follows: "Dr. W. Edwards Deming taught that by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while increasing customer loyalty). The key is to practice continual improvement and think of manufacturing as a system, not as bits and pieces." In the 1970s, Dr. Deming's philosophy was summarized by some of his Japanese proponents with the following 'a'-versus-'b' comparison: (a) When people and organizations focus primarily on quality, defined by the following ratio, quality tends to increase and costs fall over time. (b) However, when people and organizations focus primarily on costs , costs tend to rise and quality declines over time. The philosophy of W. Edwards Deming has been summarized as follows:

33. Human Implications implementing new technology may be one of the most problematic changes for an organization to complete. While technology adds new elements to the change process, management must focus on the basic issues and tools available to provide employees the best environment to adapt to the change. There are specific traits a change manager needs to have to create positive change environments. This includes promoting open and frequent communication, being a good listener, patience, being knowledgeable, a good example and most importantly willing to communicate and share their knowledge. When changes in technology are in front of employees they can be fearful of having to learn new programs and tasks. They are also wary of the issues that follow working the bugs out of a new program. This includes downtimes or malfunctions. New technology can be a breeding ground for employee frustration.

34. Human Implications The best way to combat this frustration is to communicate with the employees the potential benefits of the new technologies and to develop an atmosphere of positive change. "An atmosphere of openness, good communications, clear vision, leadership and training engenders good change management. Consultation, communications, transparency and informality minimize fear and suspicion; staff resent the sense that changes are imposed on them and that they are powerless - they need to be involved. They need to understand the rationale behind decisions which are being made, even if they do not agree with them." (Edwards and Walton, 2000) Don Forrer, D.B.A., of International College states the critical factors that contribute to the importance of technology and its impact on managing employees during change, "Technology factors are elements important to a company's ability to dominate the information systems aspects of their industry. This could include people skills, better communication equipment or more efficient technology. Expertise in any technology-related field can provide a competitive advantage. Technology enhances productivity and leads to better efficiency at a lower cost." (Forrer, 2006)

35. The critical success factors can be different for any organization and modified to fall in line with their mission, vision and future plans. Employees must be included in the development of the specific success factors as they will be more open to potential changes and have a vested interest in the future of the organization.

36. "Key success factors take the form of human and business processes as they evolve to help move a company forward. Organizations and people are dependent upon each other for survival. People contribute ideas, energy and talent to the organization while benefiting from the job, pay and careers provided by the company. Each individual plays an important role in productivity, quality and image. It is management's job to ensure that employees are focused on the vision of the company and change occurs when required." (Forrer, 2006) .