Making a Success of your Business

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Making a Success of your Business Through
Continuous Improvement
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Agenda
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Introduction
In recent times, South Africa has seen a large
growth in the number of new businesses starting
up. Most business initiatives develop from a
grand concept, with the hope of great
success. However, research has shown that most
small businesses that fail, will fail within the
first five years . In this ever growing South
African economy, it is difficult to imagine a
management team that is not deeply absorbed in
financial success. The ever changing economic
environment has and will continue to bring
organisational challenges imposed on business by
customers.
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A Successful Organisation
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Voice Of Customer
As customers continue to enjoy the diverse
offering of different product and services,
competition within the business environment
continues. The economic growth of the country
has increased the buying power of consumers and
has inevitable increased the voice of customers.
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Paradigm Shift
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Continuous Process Improvement

• .never ending effort to discover and eliminate
  causes of problems.
• Continuous Process Improvement (CPI) is an
  incessant attempt to discover and remove the main
  causes of problems. It accomplishes this by using
  small-steps improvements, rather than
  implementing one huge improvement
• Some of the best tools used in the quest for
  continuous improvement are
• TQM
• Lean Manufacturing
• Six sigma

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Total Quality Management
Total Quality Management (TQM) is. a
management strategy aimed at embedding awareness
of quality in all organisational processes. It
involves a change in the culture and attitudes
in an organisation strives to provide customers
with products and services that satisfy their
needs. Objective of TQM Do the right
thing, the first time, every time
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Total Quality Management

• In the cycle of never ending improvement,
  measurement plays an important role in
• Identifying opportunities for improvement
  (quality costing)
• Comparing performance with internal standards
  (process control improvement)
• Comparing performance against external standards
  (benchmarking)

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Total Quality Management

• TQM encompasses three key elements
• Total involving the entire organization, supply
  chain, people and product life cycle
• Quality with its usual definitions and all its
  complexities. The definition that encompasses the
  essence of quality in the context of continuous
  improvement is by Joseph M. Juran.- "Fitness for
  use". Fitness is defined by the customer.
• Management The system of managing with steps
  like Plan, organise, control and lead.

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Lean Manufacturing

• 5 Lean Manufacturing Principles
• Precisely specify value by specific product,
• Identify the value stream for each product,
• Make value flow without interruptions,
• Let the customer pull value from the producer and
  
• Pursue perfection

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Lean Manufacturing
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House of Lean
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Six Sigma - 6 ?
Project Charter Customer requirements Governance
structure
Implement solution Closure Poka Yoke
Determine how to measure key capabilities
metrics Descriptive stats
Determine root cause and validate root causes
Generate improvement ideas Plan for implementation
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6 ? In Everyday Life
99.99966 Good (6 Sigma)
99 Good (2.8 Sigma)
1.7 incorrect surgical operations per
5,000 incorrect surgical operations
1.7 incorrect surgical operations per
5,000 incorrect surgical operations
week
per week
week
per week
No hot water for less than 2 minutes
No hot water for less than 2 minutes
No hot water for 87 hours each year
each year
each year
Unsafe drinking water for almost
1 unsafe minute of drinking water
1 unsafe minute of drinking water
every 7 months
every 7 months
15minutes each day
1 short or long landing every 5 years
2 short or long landings at most
1 short or long landing every 5 years
2 short or long landings at most
major airports each day
major airports each day
68 wrong prescriptions per year
200,000 wrong drug prescriptions
68 wrong prescriptions per year
200,000 wrong drug prescriptions
each year
each year
One hour without electricity every 34
No electricity for almost 7 hours
One hour without electricity every 34
No electricity for almost 7 hours
years
years
each month
each month
34 lost articles of mail per year
Over 8,000 lost articles of mail per
34 lost articles of mail per year
Over 8,000 lost articles of mail per
month
month
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Companies using Six Sigma
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Success Stories
In the 1950s Japanese industries lowered
manufacturing cost by 10 per year. Japan
manufacturing cost differential reached 100 in
the 1970s General Electric achieved the cost
saving of 800 million as a result of its
continuous improvement programme Citibank
reduced the credit cycle time by 67 Motorola
under Bob Galvin developed Six sigma in the
1980s In 1981 Motorola set out to improve
quality of their products and services
tenfold Standard Bank SA R 250
million Johnson Johnson 500
million Honeywell 700 million Ford Motor
Corporation 200 million
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Conclusion

• South Africa is part of a global village to
  compete companies have to
• offer customers value
• Value is a perception and entrenched in the
  product/service offering
• Continuous improvement methodologies are tools
  that any business can
• employ to create customer value by being
• Cost effective
• Quality driven
• Flexible to changes in customer requirements
• Quick to deliver to customer
• The benefits are endless and can translate into
  financial benefits,
• when the customers are happy, they will keep
• on coming back to buy your product

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Reference

• http//en.wikipedia.org/wiki/Total_Quality_Managem
  ent
• http//www.isixsigma.com/library/content/c031008a.
  asp
• Joel E. Ross (1993). Total Quality Management
  Text, Case and Readings. (2nd Edition)
• John S. Oakland (1993). Total Quality Management
  The route to improving performance.(2nd Edition)
• James P. Womack Daniel T. Jones (2003). Lean
  Thinking. 2nd ed. United Kingdom Simon
  Schuster UK Ltd. 19.
• John Bicheno (2004). The New Lean Toolbox.
  Cardiff Moreton Press, PICSIE Books. 11.