The Effects of
Kaizen Events on
Continuous
Improvement
A Case Study at Santon Switchgear
by Jelle Schaafsma
University of Groningen
II
Management Summary
This document is the master thesis of Jelle Schaafsma, master student Technology Management at Rijksuniversiteit Groningen. It reports about the results and proceedings of an action research project conducted at Santon Switchgear in Rotterdam in the period of September 2011 till March 2012.
The project was commissioned with the key objective to introduce (and sustain) a culture of Continuous Improvement (CI) within Santon’s P-type production department at the high volume assembly line A. In order to achieve this objective Santon assumed that ‘Kaizen Events’ were a good means to introduce CI with workers, management and other personnel involved in production at assembly line A.
Before the first Kaizen event a number of explorative and semi structured interviews were held. Subsequently the event was carefully designed and consequently executed. In action research the ‘planning’ and ‘action’ steps are followed by ‘evaluation’. From the first event it was concluded that a second Kaizen event had to be held with participants that originated from other departments (a.o. raw material planning and order administration). This in order to mitigate supply disruptions of raw materials to the production line. To evaluate whether Kaizen events have an effect on the (development of) a culture of CI we developed a Conceptual Model. The key source used for development of this conceptual model was the academic literature about CI.
The first Kaizen event had had a rather large (positive) effect on the output of line A. However, when we evaluated the results along the yardstick of the Conceptual Model we determined that the first Kaizen event had not changed the CI capabilities, of the focus department, sufficiently enough that it had reached a higher level of CI capabilities. (in Bessant’s model of CI capability levels). This led to the conclusion that Kaizen events do not necessarily increase the CI-capability level of a department, let alone the CI Capabilities of an entire organization. One of the explanations was the fact that the Kaizen event did not include a well-structured follow-up period. Well- structured follow-up periods contain elements (Bateman, 2005) like:a formal way of documenting ideas; operators allowed to make team decisions; measures to monitor the improvements; and Managers focused on Process Improvement activity
III
1.
Introduction ... 1
1.1.
Background... 1
1.2.
Action Research ... 2
1.3.
Continuous Improvement ... 2
1.4.
Kaizen events ... 3
1.5.
Objectives and research question ... 5
1.6.
Structure of the thesis ... 5
1.7.
Summary of chapter 1 ... 5
2.
Conceptual Causal Model ... 6
2.1.
Building the Causal Conceptual Model ... 6
2.2.
Variable 1 : CI capability level ... 7
2.2.1.
Operationalization of variable 1 “CI capability level” ... 9
2.3.
Variable 2: Successfulness of Kaizen event ... 11
2.3.1.
Operationalization of variable 2 ‘Successfulness of Kaizen events’ ... 11
2.4.
Critical Success Factors ... 12
2.4.1.
Variable 3: Presence level of CSFs for CI ... 13
2.4.2.
Variable 4: Presence level of CSF’s for outcomes of Kaizen events ... 15
2.4.3.
Operationalization of variable 3 and 4 “Presence level of CSFs” ... 16
2.5.
Subquestions ... 17
2.6.
Summary of chapter 2 ... 19
3.
Methodology ... 20
3.1.
Data collection ... 20
3.1.1.
Protocol first set of interviews ... 22
3.1.2.
Protocol second set of interviews ... 23
3.2.
Summary of chapter 3 ... 24
4.
Santon: Case and results ... 25
4.1.
Introduction ... 25
4.1.1.
History ... 25
4.1.2.
Ownership and Governance ... 25
4.1.3.
Business Environment ... 25
4.1.4.
Organization of production ... 26
4.2.
Case and Measurements. ... 26
IV
4.3.1.
First interviews and results ... 34
4.3.2.
Assessment of CI Capability ... 35
4.3.3.
Assessment of level of presence of critical success factors for CI ... 35
4.3.4.
Assessment of “Level of presence of CSFs for outcomes of Kaizen events ”
(for the first Kaizen event)... 37
4.3.5.
Assesment of CSFs for outcomes of the second Kaizen event.. ... 39
4.4.
Results from the events ... 42
4.4.1.
Outcomes of the Kaizen event / assessment event successfulness ... 42
4.4.2.
Presence of CSFs for CI in March 2012 ... 42
4.4.3.
Assessment of CI capability level in March 2012 ... 44
4.4.4.
Answer to Sub question 1 ... 47
4.4.5.
Answer to Sub question 2 ... 48
4.4.6.
Answer to Sub question 3 ... 49
4.5.
Summary of answers to sub questions ... 49
5.
Discussion and Conclusions ... 50
1
1. INTRODUCTION
1.1.
Background
My initial interest and current passion for Continuous Improvement (CI) was first triggered during a three day “Lean workshop” at the Rijksuniversiteit Groningen. So when, half a year later, Santon Switchgear in Rotterdam offered me the opportunity of an internship focused on the subject of Continuous Improvement, I grabbed it with both hands.
This thesis is based on my experiences during a 6 month internship at Santon Switchgear , which lasted from September 2011 to March 2012.
In August 2011 Santon Switchgear appointed a new Director Operations. One of the main responsibilities that were given to the new director was to improve the output of the production department of Santon. The period before the new Director Operations was appointed could be characterized as a period of non-improvement. This was confirmed by people from every organizational level. Based on his previous experiences in the area of Continuous Improvement, however, the Director Operations decided he wanted to achieve more than just improvement (of outputs). He wanted to create a culture of Continuous Improvement. However, resources and knowledge to do so were in rather limited supply. The Director Operations himself and one manager who had had previous training in CI methods were the only ones that could dedicate some time to the introduction of CI in the organization. They therefore decided to appoint an intern (myself) to operationally manage the CI-introduction process, and also to use Kaizen events to introduce and enable the desired CI culture. Resources to handle other CI-introduction methods were not available.
The internship appeared a perfect opportunity to participate in, and closely observe, a process of introduction of ‘Continuous Improvement’ in an organization. What makes this case interesting is that the Kaizen events were the only improvement mechanism that was used at the moment of the events. And also, they were the only improvement mechanism in the timeframe of the internship.
Because the company indicated that Kaizen events were its preferred means to come to Continuous Improvement it was decided to adopt a protocol of Action Research (further explained in 1.2.) . This type of research would help to:
1) Contribute to the achievement of the company’s main objective of establishing a CI culture at production line A.
2) Measure the effects of Kaizen Events and incorporate learning.
3) Provide a framework to report on the progress made during the observation period 4) Evaluate whether and how Kaizen events have an effect on establishment of a culture of Continuous Improvement
2
1.2.
Action Research
Because ‘Action research’ is the research methodology used in this thesis, we provide a brief explanation here of what this is: Action research is a research methodology for dealing with the participative approach of a researcher actively involved in an organization that is subject to research. Action research may be defined as an emergent inquiry process in which applied behavioral science knowledge is integrated with existing organizational knowledge and applied to solve real organizational problems. It is simultaneously concerned with bringing about change in organizations, in developing self-help competencies in organizational members and adding scientific knowledge. Finally, it is an evolving process that is undertaken in a spirit of collaboration and co-inquiry (Shani and Pasmore, 1985). According to Coghlan and Branick (2010) Action research works through a cyclical four step process of consciously and deliberately (1) planning, (2) taking action and (3) evaluating the action, (4) leading to further planning , which then leads to the next cycle. . The same authors state that there are several broad characteristics that define action research:
- Research in action, rather than research about action - A collaborative democratic partnership
- Research concurrent with action
- A sequence of events and an approach to problem solving.
During our internship we completed the four steps of the action research cycle once.
1.3.
Continuous Improvement
Continuous Improvement (CI) is a business strategy that has gained a lot of attention over the past decades. Initiatives such as “Lean Manufacturing” and “Six Sigma” have been subject of research since the early eighties. In the beginning Continuous Improvement initiatives focused on the use of separate work improvement principles. However, nowadays CI initiatives come as structured and holistic methodologies. These methodologies, like Six Sigma and Lean Manufacturing, bring the entire company in a state of change. They are often associated with the Total Quality Management movement in Japan, which started after the Second World War (Bhuiyan and Baghel, 2005). Within this context Imai (1986) argues that Total Quality Management evolved into a mechanism for improvement in a continual manner, involving everyone in an organization.
3 Bessant et al.(2001) the basic principle for successful CI is often the same : the self-evaluation of processes through routines.
There are many different ways in which an organization can change, so why is CI such a desirable one? The answer to this question has its origins in strategy thinking, more specifically the ‘resource based’ view on strategy. Below we will argue that CI is an important piece of the puzzle for staying ahead of the competition.
In a competitive environment any organization needs to improve in order to survive. A competitive environment is by definition dynamic, because the competition is always improving in order to gain the upper hand. An organization needs to improve at least as fast as the competition in order to maintain its position. Martichenko (2004) stated “organizations that do not embrace continuous improvement will follow destructive patterns of re-organization, restructuring, layoffs and other reactionary management techniques that make executives feel they are doing what’s right.” Any organization must be able to adapt to a changing environment. If this is not the case an organization cannot survive in the long term.
Also, current thinking on strategy mostly refers to the “resource based model” which sees competitive advantage as a result of an accumulation of tangible and intangible assets (Kay, 1993; Teece and Pisano, 1994).The difficulty with which these assets can be imitated determines the likeliness of a sustainable competitive advantage. “Intangible assets are hard to imitate because they are frequently the result of extended learning processes which makes them a very strong source of potential competitive advantage”(Teece, 1998; Bessant et al., 2001). These intangible assets can be divided into two groups, the first being ‘knowledge’ and the second being ‘behavioral patterns’, also known as routines. Regarding the ‘knowledge’ part Fryer et al. (2007) argue that Continuous improvement taps into tacit knowledge and makes use of it. Regarding ‘routines’ Bessant et al. (2001) show that routines are an integral part of CI.
Concluding: CI, when implemented successfully, is a strong source of competitive advantage because of the capabilities it consists of. It is therefore that these capabilities that will be the focus of this research. Section 2.2 elaborates on the subject of CI Capabilities and introduces a model to distinguish between and measure proficiency levels of CI capabilities.
1.4.
Kaizen events
4 Imai (1986) also suggested that there are at least three types of Kaizen, namely management oriented, individually oriented, and group oriented Kaizen.
Management oriented Kaizen focuses on the organization’s strategy and involves
everyone in the organization. It is therefore considered to be the most important type.
Individually oriented Kaizen is derived from the concept of bottom-up design, in which
an individual employee is expected to make recommendations to solve issues that he or she encounters during daily work. This is said to have been successful in Japanese industry because it is the employee that has the most knowledge of the problem and is therefore most suitable to find a solution.
Group oriented Kaizen can be seen as Kaizen events, which require employees to
form a team aimed at finding and solving problems that it encounters in its everyday work.
It is this last form of group oriented Kaizen that is of interest to this thesis because it can possibly function as a tool for the introduction of CI in the surveyed organization of Santon Swithchgear.
Within the context of this paragraph it is important to note that ‘Kaizen events’ are distinct from the concepts of Kaizen and CI. Kaizen events can be seen as a tool, while Kaizen, and even more so CI, can be seen as strategies.
M Rother (2010) wrote about this distinction:
“Projects and workshops are not Continuous Improvement. Let’s agree on a definition of Continuous Improvement: it means that you are improving all processes every day. In many cases the normal operating condition of an organization—its nature—is not improving”(M. Rother, 2010)
In the literature we find various other terms for Kaizen events, to name the most popular: ‘‘accelerated improvement workshops”, ‘‘rapid improvement events’’, ‘‘Kaizen blitz’’ and ‘‘gemba kaizen’’ (Melnyk et al.,1998; Cuscela, 1998; Martin, 2007; Alexander and Williams, 2005).
5 Kaizen events are often used as a method to do two things: the first is to achieve direct improvements in a target work area. The second, and in the light of CI, most important product of Kaizen events, is the development of new capabilities (and therefore routines) for the participating employees (Farris et al., 2009; Glover et al., 2011). This last point is of particular interest for the rest of this thesis because it indicates that Kaizen events can function as a tool to achieve a culture of CI.
1.5.
Objectives and research question
As can be seen in the brief discussion of the literature above, Kaizen events are associated with CI. Even more so, some authors even see them as a mechanism for CI (Doolen et al, 2008). The literature to date, however, does not go further into depth on the subject. Specifically, the question how Kaizen events can lead to CI has not been answered yet. This leads us to the following objective for this thesis:
To understand the effect of Kaizen events on the Continuous Improvement capabilities of an organization.
This objective logically leads to the following research question:
How do Kaizen events affect the evolvement of Continuous Improvement capabilities in an organization?
1.6.
Structure of the thesis
This thesis will attempt to answer the research question by firstly constructing a Conceptual Causal Model in Chapter 2. This model is based on literature and logical reasoning. It encompasses both the area of CI and the area of Kaizen events. The conceptual causal model will lead us to a number of propositions concerning the effect of Kaizen events on CI capabilities. As we envisage to test these propositions during our action research we have formulated them as sub research questions in Chapter 3. In Chapter 3 we will also discuss the methodology and frameworks used to answer the research (sub)questions. In chapter 4 we use the format of a case study to report the results of our action research and to answer the sub questions. This leads us to the conclusions from our research in chapter 5.
1.7.
Summary of chapter 1
6
2. CONCEPTUAL CAUSAL MODEL
In the previous chapter we briefly discussed the available academic literature about the subjects of Continuous Improvement and Kaizen events. In this chapter 2 we develop a Conceptual Causal Model (CCM). Within the context of this thesis this model is meant to provide a tool to evaluate the results of our action research. This conceptual model defines the area of research, the variables and the relationships between those variables.
The main research question of this thesis was formulated as: “What is the effect of
Kaizen events on the evolvement of Continuous Improvement capabilities in an organization?”
In order to start answering this question we decided to first divide our research approach into manageable and measurable chunks. These are:
- CI capability level
- Presence level of Critical Success Factors for CI - Successfulness of Kaizen events
- Presence level of Critical success factors for outcomes of Kaizen events
The reason why these four variables have been selected is, per variable, explained below.
2.1.
Building the Causal Conceptual Model
7 Figure 1: Conceptual Causal Model
In the following sections the individual variables within the Conceptual Causal Model are discussed.
2.2.
Variable 1 : CI capability level
“CI Capability Level” is the goal variable within the conceptual model. This choice results from literature about CI that identifies CI to be a very important source of competitive advantage (Identified and discussed in section 1.2). The goal variable is a dependent variable. Which means the variable cannot be influenced directly. So, if one desires to increase the level of CI capability in an organization, this should be done through influencing the preceding independent variables.
In 1994 one of the most cited authors on this subject describes CI as “ a
companywide process of focused and continuous incremental innovation” (Bessant et
al,1994). In 2001 Bessant et al. continue this discussion in a new article that states that CI-definitions can be classified in two groups. “There is considerable and
unhelpful confusion in the way the term ‘continuous improvement’ is used, since it is deployed both as a verb — the process whereby a continuous stream of innovations emerge — and also as a noun, referring to the outcome of that process. Here we are concerned with the latter and particular with looking at CI as a particular bundle of routines which can help an organization improve what it currently does.”
Through this quote the authors demonstrate there’s ambiguity in the subject matter of definitions of CI, but they also seem to contradict themselves. They state that they are concerned with referring to CI as the “outcome of the process whereby a continuous
8 suggest that these definitions are in line with each other. Nonetheless, we will use Bessant et al.’s (2001) definition for three reasons:
- this is one of the most cited articles on the subject,
- It defines CI as a noun, which implies CI can be acquired and is therefore a resource which can lead to a competitive advantage (Bessant et al., 2001)
- We will adopt Bessant et al.’s Five stage evolutionary model to operationalize CI later on in this thesis.
Therefore, the preferred definition of CI for use in this thesis is:
“a particular bundle of routines which can help an organization improve what it currently does.”
Rother (2010), whilst building towards a definition of CI, comments on the conditions, the expectations and the business environment for CI to be successful. His definition “the ability to move toward a new desired state through an unclear and unpredictable
territory by being sensitive to and responding to actual conditions on the ground” is
grounded in the same conception that “true certainty and confidence do not lie in
preconceived implementation steps or solutions, which may or may not work as intended, but in understanding the logic and method for how to proceed through unclear territory”.
He also states that routines, or in his words “Kata”, which is the Japanese translation, are the basis for successful CI. In line with this reasoning, Bessant et al.(2001) describe ‘routines’ as clusters of behaviors which have become embedded in the organization and which represent “the way we do things around here” (Nelson and Winter, 1982). In other words: “bundles of routines” are “ways of working” that are established in an organization.
In addition to the discussion about definitions Bessant et al. (2001) also show that CI is not a binary state. Meaning that it is not simply a matter of determining whether CI is present in an organization or not, but that various levels of CI capability can be distinguished in an organization. Based on a large number of case studies Bessant et al (2001) have derived a 5 stage evolutionary model for CI, which can be seen as discrete stages in the journey towards CI. The model and the levels of CI capability are discussed in paragraph 2.2.1
Summarizing: We find there are two groups of CI definitions. The first group is about
definitions that describe CI as the outcome of a process. And the second group describes CI as the process itself. We find that “routines that help an organization improve” are at the core of the definition of CI.
The definition we have adopted is: “a particular bundle of routines which can help
9 We come to the conclusion that this particular definition is perfectly suited for use in this thesis. This because the definition gives a clear perspective on the origins of the improvements: the processes, actions and/or behavioural patterns that make it possible to continually improve. Paragraph 2.2.1 will go into the detail of the ‘routines’ mentioned by Bessant et al. (2001).
2.2.1. Operationalization of variable 1 “CI capability level”
How does one measure the level of CI in an organization? This paragraph will put forward a framework for doing so. This framework was developed by Bessant et al. (2001) and can be seen as “a reference model for assessment of progress in the evolution of CI capability”. The model displays an evolutionary learning process, with a gradual accumulation and integration of key behaviors over time. With this evolution of “practice'' (acquiring and embedding relevant CI behaviors) comes a corresponding evolution in performance improvements across the organization, from local to organization wide and from operational to strategic (Bessant and Caffyn, 1999). Bessant et al. (2001) describe the evolutionary model, its five stages, and its constituent behaviors, as follows:
Level 1 - Pre-CI
Interest in the concept has been triggered, for example by a crisis, by attendance at a
seminar, or by a visit to another organization
Behaviors:
Problems are solved randomly; No formal efforts or structure for improving the organization; Occasional bursts of improvement etc. - but implementation is on an ad hoc basis punctuated by inactivity and non-participation; Solutions tend to realize short-term benefits; No strategic impact on human resources, finance or other measurable targets; Staff and management are unaware of CI as a process
Level 2 - Structured CI
There is formal commitment to building a system which will develop CI across the
organization
Behaviors:
CI or an equivalent organization improvement initiative has been introduced; Staff use
10
Level 3 - Goal Oriented CI
There is a commitment to linking CI behavior, established at ‘local’ level to the wider
strategic concerns of the organization
Behaviors:
All the above plus: Formal deployment of Strategic Goals; Monitoring and measuring of CI against these goals; CI activities are part of main business activities; Focus includes cross-boundary and even cross-enterprise problem-solving
Level 4 - Proactive CI
There is an attempt to devolve autonomy and to empower individuals and groups to
manage and direct their own processes
Behaviors:
All the above plus: CI responsibilities devolved to problem solving unit; High levels of experimentation
Level 5 - Full CI Capability
Approximates to a model ‘learning organization’
Behaviors:
All the above plus: Extensive and widely distributed learning behavior; Systematic finding and solving problems and capture and sharing of learning; Widespread, autonomous but controlled experimentation
An analogy that can be used to illustrate the sequence of behaviors and abilities is that of a student who has the overall capability of writing a brilliant thesis. Which is composed out of number of other abilities, including formulating a research question, creating a sound structure, building solid arguments, etc. Below these abilities are some basic behaviors that are also learned, like reading (articles) and writing, working with a computer, or planning and discipline. Practice is the way these behaviors become automatic ones. And repetition is necessary in order for them to become second nature.
11 The above mentioned evolutionary framework for CI capabilities can be used to determine which capabilities and behaviors still need to be acquired by an organization before it has full CI capability. It can also be used the other way around, for determining what the current CI capability level of an organization is. This can be done at any given moment in time. This model is therefore a way of operationalizing CI.
2.3.
Variable 2: Successfulness of Kaizen event
Farris et al. (2009) have identified two types of outcomes of Kaizen events: Social system outcomes and technical system outcomes. “Understanding of CI”; “Skills” (synonymous to capabilities); and “Attitude” are social system outcomes. “Goal achievement”, “Impact on area” and “Overall Perceived Success” are technical system outcomes of Kaizen events.
The social system outcomes of Kaizen events are of particular interest to our research, because they could directly address some of the capabilities from the Five stage CI capability model by Bessant et al.(2001). This might imply that there is some overlap between “CI capability level” and the variable “Successfulness of Kaizen event”. Kaizen events, however, are focused on a certain subject and occur over a short period of time, typically they last five days. The assumption that skills or capabilities learned during a Kaizen event automatically lead to those skills being applied and used in everyday work situations, and thus leading to CI, could perhaps be over optimistic. This warrants a closer look in this research.
The fact that Kaizen events are short and temporary occurrences also implies that the successfulness of these events cannot be influenced after the events have taken place. They are therefore discontinuous changes, which makes the question how they can influence continuous improvement interesting. Section 2.5 will elaborate on this relationship. The variable “successfulness of Kaizen events” is a dependent variable within our CCM. According to Farris et al (2009) it depends on the variable of “Presence level of CSF’s for outcomes of Kaizen events”. This latter variable will be discussed in section 2.4.
2.3.1. Operationalization of variable 2 ‘Successfulness of Kaizen events’
Kaizen events themselves are a process. They cannot be measured and are not a variable. Their outcomes can be measured though; and it is the combined outcomes that determine the successfulness of a Kaizen event. Also, the outcomes determine the effect a Kaizen event has on an organization, not the event itself. This is why we call this variable “Successfulness of Kaizen Events” and not “Kaizen events”.
12 important objective and a reported benefit of Kaizen events (Sheridan, 1997; Melnyk et al.,1998; Laraia et al.,1999).
As mentioned earlier, Farris et al. (2009) give a more detailed explanation by showing there are two sorts of outcomes of Kaizen events:
Social system outcomes: Understanding of CI, Skills, and Attitude
They describe human resource impacts of the events e.g. problem solving capability development, and affective outcomes. The social systems outcomes exist also out of capabilities for and attitude toward Kaizen, and thus CI. These social systems outcomes are most interesting in the context of CI because they may lead to routines that contribute to the CI capability level.
Technical system outcomes: They describe the impact of the event on the technical
performance of the target work area e.g. Goal achievement, Impact on area, and Overall Perceived Success.
Because these two encompass all the possible outcomes that Kaizen events can have, we will utilize these two groups of outcomes as part of the Causal Conceptual Model (see paragraph 2.1). They, together, will function in this model as one of the dependent variables.
Summarizing: According to Farris et al. (2009) the level of success of Kaizen events can be determined through scores on two output variables, which are: the technical systems outcomes and the social system outcomes. Together these outcomes can be used to operationalize the variable “Successfulness of Kaizen event”. This is because these outcomes form a measurable variable together.
2.4.
Critical Success Factors
Both “CI capability level” and “Kaizen event successfulness” cannot be influenced directly. In this paragraph we will put forward a general definition of the term ‘Critical Success Factor’. We also providean overview of the critical success factors (CSFs) of CI that are defined in literature. And will do the same for the CSF’s that determine the successfulness of Kaizen events.
13 of the concept of CSFs. The importance of defining the CSFs for implementation is to increase the success rate, reduce costs and prevent disillusionment with continuous improvement programs.
2.4.1. Variable 3: Presence level of CSFs for CI
This is one of the two dependent variables. As the previous paragraph states, CSFs are “those few things that must go well to ensure success” (Boynton and Zmud, 1984). An excellent article about CSFs for CI was published by Fryer et al. (2007).These authors firstly carried out a thorough literature review. After which they compared CSFs from various studies in the areas of CI, Six Sigma, Kaizen and Total Quality Management (TQM). These studies originated from projects that were carried out in manufacturing, the private sector, as well as the public sector. They compiled a definitive list of six CSFs which are consistent throughout the sector of manufacturing organizations. Because these six CSFs are largely consistent with CSFs from earlier literature reviews (Ahire et al.,1996; Kaye and Anderson, 1999; Coronado and Antony, 2002; Hamid, 2011), and they are directly applicable to CI, they will be used for the rest of this thesis. A summary of the CSFs from the authors that were considered next to Fryer et al. can be found in Appendix D.’
Fryer et al.’s (2007) six CSFs are listed below. In their article Fryer et al (2007) do not explain their CSFs, they only provide a list based on other author’s research. The explanations we provide below are therefore not from Fryer et al.(2007), but from the authors they base their research on.
Strong and committed leadership from senior management team
Senior management should demonstrate its commitment and involvement to quality and continuous improvement by regularly being available to speak to staff through: operating an ``open door'' policy, walking the floor and holding briefing and feedback meetings. Senior management should, in consultation with other managers and staff, establish a vision and mission statements for the organization which clearly identify the long-term aims and purpose of the business/service. Senior management commitment should be demonstrated through their acting on issues raised by staff, or which they themselves identify, which lead to improvements in quality or the working environment (Kaye and Anderson, 1999).Communication
Effective communication mechanisms to inform, raise awareness and involve staff in the aims of the organization should be established (Kaye and Anderson, 1999). Effective communication mechanisms in this context encompass both top-down (inform) and bottom-up (involve) communication as well as horizontal communication (raise awareness).
Training and learning
14 appropriate) of the general concepts of CI as it applies to them and their particular organization’s context (Kaye and Anderson, 1999). Staff and management should be trained in quality principles, problem-solving skills, and teamwork (Motwani, 2001)
Quality culture
Having aims and objectives that are communicated to the workforce and used to prioritize individual’s actions (Fryer et al.,2007)
Customer management
Any task must be carried out always bearing in mind customer satisfaction (Claver et al.,2003)
Quality data
A company must embrace strong acceptance and maintenance of a total quality measurement and benchmarking plan. Most authors endorse a “zero defect'' and a “do it right the first time'' attitude towards the quality program. Quality programs should measure the percentage or the number of parts that deviate from the acceptable in order to prevent the recurrence of a defect (Motwani et al., 2001). As the case study is executed in an SME, it is important to note that multiple authors have shown that the size of an organization has an influence on the CSFs involved. This was illustrated for TQM (Yosof & Aspinwall, 2000; Salaheldin, 2009); for Lean Manufacturing (Achanga et al, 2006); and for Six Sigma (Antony and Kumar, 2005; Kumar et al. 2009; Wessel and Burcher 2004; Cheng, 2007). Each of these authors states that implementing a quality improvement program in an SME is different from implementing it in a large corporation. Particularly the influence of the owner/director of an SME on the total organisation could be much higher (positively or negatively) than the influence of a director in a large organisation (Hamid, 2011; Achanga et al, 2006.). Achanga et al.(2006) go further by stating that “Application of Lean Management in independently managed SMEs demonstrates a feasibility of enormous increases in the level of ROI as compared to those of owner-managed SMEs”. This is because they find “SMEs to be by default, owner managers who may
not have the tactful management know-how. Consequently, a large number of SMEs are hampered strategically due to a lack of quality strategic drives from good leadership traits.” As a result, SMEs typically lack “strong and committed leadership
from senior management team” and that this should be a point of attention for SMEs embarking on a journey towards CI.
Summarizing:
15 2.4.2. Variable 4: Presence level of CSF’s for outcomes of Kaizen events
Multiple scholars have done research on the success and failure of Kaizen events. Farris et al. (2009) demonstrate that there are a number of Critical Success Factors for outcomes of Kaizen events. They found ten CSFs that can be divided into three groups:
- Kaizen event Design antecedents: Goal Clarity, Goal Difficulty, Team Autonomy,
Team Kaizen Experience, Team Leader Experience, and Team Functional Heterogeneity
- Organizational and work area antecedents: Management Support and Work area
routineness
- Kaizen event process factors: Internal process dynamics and Affective
commitment to change.
Table 1 below gives an overview of these CFSs in order of relevance.(Farris et al., 2009)
Critical Success Factors
for
Kaizen event outcomes
Internal processes
Goal clarity
Management support
Team functional heterogeneity
Goal difficulty
Team autonomy
Team Kaizen experience
Team leader experience
Work area routineness
Affective commitment to change
16
Summarizing: This paragraph has provided a set of CSFs for the outcomes of
Kaizen events. This set of CSFs can be used to evaluate and predict Kaizen event outcomes. One might have noticed that these CSFs have not been operationalized as thoroughly as those for CI. This is because the CSFs for Outcomes of Kaizen events themselves leave less room for interpretation. Farris et al. (2009) made a questionnaire that operationalizes each variable in more detail. This questionnaire is presented in appendix E.
2.4.3. Operationalization of variable 3 and 4 “Presence level of CSFs”
In the CCM two variables encompass the presence level of CSFs. In paragraph 2.4.1 and 2.4.2. we described which individual CSFs constitute a variable. . These variables, because of their similar nature, can be measured in a similar fashion. In order to measure a variable the level in which these CSFs are present will have to be monitored. Each CSF will therefore be scored on a five point scale to achieve this. On this scale a score of “1” represents: “no presence of the relevant factor” ; and a score of “5” equals full presence of that factor. Table 2 is an example of the table that will be used for this purpose. Data from the case study will be used to determine each score.
CSFs for CI
1
2
3
4
5
Strong and committed
leadership from
senior management
team
Communication
Training and learning
Quality culture
Customer
management
Quality data
17
2.5.
Subquestions
When examining the CCM (fig.1) one notices that the modelshows five interrelationships between the variables. These relationships form the basis for formulating propositions that we can test. Hereafter we name the propositions to be tested ‘the research sub questions’, or in short: “sub questions’.
Figure 2: Conceptual Causal Model
The observant reader may notice that we have refrained from assigning a corresponding letter to two of the possible relationships. The reason for this is that those two relationships have been extensively discussed in literature. And that the existence of those relationships has been established. The relationship between the variable called “Presence level of CSFs for Kaizen events” and the variable called “Successfulness of Kaizen event” was established and proven by Doolen et al. (2008) and by Farris et al. (2009). The later find a list of CSFs for outcomes of Kaizen events (presented and explained in paragraph 2.4.2) based on the statistical analysis of 51 Kaizen events. The relationship between the variable called “Presence level of CSFs for CI ” and the variable called “CI capability level” has been proven by Fryer et al. (2007). They state that “for manufacturing organizations there is a definitive list of 6
CSF(critical success factors) for the successful implementation of a CI program” and
base this statement on a thorough literature review.
To formulate the sub questions we will start off with investigating the relationships of independent variable no. 4 ‘Presence level of CSF’s for outcomes of Kaizen events’ with the other two variables (2 and 3)
18 on the CSFs in variable 3. This would imply a relationship between the two. More concretely, when attempting to increase the CSF ‘Management support’ from variable 4 one might simultaneously increase the CSF ‘Strong and committed leadership from senior management team’ in variable 3. This could be the case when these CSFs involve the same person/people. Which leads to the following sub question:
Sub question 1: Does a change in ‘Presence level of CSFs for outcomes of Kaizen
events’ affect ‘Presence level of CSF’s for CI’ ? (relationship A in Fig. 1)
The second dependent variable is ‘Kaizen event successfulness’, but this relationship has already been proven empirically by Farris et al. (2009) and we will therefor adopt their conclusions. Leaving no need for a sub question.
The two dependent variables discussed above also have a proposed effect on each other in the CCM. More specifically, ‘Successfulness of Kaizen event’ might have an effect on ‘Presence level of CSFs for CI’. Which leads to the following sub question: Sub question 2: Does a change in ‘Successfulness of Kaizen event’ affect ‘Presence
level of CSF’s for CI’ (Relationship B in Fig. 1)
Until this point we have not discussed the relationships with the goal variable ‘CI capability level’. In the CCM this variable can be influenced by the two dependent variables. The relationship between variable 3 (presence level of CSF’s for CI) and the goal variable has already been proven by multiple authors. We therefore assume this relationship to be present.
This leaves us with only the relationship between variable 2 ‘Kaizen event successfulness’ and variable 1 ‘CI capability level’ to be tested, leading to the follow sub question:
19
2.6.
Summary of chapter 2
This chapter has provided a model that will be used to evaluate the actions that were taken during the action research, and to answer the research question. This model consists out of four variables concerning two subjects, the subject of Kaizen events and the subject of CI. Both of these subjects have been attributed two variables: one that makes the subjects themselves measurable (variables 1 and 2 in fig.1) and one that reflects the factors that have been proven to affect the success of CI (variable 3) and Kaizen events (variable 4).
If Kaizen events affect the evolvement of CI capabilities within an organization, these two groups of variables have three interrelationships that possibly explain this
20
3. METHODOLOGY
To find an answer to the main research question, we formulated three sub questions that need to be answered. We expected to answer the sub questions by combining findings from theory/literature with results from the “action research” that was conducted at Santon Switchgear. This paragraph describes in detail the methodology that was used to answer each individual sub question.
The data that was used is predominantly qualitative because of the explorative nature of the research question. Quantitative data was also collected but mainly concerned cycle times, daily output volumes, etc. But this later data source did not tell us a lot about the CI capabilities of the organization. Ideally, to answer the sub questions, one would construct at least two questionnaires (before and after the Kaizen events) and distribute it to everyone in the company. This could give a detailed view of the variables and the effects they have on each other, providing the possibility of a statistical analysis. The short time span available before the start of the first event, and thus the short period available to measure the starting situation, prevented us from using this data collection method. There was not enough time to properly design a questionnaire for that purpose. This forced us to collect qualitative data from a number of sources.
‘Triangulation’ is one method commonly used to draw overall conclusions from case study data. In a case study context, it describes the situation where data from multiple sources, or multiple data collection methods, are examined to determine to what extent these data lead to the same conclusions (Yin, 2003). This form of triangulation is conceptually similar to, but methodologically distinct from, the mathematical triangulation used to determine a location of a given point in land surveying. We applied ‘triangulation’ to compare the different data sources and to draw conclusions about the meaning of the data. We used observations gathered during the action research as the main data source. These were confirmed through verifiable data sources (e-mail, etc.). Finally results from interviews will be used to give more value to the observations. The various data sources will be combined in sections 4.3 and 4.4.
3.1.
Data collection
The first and most important group of data we used are the verifiable observations that were done during the action research at Santon. These observations and the context they were done in are discussed in section 4.2. The observations are verifiable through a number of data sources including e-mails sent and received during the action research, confirmed reports of numerous meetings, and data from the intranet at Santon.
21 people. This was to create the possibility to compare the two situations and find any changes that took place.
Both these sets of interviews consist of semi-structured interviews. The reason that this form of interview was chosen is that at that time the exact formulation of the research question was not completely clear yet. That the subject would be CI in some form, however, was clear. A broad data gathering instrument was needed that would not filter out too much information in advance. Another reason for this type of instrument is the explorative character of the research. Both considerations led to the choice for semi structured interviews.
For the first set of interviews a group of 4 people was interviewed individually. This group consisted out of two managers (interviewee C and D) and two participants of the first Kaizen event (interviewee A and B). The first manager (interviewee D) was the Quality manager. The role of this manager encompassed all decisions regarding quality, safety and environment. In addition, the quality manager is the person that handles quality related complaints from clients. The second manager (Interviewee C) that was interviewed was the manager of the P-type production location, which is the production location for all manually assembled switches. This manager is basically responsible for everything that happens at that location. The first of the two event participants that were interviewed was the quality control team leader (interviewee A). At Santon there is a 100% quality check in place, which means that every switch is checked before it leaves production. The fourth interview was with the low volume assembly team leader (Interviewee B). The low volume assembly department assembles more complicated switches that are not suitable for mass production. To gain information on Santon Switchgear’s competitive environment, a fifth interview was held with the owner/director (interviewee E). This interview also provided the opportunity to discover the owner/director’s attitude and commitment towards the subjects of CI and Kaizen events. In retrospect it would have been better, in order to create a more diverse view of the situation, to additionally interview one or two Kaizen event participants that did not have a management or team leaders role. However, the three participants in the event without such a role became only known to the researcher at the time the Kaizen event started. This means that no unbiased starting situation could be measured with those people.
22 documents that were gathered and recorded during the internship. These observations have been formulated into a chronological account of events in the observational period. In addition approximately thirty informal conversations were held during the internship, from which significant quotes were recorded.
3.1.1. Protocol first set of interviews
An interview protocol was set up for the interviews in order to conduct the interviews in a structured manner and for gathering the desired information. The first set of interviews was aimed at gaining a good view on the starting situation at Santon Switchgear. At the time of the interviews the theoretical part of the research had only covered Continuous Improvement in general And not the specific CSFs that later on became part of the CCM and sub questions. The protocol was composed of the following questions (these questions are in Dutch, because the interviews were in Dutch and they might lose nuances in translation):
1. Hoe lang werk je al bij Santon?
English: How long have you been working for Santon?
2. Wat zijn de taken die bij jouw functie horen?
English: Which tasks are part of your role?
3. Wat zijn de problemen waar Santon het meeste last van heeft?
English: What are the main problems for Santon?
(This question addresses sub question 3)
4. Wie is er verantwoordelijk voor het doorvoeren van verbeteringen in de productie?
English: Who is responsible for the implementation of changes in the production department?
5. Hoe komen verbeteringen op dit moment tot stand?
English: How are changes currently being made?
(This question addresses sub question 3) After explanation of the project:
6. Wat vindt u van deze aanpak?
English: What do you think about such an approach?
Question 1 and 2 were aimed at “breaking the ice” and gaining a view of the role of the interviewee within the company. Questions 3 to 5 were supposed to establish the existing (starting) level of CI capability at Santon. This means that the results of these questions can be used to partially answer sub question 3 of this thesis. The sixth interview question was aimed at identifying the attitude of the interviewees towards the upcoming Kaizen events and the CI project in general.
23 capability level” at Santon, but in hindsight they can also be used to determine the starting level of the CSF-CI factor “Strong and committed leadership from senior management team”. The interview with the owner/director contained the following questions:
1. Hoe belangrijk is het voor Santon om snel te kunnen leveren?
English: How important are short delivery times to Santon?
2. Wat voor type afnemers heeft Santon?
English: What types of customers does Santon have ?
3. Welke concurrenten heeft Santon mee te maken?
English: Which competitors does Santon have ?
4. Wat is het “unique selling point” van Santon? (Waar is Santon goed in?)
English: What is Santon’s “unique selling point”? (what is Santon good at?)
5. Hoe belangrijk zijn de producten van Santon voor het productieproces van de klant?
English: How important are Santon’s products to the production process of its customers?
6. Wie is verantwoordelijk voor verbeteringen?
English: Who is responsible for improvements within Santon?
(This question addresses sub question 3) 7. Hoe komen die tot stand?
English: How are improvements being made?
(This question addresses sub question 3) 3.1.2. Protocol second set of interviews
The second set of interviews was held six months later. The research was also in a more mature state at that moment, and therefore questions could also be more specifically aimed at CI capabilities. This resulted in the following questions:
1. Hoe wordt er op dit moment verbeterd bij Santon?
English: How are improvements currently being made within Santon?
(This question addresses sub question 3)
2. Wie is er verantwoordelijk voor het invoeren van verbeteringen?
English: Who is responsible for implementation of improvements?
(This question addresses sub question 3) 3. Wat is het verschil met 6 maanden geleden?
English: What is the difference with six months ago ?
(This question addresses sub question 3)
4. Wat zijn de lange termijn doelen binnen productie?
English: What are the longer terms goals within the production department?
(This question addresses sub question 3) 5. Wat voor procedure wordt daarvoor gebruikt?
English: What kind of procedure is used to achieve those goals ?
(This question addresses sub question 3) 6. Wat is jouw mening daarover?
24 This second set of questions has a better link with the research questions. The first two questions were aimed at measuring the “CI capability level” for the second time. When comparing them with the result from the first set of interviews, a change of “CI capability level” should be reflected in the difference between the answers. Question 3 is a verification, to see whether the participants have noticed a change themselves. The first three questions, in combination with the answers to question 4 and 5, can be used to detect a change in “CI capability level”. Therefore they can partially answer sub question 3 of this thesis.
The data from these interviews (of which the full results can be found in appendix B) was not sufficient to answer research sub questions 1 and 2, and consequently the main research question. This is because the interviews took place before the definitive structure of the research was determined. It was therefore not possible to devise an accurate interview protocol for the collection of sufficient data.
This leaves less room for triangulation to strengthen the validity of the results of this research. The observations, however, are founded on relatively reliable and verifiable data sources such as e-mails. In addition a second party that has been closely involved in the project, being the Director Operations Jelle Postma, was asked to validate the research results and conclusions. He confirmed them, thus adding to the validity of those results and conclusions.
3.2.
Summary of chapter 3
25
4. SANTON: CASE AND RESULTS
4.1.
Introduction
This chapter starts with a report of the events and observations that were done during the six months of action oriented research. It is a report on the stages of the action research cycle “planning action” (4.1 and 4.2) “taking action” (4.2) and part of “evaluating action” (4.3 and 4.4). The action research cycle will be completed in chapter 5.
The second part of this chapter discusses the results and their implications for the research questions. As indicated before, when we have answered the individual sub questions we will have answered the main research question as well.
The case study for this research was conducted at a company named Santon Switchgear over the course of 6 months. In those 6 months two Kaizen events were prepared and took place. A third one was planned.
What makes this case interesting is that the Kaizen events were the only improvement mechanism that was used. And also, they were the only improvement mechanism in the timeframe of the internship. This allows for a clear view on the effects of those events. The case study will be reported in a chronological manner. 4.1.1. History
Santon is a company that produces safety switches for a broad range of purposes. The company was founded in the UK by Mr. Sanders and Mr. Fulton around 1900. The first three letters of Mr. Sanders’ name and the last three letters of Mr. Fultons name were used to create the company name. The production facility of Santon’s switches is currently situated in Rotterdam, and Santon sells its switches internationally.
4.1.2. Ownership and Governance
Currently, Santon is a privately owned company. This is due to a management buyout that took place in 2004. The current owner is therefore also managing and commercial director of the company.
4.1.3. Business Environment
26 Over the past year the market has cooled down due to governments cutting grants for solar power installations. The economic recession has not done them any good either. As a consequence, demand for Santon’s switches has halved compared to 2010. Santon assumes this situation of lagging demand is similar to its competitors and causes a significant production overcapacity in the market as a whole. Which in its turn causes an severe pressure on prices. In order to stay profitable and to keep offering competitive prices in the market place it is therefore mandatory for Santon to become more efficient and decrease costs.
4.1.4. Organization of production
Santon can be divided into 3 types of production facility. Firstly there is a (semi)automated facility that produces the “X-type” product family. This is a relatively new facility. The aim of this new product family and production facility is to radically reduce both labor and material costs
Secondly Santon houses a high volume manual production facility for the “P-type” product family, that consists out of five assembly lines. Both of these facilities mostly supply the photovoltaic (PV) cell industry for application in inverters. Finally there is the traditional department where the most unique and complex switches are made. This department predominantly produces small or single piece orders.
In order to remain flexible to variable market conditions personnel on the high volume production lines consists mainly out of temporary workers.
4.2.
Case and Measurements.
The new Director Operations had formulated the goal of achieving a culture of Continuous Improvement. There was no budget available for doing so, which meant that hiring external consultants was not an option. Instead of hiring consultants he decided to take on the project with a team consisting out of three people:
- a manager: This manager was in charge of the X-type production facility, which is the automated assembly location. The reason he was chosen to take part in this team was because he had prior experience and training for Kaizen events and improvement methodologies. He had acquired these skills at his previous employer.
- a student intern
- and the Director Operations himself.
27 Fairly quickly the decision was made to execute a pilot project in the form of a Kaizen event. The aim of this event was primarily to gain support and buy-in for CI with top management, as well as with the factory employees. A chronological report of the relevant events that took place is presented in the following pages. Table 3 below gives a summary of these events.
Table 3: Actions labeled and dated
Label Action Date
A First team meeting 10/10/2011
B Feasibility improvement targets 14/10/2011
C Planning details Kaizen event 1 14/10/2011 – 31/10/2011
D Design meeting 26/10/2011
E Participant selection 31/10/2011 – 02/11/2011
F First Interviews 27/10/2011 – 02/11/2011
G Kaizen event 1 03/11/2011 – 10/11/2011
H Implementation of proposed improvements 28/11/2011 – 04/12/2011
I Evaluation meeting 12/12/2011
J Inter Kaizen event period 04/12/2011 – 11/01/2012
K First meeting 2nd event 11/01/2012
L Planning details 2nd event 11/01/2012 – 26/01/2012
M 2nd kaizen event 27/01/2012 – 08/02/2012
28 A. Meeting 1 (Kick off meeting) 10-10-2011
This meeting was the first time the project team formally met. In this meeting the Director Operations made clear what the long term goals for the production department were. These goals were to be achieved through a Kaizen event program, because both the Director Operations and Facilitator 1 had experience with this concept.
The planned date for the event was determined for the beginning of November. The following weeks were to be used for the design of these events.
B. Feasibility of improvement targets : 14-10-2011
The Director Operations had a clear preference to focus the improvement program on the assembly line that made the most switches with the most demanding customers. This assembly line was the A-line which mostly produces the 60UL29 switch. His reason for this choice was that the problems in this line combined with the high volumes meant that the potential wins were also high. Creating large wins was desirable because it might increase support for the initiative throughout the entire company, including the director/owner.
In order to assess whether it would theoretically be possible to achieve a satisfactory high output from this line the average cycle time of each individual assembly step was measured (clocked). From these measurements it was derived that in an ideal case, with minimal disturbances in the total assembly process, it should be possible to substantially increase the output of the line. And to reach output levels that were deemed satisfactory by the Director Operations.
C. Planning the details of Kaizen Event 1
In the same week the intern student and the manager planned the content of the workshop and decided on the relevant content that was to be presented to the participants. The plan was to predominantly invite work floor personnel, because in the past ‘improvements’ were said to have failed as a result of workers disagreeing with them. Additionally, workers at Santon typically have a low level of education, which meant that the theory that would be presented could not be too complicated. D. Meeting 2 (design meeting) 26-10-2011
29 E. Selecting participants
The week before the first Kaizen workshop the final list of participants was assembled. Due to illness and other circumstances the originally intended group of participants had to be changed. The Operations and the manager responsible for the targeted part of production selected the new event participants. The goal was to invite people from every sub division of the assembly line that was to be targeted, and some of the more influential Santon work floor employees.
The definitive selection consisted of the following people: - Head Contol
- Head traditional assembly - Worker ‘mechanisme’ 60UL-29 - Worker ‘Bouwen’ 1
- Worker ‘Bouwen’ 2
F. First interviews
During the days before the Kaizen event was to take place, the first set of interviews was conducted. The results of these interviews are shown in section 4.3.
G. Kaizen Event 1: 2nd week November
The first Kaizen event that was held at Santon Switchgear had a number of goals. The first of which was to make the output of the production line for 60UL29 more predictable. The line had a daily production varying from 150 to 375 switches, with an average of 300.
The second was to re-design the production line in such a manner that it would produce in “tact” with customer demand, which was about 400 switches per day. The third was to dramatically decrease buffers, and thus lead times.
Because this was the first event, it was important to reach the intended goals in order to show the potential of Kaizen events for Santon Switchgear to the entire company. Failure could lead to less support for the initiative, and confirmation of current beliefs that the workforce at Santon Switchgear was not capable of improvement.
The program was composed out of the following elements: - Three days instruction, basic Lean and Kaizen theory
30 In the days between the presentation to the owner/director and the foreseen implementation of the recommended improvements the CI team held multiple meetings. In those meetings the successful deployment of the re-designed assembly line was prepared. However, two main potential problems were identified:
1. Since there were far less buffers in the new design, the line would reach a complete halt if the supply of any of the parts would not be adequate. This had to be prevented, because it could have a negative effect on the performance of the line which could conceal the positive effects of the new plans.
2. For the success of the redesign, cooperation of the entire group of workers was essential. If they would perceive the more efficient way of producing as a threat to their job security, they would probably not fully cooperate. Because the method of assembly for this line was purely manual they even had the possibility to sabotage the project by simply working slowly. To prevent this from happening the decision was made to give the workers participating in the project more job security. The Director Operations did this by guaranteeing them that they would be the last of the temporary workers to be laid off from Santon, in case such a situation would arise.
H. Implementation of workshop recommendations (one week): 28-11-2011
After the approval of the Director Operations and the owner was gained, the plans could be executed. The first week of implementation was planned to be an ’adaptation week’ in which the assembly line and its workers could get used to the adjustments that were to be made. The goal was to reach the production total of 400 per day at the end of the first implementation week.
However, this total was reached the second day of this week. And it was consistently repeated during all other days of the first week. During the two weeks after the implementation the assembly showed a decrease in defects and the only large problems where inventory shortages. The output of 400 switches per day remained steady when supply was sufficient. This meant that the implementation of the recommendations could be considered a large success.
I. Evaluation of results first workshop: 12-12-2011
A meeting took place to evaluate the first Kaizen event. A list of things that went right and a list of things that went wrong were compiled.
Right:
