Process Improvement Definitions

Within work on Six Sigma, process improvement represents the focus of improvement activities.

“Six Sigma is an organized and systematic method for strategic process

improvement” (Linderman et al. 2003, p.195)

This definition is consistent with the findings of Zhang et al. (2008), who showed the importance of the selection of strategic aligned improvement projects compared to the structure methodology. However, without appreciation of this focus on operational processes, attention may be directed to other operational activities.

“The problem is that managers waste their time in adopting the newest

improvement tool [for example Six Sigma], using consultants, and spending very little time in driving process improvement from the bottom.” (Chakravorty 2009b,

p.9)

This observation appears consistent with the attention that was given to researching continuous improvement in the 1990s (for example Bessant et al. 1993; Bessant et al. 1994; Bessant and Francis 1999b; Bessant and Francis 1999a; Kerrin 1999 amongst others). While focus was given to achieving the goal of continuous improvement, attention was not directed towards how continuous improvement could be realised. For example Bessant and Francis (1999a) defined continuous improvement as “an organisation-wide process of focused and sustained incremental innovation” (p.1107), without focusing attention on the types of innovation that were taking place (for example, process, product, market, organisational (Schumpeter 1934)). In comparison, Terziovski (2010) stated the “innovation in the manufacturing sector generally focuses on

process improvement” (p.893), which gives focus to firms who may want to work towards

continuous improvement.

Work on continuous improvement can thus be viewed in a similar light to the early work on quality management presented in section 2.2. By researching continuous improvement without giving specific attention to the unit of improvement was similar to

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researching quality performance by focusing upon quality management tools and techniques while overlooking process improvement. Oliver (2009) assists in addressing this limitation by locating discussions on continuous improvement within quality management practices. As a result, practitioners were provided with a context, a focus, accepted tools, relevant training, measurement criteria and a theoretical underpinning to support practitioners in pursuing continuous improvement. Oliver (2009) even presented process improvement as an important performance measure.

While attention was given to learning within the work of Bessant and colleagues, overlooking operational processes introduced other limitations to this work. As the culmination of this stream of research, Bessant et al. (2001) identified a range of important aspects such a key behaviours, culture, resource-based strategies and incentives as being important for enabling continuous improvement. However, this overlooked the existing work within quality management, which could have provided a similar framework for achieving continuous improvement. Apart from the resource-based view (Wernerfelt 1984), the work also overlooked the relevance of theory, instead drawing on the concept of the learning organisation (Senge 1993). This gives greater emphasis to cultural aspects of learning, compared to the processes that are central to operations management and organisational learning (Tsang 1997). Anand et al. (2009) was able to address these limitations, providing a relevant definition of continuous improvement and basing discussions within the context of process improvement.

“Continuous improvement is defined as a systematic effort to seek out and apply

new ways of doing work i.e. actively and repeatedly making process improvements” (Anand et al. 2009, p.444)

Compared to Anand et al. (2009), Bessant and Francis (1999a) while also presenting continuous improvement as a dynamic capability, put less emphasis on engaging individuals or embedding continuous improvement behaviours within organisational systems. Anand et al. (2009) used Six Sigma to provide a framework that included incentives, training and structured methods, as well as providing a foundation on which an appropriate organisational culture could be developed. Compared to the learning organization used by Bessant and colleagues, Anand et al. (2009) drew more effectively

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from organisational learning that appeared to provide a stronger theoretical underpinning to the research.

Reflecting on the systematic accumulation of scientific knowledge, Anand et al. (2009), Six Sigma and organisational learning could represent a revised theory of continuous improvement, refuting previously held theories on continuous improvement presented by Bessant and colleagues (Schmenner et al. 2009). Organisational learning appeared to provide a stronger foundation on which to locate discussions on cumulative learning through process improvement and implementing changes to organisational policies and procedures. The role of organisational learning within Anand et al. (2009) is also consistent with other theoretically underpinned work on Six Sigma, for example:

“Six Sigma is an organizational learning process and one that results in greater

knowledge” (Schroeder et al. 2008, p.549)

Six Sigma could thus be considered the systematic and repeated use of process improvements to promote knowledge creation and organisational learning. Although particular work within Six Sigma chose to define improvements in terms of quality (for example, Choo et al., 2007a, 2007b), consistencies between the two terms are present. Angel and Chandra (2001) drew from Juran (1951) to state that quality took the form of both conformance and design. This may take the form of process variation being reduced to improve conformance to specifications or the characteristics of a process being changed to improve the product as received by the customer. Consequently, quality improvements can be realized by undertaking process improvements.

“Quality improvement is inherently a learning and knowledge-based activity that

emphasizes learning and knowledge creation” (Choo et al. 2007, p.918)

The above highlights the similarity with Schroeder et al.’s (2008) Six Sigma definition. However, while the above discussions show the relationships between quality, continuous (Anand et al.’s (2009) definition) and process improvement, the specific nature of process improvement remains undefined. From a quality management perspective, process improvement may result in the refinement of operational processes to increase the level of conformance to specification (Juran 1951). This is consistent with

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Williams et al. (2000), who stated that process improvement in quality management is primarily variation reducing. As a result, process improvement effort as resulting from being informed of non-conformances by customers (induced learning) can be defined as follows.

“Induced learning represents the result of conscious managerial actions such as

process improvement projects, defect prevention efforts, quality circles and labor- training” (Li and Rajagopalan 1998, p.1519)

“Defect levels as a surrogate for the effort devoted to process improvement” (Li and Rajagopalan, 1997, p.183)

However, due to such forms of quality/process improvement diminishing over time (Argote and Epple 1990; Li and Rajagopalan 1997), the impact of process improvement efforts tends to reduce over time as the rate of non-conformances reduces. There may also be a risk of problems only being resolved once problems have been experienced by customers, with companies not undertaking more fundamental changes that may require the redesign of products and processes (Harry and Schroeder 2000).

However, non-conforming products may still represent an important initiating point for the plan-do-check-act cycle, Six Sigma improvement projects or more generally, process improvements. While this represents an accepted initiating point for process improvement efforts, proactive process improvements will also be considered within the current research. This is consistent with the Six Sigma approach to initiating improvement projects. Following the generation of a portfolio of potential projects (Kornfeld and Kara 2011), projects are selected by upper management, ensuring they are strategically aligned. Rather than simply addressing problems identified by customers, larger, strategic and fundamental issues can be resolved that may cross-functional boundaries. This can be important for reducing the pursuit of localised improvement goals with localised solutions (Schroeder et al. 2008).

The focus on performance metrics and achieving challenging goals within Six Sigma can drive improvement practitioners to deliver improvements in excess of the immediate complaint received from the customer, and provide improvements in line with

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a firm’s strategy. Within such cases, process improvements are not only initiated by customer complaints, but also focus on reducing costs, increased value received by customers and achievement of strategic aims (Linderman et al. 2003).

To provide additional context to what a process improvement project may consist of, away from resolving quality non-conformances, it is necessary to provide a relevant example of what a process improvement project may aim to achieve. Mukerherjee et al. (1998) provided a simple example of an improvement project that aimed to “Reduce wire

fractures from 5 per ton to 3.5 per ton” (p.S40). Through the application of quality

management tools, improvements in process consistency were realised through changes in operational practices, implemented via standard operating procedures and improvements in process capability (Mukherjee et al. 1998). However, within the previously discussed literature on Six Sigma (Linderman et al. 2003; Linderman et al. 2006; Choo et al. 2007a; Choo et al. 2007b; Schroeder et al. 2008), while Six Sigma itself was defined, process improvement was not. This may have been due to process improvements being defined practically within Six Sigma as resulting from the application of a structured method to reduce variation or improve the ability of operational processes to meet the needs of customers (Antony 2012). However, this limitation can be addressed by Anand et al. (2009) who stated that a process improvement may consist of the following:

“For example, raw materials such as wood and iron fixtures go through several

operational processes to manufacture a chair; information about the customer and aggregate risk-related data are processed to produce an automobile insurance policy. Process improvements are defined as enhancements in operational processes; e.g. improving a chair manufacturing process so that less raw material is consumed, or reducing the cycle time from proposal to delivery of an insurance policy” (Anand et al. 2009, p.445)

In combination with the previous discussion and definitions of Six Sigma, the above provides important context. Six Sigma thus provides a structured method to realize process improvements that are aligned with firm strategy (Zhang et al. 2008) and aim for improvements goals that are challenging (Linderman et al. 2006, p.780). However, before accepting findings of the presented research on Six Sigma, the empirical foundation on

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which the work is based needs to be considered. While the above research has attempted to build upon a strong theoretical foundation, the variety of companies was extremely limited. As a result, while particular pieces of research (for example Linderman et al. 2006) attempted to validate theory, by drawing from a single organisation, the research methods does not provide findings that can be considered in relation to other organisations. This is of particular concern when two of the most highly cited papers on Six Sigma (Linderman et al. 2006; Choo et al. 2007b) appear to rely primarily on the same single company.

“MFG is a Fortune 500 company with more than 60,000 employees worldwide” (Linderman et al. 2006, p.782, Choo et al. 2007, p.442).

While the previous section outlined the logical and theoretically underpinned arguments presented on literature related to project-oriented process improvement and definitions related of process improvement, the empirical foundations of the work is relatively weak5. Although Zu et al. (2008; 2010) explored Six Sigma practices across a range of firms (266) without the critical discussions presented by Roger Schroeder and colleagues, the relevance of this work was also limited. Although work on project- oriented process improvement provides useful insight to the drivers of process improvement, further exploration of process improvement practices within a range of companies is still required.

To help address this empirical limitation of research on Six Sigma (and process improvement); the insight provided by work on Six Sigma can be drawn upon to provide insight to viewing other process improvement practices. Due to the above research focusing upon larger firms and the current research focusing upon engineering-oriented SMEs, this issue also needs to be addressed. While exploring how British manufacturing SMEs employed Six Sigma, Antony et al. (2005) found that smaller firms had difficulty freeing up sufficient resources to implement Six Sigma. Smaller firms also found that the scope of Six Sigma projects was too large (>$300,000 per year). As a result, firms tended

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to pursue alternative improvement initiatives such as Lean or TQM with over 80% of the 60 firms contributing to Antony et al.’s (2005) research holding ISO 9000 accreditation. Similar observations were made by Thomas et al. (2008) within a small engineering company implementing Six Sigma. The firm has insufficient resources to provide the necessary statistical training to improvement practitioners. Antony (2007) at least partially addressed this issue by emphasising the importance of viewing Six Sigma as a logical and sequential problem solving framework. Antony et al. (2007) also highlighted the primarily importance of six sigma tools is develop process understanding in order to improve operational processes. These views move away from conceptualising Six Sigma as primarily the application of statistical techniques (Kumar et al. 2008).

Overall, this review of research on Six Sigma and definitions employed within Six Sigma literature, highlight how Six Sigma can provide a theoretically underpinned understanding on process improvement activities, however, it has also highlighted its potentially limited relevance as an improvement initiative in smaller firms. Work on Six Sigma within SME appears to give great benefits to confirming the relevance of improvement methodologies to the context (for example, Batmen 2005 or Kumar et al. 2006), compared to exploring the broader nature of process improvement within the SME context. The following sections consider Lean and ISO 9001 accreditation, as approaches that are popular in practice and an area in which empirical research has been conducted with SMEs.