Profit Improvement Approach

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Our newsletters provide information on business management systems and process improvement methods. These systems include ISO 9001, AS9100 Aviation, Space and Defense, ISO/TS 16949 Automotive, ISO 27001 Information Security, ISO 13485 Medical Devices, ISO 14001 Environmental Management Standard, and others. Subjects include performance improvement methods such as Six Sigma, Lean Enterprise, and other topics of interest to our readers.

If you have any questions regarding content, or have a subject of interest for a future newsletter, please let us know.

Profit Improvement Approach

business-deal-illustration.jpg Organizations are faced with numerous improvement choices and buzzwords everywhere; Kaizen, Lean Manufacturing, Six Sigma, TQM, and Value Propositions. Sometimes the wrong choice is made based on the latest fad or recommendation of another. Often we rarely take the time to step back, identify, and analyze what the real issues are and the type of method to use.

Let’s take a look at a simplified and proven improvement choice that we initially began using in our careers way back in 1992, and now have successfully accomplished results with our manufacturing and service clients.

The Kaizen Methodology to Profit Improvement   

Kaizen (usually pronounced ‘kyzan’ or ‘kyzen’ )  is a Japanese word, commonly translated to mean ‘continuous improvement’. Kaizen is a core principle of quality management aligned within the methods of Total Quality Management and ‘Lean Thinking. Kaizen is a methodology aimed at the elimination of waste in every area of the business including customer relations, manufacturing and service delivery, design, supplier networks and office management. Its goal is to incorporate less human effort, less inventory, less time to develop products and services, and less space to become highly responsive to customer demand while producing top quality services in the most efficient and economical manner possible.

The principles of Kaizen are based upon:

  • Waste is hidden in all processes
  • Identifying and eliminating waste impacts costs and customer satisfaction
  • When waste is identified, it becomes clear that it adds no value to the customer and increases operating costs.

In order to focus improvements on what matters, we have to clearly understand the interests of the people involved. These can include customers, stakeholders, suppliers, management, and employees. Kaizen uses a team approach. Team membership is made up of personnel who do the work. The team uses analytical tools and techniques to review systems and identify ways to improve and eliminate waste of time, money, materials, resources and effort to increase productivity and customer satisfaction.


What are Kaizen Events?

Kaizen events are focused three-to five-day breakthrough events that generally include the following activities:

  • Training
  • Defining the event scope /goals
  • Documenting the current state
  • Brainstorming and developing a future state
  • Implement improvements and presenting results
  • Follow-up activities.

The following information is provided based on our approach.

Pre-event Training- two hours or more is preferred to achieve familiarity with lean principles and tools training. Training should cover basic lean principles, eight wastes, benefits of standard work, event methods and team roles. More advanced training with method and tools are introduced during the event on an as-needed, just-in-time basis.


Determining the Event Scope – When determining event scope, the leaders contribute relevant information such as event drivers, current state performance, and the desired performance. Variables can include 1) How aggressive are the event objectives? 2) Current state understanding in relationship to time and team members. 3) Process complexity can include the number of steps, systems, and personnel involvement. 4) Solutions complexity – What can be done now, and what will be part of the follow-up plan?  We use an effective team charter and objectives matrix for this process effectiveness.  

Documenting the Current State – Mapping and flowing the processes that are involved you will be able to identify and eliminate the waste that causes the delays. Creating benchmark metrics will give you a baseline and let you identify where the problems in your processes really are and measure impact of changes. Metrics include process time (touch time) lead time (turnaround time) and percent complete and accurate. Remember that time is the primary metric in a lean approach, so determining the critical path of your mapping will determine the overall lead time.


Developing a Future State. With the current state documented, the Kaizen team members identify the waste in the process, determine root cause for the waste, and design effective countermeasures which becomes part of the future sate design. Analyzing the current state includes identifying the value-adding and necessary non-value adding steps with the primary customer in mind, the end user of the product or service. Specific root cause analysis tools are used to evaluate, prioritize, and select improvements the team will implement during the event. The goal is to highlight the process steps that contain the greatest waste, and improve the process using a number of metrics for future state implementation.

Implement improvements and presenting results. Measurable, incremental improvement requires the team to focus on what can be done within the event timeframe. All improvements should make work easier, and an improvement must generate positive measurable results. During this phase team members are identifying potential future training requirements, anticipated benefits, and a sustainability work plan. This plan can include process monitoring, 30 to 60 day action plans, user inputs for process modification, and process compliance audits. The team is responsible for presenting their project results to the leadership group. A formal reporting process is used which includes event objectives, key improvements implemented, and projected and measurable results.


Follow-up Activities. The improvement cycle is never over when the kaizen event concludes. Measuring, monitoring, and continual improvement is key to ensuring sustainability. Management and team follow-up meetings are needed to monitor progress, track results, and conduct lessons-learned activities are required. Part of this important stage is to conduct post-event process audits to ensure the improvements have been done, the new processes are being followed, and improvements are having the intended results. The “actual after measurement” metrics are documented to validate or alter the projected improvements defined in the future state process. Many organizations fail at this stage because they don’t aggressively continue to measure and analyze processes.

Kaizen Works Best when it is ‘owned’ by people, who see the concept as both empowering of individuals and teams, and a truly practical way to improve quality and performance. Developing a continuous improvement organization ensures improvements produce not only better productivity and profit for the organization, but also better recognition and reward and other positive benefits for employees, whose involvement drives the change and improvement in the first place.


We highly recommend this proven method due to its minimal investment costs and high rate of return!

Contact us  for more information, and to design an effective and repeatable system for your organization.

Investing in Process Improvement


When times are good, many companies create a “surplus to  process requirements” based on immediate needs.

More inspection and non-value-added steps that result from high volume needs may not work in a reduced economy.  There is no room for redundancy and cost cutting must be focused on waste reduction. 

Organizations need to streamline costs yet still provide optimal value through exceptional product or service quality.

Investing in process improvement while cutting costs may seem counterintuitive, however by studying how the process is producing the desired output you can scale back and still meet your requirements and the customer’s needs. A well designed and executed improvement effort will always identify non-value-added activities for elimination, where those dollars saved can be used for other purposes and positively impact customer satisfaction.

On the flip side, hazardous decision making and cost cutting can produce a detrimental effect on your business disappointing customers and reducing your revenues.

How can your organization take a strategic approach to improve processes during good and lean times?

  1. Identify the critical processes that produce the most value to your customers.
  2. Communicate with your customers and involve them with defining (or redefining) their needs and wants and adjust your outputs accordingly.
  3. Understand how your processes work.  Dissect your processes and identify the critical variables, inputs into outputs.  For example, people, material, methods, environment, hardware, software.
  4. Establish and/or review the criteria used for the operation of your processes For example, performance metrics related to process outputs, key variables, documentation used, or not used effectively, training effectiveness or lack of training validation.
  5. Use Lean tools and methods to aggressively eliminate waste in these processes.  For example, 5S, value steam mapping, error proofing, kaizen, visual management or kanban.
  6. Follow-up with Six Sigma tools to minimize process variation and improve the accuracy and predictability of your processes.  For example, process mapping, QFD, FMEA, control charts and SPC methods.
  7. Make process improvement a constant within your organization.  Reward people for their ideas and ensure they provide the highest quality product and service. This requires leadership determination and organizational commitment.

In the proactive mode, the organization that recognizes the need to continually improve its processes to meet the challenges of the future, even in strong and lean times is successful.  Successful organizations understand this – let it work for you and your organization.


Selecting the Right Quality Measures



Selecting the right quality measures can have a tremendous impact on overall performance outcomes and the culture of quality throughout an organization. The challenge is figuring out the right balance to ensure that measures are not so standardized that they lose the value to affect performance.


The Discoveries Global State of Quality Research identified the following measures being used:

  • Defects per million: 82% manufacturing vs. 38% service
  • First pass yield: 88% manufacturing vs. 43% service
  • Percent on-time delivery: 97% manufacturing vs. 58% service
  • Measures of safety: 96% manufacturing vs. 63% service
  • Internal failures: 96% manufacturing vs. 67% service
  • Percent compliant: 96% manufacturing vs. 83% service
  • Employee satisfaction: 91% manufacturing vs. 94% service
  • Customer satisfaction: 98% manufacturing vs. 96% service

Question: Although the percent usage is interesting, an obvious question comes to mind:  Why aren’t these quality measures being used more?

Using Quality Measures

Organizations can use quality measures in the establishment of strategic goals, for trending and predictive analysis to enable pre-emptive and not just reactive decision making, and in rewarding employees through performance compensation. Data show that the majority of organizations use measures in a more mature way, but there are a few significant differences among manufacturing, services, and healthcare respondents.

Only 59% with distributed governance (decentralized quality responsibilities) of quality use measures to drive performance, whereas usage is 81% of organizations that manage quality by a functional central group.

Question: Why the large difference?   Give us your thoughts on these questions; and is your organization using the same types of quality measures?  Email Us.



In the News

Coming Soon: ISO 9001:2015 Revision and Update Webinars and Workshops

Sustaining Edge Solutions will be conducting webinars and workshops in 2015 on the subject of the future ISO 9001:2015 Risk-Based QMS Standard. Who’s going to be affected by this future revision? Customers, supply chain, certified companies, end users, consumers, certification bodies, auditors, regulatory agencies and You!

Sign-up now and we will notify you of future dates in advance.   


How to Get Outsourcing Right

Outsourcing, the transfer of work to an external company, is nothing new. But recent years have seen an exponential increase in this practice and this is expected to continue. Behind this pattern are companies choosing to focus on their core business areas and reduce costs.

Although the premise of outsourcing can be beneficial, the introduction of an external third party can also backfire and result in lower quality, more complicated interactions, slower turnaround times and unhappy customers and employees. But new guidance can help organizations reap the benefits and avoid common pitfalls.

ISO 37500:2014 covers the main phases, processes and governance aspects of outsourcing, independent of size and sectors of industry and commerce. It is intended to provide a good foundation to enable organizations to enter into, and continue to sustain, successful outsourcing arrangements throughout the contractual period.

ISO 37500:2014 gives guidance on:

  • good outsourcing governance for the mutual benefit of client and provider;
  • flexibility of outsourcing arrangements, accommodating changing business requirements;
  • identifying risks involved with outsourcing;
  • enabling mutually beneficial collaborative relationships.

For more information on ISO 37500, visit the ISO Website.

Cutting-edge insights and practical lessons from MIT Sloan faculty–for free!


Thousands of people globally have listened to the MIT Sloan Executive Education Series learning breakthrough concepts and innovations from the MIT faculty who developed them. If you haven’t tuned in, here’s a roundup of 10 big ideas–fundamentals of our executive education programs–that you can access for free in our webinar archive. Categories include Manufacturing, Process Improvement, Information Technology, Supply Chain, Management and Leadership, and many more.

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Don’t see a course or schedule that fits your needs?  Contact us.

Interested in what’s ahead for the ISO 9001 Standard and all other QMS standards to follow? Register for our AZTC Lunch and Learn. Whether your company is certified, or are just thinking of getting started, with over 1.3 million global registrations, this revision will have a direct impact towards your operational effectiveness and profit improvement.  See you in April!

Best regards,

Walter Tighe and SES Team
Sustaining Edge Solutions, Inc.
Toll Free 888-572-9642




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