QUALITY MANAGEMENT Continual Improvement Auditing By

QUALITY MANAGEMENT
Verifying Improvement Assessment

Continual Improvement Assessment (CIA): Part 3/6
By: J.P. Russell
JPR@QualityWBT.com

Continual improvement (a process of on-going changes that add value to the organization) needs to be verified because 1) it is too easy for market conditions to cloud improvement efforts, 2) managers may manipulate results such that progress is overstated or 3) successful achievement of scorecard metrics may overshadow damage to the organization and customer relations. Auditing for continual improvement will provide the factual information that management needs to make internal and supplier decisions. Top management needs answers to questions such as: Was the process really improved? Are problems being eliminated? Is the organization benefiting?

Continual Improvement Test

A tool for testing continual improvement is the Analyze-Change-Do-Prosper (ADCP) improvement cycle. In this article we want to use the ACDP cycle (PDCA letters in reverse) to test for continual improvement. These are the earmarks of improvement regardless of the improvement program or combination of programs used by the organization. The assessment objective is to verify that there is improvement, not that specified steps were followed or specified records are filled out completely.

ACDP Improvement cycle

Analyze:	Is the organization analyzing and evaluating data? Are chart techniques, comparisons, spreadsheets, tabulations, pictures, statistical techniques being used to identify opportunities for improvement?
Change:	Does the proposed improvement change the process? Has the organization identified and justified changes to methods, application techniques, acceptance criteria, equipment, material, technology, and personnel? Does the proposed solution(s) represent a change to the process (conducting business differently)?
Do:	Has the proposed improvement been done (completed)? Has the proposed change been implemented and/or deployed? Are funds and resources provided to enact the change?
Prosper:	Has the organization prospered as a result of the change? Was there added value to the organization as a result of the change? Has the organization’s effectiveness and efficiency improved? Were objectives met?

Auditors can ask questions to gather information about improvement. They can be general questions (see A-C-D-P questions) or questions regarding a specific project or corrective-preventive action.

Analyzing and Classifying

There may be a wide variety of projects and improvement actions. Improvement activities are initiated for different reasons and the outcomes may or may not benefit the organization. It is helpful to classify improvements into three types: necessary, value-added, and superficial. The audit report should indicate the types of improvement that are taking place for the unit, area, department or supplier organization.

Types of improvement

NECESSARY improvement is required to prevent deterioration, or comply with legal, regulatory and contractual requirements (such as OHSA railing height requirements, responding to a nonconformity or noncompliance citation, repainting to protect surfaces, or repairing a water leak).

VALUE-ADDED improvement enhances value [more consistent product/service, less process variation, new equipment that results in more efficiency, software changes, cement driveway, expansion of facilities, etc.].

SUPERFICIAL improvement is merely adding aesthetic qualities, comfort or beautification [piped in music, new color coordinated room signs, using unusual plants in landscaping]. Benefits may be intangible and subjective.

Improvement actions may also be characterized as remedial, corrective, preventive, or innovative in nature. The nature of the action(s) is normally determined by either an area manager or improvement team.

Remedial or Containment Action (correction): Action taken to alleviate or contain a problem, nonconformity or undesirable situation (reactive). Examples are: reworking, regrading, sorting, repairing, rejecting, replacing, and discounting.

Corrective Action: Action taken to eliminate the cause(s) of a problem, nonconformity or undesirable situation (reactive). Action taken to prevent recurrence.

Preventive Action: Action taken to eliminate the cause(s) of a potential problem, potential nonconformity or potential undesirable situation (proactive). Action taken to prevent occurrence.

Innovative Action: Action taken to change a process or system to better meet objectives (such as improved profitability, lower cost, higher customer satisfaction ratings). Innovative actions may require modifying processes, products or services or the introduction of new processes, products or services (proactive).

Continual Improvement Reporting

The results of checking the improvement actions will provide the information needed for the assessment report. First, the information should be reported at an exit meeting to the people in the area audited and later in a formal report and perhaps another presentation.

When investigating and looking for evidence of change, an auditor may find that a change was proposed, but that it did not address the root cause and the problem still exists. This would show up in the report as change with no value or benefit. However, a good faith effort should always be applauded even if it takes a second time to get it right. The real world problem is that people are afraid to take a risk and most improvement actions are limited to remedial actions that don’t change (improve) the system.

The information should be reported and used to assess future performance of the internal department or supplier organization. Auditing for continual improvement should be used as a leading indicator of what management can expect in the future. Reports may indicate continual improvement efforts are on track or that there is a downward trend that needs to be turned around.

Conclusion

Auditors verifying continual improvement are not judging the acceptability of the problem, solution or implementation. Assessors verifying continual improvement are determining if the solution results in improvement, if there was added value, and if organizational objectives (for continual improvement) are being achieved.

Taken from book and class materials (Continual Improvement Assessment) by JP Russell.

	Part 1: Continual Improvement Auditing/ SME - May 2003
	Part 2: What is Continual Improvement? – June 2003
	Part 3: Verifying Continual Improvement – July 2003
	Part 4: Process Auditing for Continual Improvement
	Part 5: Assess Gaps Compared to Performance Excellence Models
	Part 6: Assess Continual Improvement Perceptions

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