As the workers in any organisation see its processes in action all the time, they are often best placed to make suggestions for improvement. Continuous improvement is a process whereby these small, incremental changes are introduced regularly in order to develop quality and efficiency. Corus, one of Europe's largest steel producers, uses this to help it gain new business and increase profitability by reducing costs and increasing productivity. By enabling employees to share their ideas and expertise they were able to win a large contract with the Royal Navy. Continuous improvement was used throughout the development of new steel products for use in the Navy's aircraft carriers.
To maintain competitive advantage, firms must review how they do things. If they do not, they run the risk of their competitors overtaking them. These improvements may be significant step-changes, but equally they may be in the form of constant, incremental changes made as a response to employees' ideas. Other forms of achieving productivity include re-structuring and re-organisation.
For example, retail businessman Sir Philip Green is currently in the process of making improvements to his business empire. In order to streamline the business and improve the performance of BHS Sir Philip has taken the decision to close down 10 BHS department stores, with the shop leases being taken over by Primark. In addition to this he is merging the BHS chain into the rest of the Arcadia Group, which includes Top Shop, Dorothy Perkins, Wallis and Burton. These brands will be showcased in BHS stores meaning that he will be able to close down between 200 and 300 of the smaller Arcadia stores over the next few months. Other possible changes include the introduction of a convenience food range at BHS and more stores being opened which focus on home products rather than clothes. (The Sunday Times, 17th January 2010)
- What is meant by continuous improvement?
- Using the case study, explain how continuous improvement has been used in Corus
- Analyse the ways that continuous improvement processes could be used within the Arcadia group.
Answers to questions
- What is meant by continuous improvement? Continuous improvement is an ongoing process of seeking to make improvements to company practice.
- Using the case study, explain how continuous improvement has been used in Corus – Waste minimisation, Stock management,Research and product development
- Analyse other ways that Philip Green and the Arcadia group could benefit from continuous improvement This answer could include any examples where incremental improvements are suggested and implemented by the workers, perhaps through the use of quality circles or Kaizen groups e.g.More efficient transport and delivery of stock, Improved stock control methods, Better customer service in stores