It is with this enigmatic sentence that one of my Japanese mentors introduced the growing difficulty with continuous improvement.
What it means is that at the beginning of an improvement program or when starting in a new area, the first and usually the easiest actions bring big improvement, hence the “easy” 50%.
This is also known as “reaping the low hanging fruits“, another metaphor for earning easy results with very reasonable effort.
Once these easy and quick wins are done, what is left to improve requires more effort, more time or more investment.
The improvement curve is therefore asymptotic and it is increasingly difficult and expensive to squeeze out the last improvement potential, hence the “difficulty to improve (the last) 5%”
The graph shows the 3 stages of improvement
A: quick and easy, few actions, visible results, big leverage, usually a leap in performance. Excellent Return On Investment (ROI).
B: second stage in continuous improvement, more effort and investment is necessary, but the ROI is still worth it
C: “chasing the decimals” : huge efforts and investment are required to squeeze out the last potential. The ROI is not worth it.
At some point, the Return On Investment (ROI) is not worth going on. This means that improving further what exists and/or the way it has been done until now is no more meaningful. What is required is a breakthrough, a radical change.
This is where kaizen (continuous incremental improvement) must give way to kaikaku (radical change), or in other words: as the old process or usual way cannot be further reasonably improved, it must be totally reconsidered.
Yet in many cases this is the upper limit of improvement as the process cannot be changed. Too often redesigning the product or process is not possible:
- Design has to be approved or the new product/process has to undergo lengthy and costly qualification (pharma, automotive, aerospace…)
- Remaining life is not long enough to pay for
- Facilities are not flexible, can’t be modified
- The modification would break some contract
The continuous improvement is often limited by options and decision made in early design and development stages, a fact I discuss in >this post<
Related: Stuck with continuous improvement?