Linking continuous improvement to manufacturing performance

The purpose of this paper is to examine factors that inhibit and facilitate the contribution of continuous improvement activities to advance performance in “lean” factories.

From the perspective of the routine dynamics theory, this paper considers the possibility of changes in the standard operating procedures (SOPs) made in the course of continuous improvement activities being ignored by employees. This paper builds a hypothesis predicting that firms where employees ignore changes in the SOP cannot achieve the intended improvement effect of these changes. This hypothesis is confirmed with comparative case studies of Toyota and Matsuo.

At Toyota there is an incentive to perform operations according to the SOP, while at Matsuo this incentive is not present. This difference means that process improvement activities at Toyota generate changes in manufacturing operations, while at Matsuo, although the SOP has been changed, workers continue to perform operations according to the old SOP and fail to advance performance. This paper argues that the presence/absence of an incentive to perform operations according to the SOP is dependent on whether the responsibility of the performance lies with the SOPs or employees. Additionally, this paper finds that the SOP not only limits employees’ creativities but also supports creative activities for the development of continuous improvement as an organizational activity.

The generalization of our findings requires statistical support for which an extensive subsequent sampling survey including non-Japanese firms is necessary.

This study makes a new suggestion regarding the theory of routine dynamics and the fields of operations management: adequate management of consistency between the three aspects (material, ostensive and performative) of organizational routines is important for lean manufacturing.