Quality Cycles Improvement

One particular section of the model deserves a closer look in the discussion of quality cycles. The flow of information in the upper left quadrant of the model changes depending on the type of quality improvement process involved. Two quality improvement terms borrowed from the Japanese are particularly relevant to this topic. The terms and their definitions are:
Hoshin:
A breakthrough innovation or dramatic change in level of performance. The Hoshin concept was developed in Japan to communicate company policy to everyone in the organization. Hoshin's primary benefit is to focus activity on the key things necessary for success. Japanese Deming Prize winners credit Hoshin as being a key contributor to their business success. Progressive US companies, like Hewlett-Packard and Xerox, have also adopted Hoshin as their strategic planning process. Hoshin plans, therefore, map out a framework for substantial increases in performance.
Kaizen:
Kaizen is the Japanese term for continuous improvement. It refers both to a statistical/quantitative evaluation of process performance and an adaptive framework of organizational values and beliefs that focuses workers and management alike on zero defects. Kaizen plans lay out an ongoing refinement process.
Hoshin and Kaizen, along with a Plan-Do-Check-Act (PDCA) cycle, will be used to describe the previously mentioned information flows and demonstrate the quality improvement cycles.
1. Breakthrough Innovation (Hoshin) Cycle
When Cp <=4/3, an unstable process is indicated and a major innovative change, or Hoshin, is suggested. A Hoshin could also be considered even when a process is stable. For a business firm to maintain its competitive edge and/or increase revenue, it may be necessary to initiate a Hoshin cycle for a process that is already at a high sigma level of quality. Figure 8 depicts the information flow within the model when a jump in productivity or level of performance is desired.
Through the use of the MBM component, a simulation of the physical layer is created so that the effects of altering process variables may be analyzed. It is probable that numerous simulations will be executed with differing variables until a path representing the breakthrough is discovered. At this point, the results of the simulation are implemented in the actual system with feedback flowing back through the management element for monitoring and adjustment. It may take a process several cycles to stabilize and begin the Kaizen cycles.

2. Continuous Improvement (Kaizen) Cycle
Generally speaking, when Cp >4/3 for a process, that process is considered stable [Mizuno, 1988]. Figure 9 depicts the information flow for Kaizen continuous improvement cycles. In this situation, feedback from the physical layer is monitored by the management component . Input from the MIS and DSS assist managers in making incremental improvements to the business processes.

3. PDCA Quality Cycles
In this view of quality improvement cycles, the upper and lower PDCA cycles of Figure 10 correspond to Hoshin and Kaizen respectively. For illustrative purposes we will assume an unstable process as a starting point and follow it through the 8 steps of this process improvement procedure [Eddlestone, 1992].
Beginning at the Plan element of the upper cycle, the steps are as follows:
Develop process innovation/breakthrough plans.
Implement plans.
Check impact on capability
Act on results (decision point). If Cp >4/3 , process has stabilized. Go to plan element of lower PDCA (Kaizen) cycle.
Develop process improvement plans.
Implement plans.
Check process variation.
Act on results (decision point). If Cp <=4/3 , process is now unstable. Go to plan element of upper PDCA (Hoshin) cycle.
4. A Simplified Example of Process Improvement
For the purpose of demonstrating a series of quality improvement cycles, the output of a modeling simulation under development at North Carolina State University will be presented1. It is beyond the scope of this paper to provide an in-depth description of the theory and formulae that form the basis of this simulation. The information provided here is for illustrative purposes only. The simulation requires variable values to be input for certain business competencies. The inputs are a decimal number ranging from 0 to 1and represent the percentage level of a particular competency. Of interest to this example are:
Information Technology Competencies: The business firm's level of competency in utilizing information technology. For this example, the variable has values of IT=0.45, IT=0.5, and IT=1.0.
Mission Critical Competencies: These are the core competencies vital to the success of critical business processes. This variable has values of MC=0.85, MC=0.5, and MC=1.0.
Learning Competency: The ability to incorporate learning from the changes to a business process. This variable has a value of L=0.5 for all three simulation runs.
The simulation scenario portrayed here is that of a major pharmaceutical company that has decided it must reduce the mean time for drug-to-market delivery. The delivery time units are in days and the company is seeking a reduction in mean delivery time from approximately 4000 to 2000 days over a period of four years.
Notice that the process is starting at a current level of six sigma. In essence, the trailing end of the distribution curve for longer delivery times is cut off. When the sigma level is recalculated under these conditions the result is that sigma = 3.
In the simulation, the start of each major Hoshin cycle corresponds with the beginning of a year. Four cycles are depicted within each major Hoshin cycle; each of these corresponds to a 3 month period (one quarter). During the period of four cycles (1 year), sigma builds from sigma =3 back to sigma = 6. Figure 11 is a graphic depiction of the simulation output for the mean delivery times over a period of four years. Each line on the graph represents the mean delivery time as impacted by the differing competency values.

The simulation shows that significant drops in mean delivery time occur at the beginning of each major Hoshin cycle. The values associated with business competencies also have a measurable effect on achieving the company goal. The main point here is that breakthrough innovation is a cyclic process with dependencies on business competency values.

1. Implementation of simulation model by T.L. Honeycutt and W.M. Waters, Department of Math, Science, and Technology Education

V. Conclusion
Quality improvement and information technology have an integral relationship in a business firm. The IT infrastructure is essential in tracking and monitoring the quality improvement process. The model of a business firm presented in this paper combines IT and quality improvement in an organized structure that exploits the synergy of the two concepts. Finally, the competency and quality of the management process carries more weight than the technology by which it is supported.