In the quest to reduce waste on production lines, managers often find that the harder they work at improving their manufacturing processes, the more elusive the benefits become.
The authors' study of data provided by Belgian manufacturer N.V. Bekaert S.A., the world's largest independent producer of steel wire, showed that only a quarter of process improvement projects delivered factorywide benefits; half had no bottom-line impact, and the remaining 25% had a negative impact on the plant's overall productivity.
But it's possible to design projects that are more likely to improve the plant's bottom line. The key is making sure they deliver both conceptual and operational learning. Conceptual learning yields know-why: acquiring a better understanding of cause-and-effect relationships through statistics and other scientific methods. Operational learning yields know-how: implementing a theory and observing results.
Projects that delivered high levels of both learning approaches were the only ones that enhanced the global rate of quality improvement. In such projects, teams drew on scientific insights to implement changes and produce replicable results.
Harvard Business Review, October 2002