Continuous Improvement Plan of PEW

Precision Engineering Works Private Limited or PEW is facing problems like reduction of profits and loss of experienced employees. This report identifies the root causes of the problems and develops a continuous improvement plan for the company using Six Sigma model. The core competencies required from the management and employees are also discussed.

Running head: CONTINUOUS IMPROVEMENT PLAN OF PEW
Continuous Improvement Plan of PEW
Name of the Student:
Name of the University:
Author Note:

1CONTINOUS IMPROVEMENT PLAN OF PEW
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................3
Problem Statement.......................................................................................................................3
Root cause analysis......................................................................................................................3
Five Whys Tool.......................................................................................................................3
Brainstorming Tool..................................................................................................................4
Tree Diagram Tool..................................................................................................................5
Flowchart Diagram Tool..........................................................................................................6
SWOT Analysis Tool..............................................................................................................7
Fishbone Diagram Tool...........................................................................................................8
Affinity Diagrams Tool...........................................................................................................9
Continuous Improvement Plan..................................................................................................10
Six Sigma Model...................................................................................................................11
Core Competencies....................................................................................................................13
Conclusion.....................................................................................................................................15
References......................................................................................................................................17

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Introduction
Precision Engineering Works Private Limited or PEW is an original equipment
manufacturing company that specializes in manufacturing of plastic moulding parts, which are
supplied to the telecommunication industry. Precision Engineering Works or Pew is
headquartered in Mumbai, a city in Maharashtra, India . PEW are providing their services to the
telecommunication industry for almost around 30 years, they caters their service to the leading
telecommunication servers providers. Because of the reliability and reputation of PEW in the,
market, they have developed to become a successful organization in the industry. However,
because of certain issues and factors faced by Precision Engineering Works Private Limited,
there are some problems, which have emerged for PEW. The problems of Precision Engineering
Works Private Limited include reductions of profits by a significant margin and loss of
experienced employees. Both the problems have a serious implications for the company PEW.
The report identifies the root causes of the problems PEW are currently facing by application of
proper tools. The tool that that have been used for the identification of root cause analysis of the
problems of Precision Engineering Works Private limited is 5-Whys. The paper also develops a
continuous improvement plan for the company PEW, which would ensure that the problems are
not repeated in the future .The Quality management system that has been used in the paper to
devise the Continuous Improvement Plan for PEW is Six Sigma method. The report also
highlights the competencies required from the management of PEW and the employees so that
they can bring about the proposed changes effectively.

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Discussion
Problem Statement
Precisions Engineering Works or PEW observed that their share of profits or profitability
have dropped drastically and it decreased by 45%. This is a growing concern for PEW, which
requires immediate actions.
Root cause analysis
Root cause analysis or RCA is a technique of identification of root causes of a problems
of faults in an organization (Latino, Latino & Latino , 2016) .The root cause factors are factors
whose elimination would prevent the final unwanted outcome of the company or organization.
Several causes lead to the emergence of problems for Precision Engineering Works Limited or
PEW. The roots cause of the problem needs to be identified by PEW (Cromar, 2013). The
continuous improvement plan has been developed below so that the problems are not repeated in
future. The core competencies have also been discussed below. Some of the tools required for
the identification of root causes of the problem for PEW are:
Five Whys Tool
The Five whys tool is one of the tools that are used to find root cause of any problem
(Serrat, 2017). In this tool, five questions are asked and solutions are tried to be found .This five
questions leads to the identification of root cause of the problem. In this case, the problem has
been identified as the drastic drop of share of profits which is estimated around 45%. The
questions asked in five why tools are:
 Why 1: Why has the profitability of PEW reduced by around 45%?

4CONTINOUS IMPROVEMENT PLAN OF PEW
Because , PEW is finding it difficult to win new contracts from the customers and
clients of telecommunication industry and due to less number of experienced
employees.
 Why 2: Why is it becoming difficult for PEW to get new contracts?
Because of the emergence of new suppliers in the market who are taking away the
contracts .
 Why 3: Why are the emerging suppliers winning the contracts?
Because, they are offering better pricing than PEW.
 Why 4: Why there is lack of experienced employees in PEW?
Because all the experienced employees are opting to join new suppliers, that have
emerged in market.
 Why 5: Why are new suppliers emerging in the market?
Because ,this industry is deemed as very lucrative.
Brainstorming Tool
In this tool process, a group gathers as many ideas as possible in order to identify the root
cause of the problem (Okazaki et al., 2015). The steps of using brainstorming tool in this
problem scenario are:
 A team is formed which comprise of Business improvement consultant and the
members from PEW.
 A facilitator is engaged for brainstorming, who needs to be impartial and should
keep the session steady.

5CONTINOUS IMPROVEMENT PLAN OF PEW
 Two people should be assigned who would write the ideas of identifying the
problems related to the decrease of profitability of PEW. All the ideas need to be
gathered together.
 It should be ensured that the aim should be quantity of the idea and not the quality
of the ideas, which are to be gathered for identifying the problems of PEW.
 It should also be ensured that the ideas, which are gathered, are not judged as all
the ideas related to the identification of cause of problems of PEW would be
entertained.
 The session should be stopped when the ideas, which are gathered, are sufficient.
Tree Diagram Tool
The tree diagram is also used as a tool for the root cause analysis of Problems in an
organization. The tree diagram tool used for the scenario in the company PEW are shown below:
Low Profitability in PEW
Inability to win
contracts
Loss of experienced
employees
Emergence of
new suppliers
Better pricing
offered by others
Opting for rival
suppliers Lacking
motivation
Figure 1: Tree Diagram

6CONTINOUS IMPROVEMENT PLAN OF PEW
Decrease in profit
gnn
Company inefficient? Other reasons
No
Yes
Unable to win contracts?
Less pricing
Yes
Flowchart Diagram Tool
Flowcharts organize the information about a particular process by depicting it in a
graphical form. In this case, the root cause have been identified that lead to the problems in the
company, PEW, using Flow Chart diagram.
Figure 2: Flowchart Diagram
(Source: Created by Author)

7CONTINOUS IMPROVEMENT PLAN OF PEW
SWOT Analysis Tool
The SWOT analysis is also a toll for the identification of root cause of a problem in an
organization (Eva et al., 2014). The SWOT analysis that has been used for the identification of
the root cause in the scenario of the company PEW is shown below:
Strength
 Presence of the company PEW in the market
for around 30 years.
 Reputation in the market.
Weakness
 Inability to apply proper pricing for their
products.
 Inability to win contracts from the markets.
Opportunities
 It has been noticed that the new emerging
suppliers in the market cannot sustain or
persist long in the markets.
 Lack of reputation of new suppliers in the
market
Threats
 Emergence of new suppliers in the market.
 High chances of losing contacts to the new
suppliers in market resulting in decrease of
profits.
Table 1: SWOT Analysis
(Source : Created by Author )

8CONTINOUS IMPROVEMENT PLAN OF PEW
Decrease of profit of PEW
Experienced Employees leaving
Poor Business approach
Emergence of competitors
Inability to win contracts
Fishbone Diagram Tool
A Japanese Quality Control Expert, Dr .Ishikawa developed the fishbone diagram. The
Fishbone diagram is an important tool to identify the root cause of a problem (Reilly et al .,
2014) . The Fishbone diagram that has been used for the determination of the root causes of the
problem is shown below:
Figure 3: Fishbone Diagram
(Source: Created by Author)

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Why is there a drastic decrease in the profitability of PEW?
Inability to win contracts from the clientsLoss of experienced employees from the organization
Emergence of new suppliers in the market, resulting in stiff competition.The experienced employees are moving to the organizations of the
The new suppliers in markets are offering better pricing to clients.
The employees are getting better offers from new suppliers in mark
Affinity Diagrams Tool
The affinity diagram is an important root cause analysis tool that helps to organize the
information and amalgamate together the gathered information (Tenera & Luís Carneiro, 2014).
After the ideas are generated, they are grouped together using Affinity diagram tools. The
affinity diagram to identify the root cause for the problem encountered in PEW is shown below:
Figure 4: Affinity Diagram
(Source: Created by Author)

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Continuous Improvement Plan
A continuous improvement plan can be defined as the group of activities that have been
designed with the aim to bring continuous improvement to any organization in terms of products,
services and process by reviewing these factors constantly (Singh & Singh, 2015). A continuous
improvement plan is necessary in the company PEW, in order to ensure that the problems and
issues which the Company, Precision Engineering Works Limited or PEW is facing are not
repeated in the future. To devise the continuous improvement plan of PEW, the Six Sigma
Model is followed.

11CONTINOUS IMPROVEMENT PLAN OF PEW
Six Sigma Model
The Six Sigma model makes use of the DMAIC model for the improvement of the
quality of process and systems (Pyzdek & Keller, 2014).This also increase the customers
satisfaction, which results in increase of sales. It curtails the variations in the process and results
in reduction of problems for an organization. Proper implantation of Six Sigma methodology
leads to desirable output or outcome for any organization. The DMAIC model, which is used in
Six Sigma model, consists of five phases (Ramanan, Kumar & Ramanakumar, 2014). The five
phases includes define, measure, analyze, improve and control (Evans & Lindsay, 2014). The
first phase defines the problem, the second phase details the way to measure the problem and
ways of improvement. The third phase includes the analysis of the factors resulting of the
problem. The fourth phase suggest the improvements and its implementation .The fifth phase
emphasizes the need of ensuring that the improvements will sustain.
The Six Sigma plan for devising the continuous improvement plan of the company,
Precision Engineering Works Private Limited or PEW is shown below:

12CONTINOUS IMPROVEMENT PLAN OF PEW
Define Measure Analyze Improve Control
The problem of the company PEW is that it has been observed that the profitability of the company a have reThe profitability of PEW has decreased by almost 45 percent. The organization PEWAfter analyzing the problem, various factors have been identifi
The emergence of new suppliers in the market is posing threat
It has been identified that the inability of PEW to gain new con
In order to solve the problems encounterePEW should ensure
PEW should also en
Figure 5: Six-Sigma Plan
(Source: Created by Author )

13CONTINOUS IMPROVEMENT PLAN OF PEW
Core Competencies
The core competency of an organization defines the strength of an organization. C.K
Prahalad and Gary Hamel developed the concept of core competency. It provides the
infrastructure for an organization to build, grow and grab new opportunities and also cater value
to the customers .The competencies of any organization cannot be replicated easily even if new
competitors emerge in the market which poses threat to the organization. Generally a company
have multiple core competencies .The core competencies are also called the core capabilities. It
results in creation of environment that provides advantages that are competitive for the
organization. The core competency generally meets three criteria, which are:
 A wide variety of markets can be potentially reached by the application of theory of core
competency.
 It should contribute to the customers, who must benefit from the provided output
products.
 The core competencies of any particular organization is difficult to replicate or copy by
another organization.
The core competencies that are needed by Precision Engineering Works Private Limited or
PEW are as follows:
 Ability to Inspire and Motivate – Considering the mass scale departure of experienced
employees from Precision Engineering Works Private Limited or PEW, it is necessary for
them to inspire and motivate the experienced employees so that they are not lured by the
rival companies in the market (Green et al ., 2014). If the experienced employees start

14CONTINOUS IMPROVEMENT PLAN OF PEW
leaving the company in large number, new employees would take time to adjust and hone
their expertise in PEW, which would negatively influence the organization. The leaders
in the management of the company should emphasize on relationship building ,should be
a role model of the employees and communicate a better picture of the future prospects in
the organization .
 Ability to analyze issues and Solve Problems – Precision Engineering Works Limited
or PEW should ensure that the issues which PEW are facing are detected promptly and
solved as well before they lose their markets. Considering the emergence of new
suppliers in the market, it is understandable that the company will encounter several
issues and problems considering the competitiveness in the industry. They management
of the organization ,PEW should use proper systems to detect the issues and problems
affecting the organization (Goetsch & Davis, 2014).They should ensure that the
problems and issue are solved without delay .Proper measures and developments of
proper plans are also necessary to ensure that the problems and mistakes are not repeated
in the future .
 Technical and Professional Expertise –The management leaders in the company,
Precision Engineering Works Private Limited or PEW, should exhibit their technical and
professional expertise and prowess for the betterment of the company (Susskind &
Susskind, 2015) .They garner respect from their abilities to assess the issue and problems
faced by the companies when chips are down . They use their expertise to analyze the
situation and come out with solutions to the problem by using their extensive knowledge
in the field. It is the duty of the authorities and higher level management of the company
PEW , so that they can motivate their experienced employees so that they do not leave

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the company during crisis period .The management leaders should contribute
significantly so that the goals and objectives of the company are achieved . It should be
ensured that the leaders of management are well aware of the latest happenings,
challenges and the innovations that are occurring in the field and apply their expertise and
their extensive knowledge for the success of the organization.
 Proper Implementation of Business Strategy – It is very important for the
organization, Precision Engineering Works Limited or PEW to devise proper business
strategy and implement efficient marketing plans. It has been observed that the due to
inappropriate pricing of products by the company, PEW, they are not able to gain
contracts from the clients of the telecommunication industry. These contracts are taken
over by the new emerging supplier organization as a result, these organizations get the
opportunity to penetrate the market. Due to these factors, the company, Precision
Engineering Works Limited or PEW had suffered a drastic drop in the profitability,
which is estimated around 45 percent. Thus, it is necessary for the management and the
authorities of the company to adopt proper business approaches that would not result in
undesirable outcome like decrease in profitability .On the contrary they should devise
plans and undertake strategies so that they can gain competitive edge over the rivals and
the newly entered companies in the market.
 Situational Leadership Style –Considering the scenario of PEW the manager of the
company should follow situational leadership style (McCleskey, 2014). Accessing the
situation of PEW ,where the company is experiencing a decrease in profitability ,some
changes should be immediately made after assessing the situation so that the company
can overcome the adverse situation.

16CONTINOUS IMPROVEMENT PLAN OF PEW
Conclusion
From the paper, which pertains to the problem encountered by the company, Precison
Engineering Works Private Limited or PEW, it can be concluded that the problem they are facing
is directly affecting the profits of the company. This is a serious issue of concern, which needs to
be solved and fixed immediately. By using several tools , the root cause of the problem has been
analyzed and identified .The paper also provides a detailed continuous improvement plan by
using the Six Sigma method tools that needs to be implemented by the employees and the
management of the company ,PEW so that the problems are not repeated in the future . The
paper also details the competencies, which are required by the employees and the management
leaders of the company, PEW so that they can contribute to the company and bring about
positive change to the organization.

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