Continuous Improvement Plan for PEW: Six Sigma Approach

This report outlines a continuous improvement plan for Precision Engineering Works (PEW), an original equipment manufacturer facing declining profitability and employee attrition due to increased competition. The report identifies the root causes of these issues using tools like the Five Whys, brainstorming, tree diagrams, flowcharts, SWOT analysis, fishbone diagrams, and affinity diagrams. The proposed continuous improvement plan is based on the Six Sigma DMAIC model (Define, Measure, Analyze, Improve, Control), with specific actions recommended for each phase to address the identified problems. The report also emphasizes the core competencies required from PEW's management and employees to effectively implement and sustain the proposed changes, ensuring long-term success and competitiveness. The aim is to provide PEW with a roadmap to regain its market position and improve its financial performance.

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

2CONTINOUS IMPROVEMENT PLAN OF PEW
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.

3CONTINOUS IMPROVEMENT PLAN OF PEW
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)

9CONTINOUS IMPROVEMENT PLAN OF PEW
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)

10CONTINOUS IMPROVEMENT PLAN OF PEW
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: