There is a famous Chinese proverb that says, “Be not afraid of growing slowly; be afraid only of standing still.” In the world of manufacturing, this proverb holds particularly true; manufacturers and SMBs should be on a never-ending quest to improve every facet of the business and maximize product quality. The good news is that with the availability of all the granular data and metrics that are around these days, continuous improvement is not only easier to analyze and implement, but it’s also easier to track.
Here at Method CRM, we’ve been supporting QuickBooks-based businesses since 2010. Method is loved by business owners in the manufacturing sector for its real-time, two-way QuickBooks sync, and end-to-end sales automation. In this article, we’ll discuss continuous improvement methods you can use to optimize your manufacturing operations. 🏭
Table of Contents
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What is continuous improvement in manufacturing? 🤔
Continuous improvement is a management philosophy built around the idea that processes can always be made better. In manufacturing, this philosophy applies to the entire operation: quoting, scheduling, production, inspection, inventory movement, shipping, and customer follow-up. Most manufacturers already improved processes informally. A supervisor tweaks a setup routine. An operator finds a faster inspection method. A buyer adjusts reorder points after a stockout. Continuous improvement turns those isolated fixes into a repeatable system. Improvements are measured, documented, and shared so they survive beyond one person or one shift.
Why manufacturing operations need ongoing improvement
Manufacturing environments are constantly changing. Customer demand fluctuates, suppliers miss deliveries, equipment ages, and labor availability shifts. Without the mindset and fortitude to continuously improve, things can get stale fast, and businesses can end up being more reactionary than proactive.
| Common challenge | Without continuous improvement | With continuous improvement |
|---|---|---|
| Recurring defects | Rework becomes normal | Root causes are identified and eliminated |
| Long lead times | Customers wait or leave | Flow is optimized and stabilized |
| Manual handoffs | Errors and delays increase | Standardized workflows reduce variation |
| Legacy knowledge | Processes depend on individuals | Best practices are documented and shared |
For example, a mid-sized manufacturer running three production lines could see scrap rise from 2.5% to 5.8% over six months after a key overseas supplier began missing delivery windows and material substitutions became more frequent. By running a focused improvement cycle, the company might be able to bring scrap back down to 2.9%, free up roughly 400 labor hours per quarter, and avoid an estimated $180,000 a year in material and rework costs.
Method connects customer demand, quoting, orders, and production processes in one place, all synced back to QuickBooks. That means you finally see the granular operational data behind every order, not just the financial outcome. With that visibility, teams can spot breakdowns, fix manual workarounds, and make smarter decisions about how work actually flows through the business.
READ MORE: How J.P. Cooke Company built a fully integrated manufacturing system
Continuous improvement vs one-off projects
One-off improvement projects are great and are necessary, but they often fade once attention shifts. Continuous improvement, by contrast, is designed to persist and builds feedback loops that reinforce better performance over time.
Fixes a specific issue once. ✅ Useful for urgent problems or quick wins.
⚠️ Improvements often fade once attention shifts.
Targets one bottleneck or symptom. ✅ Easier to scope and launch.
⚠️ Misses upstream and downstream impacts.
Led externally, owned temporarily. ✅ Brings outside expertise and momentum.
⚠️ Knowledge often leaves with the consultant.
Measured inconsistently, if at all. ✅ Minimal reporting overhead.
⚠️ Results are hard to track or sustain.
Core methodologies that drive continuous improvement 💡
Manufacturers have their own set of core methodologies that dictate how they manufacture products. Most don’t rely on a single ideology, but rather mix and match. Below are some core concepts.
Lean manufacturing
Lean manufacturing focuses on making the process as “lean” as possible, meaning minimizing as much waste or inefficiency as possible while still maintaining quality. There are several tactics one can use in a lean manufacturing strategy, and below are some of the most common ones.
| Lean tool | Purpose | SMB manufacturing use case |
|---|---|---|
| Kanban | Control work-in-progress | Prevent overloading work centers |
| Just-in-time | Reduce excess inventory | Free up cash tied in stock |
| Standard work | Reduce variation | Improve consistency across shifts |
| Visual management | Increase transparency | Make bottlenecks visible immediately |
Kaizen
Kaizen emphasizes small, continuous improvements driven by the people closest to the work. It’s a philosophy focused on ongoing optimization rather than major overhauls. Kanban is one method that supports kaizen by making work visible and enabling teams to identify, test, and refine incremental improvements over time.
Six Sigma
Six Sigma is not limited to manufacturing; it is a business philosophy that makes an extreme use of data and processes to eliminate inefficiencies. One of the most fundamental pillars of Six Sigma, which is also applicable to manufacturing, is Define, Measure, Analyze, Improve, Control (DMAIC).
| DMAIC phase | What happens |
|---|---|
| Define | Clarify the problem and goals |
| Measure | Establish baseline performance |
| Analyze | Identify root causes |
| Improve | Implement targeted solutions |
| Control | Sustain gains over time |
PDCA (Plan–Do–Check–Act)
PDCA is a simple, repeatable cycle for testing improvements. It’s especially effective for small manufacturers because it encourages experimentation without committing excessive resources upfront. For example, if you are a shoe manufacturer seeing a spike in sole separation complaints, you plan a change by adjusting adhesive cure time, do a small pilot run with the new setting, and check the results by tracking defect rates and customer returns.
Key tools and techniques in continuous improvement 🛠️
If you want to be in a perpetual state of improvement with your manufacturing business, the best way to start is to use the right tools. Below are some suggestions.
Value stream mapping
Value stream mapping visualizes the flow of materials and information from order intake to final delivery. By mapping both the current state and the desired future state, teams can clearly see where work slows down, where handoffs occur, and which steps add no value from the customer’s perspective. For manufacturers, value stream mapping often reveals hidden delays between departments, excess waiting time, and unnecessary manual steps that don’t show up in standard reports.
Root cause analysis and the 5 Whys
Root cause analysis helps manufacturing teams move past surface-level explanations and uncover the real reasons problems keep recurring. Instead of stopping at the first obvious issue, techniques like the 5 Whys encourage teams to keep asking “why” until the underlying process breakdown becomes clear.
5 whys💡
- Why was the order late?
- Why did production start late?
- Why were materials missing?
- Why were the records outdated?
- Why manual?
For example, a shoe manufacturer could use the 5 Whys to investigate late shipments and could trace the problem to outdated material records. The team could discover that manual spreadsheet updates caused inventory mismatches, which delayed production starts. After connecting inventory updates directly to purchasing and production data, the company could reduce late orders and stabilize its schedule.
Visual management
Visual management makes the state of work immediately obvious. Dashboards, status boards, color-coded queues, and alerts allow teams to see problems as they happen instead of discovering them after a delay. When work-in-progress, bottlenecks, and priorities are visible, teams can respond faster and coordinate more effectively across production, scheduling, and fulfillment.
Metrics and KPIs
Continuous improvement depends on measurement. Metrics and KPIs provide the feedback loop that tells teams whether changes are actually improving performance or simply shifting problems elsewhere. The most effective manufacturers focus on a small, consistent set of metrics rather than tracking everything at once. KPIs should be easy to understand, update regularly, and be directly tied to operational goals.
Common KPIs
Workflow automation and real-time data
As manufacturers grow, manual workflows become more difficult to maintain. Approvals, status updates, inventory changes, and scheduling decisions often live in spreadsheets, emails, or whiteboards, making it challenging to keep information current. Workflow automation and real-time data help eliminate these gaps by ensuring updates happen automatically and consistently. When operational data is connected across departments and synced with financial systems, teams can respond faster and sustain improvements without adding administrative burden.
Step-by-step continuous improvement framework 📝
Continuous improvement works best when it follows a clear, repeatable structure. Rather than launching disconnected initiatives, manufacturers benefit from a simple framework that helps teams identify issues and sustain improvements over time.
1. Establish baseline performance
Begin by documenting current performance across key operational metrics such as cycle time, defect rates, throughput, and on-time delivery. Establishing a clear baseline creates a shared understanding of where the operation stands today and prevents teams from relying on assumptions or anecdotes when evaluating improvement.
2. Identify improvement opportunities
Look for bottlenecks, recurring downtime, rework loops, or mismatches between production output and customer demand. These constraints often represent the highest leverage points for improvement and should be identified using both data and input from the people doing the work.
3. Prioritize by impact and feasibility
Not every improvement delivers the same return. Evaluate opportunities based on potential impact, effort required, and organizational readiness. Prioritizing effectively helps teams focus on changes that produce meaningful results without overextending limited resources.
4. Apply the right methodology
Select the improvement approach that best fits the problem. Lean tools are effective for flow and waste reduction, kaizen supports incremental daily improvements, Six Sigma targets quality and variation, and PDCA provides a lightweight framework for testing and refining changes.
5. Standardize and document new processes
Once an improvement proves effective, it must be documented and standardized. Updating work instructions, workflows, and ownership ensures that gains are maintained across shifts and new team members, even as conditions change.
6. Monitor KPIs and adjust
Continuous improvement depends on feedback. Track relevant KPIs regularly and revisit existing processes as demand, volume, or constraints evolve. This ongoing monitoring keeps improvement continuous rather than episodic and helps teams adapt without starting from scratch.
Overcoming common challenges ⚠️
Even well-designed continuous improvement programs encounter obstacles. Recognizing these challenges early makes it easier to address them before things stall.
Lack of an improvement culture. ✅ Teams rely on familiar routines.
⚠️ Changes feel imposed rather than collaborative.
Gains aren’t reinforced. ✅ Improvements show early results.
⚠️ Performance varies by shift and reverts under pressure.
Weak feedback loops. ✅ Decisions move quickly.
⚠️ Teams can’t tell what’s actually improving.
Internal focus outweighs demand. ✅ Local efficiency increases.
⚠️ Lead time, quality, or responsiveness suffer.
Overcoming these challenges requires more than tools alone. Continuous improvement succeeds when teams share visibility, measure progress consistently, and connect operational changes to real customer outcomes. Systems like Method CRM, when paired with QuickBooks, help manufacturers reinforce improvements through clear workflows, shared data, and ongoing accountability, increasing customer satisfaction and sales.
Real-world examples of the continuous improvement process 👇
Continuous improvement principles are most powerful when applied in real manufacturing environments. These examples illustrate how structured improvement delivers measurable results.
Toyota Production System (TPS)
The Toyota Production System laid the foundation for modern continuous improvement by emphasizing waste reduction, standardized work, and employee involvement. Its core ideas scale well to smaller operations when applied pragmatically.
Six Sigma in action
One of the most famous cases of Six Sigma comes from General Electric, which adopted Six Sigma company-wide in the mid-1990s under Jack Welch for big time problem-solving. GE used Six Sigma to attack variation in manufacturing and service processes, focusing on defect reduction, excess inventory, cycle-time improvement, and cost leakage. Within a few years, teams applied DMAIC projects to areas like turbine assembly, medical imaging equipment, and order fulfillment, leading to measurable reductions in rework and scrap. By the early 2000s, GE publicly credited Six Sigma with delivering billions in savings by making problems visible, quantifiable, and repeatable to fix rather than relying on experience or intuition alone.
Measuring success: KPIs and metrics to track 📊
Measurement is the backbone of continuous improvement. The right KPIs help teams understand whether changes are producing real, sustainable gains.
Tracking KPIs over time is more valuable than reviewing isolated snapshots. Trend data shows whether improvements are holding as volume, mix, or operating conditions change. By monitoring a small set of core metrics monthly, manufacturing teams can spot early warning signs, confirm whether changes are working, and course-correct before performance slips.
In this example, gradual reductions in cycle time and lead time reflect process stabilization and improved flow, while declining defect rates indicate more consistent quality. The key insight is not the absolute values, but the steady month-over-month direction.
Always be improving; being stationary is not an option 🚀
Every part of your operation holds opportunities to work smarter, faster, and more efficiently. What often starts as a search for a few improvements quickly becomes a broader realization: meaningful progress comes from seeing the entire picture and committing to ongoing optimization, not one-time fixes. Sustainable improvement requires clarity, consistency, and data you can trust. That’s where Method comes in. We give you the visibility and insight needed to understand how your operation truly runs, so you can identify opportunities, make informed decisions, and keep improving, day after day. 📈
Ready to see the full picture? Try Method for free today.
Frequently asked questions
What are the five principles of continuous improvement?
Common principles for continuous improvement in the manufacturing industry include focusing on customer value, eliminating waste, engaging employees, using data to guide decisions, and standardizing improvements so gains are sustained over time.
How do you implement continuous process improvement?
Begin by establishing baseline metrics, identifying recurring bottlenecks or inefficiencies, and prioritizing improvements meant for operational excellence.
Why are continuous improvement efforts important for manufacturers trying to stay competitive?
Continuous improvement efforts help manufacturers adapt to changing markets, stabilize operations, and make informed decisions based on real performance data. By continuously evaluating processes, teams can respond more effectively to customer needs while avoiding reactive, short-term fixes.
How should manufacturers decide between an enhancement and improvement initiatives?
An enhancement is typically used when a process is already stable but needs additional capability or functionality, while improvement initiatives focus on correcting inefficiencies, reducing waste, or eliminating recurring problems. Choosing the right approach depends on whether the goal is to fix a breakdown or elevate an already functioning process.
