How to Get Started with Continuous Improvement in Manufacturing

What if trimming just 15 seconds from a single production step could save your company tens of thousands of dollars every year? That’s not an exaggeration. In manufacturing, even small inefficiencies multiply quickly. When repeated across hundreds or thousands of cycles per day, that lost time turns into lost revenue. That’s exactly why continuous improvement isn’t just for the biggest manufacturers it can deliver major wins for your operation too. It’s a powerful, practical approach for midsize manufacturers looking to grow smarter.

You don’t need a Six Sigma black belt to get started. Most progress begins with a clear problem, a motivated team and the willingness to track what works. Continuous improvement is about building good habits into your processes, one manageable step at a time. It’s the kind of work that strengthens margins, deepens accountability and positions your company for long-term growth without added overhead.

The cost of standing still

Manufacturers that actively pursue continuous improvement report stronger productivity, higher employee engagement and better resilience during economic shifts. Yet many still operate reactively, dealing with bottlenecks, quality issues or missed deadlines only after they become a problem. That approach might have worked in the past, but it won’t hold up as supply chain pressures and customer demands increase.

Let’s look at the real cost of inefficiency. A plant that loses five minutes per hour due to setup variation is losing 40 minutes per shift. Over a 250-day production year, that’s more than 165 hours of downtime per machine or station. Multiply that by your direct labor cost and machine utilization rate, and you’re likely staring at five or six figures in wasted value. And that doesn’t account for missed deadlines or lost opportunities.

Frameworks like Lean have been around for decades, but the principles behind them (reducing waste, improving flow, empowering teams) are just as relevant today. What matters more than the buzzwords is your commitment to act. That means identifying where waste is happening and building a culture that looks for better ways to get things done.

This is where continuous improvement becomes a mindset shift. Real process begins when your employees start asking “Why are we doing it this way?” or “What’s one step we could remove?”

Laying the groundwork: Culture before tools

Before you talk software, sensors or dashboards, focus on people. If your team sees improvement as extra work instead of an opportunity, the process will stall before it begins.

The most successful initiatives we’ve seen begin with leadership making a clear commitment to transparency and engagement. Improvement efforts thrive when the people closest to the process are empowered to speak up. Operators, supervisors and maintenance staff often hold the best insight into where delays, waste or defects originate.

To build the right foundation:

• Start with a specific problem area that affects cost or delivery
• Assign a cross-functional team that includes frontline voices
• Establish a clear goal and timeline (ideally within 60 to 90 days)
• Communicate that the goal is to learn and improve, not to blame

One of the most overlooked success factors is accountability. Without consistent check-ins, good ideas fade. That’s why we recommend setting up a weekly or biweekly touchpoint where progress is shared and roadblocks are addressed. These short but structured updates keep the momentum going.

At James Moore, we are built around this principle. Our team helps companies identify inefficiencies and implement measurable, people-centered solutions that align with financial goals.

Keep in mind, the culture you create around improvement will determine how far your team takes it. If every success is recognized and every idea is respected, your shop floor becomes a source of innovation, not just execution.

Measuring what matters

You can’t improve what you don’t track. But that doesn’t mean every number deserves your attention. Too many companies drown in dashboards filled with data that doesn’t drive decision-making. Continuous improvement works best when you’re measuring a few meaningful metrics and using them consistently.

Start with these performance indicators:

• OEE (Overall Equipment Effectiveness): Tracks availability, performance and quality
• First Pass Yield: Measures quality by identifying how many units pass inspection without rework
• Cycle time: Helps identify variability and production bottlenecks
• Scrap rate: Reveals material waste tied directly to cost

While these are common, the right KPIs for your facility depend on your goals. A company focused on reducing downtime might track machine utilization more closely. One aiming for margin improvements might zero in on labor productivity or waste rates. What matters most is that your metrics connect directly to business outcomes, not just activity.

We recommend choosing three to five key metrics at the outset. Make them visible, review them regularly and tie them to your improvement goals.

Also, involve your team in metric selection. When your employees help define success, they are more invested in achieving it. Many companies find success using visual tracking methods like whiteboards or posted charts to make progress visible in the workspace. Others build dashboards that refresh daily from their ERP system. The method matters less than the habit.

Technology that supports (not replaces) process

There’s no shortage of digital tools promising to revolutionize your production floor. But technology should support your continuous improvement strategy, not drive it. When software leads and process follows, it’s easy to invest in a tool that doesn’t solve the real problem.

Small tech upgrades often yield the highest returns. A mobile app that captures downtime causes in real time, a barcode system to improve inventory accuracy, a digital SOP platform to reduce training time… these are focused improvements that solve specific pain points.

ERP integrations can also be effective when used with intention. Many midsize manufacturers have underutilized ERP systems that, with a little customization, can provide real-time visibility into production KPIs. But even the most powerful dashboards will fail if operators don’t understand or trust the data.

Before bringing in a new solution, ask:

• Does this tool address a specific, measurable need?
• Will it be easy for our team to adopt with minimal training?
• Can we implement it in stages to manage risk?

James Moore focuses on the process first. That means mapping out the current workflow, identifying breakdowns and clarifying what improvement looks like. From there, we help choose tools that enhance performance, not distract from it.

Technology should be the last piece of the puzzle, not the first. A strong culture of accountability, accurate data and continuous learning will always beat a flashy platform that no one uses correctly.

The role of tax strategy in continuous improvement

Improving your manufacturing operation isn’t just about process and productivity. It’s also a smart financial move, especially when aligned with the right tax strategies. Many of the investments tied to continuous improvement qualify for powerful incentives that midsize manufacturers often overlook.

For example, the IRS allows businesses to deduct the full cost of qualifying equipment purchases under Section 179, up to $2.5 million for the 2025 tax year (under the One Big Beautiful Bill Act). That includes new or used machinery, computers, and certain off-the-shelf software, as long as it is placed in service during the year. The deduction begins to phase out dollar for dollar once total purchases exceed $4 million.

In addition, bonus depreciation is available for a percentage of qualified asset costs. While that percentage is phasing down, it still allows for significant write-offs in the year assets are acquired. If you’re upgrading machinery or adding tools to improve efficiency, these deductions could offset a major portion of the cost.

Then there’s the Research and Development (R&D) tax credit. Despite its name, this credit is not limited to labs or tech firms. Many manufacturers qualify for R&D credits when they improve production processes, test new materials or design more efficient workflows. Activities such as automating manual tasks or experimenting with new machine settings may meet the requirements, if documented properly.

These tax incentives can be powerful, but they require planning. Timing your purchases, documenting qualifying activities and integrating tax with operations strategy is key. That’s where working with a business advisor who understands both tax law and the manufacturing industry makes a difference.

Putting it all together: your continuous improvement kickoff plan

Getting started with continuous improvement doesn’t require a major capital investment or a team of consultants. What it does require is focus, structure and follow-through. The goal is not perfection but progress you can measure and build on.

Here’s a practical five-step kickoff plan tailored for midsize manufacturers:

1. Identify a pain point
   Choose a process that is inefficient, inconsistent or costly. Start small; a single production line or a recurring bottleneck is a great place to begin.
2. Form a focused team
   Pull in team members from different functions, including at least one person who works directly with the process every day.
3. Define success and how to measure it
   Whether it’s reduced scrap, faster cycle time or fewer defects, be specific. Select three to five meaningful metrics that your team understands and can track daily or weekly.
4. Implement and review in short intervals
   Use a 30/60/90-day plan. Hold brief check-ins at regular intervals to monitor progress, make adjustments and keep everyone aligned.
5. Document and share results
   Whether the outcome was a big win or a learning experience, record what worked and what didn’t. Share those results across your organization to reinforce a culture of improvement.

Make continuous improvement part of your manufacturing DNA

Small and midsize manufacturers are under pressure to do more with less. The good news is that you don’t need to overhaul everything at once. You need a structured starting point, the right team and a partner who understands how operations and tax strategy work together to strengthen your bottom line.

That’s what we provide at James Moore. We with manufacturers every day to improve performance, reduce waste and unlock tax savings through smart planning. Whether you’re launching your first improvement project or looking to build on existing success, we’re ready to help.

Ready to uncover the untapped value in your operation? Connect with a James Moore professional and start your improvement journey with guidance built around your goals.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.