Continuous improvement is philosophy that business processes can be improved, forever, through a series of innovations and improvement initiatives. This philosophy that an existing product can be made better, or that products can be replaced with superior products are a part of the core philosophy behind all modern manufacturing today.
Continuous improvement is also called "continual improvement," which hints that improvement is ongoing but it happens in discreet stages. That is to say, many small incremental changes deliver individual benefits that taken together look like change happens in every moment, but each improvement is separate. However slight the difference between these two philosophies, they both have the idea of ongoing change at their center.
While manufacturing has long since acknowledged that products and services must be continually improved in order to be competitive, internal products and services often do not follow this philosophy. Internal services are usually focused on maintaining costs and service levels. Maintaining the existing service level is seen as good management, whereas in manufacturing maintaining the same level of cost and quality is seen as falling behind.
Continuous improvement can be seen in two different variations, one version leaves the apparent features of the product unchanged, but improves the cost, production, sourcing and delivery. Another view is to change the product/service itself, radically altering appearance and function. As an example, consider the Oreo cookie. The Oreo was created over 100 years ago, and is still one of the top selling cookies in the world. The Oreo looks essentially the same way as it did a century ago, with two chocolate cookies with a cream center. But in the past century: the packaging has evolved to keep the cookies from breaking, improved seals on the liner keep cookies fresh longer, and the supply chain improved to deliver cookies faster. At the same time, while maintaining the original cookie design, they introduced new version so the cookie in response to user demand: double-stuffed cookies had more cream, reduced fat tweaked the formula for the cream, cookies are sold in different sized packages, and even vanilla cookies have been offered.
The goals and methods of continuous improvement are many, but the results should be a better product that more people want. In outsourcing, continuous improvement can dramatically improve how a program functions. A commitment to continuous improvement may at some point make revolutionary change that alter superficial appearances, but that deliver far better performance.