I am also intrigued by Jennifer's question as well. It is indeed good. However, since I am not QS savvy, but I will try to address from a Quality Management point of view.
Jennifer: "Am I wrong then in assuming that continuous improvement, as associated with defective parts, can not happen until there are no defective parts?"
Answer: Yes, that particular view is incorrect.
When I give a class in Quality Management, I have a standard question I always ask. "How do you get a car to travel at the same speed?" Typical answers vary, usually along the lines of "cruise control." The solution: Park It. The follow-up question is "How do you produce a perfect product (read zero defects)?" The answer: You Produce Nothing (theory of common cause variation). Then I go on to explain that continuous improvement does not mean "perfect" or "zero defects." It means taking a process that is producing at some level of quality and making it better (higher or lower, depending on the case in hand, as Kevin stated). Not perfect, better. Then you do it again, and again, and again. You approach perfect, but you do not obtain it. Continuous is just that, continuous.
The inverse to continuous improvement I also try to teach is the concept of entropy (From Slater's book). I give it a face (usually very mean and very ugly) and explain it this way:
"Entropy has one function in life. His job is to make things just a little worse today than they were yesterday. The clutter on your desk, the typical kitchen 'junk' drawer, etc. Given time, a little worse adds up to a LOT worse." I give the example of a car. The class is told, "Right now, even as we speak, your car is rusting. You may not see it today, tomorrow or even next week. But, it IS happening. Ten or twenty years from now, it will show up. What do you do to stop it? You wash and wax and wash and wax and wash and wax. Now, apply the same principle to your job. What can YOU do to make things a little better today than they were yesterday? Entropy is a tireless and fearless warrior. He will never stop. You cannot win the war, but you can win battles. YOU must be better. What can you do to stop HIM!"
Anyway, these are my views on continuous improvement. Hope someone can use them, or did I just muddy the water.
Regards,
Don
[This message has been edited by Don Winton (edited 11-20-98).]