How do you answer an interview question on what needs improvement?

You might start by understanding why the company is in business in the first place. So... what do they do and why would a customer go to them for products or services? Then, look for ways to make that happen better, faster, more eficiently, at less cost and with the highest level of quality and on time delivery, over a broader market. Here are some examples: A receptionist can take an extra moment to screen calls that come in to more acurately refer the call. An engineer may see a design flaw and recommend a change to increase the life or improve the operation of the product. A purchasing person may see a part order and research a less expensive alternative that still meets engineering and customer specifications. A factory worker may see a better way of holding the piece part in the Grinder, that eliminates one step in the process without increasing scrap or compromising safety. A Word processor may find and suggest abreviations or codes work just as well as spelling out long Words, increasing the amount of entries per minute. A sales person may sense a whole new application for an old-line product, opening up a new market for something that might be in the throws of sales decline. A retail clerk may try placing a display in new areas of the store to find the right exposure to sell more product.