This paper proposes an algorithm to simplify automata in such a way that compositional synthesis results are preserved in every possible context. It relaxes some requirements of synthesis observation equivalence from previous work, so that better abstractions can be obtained. The paper describes the algorithm, adapted from known bisimulation equivalence algorithms, for the improved abstraction method. The algorithm has been implemented in the DES software tool Supremica and has been used to compute modular supervisors for several large benchmark examples. It successfully computes modular supervisors for systems with more than 1012 reachable states.