ISO 9000 on the Road to Total Quality
Merrill, Peter, CMA - the Management Accounting Magazine
Meeting ISO 9000 requirements doesn't mean your organization has completed a total quality management process.
But preparing your company for ISO 9000 is a good start on the road to total quality. Even companies that are further down the quality route will find ISO 9000 to be a useful tune-up for their business processes.
For many companies starting on the journey to ISO 9000 registration, a common question is: "Does this mean we are finished with total quality?" In fact, ISO 9000 is only one component in the complex equation of total quality: think of it as "partial" quality. For companies that have not yet started to build their house of quality, ISO 9000 provides an excellent foundation stone. For companies already well along the way to quality improvement, it lends rigor and discipline and forces the business process analysis that many companies overlook.
The driving force in ISO 9000 is the customer. Customers want assurance that their suppliers will do as they promise. Third- party certification under ISO 9000 indicates that a supplier's processes are well-linked and under control to deliver consistent quality. The customer can place orders and choose suppliers with confidence that their business processes are definable, repeatable and predictable. But ISO 9000 is only partial, and not total, quality. In implementing a total quality improvement process, organizations must balance "people" improvement and "process" improvement.
At the beginning of the 1990s, with the West stuck in the worst recession since that of the 1930s, quality got dumped. But even during the '80s, most people had been practising only "partial" quality anyway. Some companies that had addressed only "process" issues found improvements slow in coming and suffered loss of trust. Those that had concentrated on "people" issues sparked warm feelings among employees but no measurable improvement. Few of the ISO requirements address the people issues of quality like communication, teamwork and recognition. Compared with the Baldrige Assessment, which is one of the most comprehensive methods of assessing an organization for total quality, the ISO 9000 criteria are more comprehensive in only one category: process management. If your company has done no teamwork or communication development, or lacks an adequate recognition system, then its ISO 9000 journey will be tougher, and much more expensive. And in order to become a world-class organization, you will need to move well beyond ISO 9000.
In its favor, ISO 9000 sets out a series of clear registration requirements that the organization must meet (and that any organization could achieve). Absent is the "do it if you feel like it" attitude that often pervaded TQM. The prospect of an external auditor coming to look at your business pushes you to clean up the business, much as the prospect of visitors pushes you to finish in just a few hours all those household chores that you had been putting off for six months. ISO 9000 motivates an organization to define its processes. And by addressing such elements as internal audit, management review, and corrective and preventive action, ISO 9000 will drive continuous improvement of those processes.
Process - and people - improvement
The first steps into ISO 9000 resemble those of TQM. It is important to support the process development of ISO 9000 with the people development of a good TQM process, as follows:
1. Develop a just-in-time education plan that gives people the needed skills in process mapping, procedure writing, measurement and auditing.
2. Create a communication system based on the team briefing concept, which ensures open communication throughout the organization. Ensure that information generated by the team flows down and across the organization, and that feedback from within the organization flows back into the leadership team.
3. A recognition system will recognize that you are asking people to change their behavior. You must endorse new behaviors such as designing and following new procedures, keeping measurement data, and working as teams.
4. Teamwork is a natural evolution from these people developments. But investing in the development of team skills will bring rewards in more effective process management.
Five must-haves for ISO 9000
In order to truly improve the business, the organization must build these people developments into a plan for ISO 9000 registration. Let's walk through the standard, looking in turn at five groups of requirements: organizational; pre-operational; operational; inspection and correction; and support systems.
1. Organizational requirements - Not surprisingly, the standard starts with management responsibility. The organization's leadership must lay out their commitment to the customer in a policy statement, and then establish who is responsible for achieving parts of that policy. The leadership team must then monitor the organization's performance in achieving that policy, and address any gaps.
In order to meet the policy of conforming to customer requirements, the business must have a methodology or system for delivering quality that it can regularly audit and document itself. Documentation can be the greatest weakness of ISO 9000, and it is what can most differentiate ISO 9000 from TQM. Documentation that is bureaucratic, lethargic and irrelevant is a classic sign that the business hasn't a due about quality. Quality management puts quality into the minds of people and develops their skills, enabling them to improve processes. People who "fake" ISO 9000 put quality into manuals, but not into minds. Auditors are partly to blame for allowing this to happen. I heard one auditor offer the excuse that "the standard is about consistency and not quality." If that is the case, why not call it the International Standard on Consistency? The standard is about quality and, if properly implemented, will produce quality.
The standard actually provides the system you need to keep your quality system running effectively. Failure to keep the system up to date, and failure to define processes and procedures, leads to lethargy and bureaucracy in the quality system. A well-documented quality system is brief and allows for quality to grow inside people, not on paper.
2. Pre-operational requirements - The first hands-on requirement is that, before doing anything, the supplier must agree to the customer's requirements. This is one of the absolute basics of quality, and is the first step in prevention. If a product or service requires design work before it can be delivered, this is a whole business in itself. The standard requires a clearly defined, balanced design process, not just a hare-brained or right-brained process that kicks in at a minute to midnight.
The other components in pre-operations are purchasing and customer-supplied product, which address the business' inputs. Purchasing requires you to select suppliers on performance, not just price, and to establish a supplier performance measurement system. It requires you to dearly communicate your requirements to your supplier, not simply to fax out notes calling for "more of the same."
3. Operational requirements - The standard contains only two operational requirements. The first is simply a requirement for information about where things are. Whether a company sells insurance policies or manufactures automobiles, a well-run (quality)company knows where to find things and at what key points in the process they will arrive. From making paper for an insurance company to renting automobiles to travellers, process control is the core of any operation. ISO 9000 requires a well-planned operation, with dear instructions for anybody operating a process within the operation. Again, a quality management approach to ISO 9000 will emphasize communication skills and ensure clearly-defined processes in which internal customers and suppliers are dearly specified.
4. Inspection and correction - The assumption that things will go wrong and that there is a need for inspecting and correcting mistakes supports the perception that ISO 9000 is only a "starter kit" for total quality. But inspection and correction simply requires a company to identify the critical points in its process flow and measure performance at these control points. And statistical techniques require you to analyze the data collected at those control points and use them to improve process performance. Does that not sound like process management or process improvement?
Two clauses in this section are probably the most critical links between ISO 9000 and continuous improvement, kaizen or quality management (they all mean the same thing, by the way). Clauses outlining control of non-conformance, and corrective and preventive action, require you to analyze failures or non-conformances caused by business processes and use that analysis to improve processes. Preventive action was recently included in ISO 9000 to underline the importance of being proactive in process improvement. Don't wait for customer complaints. Instead, seek out weak processes and use tools like cost of quality to select the process you must work on.
5. Support systems - Handling, packaging, storage, preservation and delivery are all part of good housekeeping, a true hallmark of a well-run company. Hidden away at the end of the ISO laundry list, quality records are probably one of the biggest stumbling blocks in the interpretation of ISO. Instead of raising efficiency, quality records often increase bureaucracy. People produce records just to satisfy the auditor, instead of using them as information to improve the business.
Training deserves more than the scant mention it receives in ISO requirements. A company that is interested in quality will train to the standard, and beyond. The few words that the requirements contain on the topic emphasize the importance of identifying the skill requirements for each work process and the skills inventory of employees, then analyzing the gap and implementing a training plan to close the gap. It is also important to keep records that prove you gave the required training.
Finally, servicing requires a process to provide after-sales service to customers. Ideally this point would have been incorporated earlier under pre-operational requirements, and not left as an afterthought.
What cost ISO 9000?
The ISO 9000 document itself is poorly written and is structured in a way that appears hypocritical for a standard on quality. Past these shortcomings, however, the standard contains a set of good business practices. Unlike the "touchy-feely" approaches of the 1980s, following these practices will give you a clearly defined route to quality.
Teaching the management team about ISO 9000 - involving roughly two days' worth of work - is the first critical step. Managers must understand the appropriate scope of ISO 9000 and its requirements. Training will enable the team to make decisions and work out timing, process ownership and the scope of the business to be certified. Managers should then share the plan with employees and teach them their roles in achieving it.
The journey is not easy but the benefits are considerable. Implementing ISO 9000 forces you to undertake process analysis; done correctly, it can allow you to reduce costs by as much as 10 per cent. Many large organizations look for ISO 9000 registration as a prerequisite for serving them as a supplier. Not being registered might mean a significant cost: the complete loss of their business. Remember that the customer is the final arbiter of quality; in asking that you become registered, the customer is simply seeking an assurance that your business is driven safely and reliably. A good quality system means clearly defining your business processes and delivering what the customer wants. In requiring you to maintain a quality system, ISO 9000 forces you to face the truth about how you run your business.
Many organizations feel their quality initiatives of the past decade failed. But more than a few believe that they would have failed without their quality process. Even the success stories have had their share of failures. Most important, their experience has required them to take steps to measure and understand their quality process. Their quality process had a plan and a structure, and they applied the principles of continuous improvement to the quality process itself. Among these success stories, the organization's people all know why they are involved in quality and where they are heading.
Do you know why your business exists? Is it simply to make money and little else? How do you want your organization to be remembered, in the community and the world? In order to achieve long-term success, you need a continuous improvement process that improves both your business processes and your people. ISO 9000 is a well-defined and disciplined first step into continuous improvement.
RELATED ARTICLE: The seeds of the movement
The seeds of total quality. were sewn back in the late 1920s, when W. Edwards Deming and Joseph Juran worked at different times with two of the gear names in industrial history: Walter Shewhart, the father of statistical process control, and Elton Mayo, famous for the Hawthorne experiments at the Western Electric plant in Chicago. Deming and Juran both saw that, in order to improve an organization's operation, you needed to balance improvements in its processes or hard skills (Shewhart) and in its people or soft skills (Mayo).
After World War II, the United States was the only country with an intact economy. But Deming and Juran found their theories on quality improvement irrelevant to U.S. business leaders who were interested not in quality but quantity. Deming found a more appreciative audience in Japan, where he was conducting postwar census work. He was invited to speak about his views during a now-famous dinner in the early 1950s. The Japanese business leaders listened, and the rest is history.
RELATED ARTICLE: No quality quick-fix here
North America finally woke to the realities of quality in 1980, the year in which Philip Crosby's book, Quality is Free, became an immediate bestseller. His 14-step change process gave each of an organization's leaders a piece of the action and something to do. But there were still problems. Crosby's "starter kit" took most companies only about 18 months into the process, but no further. And many North Americans underestimated how much effort it would take for them to implement total quality. The "overnight success" of the Japanese had actually taken 30 years to achieve; many Americans thought that they could make a quality company in 30 weeks. Seventy per cent of companies that began working on quality during the 1980s gave up after 18 months and went looking for another magic pill to solve their problems.
Peter Merrill has been implementing change to quality management for more than 10 years. He is president of Strider International, which specializes in training consultants to train organizations in quality management and ISO 9000.…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: ISO 9000 on the Road to Total Quality. Contributors: Merrill, Peter - Author. Magazine title: CMA - the Management Accounting Magazine. Volume: 69. Issue: 4 Publication date: May 1995. Page number: 21+. © 1991 Society of Management Accountants of Canada. COPYRIGHT 1995 Gale Group.
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