Beyond ISO 9001 : Benefits to SMEs

Excellence unLimited, Rajkot 1

A presentation given at Rajkot Management AssociationOn 22nd October, 2010 at Rotary Hall, Vidyanagar Road, Rajkot, Gujarat, India


In this highly competitive world, and in Global meltdown situation,Darwinian Principle of “ Survival of the Fittest ” will prevail.

It is, therefore, imperative for organizations to be fit.

Systematic approaches provide them an opportunity to become fit, survive & grow.


ISO 9001 ( Quality Management System )

and TS 16949 ( Automotive QMS ) standards

are one of systematic approaches and

basic foundation stones on which,

we have to build company improvement efforts.


But we must know, they are just basic

foundation stones and a house or avenue

cannot be built merely by foundation stones !

( Unfortunately, most companies just stop here. )


What is ISO ?ISO stands for International Organization forStandardization.

Why Standardization ?•Standardization renders consistent output, again and again, year after year. ( Examples . . . )

•Errors and variations are minimized, leading to reduction of wastages and time, thus saving costs.

• It employs scientific Process and Systems approach.


ISO 9001 is a generic standard, that meansit can be applied by any kind of institution,whether it be industry, business, trade, NGO,Govt., Educational or Health care institution.


Source : A C Neilson Annual surveys www.iso.org

9,82,832

Dec.’08


Rajkot and surrounding area’s share is @ 1%, i.e. about 500 certi. existing.

Source : A C Neilson Annual surveys www.iso.org

37,958

Dec.’08


TS 16949 is ISO 9001 version specifically modified for automotive supply chain industries. It contains some additional tools like SPC, FMEA(Design & Process), COPQ, Risk Analysis, 5 Why, RCA, Supplier & Competitive Analysis,Preventive and Predictive Maintenance, Inventory Management, Pokayoke etc.

Additionally, it mandates all its suppliers shall beISO 9001 certified.It also mandates that its own laboratory may conform to ISO/IEC 17025. However, external labmust be ISO/IEC 17025 certified.


ISO 14001

OHSAS

18001ISO 9001

Other beneficial standards are . . .


• ISO 14001 : 2004 – This is Environmental Management Standard for reducing pollution, saving natural resources, and reducing wastage.

Other beneficial generic standards( can be applied by all )

• OHSAS 18001 : 2007 -- This is Occupational health and safety standard, leading to better employee and other stakeholder health and safety.

• M/S Preci-Max Rollers, Metoda, is having all 3 TS 16949, ISO 14001 and OHSAS 18001 certificates.


Other Sector specific beneficial standards

• ISO 10006 : 2003 – This is ISO 9001 guidelines adopted for Projects

• ISO 10014 : 2006 – This is ISO 9001 guidelines for realizing financial & economic benefits

• ISO 22000 : 2005 – Food safety std.(equi. to HACCP)

• ISO 27001 : 2005 – Information security standard

• ISO 20000 : 2005 – IT service standard


All these standards help organizations to develop basic processes and systems, specific to business. However, they are notsufficient to get an edge over competitors.

For this, organizations must employ othertried, tested and proven management tools and techniques.

Let us discuss these management tools and techniques, one by one.


Continuous Improvement using Deming’s PDCA cycle

Plan

Do

Check

Act

Planning through Quality policy,Quality plans or Procedures

Doing = Carrying out activitiesas planned

Acting= Bridging the gaps or resolving non-conformities and observances

Checking= Checking whether planned activities are done or carrying out audits


• 5 S : This Japanese technique can bring out waste by visual control,

What else can SMEs do in competition ?

• COPQ : Identifying and reducing waste in every activity, thereby improving cost( Almost 30% of cost due to various wastes ) • SPC : Analyze and identify process variation, cycle time, cost etc. and make corrections,

• Kaizen : This Japanese technique can make continuous improvement possible,

• Six Sigma : Abandon % variation mentality, adopt sigma concept and control processes.


• Based on Japanese words that begins with letter “ S ”,

The 5 S Philosophy

• Simplifies the work environment,

• Reduces waste and non-value activities,

• Focuses on workplace organization and standardized work procedures,

• Improves quality, efficiency and safety .


5 - S 5 - S THE 5 -KEYS TO WORKPLACE MANAGEMENTTHE 5 -KEYS TO WORKPLACE MANAGEMENT

SEIRI = Sort ,SEITON = Set in Order ,SEISO = Shine ,SEIKETSU = Standardize ,SHITSUKE =Sustain the gains .

“A place for everything and everything in its place.”


Examples of 5 SExamples of 5 S

Factory Area Factory Floor



Tool Post Tool Rack

Table Drawer Storage Area



Meeting Room Notice Board

File Rack


Have you heard of 5 Wives and 1 Husband ?


Once fully implemented, 5 S gains are -Once fully implemented, 5 S gains are -

• Employees feel better about where they work,

• Increase morale,

• Increase efficiency,

• Lead to continuous improvement in the form of less waste,

• Better quality and faster lead times,• Creates positive impression on customers,

• Make the organization more profitable and competitive in the market place.


COPQ( Cost of Poor Quality )

It is about 4 to 30 % of revenue for established to new organizations .


COPQ Initially, one identifies only visible losses.

They are : Customer returns, recalls, rejects, rework, waste, testing costs, inspection costs.These are normally 4 – 6 % of sales turnover.


COPQ When company gets experience, invisible losses also becomesapparent.

They are : complaint handling, excessive field service expenses, premium freight cost,excessive inventory, excessive overtime,Unused capacity, excessive employee turnover, etc.These are normally 15 – 25 % of sales turnover.


COPQ

10 % expenses done for good quality, saves 90 % expenses for bad quality.


SPC ( Statistical Process Control )

“If you want to manage, you have to control. If you want to control, you have to measure.”

By measurements , you get data.

By analyzing data , you get information .

Act on information and you improve .

“In God we trust, for everything else, we require data” ~ HP


Purposes of application of Statistical techniques

Pinpointing problem areas

Identification of current quality status

Judgment regarding acceptance or rejection of lots

Improvement of processes

Control of Processes

Designing products and processes


SPC ( Statistical Process Control )


Pareto Analysis

A simple tool for problem solving that involves, ranking all potential problems according to their contribution to cost or to total variation.

“Pareto Analysis” can be used to arrange the causes in order to locate the largest contributor so that it can be acted upon first, concentrating on the “Vital Few” causes, temporarily ignoring the “Trivial Many” .


Pareto Analysis ( Rule of 80 : 20 )

e.g.

80 % of our specific problems are on

account of the 20 % of the causes.

80 % of our revenue comes from 20 % of

our vital customers.


Pareto Analysis

0

20

40

60

80

100

120

Ce

me

nt

S.A

sh

- L

igh

t

S.A

sh

-H

eav

y

S.A

sh

-M

ed

ium

Cau

sti

c

Bic

arb

Bro

mid

e

Rejection analysis of products in a multi-product company


Cause & Effect / Fishbone / Ishikawa DiagramCD DIAGRAM FOR TOTAL PRODUCT VARIATION

BASIC FACTORS ( BASIC TO MACHINE )

MACHINE AND INTERGRAL COMPONENTS

IN OPERATION DESIGN & CONSTRUCTION

TOTALPRODUCTVARIATION

THERMALINFLUENCES LOADING &

LOAD REVERSAL

LUBRICATIONPOSITIONALERROR

DYNAMIC

BEHAVIOUR VIBRATIONS

END PLAYS

FITS

CLEARANCES

ALIGNMENTS

DYNAMIC

STATIC

RIGIDITY

MATERIALS

LEAST COUNT

SUITABILITYOF INSTRUMENT

REPRODUCT-BILITY OFINSTRUMENT

DIFFERENCE BETWEENINDENTICAL TOOLS

TOOLING

TOOL DESIGN

TOOL WEAR

FEEDS & SPREADS

OPERATIONALSEQUENCE

FIXTURE

CLAMPING

ENVIRONMENTALCONDITIONS

COOLANTMEASUREMENTOF WORK PIECE

METHODS OFMANUFACTURE

OPERATOR’S SKILL

JOB SETTING

OPERATOR’SEXPERIENCE

MEASUREMENT DIFFERENCE( INSPECTOR )

MAN

SHAPE

MATERIAL ( MACHINABILITY )

SUITABILITY TOCLAMPING / LOADING

INPUT DIMENSIONS

WORK PIECE

EXTERNAL FACTORS( EXTERNAL TO MACHINE )


Other management tools and techniques -

• J – I – T : Just in Time

• 5 Why : Ask “ Why ” five times for any problem

• SWOT Analysis : Identifying company standing

• VMV : Formulating Vision, Mission, Values

• BSC : Balanced Score Card for strategy Deployment

• Strategy : Long & short term strategy formulation


Management practices / philosophies

• TQM, TPS, WCM, TPM are management practices adopted world over to give lasting benefits.

• TQM : Total Quality Management

• TPS : Toyota Production System or Lean Mfg.

• WCM : World Class Manufacturing

• TPM : Total Productive Maintenance


Award processes

• There are several holistic Quality Award models that encompasses all best practices, are thoroughly documented, assessable and provide written feedback to applicant for further action and improvement.

• Malcolm Baldrige National Quality Award (MBNQA), USA Its Indian versions being –1.Ramkrishna Bajaj National Quality Award : IMC, Mumbai,2.Rajiv Gandhi National Quality Award : BIS, New Delhi,3.Golden Peacock National Quality Award : IOD, New Delhi,4.Tata Business Excellence Model (In-house) : TQMS, Pune.


Award processes

• European Federation of Quality Management (EFQM) Award, European Countries Its Indian version being – CII – EXIM Bank National Quality Award : CII, Bangalore.

• The Deming Award : JUSE, Japan

• The Shingo Prize : Shingo Foundation, Japan

• TPM Excellence Award : JIPM, Japan


ISO 14001

OHSAS

18001ISO 9001 etc.

TQM,TPS,

WCM,TPMetc.

National

QualityAwardsbased

onMBNQA

,EFQM,Demin

gAward

Etc.

Is it enough to have ISO only ?

ISOs are just basic approach

esMgmt. toolsLike 5S,

COPQ,SPC,6 Sig.etc

In order to compete, grow and sustain,You also need to adopt Mgmt. tools and WC practices.


Any Questions ?


We, at Excellence unLimited, can help you in the whole journey,

from very basic processes to utmost complex systems . . .

It will be our pleasure to be associated with you.

Be it for awareness, training,documentation, audits or maintenanceand improvements.

www.excellence-unlimited.com


Thank You