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Point 11 – Arbitrary Numerical Targets

July 11, 2011 By 1 Comment
Is your management review a continuous improvement tool or an arbitrary numerical target?

 

Is your management review a continuous improvement tool or an arbitrary numerical target?

Management Review – a Continuous Improvement Tool or Generator of Arbitrary Numerical Targets

 

Eliminate arbitrary numerical targets
Eliminate work standards that prescribe quotas for the work force and numerical goals for people in management. Substitute aids and helpful leadership in order to achieve continual improvement of quality and productivity.
Dr. W. Edwards Deming

Doing it Wrong – Management by Arbitrary Numerical Targets

I think the key phrase is “arbitrary numerical targets”. Various companies I
worked for over the years have had management goals and objectives. Sometimes
the managers chose them, sometimes we were guided in them, and at a few it was
just an outright order. At one particular company we had to find either a 10%
increase in productivity or a 10% reduction in costs each year. To the outside
world we were setting our own goals. In reality we were working to arbitrary
numerical targets. The glossy projection sheets and plans appeared to be the
desires of a motivated workforce. We were motivated alright, we either
delivered on the arbitrary numerical target or lost our jobs.
The reason these goals were arbitrary numerical targets was they were identified
using the wrong method. Management did not sit in the management review and
look at the reported performance, and ask the staff to participate in continuous improvement. They looked at how much money they needed to bring in
to be a hero and then told everyone to deliver on arbitrary numerical targets.

Doing it Right – Management by Continuous Improvement not Arbitrary Numerical Targets

There was one company I worked for that did this right. They decided, from the data
in the management review, which was the worst performing press in the plant. It
was one of those bad economic times and no one had money to replace the
machine. Management built a team of operators, mechanics, supervisors and
engineers and turned the machine over to them. They didn’t set an arbitrary
numerical goal, they asked “what would you do to make this run better?”
The team cleaned the machine and then ran an order. Any place there was an oil leak,
they fixed it. They figured out why the leak had occurred in the first place
and where necessary made improvements in replacement parts like bearings and
seals. Once the machine was functioning as designed, they implemented the
Plan-Do-Check-Act process. They analyzed the production on the next order and
tweaked the machine and tooling. They adjusted gages so they were easy to read
and ran another order. By the time they got through, the machine was producing
at 130% of design with a part-time operator. No arbitrary numerical target
would have set the goal this team achieved.

Which Way Are You – Management Review to Eliminate Arbitrary Numerical Targets

A key tool in eliminating arbitrary numerical targets is the management review. If done well, it leads to aiding the improvement of quality and productivity. If done poorly it leads to arbitrary numerical goals. Look at how the process is managed. Are reports put into place to pass the audit or are they a tool to identifying problems and solutions? Who contributes to the reports? Is this a “dog and pony show” or are
employees encouraged to talk openly without fear of losing their jobs? If a
company wishes to create continuous improvement, to stay in business and create
jobs, then the first place they need to look is the management review. So what
does your management review generate; continuous improvement or arbitrary
numerical targets?
Filed Under: Continuous Improvement, Dr. W. Edward Deming, Featured, ISO 9000, ISO 9001 Tagged With: , , , , , , , , , ,

Creating and Maintaining a Corporate Culture Using ISO 9001

January 17, 2011 By 1 Comment
lock in corporate culture using ISO 9001

 

How do we maintain and communicate corporate culture using ISO 9001?

                I have a Saturday morning secret weapon, to improve my business. I attend the Levy Entrepreneurial Group meeting. Thank you Joe for creating it, Jack and Terry for leading it, and Don for introducing me to it. I love talking to the attendees, they have so much experience and they are happy to share.  Subjects range beyond my imagination, no small feat when you realize I write fiction as a hobby. On the drive home, this week’s meeting  on corporate culture, had my mind running like a squirrel that got into chocolate covered coffee beans. Good thing traffic was light, I was definitely a distracted driver.

                Let’s start by defining corporate culture. It is the psychology, attitudes and experiences of the society formed in a company. It is a blend of values, beliefs, rituals and myths, developed over time. To sum up, corporate culture is the perception of a company by its’ employees, vendors, and clients.

                So how do we create and keep a positive corporate culture? Implementing ISO 9001 correctly.

Communicating Corporate Culture using ISO 9001

It starts with the Quality Policy. It is a simple, straight forward statement of how we treat the customer, our employees and our suppliers. It must be something more than a framed plaque on the break room wall. Company leaders, and that is anyone who supervises, trains, or assists other employees, must live and refer to the values stated in the policy when it comes to decision-making. Thus a requirement of ISO 9001 is communicating the corporate culture.

                Job descriptions also communicate the corporate culture in more subtle ways and are required by ISO 9001. The job descriptions guide the employee to work within specific constraints and include a responsibility to evaluate and improve how the company does business. This should also be reflected in the employee review process and the development of objectives. All of these are requirements of ISO 9001. All of these communicate the corporate culture.

                Using the standard organizes communications to the employees. Clearly defining the corporate culture using ISO 9001 provides consistent values as different people generate job descriptions, reviews and other employee documents since everyone is guided by the quality policy.

                Small companies often do a good job of “presenting the vision” when they start. Growth can change all of that. Training is necessary. Not just job training but also training on the corporate culture. Much of Saturday’s meeting included examples of when this was done well and when this was done poorly. The standard requires the training on the quality policy which defines the corporate culture. Using ISO 9001 requires the communication of the corporate values.

Keeping the Corporate Culture Using ISO 9001

                Documentation  

                When developing your documentation systems it is critical to realize everything is linked and the quality policy it the keystone holding the over arching philosophy together. Using the standard as a guide helps control the dispersal through the documentation process, making it easier to communicate the corporate culture using ISO 9001.

Section 4.2 of the ISO 9001 standard lists the documents a company needs to use for training to keep the corporate culture in place:

  • A quality policy and objectives
  • A quality manual
  • Procedures
  • And documents for planning, operation and control of the processes

All of these must reflect the corporate culture, particularly when it comes to guidance on decision making.

                Management

                According to section 5.1 of the standard, management must accept the responsibility to keep the values important to the corporate culture in place. A key element to keeping corporate culture is stated in clause 5.5.1 of the ISO 9001 standard, “Top management shall ensure responsibilities and authorities are defined and communicated within the organization.” That isn’t just guidelines on who does what and with what and to whom, but also the values guiding each and every interaction, decision and activity in the workplace.

Viewing Employees as a Resource Stabilizes the Corporate Culture using ISO 9001

                ISO 9001  has a whole section on employees. How does management make sure they are competent, aware of the corporate culture, and trained? Does the corporation provide the infrastructure and work environment to make the employees successful at living the corporate culture? Most importantly, the standard recognizes employees are a valuable resource. Section 6 of the standard is a guide to empowering employees. It becomes a simple task to stabilize the corporate culture using ISO 9001.

Outside perceptions of the Corporate Culture using ISO 9001

                The Care and Feeding of Clients

                ISO 9001 requires interaction with the client and a development of a feedback mechanism, not only for errors but in ways to provide better service. The corporate culture has to be built around serving the customer or the company doesn’t stay in business. Thus the clients perception  is improved and the corporate culture using ISO 9001 is propagated.

                Controlling vendors

                Most companies focus on communicating and living their corporate culture  when it comes to their clients and their employees. A much smaller number take the same care to communicate the corporate culture to their suppliers. Implementing ISO 9001 addresses that shortfall. The supplier must have a good perception of how the company expects them to perform and clear communication as to whether these requirements have been met. This goes beyond, meeting performance requirements, on-time delivery, and reasonable price. Consistency is created through the entire process stream and clear perceptions created of the corporate culture using ISO 9001 to deal with suppliers.

                How the standard is viewed and implemented can take many forms. However, creating and maintaining the corporate culture using ISO 9001 is one of the strengths of doing the job right, staying in business and providing jobs.

Filed Under: ISO 9000, ISO 9001 Tagged With: , , , , , , , ,

ISO 9001 Management Review – Going in Circles

November 26, 2010 By 5 Comments
dog chasing tail

Are We Going in Circles ?ISO 9001 Management Review

Implementing ISO 9001 can sometimes feel like you are a dog chasing its’ tail; you can’t just walk down through the standard completing  a section at a time. Instead you have to jump from quality policy to documentation to customer requirements to design and hey isn’t this all about process control? Talk about making us linear, engineering-types crazy with frustration.

ISO 9001 Management Review is really a two-way Street

ISO 90010 management review is a key element in making implementation of the standard a viable continuous improvement effort. Support for change comes from the top down and is communicated in the ISO 9001 management review. Management is responsible for making sure the resources are available to create change. Management is responsible for setting priorities for change. ISO 9001 management review is the place where employees demonstrate what is and isn’t working and conveys to management what they need to accomplish positive change. ISO 9001 management review is the place to communicate and set the goals for the next business cycle, so while it may feel like you are going in circles it is really a two-way street for communication.

Typically, the management representative pulls all the information together for the ISO 9001 management review and generates the agenda for the business cycle. Note, it should be for the business cycle. In most companies the business cycle is annually so a single ISO 9001 management review per year suffices. However, I have seen companies where the business actually cycles multiple times a year. In this case, for the ISO 9001 management review to be an effective tool, and not just “the ISO 9001 standard requires it so we have to sit through it” meeting, it should be performed multiple times per year.

The management representative is responsible for keeping the presentation on track, but that does not mean doing the entire ISO 9001 management review, single-handedly. Each area should report and take full responsibility for the presentation of the data and answer questions related to that data.

Organizing the ISO 9001 Management Review

The data being presented at the ISO 9001 management review should not come as a surprise to management. They should have been receiving, and reading, regular updates. This meeting is to present trends from the data to be used to guide future actions and goals and most importantly, determine if the system is working or needs serious revision.

Each activity in standard implementation should link back to and communicate to management through the ISO 9001 management review. The ultimate responsibility of management is to allocate resources, develop a plan to be competitive, to stay in business and to provide jobs. For this reason, during implementation of the ISO 9001 standard it sometimes feels like the efforts take the employees in circles, always returning to the ISO 9001 management review. Continuous improvement is a cycle and a never ending quest following the Plan Do Check Act model. ISO 9001 is a tool for continuous improvement and therefore is cyclical in nature. ISO 9001 management review is the two-way street for communication to create constancy of purpose for continual improvement of products and service to society, allocating resources to provide for long range needs rather than only short term profitability, with a plan to become competitive, to stay in business, and to provide jobs[1].

[1] Dr. W. Edward Deming, 14 Points, “Constancy of purpose”

Filed Under: ISO 9000, ISO 9001 Tagged With: , , , , , , , ,

Point 9 – Are You Talking to Me?

November 16, 2010 By 3 Comments

Break down barriers

Break down barriers between departments and staff areas. People in different areas, such as Leasing, Maintenance, Administration, must work in teams to tackle problems that may be encountered with products or service.

Dr. W. Edward Deming

If you every want to see a head butting contest, put an experienced tool and die maker with a freshly graduated tooling engineer. If you don’t have a vested interest it can be entertaining. Certainly, I found it significantly enlarged my four letter word vocabulary.

The company faced an unacceptable defect level being generated from the tool. Root cause analysis guide us to a poor understanding, and therefore almost non-existent communication, between engineers and the tool makers. Each vocally attributed the problem to the other.

Our solution, have them trade positions for a day. The engineer got his hands dirty and once he got over being self-conscious actually had some fun running mills, lathes and all the other toys the tool maker used. The tool maker got to try his hand at CAD and got an earful of just how little information the engineer had to work with. Each came away from the project with respect for the other and the freedom to communicate instead of blame.

We started a program having new hire engineers working in the tool room and training toolmakers on the engineer’s toys. Each learned to respect the other. The groups went from snubbing each other in the lunch room to wearing a path in the floor tile between each others’ work stations.

Our next step introduced Failure Mode and Effect Analysis (FMEA). We now had people who were willing to work together instead of point fingers. As soon as we armed them with data and invited them to utilize their education and experience our quality made a geometric improvement. Where 3 sigma had been an unrealistic dream, we made the jump to 6 sigma and parts per million defect levels.

This break though came because we broke down barriers, increasing respect and communications. If we had started the FMEA without first developing respect between the participants our success would have been minimal.

Where are the communication barriers in your company?

Filed Under: Continuous Improvement, Dr. W. Edward Deming, ISO 9001 Tagged With: , , , , , , ,

Point 5 – Improve Every Process

June 30, 2010 By Leave a Comment
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Improve every process

Improve constantly and forever every process for planning, production, and service. Search continually for problems in order to improve every activity in the company, to improve quality and productivity, and thus to constantly decrease costs. Institute innovation and constant improvement of product, service, and process. It is management’s job to work continually on the system (design, incoming materials, maintenance, improvement of machines, supervision, training, retraining).

Dr. W. Edward Deming

Improve constantly and forever, Wow, that is a tall order. Larger companies are able to staff for improvement, but what can the little guy do?

The first step is to prioritize, go for the biggest bang for the investment first. That does mean collecting data. Start with a Cost of Quality report. How much do you scrap? How much do you spend on rework?

When I go into plants to implement ISO9001 I expect to get them certified in system that is indicative of the company culture but I also look for where there is waste and I can reduce costs. I take a visit to the scrap bin and here is the trick, I look for similar parts with similar defects. This tells me there is a system failure. It can come from two places, the design of the part or the method of manufacture. I work backwards from the parts and look to save my client the annualized cost of my contract.

Service providers are a little different. There is no scrap box to look in. What I generally find with them is each employee has a different way of doing each job and there are no written directions or procedures. Each person is sure their way is best. Frequently they have found out about a customer problem and have incorporated a preventive measure in their own method. By listening and applying this information and then training the entire staff, making sure to acknowledge the source and reason for the preventive measure we create a streamline system that addresses all customer issues. We have searched out the problems and created improvement.

Both the manufacturer and the service provider do have customers. Both have complaints that can be used to create real and systematic improvement. Both have the opportunity to call their customers and really listen to what the customer wants and needs. A requirement of ISO 9000 is continuous improvement. The companies that deliver on that element grow.

My bank is ISO 9000 certified. I talked to one manager and he said the certification didn’t mean much to the average customer. What did make a difference was the consistency of accurate and reliable performance, from both new and long time employees. The customers found the bank listened to them and implementing safe new systems that made banking easier at no charge. ISO 9000 had created a system of continuous improvement that kept and drew in new customers. The bank has been able to stay in business, loan money and provide jobs. To quote the good Doctor, “So simple”.

Filed Under: Dr. W. Edward Deming, Featured, ISO 9001 Tagged With: , , , , , , , , , , , , ,

ISO 9000 is a Change to a Healthy Life Style, Not a Crash Diet

June 14, 2010 By 1 Comment
CB047447

ISO 9000 is a change in the way everyone in the company thinks and behaves. It is not easy to implement correctly and it is very easy to back slide into the old way of doing things.

Think of ISO as a corporate change to healthy living from a junk-food junky. Ninety-nine percent of people don’t get up off the couch dust off the potato chip crumbs and start running five miles while munching on tofu.

Most people get on the scale and come to the realization they have to make a change. They may start out with a crash diet or they may add a walk to their daily routine, the diet may make a big impact in the short term with disastrous long term results while starting a reasonable exercise program will create gradual improvement your need for long term good health.

The corporate scale is the Cost of Quality report. It measures where there is waste and what it costs to keep control of problems. This is a report you should craft carefully because it is how management is going to measure your success or failure. Understand where the numbers come from, what it takes to collect them, and just how closely it relates to the P&L report. If you can’t find a close correspondence between the two reports, you need to revise the Cost of Quality report.

You need to break management into the idea that you are looking at a 5-10 year plan. Yes there will be measurable improvements in the short term but the real benefit comes from continuously monitoring and improving. You are about to implement Dr. Deming’s, Plan-Do-Check-Act and you better do it right or don’t bother doing anything at all.

Filed Under: Featured, ISO 9000, ISO 9001 Tagged With: , , , , , , , , , , , , , ,

Don’t Skip the Good Stuff Part 6

June 14, 2010 By 1 Comment

Management Responsibility

            There is a saying, “What goes around, comes around” or you can look at this circle and considerate it the visual definition of “synergy”. There is a reason this is a circle. Management responsibility, resource management, product realization, measurement, analysis and improvement are interrelated. Take away any one of these and the ball, better known as your company profits, drops dead. It is another way of looking at Dr. Deming’s ‘Plan Do Check Act” model.

 

            Looking at section .2 the top box in the circle is management responsibility. I have seen many corporate executives abdicate this point to the quality manager. Usually they pass along the responsibility but not the authority. So what is management responsible for doing?

  1. Steer the bus

This means providing a long term plan, as in a 10 year objective and nothing as vague as “make money”.

  1. Provide the fuel

Management must find the people, funds, equipment and raw materials to make the process work.

            If a company is going to grow and remain in business there must be a written policy for doing business and goals to be achieved. Unless a company is a charity the basic is to make a profit. The question is how much profit? A company isn’t going to double in size without planning, or if it does, it won’t stay that way for long. Management must set out a clear and definitive game plan to get long term positive results.

            The fuel is something else management must provide. Imagine making medicine with untrained people. The result would be catastrophic. Management must find the right people and provide training. Good people are hard to find, they should not be treated as a commodity or the long term growth will suffer.

            Equipment is another resource management is responsible to provide. This does not mean going out and ordering a one of a kind machine to make your particular widget. It does mean making sure the machine consistently produces acceptable product. There is a tool called total productivity maintenance. I have seen examples where using team work and asking the operators for input has resulted in a machine which is 10 years old increasing in productivity by 30% and reducing variation by 50%. Normally productivity goes down and variation increases as a machine ages.

            Raw materials are another matter. There is an old saying, you can’t make a silk purse out of a sow’s ear. Raw materials must be capable of turning into good product. At one point I worked for a pharmaceutical company. We produced an injectable drug. The basic material was organic so there were variations. However on one particular lot an extraneous peak showed up in the gas chromatograph analysis. Checking backwards, that same peak had been in the raw material. Countless man hours were wasted because the raw material was not capable. Management had approve the purchase because they were desperate to fill a stock out situation and didn’t want to acknowledge the material was bad.

            Having provided everything necessary to make the product it is time to do just that – produce something to sell. There is an element of QS 9000 I like to implement in ISO 9000 applications. It is called the Pre-Production Approval Process (PPAP). It tests the ability to make a consistent product over a reasonable duration of time, usually half a shift.

            Once the product has been produced, it is time to measure and analyze for improvement and send it to the customer for feedback. One of my clients made toothpaste closures. They made millions of them and were very proud that they only had 12 open closures per 100,000 manufactured. The cost to the toothpaste company was huge down time. Every open closure shut the line down for cleaning for 10 minutes they were filling at the rate of 600 tubes per minute. Seven people stopped producing salable product and wielded scrub brushes for every open cap. With this feedback, my client designed a machine to make sure the closures snapped shut and removed those that did not. Cavity marking on the rejects gave the root cause of the problem and before too long they were whistling along at 3.4 parts per million open caps. Without the analysis and the customer feedback, my client would have lost a very important piece of business. Which would have impacted the long term plan.

So there you have it. The really good stuff for ISO 9000 is before you even get to the standard.

Filed Under: ISO 9001 Tagged With: , , , , , , , , , , , , , ,

Don’t Skip the Good Stuff Part 5

June 14, 2010 By Leave a Comment

            What is continual improvement of the quality management system? It is the big picture. It is looking at the performance of all the sub-processes that make the whole process, from getting the customer specifications and orders, to making sure the parts arrives on-time, at a reasonable cost and in a useable form.

            Here is where the quality manager has to avoid the biggest pitfall known to the engineering mind – trying to pick the fly poop out of the pepper. Engineers don’t know when to stop, and they are right, continuous improvement never stops but you have to know when to move on. I can say this as I am an engineer and there have been times when my engineering tendencies have driven my husband, a really knowledgeable construction consultant, to offer specific guidance (Honey, hand me the darned 2 x 4, it doesn’t matter that it’s off by a thirty-second).

            It is the Quality manager’s responsibility to evaluate the effectiveness of each step in the process and to determine where to improve the process. This means having a way to measure the performance of each step and a method to compare the various results. There are a number of tools to use.

            A good customer satisfaction survey is one. One of the most common things I see is a four or five generic question survey where any rating less than excellent draws attention like road kill draws flies. Sales staff and customers a like groan at the thought of filling the thing out and the input has no value. Do some research into your customer base. Talk to your sales staff, field engineers and repair people. They interacts with the customer in the field and you need their input on what is an effective line of questions to get real information from your customer.

            Complaints and returns are another resource when it comes to measuring customer dissatisfaction. There is a difference between measuring satisfaction and dissatisfaction. Depending on the price of a part, you may never know the customer has a problem. They may throw it away and go elsewhere without ever talking to you.

            Measuring internal costs to achieve customer satisfaction is a third. If you have to 100% sort parts before shipping them, this might be a process that needs to improve.

            Once you have all this data you must convert it into dollars of impact on the company. It is the only way to make a fair evaluation. How much is it taking away from profitability? How much sales have we lost? How much sales could we increase? Put a rough estimate together as to costs to evaluate a solution for each problem. Now you have a report that management can understand. Now you are ready to truly implement ISO 9000.

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Don’t Skip the Good Stuff Part 4

June 14, 2010 By Leave a Comment
Iso Process Model

            Let’s jump to the next page and Figure 1, don’t worry, we’re not skipping the good stuff, just getting a visual. We need to talk about how to obtain results of a process performance and effectiveness.

            We have to start with the customer requirements. Not just the in-house print but the specifications, prints and input of the customer. We need to know how they are using our product and what the method of installation is.

            The example of the reversed angle explains how the transfer of information from one document form to another can be a problem, but we also need to understand how the customer is installing the product.

            I remember being called to an automotive company to explain our excessive defect rate on a part. both shifts were reporting huge problems. The threats were long and loud. Until I pointed out that the two different shifts were installing the part in very different ways. In one case the nut had to be run almost completely down. In the other it needed to be so close to the tip of the bolt as to be in danger of falling off. Our specification from the customer was to have the nut run on “no less than 8 mm”. Of the 100 “defective” parts they had tossed on the table all 100 were at 8 mm. We than helped them do a study to find out which method of installation was most effective for their process. We left the retraining of the shifts to them.

            We could have left the customer embarrassed at their actions and gone away slapping ourselves on the back and talking about how smart we were. However, the problem was not solved and would have come back sooner or later. We would have ended up with a reputation as a poor quality supplier even though we were not at fault.

            Many times the customer’s requirements are not what they have written down. It is very possible the customer doesn’t even know what they require. When you are sure you are meeting the communicated customer requirements and they are having problems with your parts it is time to go find out how the parts are being used.

            This is the two bars in the figure labeled customers “requirements” and “satisfaction”. The circle directly relates to the standard. The continual improvement bar is for next time.

Filed Under: ISO 9001 Tagged With: , , , , , , , , , , , , , , ,

Don’t Skip the Good Stuff Part 3

June 14, 2010 By Leave a Comment

            Staying in section 0.2, it talks about a process approach emphasizing the importance of

a)    Understanding and meeting requirements

b)    The need to consider processes in terms of added value

c)    Obtaining results of process performance and effectiveness

d)    Continual improvement of processes based on objective measurement

            Understanding and meeting requirements sounds so simple but it was the root cause of my old employer producing unacceptable parts (see Don’t Skip the Good Stuff Part 2).

            Considering the process in terms of added value brings to mind a mistake by a young process engineer. He was charged with finding a way to improve the quality on a product that had approximately two more years of production life and a total sales value of $100,000. He worked diligently researching new systems and methods. He was very proud as he stood before us and proposed we invest $2 million dollars to reduce a .1% defect rate on 250,000 parts worth about 40 cents each to a defect rate of .04%.

            The young man had found a solution that would improve our product quality but the value of his solution to the process was a negative. When working on process improvement it must be cost effective as well as quality effective.

            Look at how the goals are defined to a team assigned a process improvement task. Make sure the team understands the current costs and performance when they start.

            Obtaining the results of process performance and effectiveness and the continual improvement of processes based on objective evidence are blogs for another day.

Filed Under: ISO 9001 Tagged With: , , , , , , , , , , , ,
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