As organizations are driven to become more
competitive by lowering the cost of operations, Quality is coming back
into fashion. Some organizations are latching their wagons to Six
Sigma or Baldrige. Others are renewing their emphasis on the basics by
bringing their systems into compliance with ISO 9001:2000. Ideally, the
business process focus of ISO 9001:2000 provides companies the opportunity
to align their quality systems with their operations. But to be
successful, the quality system cannot simply be a "book on the
shelf" to be studied just prior to the registrar's visit. The quality
system must be the way things get done all the time.
While many companies have a consolidated view at the Environmental Health
and Safety level, often the quality function is dysfunctional in that it
is spread throughout various business units with no overall coordination.
Consequently, there is a missed opportunity for significant cost
reductions and corporate knowledge transfer that could be gained by
looking at and
aligning these disparate unconnected quality systems.
I have consulted with a number of organizations facing this dilemma. One
in particular had no easy way to send corrective action notices from field
service personnel to the factory without involving very high levels of
management. Further, delays caused by multiple chains of quality systems
caused one frustrated customer to remark, "You're ISO
registered?" This chain also contained huge gaps from a process
perspective, so much so that steps in the process could be labeled,
"then a miracle occurs!"
Knowledgeable senior staff members who engaged their associates in the
next organization to fill these gaps often supplied the
"miracle". It was not surprising that this entire system began
to fail as these senior people retired or 'took the package'. Although all
these issues directly impacted the efficiency and cost of operations, the
heart of the problem was the very real and negative impact on customer
This problem was caused by an engineering design change at the factory
that was not communicated to customer documentation, installation service,
systems engineering. Every one of these groups had their own ISO 9001
registrations and was fully compliant in their own little world.
Nonetheless, the customer had spent over $600,000 for site preparation and
electrical work for a system that no longer conformed to the original
design. Luckily, the company credited him for his wasted money, but how
many other dissatisfied customers were created by this one design change?
When the incident was investigated, the group responsible for
communicating this change had been laid off. There was never any process
redesign after the lay off.
At another location there were over TEN different corrective action
systems in the same facility due in part to multiple registrations. These
ranged from paper based, to email, to locally written databases. My team
first focused on getting the right group of subject matter experts to
determine a streamlined process, design it, and test it. The final step
was automating the entire procedure. As a result, field engineers could
quickly escalate customer issues to the appropriate factory organization
for immediate attention and resolution. The key lesson learned was to do
the process re-design first and then automate. Don't expect an automated
system to fix all your problems. As one of my wise mentors observed,
"You can't change the culture with a system".
Another large organization conducting a review of quality registrations to
the ISO 9001 standard found it had over 100 separate registrations. In
some cases there were even multiple registrations at the same engineering
or manufacturing location due to the different lines of business that were
in residence. To further compound the problem, the company was doing
business with many different registrars, which led to conflicts in the
quality system between facilities. And finally, the company had no common
way of dealing with the basics of document management, corrective action,
or auditing systems that could lead to organizational efficiencies and
During "good times" a savings of one to three million dollars
might seem like a pittance, but today organizations need to focus on
saving every dollar. But high-level quality changes require high-level
management support. When talking to management, it is essential to speak
their language. Phrases like Return on Investment (ROI), Net Present
Value, Business Continuity and Payback catches their attention. If a
show a high ROI with a short payback, the quality manager has a much
better chance of getting approval. Every organization has its unique way
of presenting this data to management. Learn yours.
Substantiating the business case for quality reform may focus on cost
savings as well as organizational efficiencies gained. For instance,
standardizing on a single registrar can save 30-50% of direct costs paid
to registrars. This is an easily identifiable hard dollar savings.
However, it will also result in decreasing internal costs although these
may be harder to quantify. Nevertheless, some of these reductions will
include the elimination of creative work-arounds, the decrease in the
number of staff dealing with registrars, the streamlining of
administration of registrar contracts, and the elimination of customer and
employee confusion about which processes to follow.
There are a number of questions that help managers discover opportunities
for improving the quality process as well as the bottom line such as: How
many registered quality systems does the organization have? What is the
difference between how similar facilities manage documents, corrective
actions, and audits? Is the business really so different that the company
can't use the same registrar even if the registered functions are
different? Has the organization ever evaluated the number of registrars
its uses for all the different registrations?
In a constrained economy and a competitive business climate, quality is
not a luxury but an absolute necessity that can reap savings and
efficiency while enhancing customer satisfaction. Making even small
changes can yield big impacts. By answering these questions, using a single
registrar, and integrating quality outputs in terms of the bottom line,
the management of the quality process will become the golden thread for
John B. deCastro is a Consultant with Business Essentials and Associates,
LLC, a value based
consulting firm assisting clients to reduce costs and create new revenue
opportunities. John is a former Senior Manager for Knowledge Management at
Lucent Technologies and Customer Satisfaction & Quality Director for
AT&T Pacific West Business Unit. He holds an MBA from Golden Gate
University and a BS from San Diego State University. Through Business
Essentials, John enables organizations to create market opportunities and
maximize the efficiency of scarce resources in the sales, marketing and
Permission granted to
reproduce article only with biographical and source information on copies
© 2002 John B. deCastro, Business
Essentials and Associates, LLC, & Vintara Corp.