Category Archives: Quality

Why Quality Management

A quality management system for good and socially responsible business.

With the increasing pressure on efficiency and costs, we see the attention of quality management evaporate. As if it were a luxury, those organizations could hardly afford to keep at least an existing certification. While an efficiently operating quality management system is just as important today as ever before.

The basis

The basis for a quality management system is to make work processes clear in relation to the output (customer service), the effort to be provided, and other resources (money for example) and content quality aspects for the customer and the staff. That transparency, plus and then controllable compliance with what has been specified, provides reliable and certifiable service on a basic basis for financing and customer trust.

At the same time, there is a basis for critical review of the efficiency of those work processes. Are there “lean” terms of “waste”, waste of energy on issues that do not contribute to the customer and the quality to be delivered? Are quality and effort in balance? A quality management system is not ‘complete’ after certification, but must constantly be used for continuous improvement of efficiency, customer satisfaction and quality.

Luxurious

And for those who still find it quite luxurious: it provides a basis for communicating with clients or financing about that balance and reasoned counterweight of pressure to work under the cost price, for example. An organization that has its quality management system in order and insight into its processes is so many times stronger against cuts and irresponsible financiers.

Finally, let’s not forget the staff. Insightful work processes that focus on client and staff interests contribute to motivation and productivity, lower absenteeism and better self-responsibility in the workplace – to self-governing teams.

In short: an efficient quality management system (supported by a good planning / control cycle and a risk management system) is the basis for healthy and socially sustainable business management.

This article has been written by Jantina van Rossum of iConact.

 

How to Handle Risk Management.

An organization cannot exist without taking any risks. The question is, how to manage those risks to improve predictability and reduce the level of risk?

Don’t make risk management an expensive and time consuming project.

Too often risk management is seen as a time consuming exercise. I personally believe that this is unnecessary.  When we talk about strategic risk management, it is possible to have just one or two sessions of about 1.5 hours with the top management to list all the risks.

Focus on the top 10 risks

Make sure the focus is on the top 10 most important risks and don’t bother working on all the risks for the moment. It is important to assess the risks by next year, as by then you can focus on the other risks to the organization.

Align the company objectives with the risks

To accomplish this, start with the stakeholder analysis including the objectives of every stakeholder related to the company. This helps you focus on the important risks that have a direct effect on the stakeholders and the objectives.

Internal communication

It is very important that the employees support the risk management. In order to increase support it is essential to communicate the importance of the risks and that people understand why certain actions are taken.

Have a clear division of tasks

After all risks are registered it is important to assign owners to certain tasks, preferably people in higher management positions. They will then be responsible for the corrective and preventive actions taken to reduce the risk levels. The managers can give certain tasks to other employees but they are responsible for the risk.

Go further than only financial risks

Most companies have the financial risks in order due to the yearly check by an accountant. There are more than just direct financial risks for an organization. Make sure you also think about the broader picture than pure financial risks.

Use risk management as a guide for management

Risk management is much more than just listing all the risks. It is an instrument to help management get a good picture of the risks involved. Next to this, it is a great tool to perform and manage corrective and preventive actions based on these risks. Furthermore, it holds some great input for the yearly management and the actions give a good measure on how management performs.

 

This article has been written by Jantina van Rossum of iConact.

Root Cause Analysis: 5 Whys

After the elaborate piece on the Cause and Effect diagram we will take a deeper look in the 5 Whys as a root cause methodology.

The concept behind 5 why’s is that you keep on asking the question why did it happen until you reached to the underlying cause. Due to this setup the 5 Whys methodology is a very power tool for the root cause analysis because it forces people to really think about what went wrong.

Example

A wrong product has been delivered by a supplier.

1 Why. Why was a wrong product delivered?

The purchase department provided the wrong information.

2 Why. Why did the purchase department provided the wrong info?

The found this info on the server which they assumed was the latest version.

3 Why. Why wasn’t the latest version on the server?

Sales had been negotiating with the customer and forget to update.

The analysis shows that something went wrong in the process. Modifying the process can prevent this from happening in the future. A possible solution could be adding an addition step in which purchase just cross check with sales before they purchase the goods.

Also in this example it is clear we didn’t reached till the fifth why. This is not important sometimes the root cause is clear after 3 steps sometimes after 5. But for sure the root cause is clear after 5 steps.

Boundaries

When it comes to 5 Whys there are not so many boundaries. The strong characteristic about 5 Whys is that it allows you to find a root cause within purchase while the issue occurred at sales. This broad and inter process root cause analysis can very effective because of characteristic.

However, with the 5 Whys it is very easy to reach a level where it is easy to just blame a person or department. It is important to leave the personal aspects out of the equation and focus on the processes and organisation. Blaming somebody doesn’t help, always try to look at the organisation. So when a particular person is making the same mistake multiple times maybe we should give him or her training to improve his way of working. Or maybe the recruitment process is not how it should be. Just try to prevent blaming people.

Insight in Cost of Quality: the hidden gem

Total Cost of Quality is a very important topic but not well known by a lot of C-level managers. When asked about the total Cost of Quality, a lot of C-level managers simply don’t know or give an industry standard. This reaction is understandable but very striking at the same time. In many industries the estimated costs of quality is in the range of 20%, which is some serious money when you are talking about tens of millions or even hundreds of millions.

Open your eyes

Automation can help companies to get a better feeling for their cost of quality. This starts by providing employees with the tools to record a quality issue. A number of companies claim to have very little issues, only because their issue form is around 6 pages. No one in their right mind is going to fill that up so a lot of issues are not even registered. Providing a mobile app with just 2 or 3 fields and an option to add images lowers the burden significantly to report an issue. This will lead to a bigger influx of issues, which is great.

Pick up the issue

Now that the burden of reporting an issue is out of the window, the real power of automation kicks in. The different stages the issue needs to follow can be predefined with pinpoint accuracy which means that the right person can add information precisely at the right time. A good automation solution allows the option to create a structured actions plan, and distributes the action to the designated owner. This connects the corrective actions to the issue on hand.

The automation allows for the hidden costs to get exposed, for example costs like waiting hours by the team or repair hours required to fix the issue. Multiplying these hours with the internal hourly rate, the company will be able to put a price tag to the lost hours. Furthermore, the solution can give an indication of the costs the administration has cost based on the hours worked on the issue.

Finalize

When all the information required for the incident has been provided, the report can be closed. This way of tracking Total Cost of Quality allows management to get a real-time insight in the actual costs. They can always have a clear overview of what all these issues cost the company. Just check the example.

analyse issues

Dashboard

In the end it is very important to get a grip on your total cost of quality and clearly see where the company is bleeding money in order to fix this. You can only take this step when everybody in the company is able to file an issue easily. Have fun increasing your efficiency.

How to handle objectives in your management system.

Objectives are pretty vital to the Management System. With objectives you can measure how the company is doing against a benchmark set by the company itself. Of course the company can do much better or worse. But, setting clear objectives is crucial in creating this benchmark. In line with the objectives are of course the KPI’s which you should setup and track.

How to come up with objectives

Most of you have probably been on this trajectory. Goals come back every year and you try to rephrase them every time to make them look new. Especially for companies with low environmental impact, limited risks to employees, or excellent customer satisfaction, creating new objectives can be hard. Where do you find new inspiration?

Look at other companies/competitors for objectives. A lot of companies place some management system related documents open on the web as part of their CSR program. You can find quite some potential KPI’s in these documents.

Look closely at your organization and try to pinpoint the crucial mistakes that are made. Set goals to goals these parts of the organization.

Last but not least, don’t make it too hard on yourself. Often you think too hard and too deep and you just can’t think of anything at all. The longer you have to think about an objective, the more you will get stuck. Just answer a simple question: what do you want to achieve at the end of the year(s)?

SMART

Make sure your objectives are described SMART in order to manage them.

  • Specific – target a specific area for improvement.
  • Measurable – quantify or at least suggest an indicator of progress.
  • Assignable – specify who will do it.
  • Realistic – state what results can realistically be achieved, given available resources.
  • Time-related – specify when the result(s) can be achieved.

A clear description of the objectives is important in order to manage each objective. Also the assignability part is very important. When multiple people are responsible for an action, it can end up where nobody takes responsibility to complete the task and start to point towards each other.

Managing objectives

Try to not make the objectives an annual exercise. More often than not the data is just gathered at the end of the year and benchmarked against the goals. Please don’t apply this type of strategy. In order to really take advantage of goals you should manage them properly. This can be done by checking progress on a regular basis, every month for example. In order to set a good interval you should check the impact and the volatility of the data. For example, profits and revenues are measured on a monthly basis so calculating indicators based on this data on a daily basis isn’t very helpful.

stakeholder analysis: ISO9001-2015

With the new ISO9001:2015 the stakeholder analysis has got a much more prominent position in the Quality management system. Of course, every company knows their most important stakeholders. However, not every stakeholder is always well understood or taken into consideration when major decisions are taken. A good stakeholder analysis gives the company an up to date list of all stakeholders and how to manage them.

Identify stakeholder

Identifying the most important stakeholders isn’t all that hard. Most companies have stakeholders like:

  • Customers
  • Suppliers
  • Employees
  • Government
  • Neighbors
  • Competitors
  • etc.

The list can get quite long depending on how specific you get.

Classification of stakeholders

The analysis becomes slightly harder when companies start to classify or order these stakeholders. It is important to give every stakeholder a type of ranking depending on how big the influence on the company is. Yes, customers are among the most important stakeholders but for example, what about the government? Companies that have a big impact on the environment have a different relationship with the government compared to a trading company. It is important to find out which stakeholders are most important. You can ask a question like “How easy is it for this stakeholder to close the doors of the company?”

Action plan

When the stakeholders are identified and classified, an action plan needs to be created on how to manage the different kind of stakeholders. The plan should include ways how the company will inform the stakeholders and regarding which activities every stakeholder is informed of. This can be structured in a communication plan, or very easily and straight forward in the analysis document. When some concrete actions need to be taken, make sure you always assign one single person as the owner of the task. This prevents people from pointing to each other when nothing is happening.

ISO 9001 – Why get certified?

Why would any company comply with a standard apart from being forced by customers? One important reason is that quality is at the core of every organization. When an organization doesn’t deliver a high quality service or product, it won’t be in business very long. The ISO 9001 standard provides companies with guidance to keep quality consistent.

Customer Demand

Demand from the customer(s) should never be the main reason for implementing a quality management system, and neither should marketing. When this is the case, every effort for the system feels like a waste of time. A push from customers can be the trigger to implement a quality management system, but the main reason should come from within the company. The structure which comes with implementing ISO 9001 helps to align the organization.

Learning Company

Next to business continuity, ISO 9001 gives guidance for becoming a learning company. The continuous improvement methodology embedded in the standard focuses on identifying and reducing inefficiencies in internal and external processes. This way ISO 9001 provides companies with the right tools to figure out exactly which parts of the organization can be improved.

Rigid

A lot of people have the notion that the procedure makes the company rigid and less flexible. Although the written procedure should be followed by the employees, the procedure itself can be written in such a way that it leaves room to manoeuvre for employees. Besides, some slight rigidness isn’t all that bad especially when it comes to financial matters or quality of products and services. When you start to setup a new ISO 9001 management system it is important to be rigid in the procedure where there is no room for failure. The less critical processes can be noted with more flexibility.