Beyond ISO 9001 : Benefits to SMEs

Excellence unLimited, Rajkot 1
A presentation given at Rajkot Management Association
On 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 for
Standardization.
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 means
it 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 be
ISO 9001 certified.
It also mandates that its own laboratory may
conform to ISO/IEC 17025. However, external lab
must be ISO/IEC 17025 certified.

ISO
14001
OHSAS
18001
ISO
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 not
sufficient to get an edge over competitors.
For this, organizations must employ other
tried, 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 activities
as 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 - S5 - 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 becomes
apparent.
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
Cement
S.Ash-Light
S.Ash-
Heavy
S.Ash-
Medium
Caustic
Bicarb
Bromide
Rejection analysis of products in a multi-product company

Cause & Effect / Fishbone / Ishikawa Diagram
CD DIAGRAM FOR TOTAL PRODUCT VARIATION
BASIC FACTORS
( BASIC TO MACHINE )
MACHINE AND INTERGRAL COMPONENTS
IN OPERATION DESIGN & CONSTRUCTION
TOTAL
PRODUCT
VARIATION
THERMAL
INFLUENCES LOADING &
LOAD REVERSAL
LUBRICATION
POSITIONAL
ERROR
DYNAMIC
BEHAVIOUR VIBRATIONS
END PLAYS
FITS
CLEARANCES
ALIGNMENTS
DYNAMIC
STATIC
RIGIDITY
MATERIALS
LEAST COUNT
SUITABILITY
OF INSTRUMENT
REPRODUCT-
BILITY OF
INSTRUMENT
DIFFERENCE
BETWEEN
INDENTICAL TOOLS
TOOLING
TOOL
DESIGN
TOOL
WEAR
FEEDS &
SPREADS
OPERATIONAL
SEQUENCE
FIXTURE
CLAMPING
ENVIRONMENTAL
CONDITIONS
COOLANT
MEASUREMENT
OF WORK PIECE
METHODS OF
MANUFACTURE
OPERATOR’S
SKILL
JOB
SETTING
OPERATOR’S
EXPERIENCE
MEASUREMENT
DIFFERENCE
( INSPECTOR )
MAN
SHAPE
MATERIAL
( MACHINABILITY )
SUITABILITY TO
CLAMPING / 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,
TPM
etc.
National
Quality
Awards
based on
MBNQA,
EFQM,
Deming
Award
Etc.
s it enough to have ISO only ?
ISOs are
just basic
approaches Mgmt.
tools
Like
5S,
COPQ,
SPC,
6 Sig.
etc
order to compete, grow and sustain,
u also need to adopt Mgmt. tools and WC practic

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 maintenance
and improvements.
www.excellence-unlimited.com

Thank You

Beyond ISO 9001 : Benefits to SMEs

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