What is the Return On Investment of a Quality Management System?

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Your company could have many motivations behind implementing a quality management system (QMS) such as ISO 9001. But in the end, making the decision to invest in a QMS always comes down to potential for profit, and an organization’s quality performance absolutely affects the bottom line. That’s why it’s essential to understand the return on investment for a quality management system.

First, the term “quality” extends far beyond an organization’s products or services. Every process and system in an organization, whether a manufacturing, distribution or service industry, can meet quality objectives and expectations. And once an organization applies the quality concept to its entire management system and all of its processes, then the effect on bottom line will really be noticeable.

Here are a few benefits of a certified quality management system that make a financial impact.

  1. Quality management systems can help reduce manual processes, which means there’s less of an opportunity for human error. In the end, this translates to greater employee productivity.
  2. Your leadership team will have access to real-time reporting, which means they can make better, more informed decisions. Getting that real-time data means less downtime overall.
  3. Improving the processes and increasing efficiency means production can go more effectively. The end result is higher production yield.
  4. A QMS provides consistent quality control, leading to fewer product defects and/or service complaints. And ultimately, this means you’ll see fewer complaints, returns, reworks and escapes.
  5. Being more compliant with ISO 9001 (or any of the other QMS standards) means more satisfied customers, and you’ll see more sales, new sales and referral sales.

Quality does have a cause-and-effect relationship with finance – consider the simple economic equation of income minus expense equals profit. Therefore, either increasing income and/or decreasing expense increases your profit.

Investing in “good” quality systems can increase income in many different ways, including attracting more customers, encouraging repeat business and giving your organization a competitive advantage. Meanwhile, it can also lower your expenses by lowering production costs by streamlining processes, lowering inspection cost, and lowering working capital through reduced inventory. So even when factoring in the cost of implementing and maintaining a QMS, the numbers show that you’ll come out ahead by investing in quality.

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Congratulations!

These ISO 9001:2015 certified companies recognize the value of implementing and maintaining a Quality Management System. Congratulations from our team at simpleQuE to your team, we’re pleased with your success and to have provided consulting services along the way!

Batesville Products, Inc. – ISO 9001:2015

From Left:  Trevor Bovard, Plant Manager and Matt Scholl, Purchasing Agent

BHC (Brulin Holding Company) – ISO 9001:2015

BHC Office Staff

BHC (Brulin Holding Company) – ISO 9001:2015

BHC Plant Staff

Silfex – ISO 9001:2015

Quality Team

Associate Spotlight – Kimberly Roan

We are excited to introduce one of our newest team members, Kimberly Roan, a simpleQuE consultant.  Kimberly brings not only years of experience, but a great curiosity and drive to find the best solutions for our customers.  Here’s more on Kimberly:

What is your position and what do you do for simpleQuE?
I am a consultant for simpleQuE and I consult with clients, perform internal audits, and teach on site training on automotive QMS topics.

What do you like most about working for simpleQuE?
This is an opportunity to make a difference.  Every day I get to help clients identify issues and improve processes.  Sustained process improvements lead to greater customer satisfaction and improved effectiveness and efficiency in the organizations we work for.

What is your favorite QMS standard and why?
My favorite QMS standard is ISO 9001:2015.  This standard builds the foundation of an effective QMS and is the cornerstone for a series of important industry QMS standards.

What attracted you to simpleQuE?
Top managers who understand QMS development and believe in simple, sustainable, and value added quality management solutions.

What expertise do you bring to simpleQuE’s clients?
I spent 17 years in automotive and was always involved in auditing both first and second party and spent many years participating in 3rd party audits and acting as the management rep. If I could draw you a picture, I would show you a pyramid that includes a 17 year work experience – base, and approximately 8 year formal education – middle, and a 3 year certified auditor – crown. The large sections of the pyramid underpin everything I knew to make me an effective auditor. With this balanced experience I can provide clients with answers from a company management perspective, an internal auditor perspective and a third party auditor perspective. Every day I use the whole pyramid but the biggest part of it will always be my work experience.

What was your first job?
My first automotive job was part time administrative assistant for an engineering team at Saturn.  My first job ever was doing office work for a neighbor in direct sales at the age of 12 to 13.

Have met…
John Glenn, in an elevator at a Marriott hotel.  We talked about Harley Davidsons and how he wouldn’t get one now because he promised his wife he was done with high risk activities.

Where did you go to college?
Baker College of Flint for my Mechanical Engineering degree and The Chicago School of Professional Psychology for a Masters in Psychology with an emphasis in organizational leadership.

What is your hometown?
Cadillac, MI

Would love…
To visit the hometowns of my great grandparents in Germany.

My hidden talent is…
Slow racing my VT1100

What is your favorite sports team?
Let’s go Red Wings!!!

What advice would you give to a new college graduate entering the technology industry?
Learn something new every day and do something good with what you learn as often as you can.

Explain how simpleQuE is different from their competition.

SimpleQuE is different because they focus on simple solutions to meeting complex QMS requirements.  The company supports a value added approach to meeting requirements.

Where do you see simpleQuE the next five years?
SimpleQuE will grow to become the leading QMS consulting firm and they will continue to support the success of their clients.

How would other people describe you in three words?
Independent, tenacious, and helpful.

The 7 Major Components of IATF 16949

 

IATF 16949:2016 defines the quality management system requirements for the design and development, production and, when relevant, the assembly, installation and services of automotive-related products including products with embedded software. The focus of this automotive standard is the development of a QMS that provides for continual improvement, emphasizing defect prevention and the reduction of waste in the supply chain. Combined with applicable Customer Specific Requirements, IATF 16949 is also fully aligned with the structure and requirements of ISO 9001:2015.
The standard is divided into ten sections – the first three are introductory, with the remaining seven containing the requirements for the Quality Management System. Below is a brief summary of Sections 4-10:

Section 4: Context of the Organization

The organization determines its context in terms of the QMS, including interested parties and their needs and expectations. It also defines the requirements for determining the scope of the QMS, as well as general QMS requirements.

Section 5: Leadership

Top management is required to demonstrate leadership and commitment to the QMS, along with defining corporate responsibility and the quality policy. The top management must also assign process owners along with other roles and responsibilities.

Section 6: Planning

The planning section defines requirements for addressing risks and opportunities and the requirements for risk analysis. This clause also includes requirements for preventive actions, contingency plans, and quality objectives and plans to achieve them.

Section 7: Support

This section covers requirements for supporting processes and resources. It defines requirements for people, infrastructure, work environment, monitoring and measuring resources, organizational knowledge, auditor competence, awareness, communication, and documented information.

Section 8: Operation

The product requirements deal with all aspects of the planning and creation of the product or service. This section includes requirements on planning, product requirements review, design, purchasing, creating the product or service, and controlling the equipment used to monitor and measure the product or service. IATF 16949 allows for requirements in clause 8.3, regarding design and development of products, to be excluded if they are not applicable to the company.

Section 9: Performance Evaluation

This section includes requirements for monitoring the effectiveness of the QMS – assessing customer satisfaction, internal audits, monitoring and measurement of manufacturing processes, and management review.

Section 10: Improvement

The last section focuses on continual improvement of the QMS, including requirements for nonconformities and corrective actions, problem solving, and error-proofing processes.


These sections are based on a Plan-Do-Check-Act cycle, which uses these elements to implement change within the processes of the organization in order to drive and maintain improvements within the processes.

IATF 16949 is a standard that benefits businesses large and small. The experts at simpleQuE can help your business achieve this standard, ensuring your business cost savings and efficiencies.

Quality Management Dos and Don’ts – Don’t be guilty of being in the red

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1. Meet Customer Requirements

Surprisingly there are companies that want ISO 9001 certification just to satisfy one customer requirement. The customer states that it will only do business with vendors that are certified as ISO 9001 – so to get (or keep) the business they need that certification. The problem with these companies is that they’re looking for a short-term payoff and an end to the journey with a certificate. They see nothing but that one benefit — we need a certificate for this customer — and ignore the long-term benefits a robust quality management system will provide, like:

  • Less firefighting;
  • Fewer repeat problems when you perform better root cause analysis and systemic corrective actions;
  • Increased performance because you’re monitoring trends against goals;
  • More efficient and effective business processes;
  • Less scrap, rework, rejects, warranty; and
  • Increase customer satisfaction leading to more business opportunities.

Some organizations don’t embrace the concept of quality linked with the business systems and tied into the strategic direction of the company, to drive continual improvement and continued customer satisfaction. In other words, they haven’t bought into the program or the true intent of the standard.  Focusing only on that one benefit — your immediate gain — without putting the customer in front will end up costing you much more in the long run.

2. Increase Revenue and Business from New Customers

Once you earn your ISO 9001 certification, you can advertise your quality certification and respond to Requests for Quotes (RFQ) from companies that make ISO 9001 certification a “must-have”.  ISO 9001 certification can open up new markets you were virtually unable to do business with before your certification.

Yet, companies are not advertising their ISO certification enough, costing them potential business. Transition or implementation of a new standard is the perfect time to share that the company has achieved this important recognition with your potential customers, current customers, and stakeholders. Consider a link to a copy of your ISO certificate right on your website.

3. Improve Company and Product Quality

quality management system standard is all about quality so, of course, one result of adopting a QMS should be an improved level of quality for the entire organization — every process, and every product. Organizations should use the ISO series of standards to develop a QMS that is integrated into the way they do business, and assist in achieving their strategic business objectives – adding value.

Unfortunately, some organizations may have missed the mark and created a bureaucratic set of procedures and records that don’t reflect the reality of the way the organization actually works and simply add unnecessary costs, without adding value. When the business system is the same as the quality system processes, the value of ISO and certification become more logical and value-added for the business.

4. Describe, Understand, and Communicate Your Company Processes

The ISO 9001 QMS standard requires that you identify and describe your processes using business metrics, the purpose of which is to better manage and control your business processes. Quality objectives or your business process goals form the center of your system. Metrics are used to understand and communicate your system’s performance and trends relative to your quality objectives. The level of monitoring, measurement and improvement of each process will depend on the organization’s context, strategic intent and determined risks and opportunities.

Companies may identify too many processes. So it is important to understand the differences between a process, a procedure and an activity. We recommend less than 10 core processes, and fewer is commonly better.  Looking at your business from a 50,000 foot view to understand the high level business processes needed to deliver the products or services you provide your customers are the core processes ISO wants you to define.  Everything from sales, to new product development, to production planning, to production or providing a service, and finally delivery are the processes to identify for your business.  A flow diagram is most commonly used with the linkages and interactions between each.  Each of these core processes needs to have at least one objective that is measured to evaluate the effectiveness and efficiency of that process. Problems can also occur when companies don’t have set metrics on which to evaluate processes and manage the control of their business processes.

The International Organization for Standardization (ISO) has created a useful whitepaper to explain the Process ApproachContact simpleQuE to see how our consultants can assist your company with these problems or other areas of concern.

 

 

 

Powder Processing & Technology Transitions to ISO 9001:2015

Powder Processing Tech PPT 6-2017

Powder Processing & Technology, LLC  has maintained ISO 9001 certification since 1998 and just transitioned to the latest version – ISO 9001:2015.  PPT’s professionals have assisted the top materials technology companies around the world for over 30 years. The company performs process development and contract manufacturing on a wide range of powders, and has a fully equipped pilot plant as well as multiple production areas specializing in spray drying, calcining and firing

PPT uses the formulas and processing parameters provided by their customers and/or develops the formulations and processing parameters of the products produced for customers.  Therefore precise process control is necessary to meet high quality standards. For that reason in 2012, PPT brought in simpleQuE to conduct its quarterly internal audits.  Kenneth Bartelt, President, said,  “PPT is a small technology company which places significant weight on its quality management system and which needs to ensure its valuable and limited technical resources are focused on customer requirements and our ability to deliver results.”

“We consider the quality system to be part of the fabric of our management system and simpleQuE has added a critical component to that system,” added Ken.  “I think that simpleQuE has a practical approach to quality management that is effective and efficient.”  In the case of PPT, the commitment to maintaining quality standards is evident and practiced from the highest level of management to their plant workers.

SimpleQuE matched PPT to auditor/consultant, Don Milinkovich, whose 34 years in the chemical manufacturing business made him the right fit.  “Don is an experienced and personable consultant who has delivered meaningful audits and provided relevant expertise. Our audits have been at the right level of detail and have made a significant contribution to the business. The performance from simpleQuE has been such that the registrar’s representative and auditor has been very complimentary of the service they have performed,” stated Ken regarding the benefits of working with an experienced auditor.  Don also worked with the PPT team to prepare them for a smooth transition to the new standard.

These internal audits have reinforced the objectives of PPT to maintain high levels of service and customer satisfaction while utilizing the principles of ISO 9001 to incorporate continual improvement into their business practices.

Look Fors – Part 2: Leadership

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Would you like to know what 3rd party auditors are looking for when auditing how your company complies with quality system standards like ISO 9001:2015? 

What are 3rd party auditors looking for?  This is the second of a three part series by Jim Lee, President of simpleQuE

Clause 5 of ISO 9001:2015 – Leadership

Leadership is the focus of this clause, which means top management now has greater accountability, responsibility and involvement in the organization’s management system. The standard wants to see that leadership demonstrates leadership and support for the quality management system (QMS). They need to integrate the QMS into the organization’s business strategic direction, to ensure the management system achieves its intended outcomes and allocate the necessary resources. Top management is also responsible for communicating the importance of the QMS and enhancing employee awareness and involvement.

With this clause there is a requirement that top management will be present and leading the implementation and monitoring of the QMS.  Processes within the QMS must have process owners. In addition, leadership shall demonstrate leadership and commitment with respect to customer focus and the continual improvement aspect of the business.  3rd party auditors will be scheduling time with the management and leadership team asking questions and looking for the items below as objective evidence.

  • Established and communicated quality policy, objectives, strategic direction, and performance
  • Organizational chart, job descriptions and other evidence that responsibilities and authorities are defined and communicated
  • Metrics evaluated in the Management Review and the overall effectiveness of the key business processes
  • Actions being taken when goals are not met, and when trends for performance are going the wrong way. They want to see management is looking at the data and taking actions when necessary.
  • Promotion of risk based thinking and evidence of risk management processes with action items when risks are too high. This might include contingency plans, safety stocks, inventory levels, supplier selection and qualification process, etc. as a very few of the many possible ways to demonstrate this.
  • Involvement in audit activity and reviewing the outcomes and assessing the risks and actions that might be necessary for the QMS
  • Customer satisfaction and perception
  • Identification of contract terms and conditions and customer requirements, including any laws that must be met. How are these evaluated, understood, communicated and implemented in the departments that need to know and comply?
  • Evidence of continued improvement , which denotes that performance is monitored and tracked with trends
  • The company’s context changes over time, and the needs of stakeholders too. Management needs to be aware of the changing context and issues affecting the business to adjust the strategic direction.

Not that all of the elements listed above will be needed, but organizations may risk failure if they do not:

  • Identify process owners
  • Use metrics to monitor performance of the QMS
  • Include performance metrics in the Management Review
  • Develop action plans when performance goals are not met
  • Develop customer communication processes
  • Respond to customer complaints
  • Consider results of customer feedback/surveys and take appropriate actions
  • Identify internal customer requirements
  • Make improvement part of the quality policy
  • Align roles and responsibilities with processes
  • Contingency and emergency roles and responsibilities not defined
  • Have appropriate training and awareness of the ISO 9001:2015 requirements

Coming soon – Part 3 and what auditors are looking for in regard to Risk.  Also, read more about Context of the Organization in Part 1.

Source:  NQA’s Teaming Conference – August 2017