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Volume 8 · Issue 6 · May 2003


The Ground-Floor View of ISO 9001 from AQC
Have You Overcome Two Challenges to "QMS Thinking

Why have organizations been slow in transitioning to ISO 9001:2000? There are two challenges with its use that may be holding your organization and many others back in any number of ways. Those two challenges are:

  1. Less than effective communication about, and promotion of, the value and benefits to Top Management in most organizations of transitioning to ISO 9001:2000.
  2. The inability of many of those responsible for a quality management system (QMS) to design, sustain and improve that system so it is elegant—that is, simple but useful—to those who need to use it to gain that value and those benefits. As a result, it is difficult to revise those QMSs to make them elegant without expending a great deal of resources.

THE OUTLOOK has drawn this conclusion from the perspectives of attendees at ASQ’s Annual Quality Congress (AQC) in Kansas City May 19-21 and a meeting of the US Technical Advisory Group (TAG) to ISO Technical Committee 176 on May 20, 2003.

The real challenge facing the ISO 9001 user community is in implementing a truly useful and profit-generating QMS in a world where Top Management doesn’t always see the value of making the effort and where most personnel view the QMS as one more bureaucratic burden to be avoided or "short-cutted" however possible. The lack of support from above and below in many organizations makes the task of those in the middle—responsible for implementing, maintaining, monitoring and improving the system—more challenging, because the QMS is more likely to end up becoming bureaucratic, burdensome and costly without benefit.

The goal must therefore be to overcome these challenges and buck the trend that began with the growth in popularity of ISO 9001/2/3 in the early 1990s. The trend began with initial success stories from corporations that were quality leaders and implemented ISO 9001/2 with tremendous improvement in processes and reductions in variation.

This led many organizations to implement QMSs and obtain registration without understanding what they were supposed to be doing, which often resulted in conforming to the individual "shalls" without integrating the pieces into a system. This made continual improvement difficult and optimization almost impossible.

Facts About the Two Challenges
These two challenges and their impact were initially identified from previous information gained from a variety of sources, plus additional facts gained in Kansas City and thereafter in May 2003. Facts gained in Kansas City and shortly thereafter include:

  • The delay in transitioning was discussed at the May 20 TAG meeting, with the issue of Top Management’s perceptions raised for the first time. Gene Barker, Boeing Technical Fellow with Boeing Commercial Airplanes and a member of the Registrar Accreditation Board’s (RAB) Board of Directors, raised a concern that had not been previously discussed regarding the transition. Barker indicated that the lack of support for transitioning in many organizations is somewhat attributable to the difficulty management representatives and others responsible for QMS implementation and maintenance have had in effectively communicating with Top Management in a way that would gain management support for revising the QMSs. "In many organizations, Top Management doesn’t see the point of revising the system and registering to ISO 9001:2000, because the management rep or whomever would handle the revisions and transition is not telling management what they need to hear," related Barker. "Top Management in most organizations understands the value of the existing system, although they may not have a clear sense of what value it is providing day-to-day. But when you ask them for more resources to change the way things are, they are not very receptive in many companies because the request is being made without data that show how making these changes will benefit the company in concrete terms. Financial terms. Productivity terms. Customer retention terms. Sales increases—even employee retention levels. Top Management faces a lot of people seeking funding, human resources and management support for a lot of programs, and the ones that make sense to Top Management and will provide real benefits to the organization are going to gain buy-in from management. But when you tell them you need to revise the quality management system and increase auditing costs to get a new certificate because of a new standard, that doesn’t fly unless you show management real results that will come from making these changes and committing the resources. And it is harder to gain management support and commitment today than it was in 1995 or 1996, because profit margins for many organizations are tighter; concepts like Six Sigma and lean are the buzz words today."
  • Baskar Kotte of Quality Systems Enhancement, Inc., indicated that 10-12% of his firm’s 100+ clients do not plan to maintain their registrations after the transition period ends, while approximately half of the remainder already have ISO 9001:2000 certificates and the rest will be there by December 15, 2003. This doesn’t mean that the 10-12% think the 2000 edition is a bad idea, or they would not continue to use the consulting firm’s services. In fact, the vast majority plan to transition their QMSs to ISO 9001:2000, but without going through a full registration reassessment—their organizations do not see the value of the certificate.
  • As of May 14, 2003, 18.1% of all ISO 9000 certificates held by US organizations were for ISO 9001:2000 registration. While this report from the Quality Digest Registration Database may not capture all ISO 9001:2000 registrations due to a lag in reporting by registrars and delays in the issuance of new certificates after an assessment is completed, it conveys the sense that many organizations are waiting until the last minute to transition their registrations, if not their systems. If this were being done to make the greatest degree of improvement to QMSs before the third-party evaluation, the low percentage would be great news. But some of this delay appears to be the result of procrastination by organizations that will do the bare minimum to satisfy the registrar auditors, rather than to provide a system employees and management will consider value-added. This sense was confirmed by consultants, auditors and even user experts, some of whom acknowledged that their organizations or ones they knew of were resisting the imperative to transition and to do so in a productive way.
  • THE OUTLOOK discussed motivation for transitioning with quality professionals from organizations using the standards, from consultants and from registrar auditors. It was found that there is so far a lack of customer demand for ISO 9001:2000 outside the aerospace, automotive, telecommunications and a few other sectors, most of which are requiring suppliers to register QMSs that conform with sector-specific requirements that align with ISO 9001:2000. The good news: most organizations outside those sectors that transition by December 15 will be doing so for reasons other than a customer "holding a gun to our heads". The bad news: customers that saw value in the use of ISO 9001/2 by their suppliers either no longer see the value of mandating its use, with or without registration, or are assuming their suppliers will do the right thing without being directed to do so—but some aren’t.
  • Management representatives, QMS implementers and quality managers do not have proper preparation and training to implement and maintain effective systems. The lack of effective communication with Top Management noted above is a symptom of this wider problem. Even after attending training on ISO 9001:2000 and overseeing QMS implementation and maintenance with the 1994 editions of ISO 9001/2/3 and even with ISO 9001:2000, many management reps do not understand exactly what their role should be and how to effectively fulfill that role. For example, many do not understand what documentation is really required, what would be useful for their organizations to maintain and/or improve and how forms and other documentation should be written not just to satisfy ISO 9001, but to provide useful tools to personnel and management. Then there are the reports for Management Review meetings, which frequently are written in terms that are clear to quality professionals but not to Top Management, or the internal audit reports provided to various levels of management, which talk in term of nonconformities to subclauses rather than system issues and the impacts they create on the organization’s performance. This issue was raised by a training and consulting organization at AQC, Excel Partnership, Inc., which has reacted to this problem in many organizations by creating a course designed to help individuals gain and/or improve the skills needed for management representative success. An article on this issue will appear in July 2003.

Why Do—and Should—Organizations Register?
THE OUTLOOK does not endorse the need for registration unless an organization and its system will gain value from the external assessment. However, many of you are from organizations that are registered/pursuing it or provide services to organizations that do.
What follows is a revisit to a topic that has been covered in previous articles, although what follows is reinforced and/or modified as a result of discussions and presentations at AQC. The topic: Why do organizations register to ISO 9001 and what are the only reasons they should? There are many reasons why, but the following—listed in "order of merit"—remain the key motivating factors:

  1. Pursuit of continual improvement—Registrar auditors cannot provide consulting services during audits, but they can evaluate the effectiveness of your QMS beyond mere conformity with ISO 9001’s baseline requirements. Granted, the purpose of audits is to ensure the QMS is effective, satisfies ISO 9001’s requirements and is geared to the pursuit of continual and effective QMS improvement. Auditors cannot tell you what to do to improve your system, because that would compromise their objectivity in auditing the results of system changes based on their recommendations. However, an auditor can be asked to identify QMS weaknesses that are not ISO 9001 nonconformities, but do represent opportunities for improvement, or to verify the effectiveness of process improvements made by the organization by, for instance, following guidelines in ISO 9004. Any organization that wants third-party audits expanded to pursue effective continual improvement is making real use of the objective assessment that it is likely paying a significant amount for. The result would be an ever-improving system geared to listening to the voice of all stakeholders. Although a continually improving system does not guarantee product improvements and innovations or a growing market share, it does mean enhancing the fertile ground of the corporate environment for competitive growth.
  2. Verification of system effectiveness—Too many organizations view registrar audits as a test to be passed, even if it means "pulling all-nighters to learn the subject matter only to forget it after the exam", rather than as opportunities to find out if the system is as good as it is supposed to be and why. In line with the fertile ground analogy, a third-party audit (or even an internal audit) should be viewed as an automotive tune-up rather than a doctor’s check-up. The difference between them is significant. Most people get tune-ups so that worn parts are replaced and less-than-efficient systems are fixed so the car runs better. By comparison, most people go for a check-up hoping the doctor finds nothing wrong. Organizations that tell their registrars that they expect the auditors to really check out the system and identify areas that need to be tuned up—and that direct employees to cooperate with the auditors in identifying and reporting areas that are not working as well as they should—will get more meaningful results from their assessments than organizations that just want a clean bill of health. When the organization and its management are committed to using and improving the system and the auditors find areas that need improvement, the audits will be worthwhile. The cost of registrar services will be roughly the same amount either way.
  3. Demonstration of management commitment—In any type of organization, most employees will do only what is expected of them unless Top Management makes clear that an activity or approach is important to the organization and its people. THE OUTLOOK has heard frequently of companies where Top Management decided that the organization would pursue registration and then paid little or no attention to the QMS once this had been achieved. Under these circumstances, most employees only paid attention to the QMS when the auditors were coming. The fear that Top Management would be annoyed by a bad audit report prompted an effort to use the system and make sure all the documentation was in order. However, in organizations where Top Management makes clear that it values the QMS and its use, where members of Top Management use the system and participate in its maintenance and improvement and where registrar audits represent a commitment of resources to ensure the system is effective, employees will treat the QMS as important because Top Management considers it important. This is especially true in large organizations where Top Management cannot observe day-to-day activities in widespread facilities, making registrar audits a means to seeing what is occurring throughout the organization. To summarize, this means that, if you want everyone else in the organization to take the QMS and the auditing of it seriously, Top Management has to treat them seriously.
  4. Industry recognition—If organizations pursue QMS implementation and registration because it is considered an industry-recognized sign of effective management practices, it is Top Management’s responsibility to take the system seriously and ensure that adequate resources—including staff time—are allocated to implement and maintain effective processes. Organizations too often have pursued registration and treated the resulting QMS as a finished project to be relegated to the quality managers to deal with, rather than something everyone has to use and continually improve, including Top Management. If the goal is only to get a certificate to show peers, your organization is wasting its time and money and, eventually, the unused or underused system will prove a burden rather than a tool for enhanced competitiveness. The danger is complacency ("the system is good enough, so leave it as-is") and ignorance of what a QMS can really do if designed, implemented and used correctly. This is the wrong reason for implementing an ISO 9001-conforming QMS. Your motivation should be to attain an effective management system that meets and exceeds the requirements for registration.
  5. Global competition—Almost all organizations now seek to have their products gain a foothold in new markets while maintaining or growing their share in existing markets. An indication of your organization’s ability to provide a product according to the customers’ product specifications is ISO 9001 registration. It means that a third party has verified that the management system meets or exceeds internationally recognized baseline criteria. In effect, ISO 9001 registration has become a distinguishing characteristic in international trade. Thus, if a customer in Shanghai needs a product it has never purchased before that three companies worldwide make, and two can meet the customer’s needs in terms of product quantity and price, then a deciding factor for the customer may be the ISO 9001 registration status of the two. The danger is if the certificate represents a great system that is not used or is used ineffectively, the product being sold could be inconsistent in meeting the new customer’s needs, and the customer may go to the other company next time. A certificate alone will only allow you one chance with a potential customer. It will take an effective QMS to provide product that will meet customer needs, produce customer satisfaction that increases over time and reduce profit-eating variation and waste.
  6. Public recognition—In late December 2000, some organizations rushed to obtain ISO 9001:2000 registration, often to claim they were first in their field to do so and gain publicity. They thought having a certificate and noting registration on their letterhead and in banners at their facilities would bring customers running to their doors. But the registered system will have marketing value over time only if the system reflects what the organization does and helps ensure that its processes and output (product) always meet or exceed minimum expectations of management and customers. If the system is "tossed aside" when the publicity ceases and a sudden rush of new customers doesn’t happen, then the organization will not only have wasted its time, money and effort in obtaining registration, but it may have damaged its reputation by making claims to improved quality that will not stand up when the registered system is not used. ISO 9001 is not a magic wand but a set of guiding principles laid out in generic requirements that must be followed over the long-term for an organization to function consistently to meet or exceed customer expectations and remain competitive.
  7. Regulatory requirements—There are some sectors, such as medical devices, where registration to ISO 9001 or a sector-specific standard aligned with it is one way to satisfy regulatory requirements for organizations that want to sell their products in certain countries or regions. (Note: reports out of ISO Central Secretariat are that balloting of the Final Draft International Standard of ISO 13485, Medical devices—Quality management systems—Requirements for regulatory purposes, concluded with its approval internationally, although it is only partially aligned with ISO 9001:2000.) In reality, an organization registering to ISO 9001 or a sector standard to satisfy regulatory requirements usually already has a QMS that exceeds the requirements of the standard. Regulatory bodies accepting registration as a means to verify QMS conformity are simply using this approach in place of other forms of inspection or auditing to which the organization was previously subjected. The pressure of regulatory oversight is likely to drive the effective implementation, maintenance and use of a management system, although it remains up to individual organizations to go beyond the minimal requirements in improving their processes. The danger here is that fear of making changes that might imperil regulatory compliance will lead to stagnation of processes and slippage over time.
  8. Customer requirements—Historically, contractual requirements that suppliers become registered to ISO 9001/2 in order to obtain/retain business with a customer have been the most well-known reason why organizations have implemented QMSs and sought registration. It is also the reason most often responsible for systems that look good on paper and pass registration audits but prove to be a bureaucratic nightmare, less than effective or disregarded by the organization except when internal and registrar audits are scheduled to occur. Customers began to require registration of their suppliers to reduce the number of second-party audits a supplier had to endure (and customers had to pay for) and/or to provide a third-party verification of the supplier’s procedures. Indeed, if Top Management, the quality managers and the process owners use a customer requirement for registration as the leverage to make critical changes that will improve the organization’s processes and that would otherwise be difficult to accomplish, then this is an excellent motivating factor. However, many suppliers previously took the quick route to registration, seeking to do no more than the minimum to satisfy customer requirements. Or worse, some actually paid no attention to what was really being sought by the customer and directed implementation teams or outside consultants to build a system without ensuring the system met the needs of the organization and those using the system.

In fact, as noted above, outside a few sectors where major customers are mandating continued registration to ISO 9001:2000-based sector-specific requirements (e.g., aerospace, automotive, telecom), THE OUTLOOK has been unable to uncover many instances of customers issuing letters or contracts to suppliers specifying registration to ISO 9001:2000 by and after December 15, 2003. It is likely that this is a result of customer realization that mandating registration without further enforcement is not sufficient to gain benefits that surpass the cost to the suppliers of registration.

The expectation of many customers is likely that most suppliers will transition without being told to and those that do not will be judged on their ability to meet product and customer specifications, such as defect-free product delivered on time, after their ISO 9001/2:1994 certificates are withdrawn on December 16.

Facing the Reasons and the Challenges
The point of this examination of the 8 reasons above is to determine what you and your organization’s course of action needs to be—whether your organization has made the transition, is in the process of doing so, is in a sector where it can put it off or plans not to make the transition as far as registration goes or not at all. This is particularly important in light of the two challenges identified and discussed above.

As the QMS user community moves toward a post-ISO 9001/2:1994 era, it is important to evaluate what reasons underlie the implementation, maintenance and use of an ISO 9001:2000-registered or -conforming QMS in your organization—or should.

The future success of your organization may count on an effective QMS. So, you need to ask yourself (or your management rep and quality managers) the following questions:

  • Are the reasons we sought and maintained registration to ISO 9001:2000 or another QMS standard/set of requirements the right reasons and the best ones for our organization? If so, are there other reasons that should motivate us and actions we should be taking? If not, how do we change the system and our organization’s thinking so that we move forward for the right reasons?
  • Have we effectively communicated about and promoted the value and benefits of transitioning to ISO 9001:2000 to Top Management? If not, what can we do to improve our skills?
  • Is our QMS "elegant"? If so, what can we do to make the system more useful and easy-to-use to process owners and all employees in our organization? If not, how can we simplify the system to reflect what we do and how we do things and do so in a way that helps employees do their jobs without creating work? In either case, can we use the system to reduce costs and improve organizational performance?
  • Are we using process management to eliminate the waste from processes and assure a seamless interface between processes? Do we have the right metrics in place for measuring process performance and have we established aggressive improvement goals for a few of these metrics?
  • Do our customer satisfaction measures identify areas for improvement? And are plans in place and tracked by Top Management to capture these opportunities?

These are important questions, and THE OUTLOOK will be providing coverage in coming months that will try to address these issues in a way that will help organizations improve their systems, no matter how effective, efficient and well-used they are.

To start, some discussions at and subsequent to AQC merit examination. Craig Johnson, a member of the US TAG, related a conversation he had at AQC subsequent to Barker’s comments to the TAG meeting. "The best perspective I heard at AQC on this problem of overcoming Top Management resistance to transitioning came from a conversation I had with Jack West, Chair of the US TAG, at the Quality Press reception," recalled Johnson. "We were talking about the process approach in general when Jack said, ‘Banks provide the major pressure for a process approach within small businesses.’

"I had never heard this before and asked him to explain. Jack explained that banks want to know that a borrower can be a good steward of other people’s money, as evidenced by the processes it has in place to assure the lender of the organization’s good stewardship. When the stewardship of a business is in doubt, advisors urge the manager to drill deeper than the ISO 9001 requirements to identify processes that drive profit and determine how those processes are linked to the management system. The interrogation skills of the advisors need to be sophisticated and grounded in many years of successful business experience."

Johnson assumes that Top Management is concerned about its organization’s fiscal credibility but may not appreciate its dependence on the process approach. "The true challenge could be to show organizations how ISO 9001 can be used to strengthen the link between the processes that drive profit and QMS requirements. This might convince large and small organizations that an elegant QMS is critical in order to maintain their capacity to grow on borrowed money, which is how many businesses operate."

In addition, Barker addressed two questions that were posed to THE OUTLOOK at the TAG meeting by Bob Peach, who has been a US delegate to ISO/TC 176 since its founding, was the initial Convenor of the Working Group responsible for ISO 9004 and was a Founder and the first Chairman of RAB.

Peach: When making the transition, should an organization expect to see a change in QMS structure shortly, so Top Management will see a difference?

Barker: Hopefully, you will see a reduction in the resources required of the system when processes are streamlined in making the transition. Customer satisfaction takes longer and will require the "quality organization" to release control.

Peach: Do the customer satisfaction measurements an organization chooses make a difference to Top Management?

Barker: YES! What gets measured gets worked on, and a portion of the customer satisfaction measures needs to cover relationships. This is especially true for service-related activities, but even manufacturers have sales organizations. You need to know if the customers enjoy dealing with these people and their support administrative activity.

"The one thing that keeps coming to mind is the lack of understanding of Business Process Management, and how it supports the objectives of quality, by many quality assurance professionals," added Stanley H. Salot, Jr., President/CEO of Business & Quality Process Management, Inc. "This, along with their lack of ability to communicate the value of Business Process Management to the executive management team, are a major part of the problem."

Salot indicated that a related issue is the "education aspects" of ISO 9001:2000. "We should keep in mind that the 1987 and 1994 editions were based on the simple concepts of stated requirements—4.1, 4.2, 4.3 etc. The initial standard was laid out so that a basic technical approach could be taken to achieve the desired results. On the other hand, ISO 9001:2000 is nothing like its origin. It is like going from high school directly to graduate school without stopping for an undergraduate degree. I expect much more training will be made available soon for both QA professionals and Top Management and, as the need of organizations for international standards continues to mature, many of the organizations that skipped the undergrad degree will come back into conformity and registration with ISO 9001."

Finally, Sandy Liebesman, leader of the PSI, emphasized the opportunity that organizations may be missing. "Within the TAG, we have discussed how ISO 9001:2000 gives the opportunity to provide value-added improvements that affect the bottom-line. There is a strong emphasis on management involvement, continual improvement and preventive action. These new areas of focus provide Top Management with opportunities to affect the bottom-line in a positive way. Quality can play a strong role in this, but the message is not being heard."

Despite the discussions in Kansas City and the conclusions drawn, there is a need for more information from organizations about what they are doing and on what do they need more guidance and assistance. You need to be heard so that THE OUTLOOK can ensure that future coverage will focus on your situation and your needs. There is an easy-to-complete survey available from INFORM that you are asked to complete and return…simply call 703-680-1436 and ask for a copy. Your responses will provide a significant amount of information that will assist in shaping the type of guidance and information contained in future issues.

For now, consider how effective your QMS is and how effective you are in meeting the two challenges. The goal must always be continual improvement, no matter what the starting point is.