Benefit Without a Doubt
Standardization can be difficult but is well worth the effort
by R. Dan Reid
Consider the following statement: "Corporate decision makers hardly seem aware of the strategic benefits of standards. This lack of knowledge on the part of decision makers in companies means that the strategic potential of standards is not fully appreciated. Meanwhile, the strategic benefits of standards are well understood by the individuals involved in standards."1
The typical executive reward system contributes to this problem because bonuses are typically based, in part, on implementing creative solutions to complex problems rather than using standardization for strategic advantage. But senior management is not completely responsible for this situation. Quality practitioners need to present compelling arguments for standards to bridge the gap.
What the experts say
"Standardization is used by many mature industries for the mutual benefit of customers and suppliers," Joseph M. Juran said. "This standardization extends to language, products, processes and so on. All organizations make use of short designations for their products, such as code numbers, acronyms, words, phrases and so on. Such standardized nomenclature makes it easy to communicate with internal customers."2
Juran also provided some examples, pointing to the need to standardize certain concepts and practices:
- "Metrology. One early application of standardization was to units for time, mass and other fundamental constants. So basic are these standards that they are now international in scope.
- Interchangeability. This level of standardization has brought order out of chaos in such day-to-day matters as household voltages and interchangeability of myriad bits and pieces of an industrial society. Compliance is an economic necessity.
- Technological definition. A further application of standardization has been to define numerous materials, processes, products, tests and so on. These standards are developed by committees drawn from the various interested segments of society. While compliance is usually voluntary, the economic imperatives result in a high degree of acceptance and use of these standards."3
W. Edwards Deming chimed in on the subject of standardization, saying, "For their part, enterprises and individuals benefit from being subjected to fewer restrictive rules and from enjoying greater freedom than if standardization did not exist. This is an important reason why they should contribute time and money to standardization, thus to avoid the useless proliferation of mandatory regulations to fill the gap left by a lack of voluntary standards. Many branches of industry have already realized this."4
The automotive industry, for example, has had common supplier quality standards—such as QS-9000 or ISO TS/16949—with a third-party certification scheme for the past decade. The medical-device sector also developed its own standard, ISO 13485.
These standards provide powerful incentives for suppliers to comply so they can gain entrance to the market or grow market share. They also reduce costs significantly by eliminating many redundant second-party audits of shared suppliers.
Hitoshi Kume said, "Quality control is said to begin with standardization."5 He went on to say there are two types of control, each involving a different kind of activity.
The first type involves improvement—for example, reducing costs and improving sales. The other involves maintaining the status quo, which is applicable to repetitive work.
Because quality improvement involves reduction of variation, standardization is a main tool for holding the gains from successful improvement activities based on trial and error, and for maintaining subject matter expertise to reduce waste and variation in processes.
So what’s the problem?
That’s not to say standardization is without its pitfalls. Juran said, "Concerning work standardization, however, the following two types of problems are pointed out:
- Work standardization conflicts with motivation, since it restricts the creativity and ingenuity of the people engaged in the work and reduces their opportunities to exercise those faculties.
- Even after a lot of time and effort has been put into standardizing work methods, the standards are actually not often complied with."6
Kume rightly pointed out that "effective standardization is far from being a limitation; it is the launching pad for further development.
"When a fault appears in a product, it is vital to trace its cause in order to prevent its recurrence," he added. "From the standardization viewpoint, there are three main causes of product malfunction:
- No standards were set.
- Standards were set, but they were inadequate.
- Standards were set, but they were not obeyed."7
When no standards are set, multiple competing approaches can fill the gap. These approaches include numerous forms for the same purpose in the same organization or redundant processes for the same issue. Inadequate standards typically occur due to lack of product or process knowledge.
Concerning the latter, standards that are complex, lengthy or too detailed frustrate users and inhibit understanding and compliance.
Also, standards should be updated as needed to stay current with technology and best practice. This is how you foster innovation.
How different groups deal
Rather than discourage innovation or motivation, it should be relatively easy to update standards with consensus appropriate to their scope. Standards development organizations (SDOs) are at a significant disadvantage in staying current because they have many stakeholders, and it takes years to achieve consensus on revisions.
Often, the results SDOs achieve are minimum requirements. In recent years, SDO activity appears to have tailed off. Organizations have cut discretionary costs, including travel and membership dues. SDO deliverables as minimum requirements do not usually go into enough detail to be of value to organizations considering the cost and lead time to deliver.
Industry trade associations, such as the Automotive Industry Action Group and the Parenteral Drug Association, have an easier task because their standards deliverables can be more specific and prescriptive than generic SDO standards.
Companies have an even easier task because they can gain consensus faster, and their requirements are more specific than industry standards. As the scope of a standard narrows, a downside is that standards can proliferate and have different requirements from other similar standards that drive waste in the user’s organization.
When an organization agrees on the use of a standard, there is another challenge to work through. Companies miss the mark by having either too little documentation or entirely too much. An organization should have a quality manual of no more than 25 pages that briefly describes its quality management system and its elements.
The manual should be supplemented with standard operating procedures for work that crosses functions inside the organization. The procedures should be as concise as possible, with liberal use of visuals—such as flow charts and responsible, approve, support, inform and consult (RASIC) charts—to describe the process, roles and responsibilities.
Work specific to a work station and individual worker should be in a work or job instruction. This should be the most detailed documentation and could make use of other visuals, such as screen shots of a computer system that show the operator how to access and update information.
Be careful, however, not to go overboard. Organizations that have too much documentation, especially at the corporate or division levels, drive waste and often make it difficult for operators to comply.
The American National Standards Institute (ANSI) outlined the benefits of standardization:
Beyond the bottom line, standards impact quality, lead time, factory flexibility and supply chain management. Standardization activities lead to lower costs by reducing redundancy, minimizing errors and reducing time to market. Demonstrating compliance to standards helps your products, services and personnel cross borders.
Standards also make cross-border interoperability possible, ensuring products manufactured in one country can be sold and used in another. Businesses not only reduce the economic risk of their research and development activities by participating in standardization, they can also lower their overall R&D costs by relying on previously standardized technologies and terminologies.8
The British Standards Institute (BSI) added to that list of benefits, saying, "Standards allow a company to attract and assure customers, demonstrate market leadership, create competitive advantage, and develop and maintain best practice."9
ANSI and the BSI are SDOs, so their deliverables also have the inherent disadvantages discussed earlier.
On the lookout
Moving forward, quality practitioners should look for opportunities with their organizations to standardize based on a best practice. Look for some quick wins to build confidence within the organization and establish momentum. Start small, and then take on bigger projects after some early successes.
Identify contacts within the industry to begin a dialogue on what has been done at an industry level and what could be done to standardize in the future. After agreement is reached to begin work on a deliverable, convene a small drafting committee of technical subject matter experts and, if possible, someone with standards development experience. The draft standard produced by the committee should be circulated for wide review and comment, and then revised to incorporate appropriate feedback.
At this point, given the constraints on time and money, your best bet is to work at the company or industry level. Look to incorporate national or international standards as minimum requirements if applicable, but add industry-specific detail to be more relevant to your users and keep control of the deliverables so they can be easily updated as needed.
Standards are still well worth the effort involved in developing and adhering to them, but they need to be focused and managed over time to remain relevant and valuable.
- ATM Business Link, "The Economic Benefits of Standardization," 2001, www.astm.org/BIZLINK/BusLinkA01/DIN.html (case sensitive).
- Joseph Juran and A. Blanton Godfrey, Juran’s Quality Handbook, fifth edition, McGraw Hill, 1999.
- W. Edwards Deming, Out of the Crisis, MIT Press, 2000, p. 299.
- Hitoshi Kume, Management by Quality, 3A Corp., 1995, p. 10.
- Juran and Godfrey, Juran’s Quality Handbook, see reference 2, pp. 41.23-41.24.
- Kume, Management by Quality, see reference 5, p. 18.
- American National Standards Institute, "Value of Standards," http://standardsboostbusiness.org/value_standards.aspx.
- British Standards Institute, "What Are the Benefits of Standards?" www.bsigroup.com/en/standards-and-publications/about-standards/what-are-the-benefits-of-standards.
R. Dan Reid is the director of global supplier quality for Baxter BioScience Division in Westgate Village, CA. He is a co-author of ISO 9001:2000; QS-9000; ISO/TS 16949; the Chrysler, Ford and GM Advanced Product Quality Planning and Control Plan, Production Part Approval Process and Potential Failure Modes and Effects Analysis manuals; ISO IWA 1; and AIAG’s Business Operating Systems for Health Care Organizations. Reid is an ASQ fellow and an ASQ-certified quality engineer.