Presentation @ Microsoft students 2 business day (Metropolis Antwerp, Belgium)
This is an interview with Philip Vandervoort (CEO of Microsoft Belgium) who talks about the new way of managing a company.
Organizations now work different then fifteen years ago. Companies back then made processes for rigorous systems and described them is ISO procedures. Managers used a cookie cutter approach to make fixed work patterns for people. This approach had one major disadvantage: “The flexibility of the company dropped to zero…”
To evolve on a market you need to be able to adapt your business-model intuitively. And when you use something like ISO, the possibility to do that is difficult.
An other thing he tells about is the fact that most people still think that you generate 80% of your profit with 20% of your products. (the pareto principle) This is why companies try to optimize their processes in order to make as much products as possible of these 20%. He says this doesn’t have to be true, there are ways to produce more products and divide your profit more equally, in other words smooth the pareto graph (the red curve).
An other thing, for wold-wide companies it is sometimes difficult to use procedures in all their establishments. Because not everyone of them does the same. Sometimes a product is made from different parts made on different locations, shipped and send by companies like DHL. If you make procedures for this, you have a lot of work and you don’t have the time to innovate.
I agree with his pareto curve explanation, because it can be true that a company makes its profit from multiple products. But I think his opinion is more based on software development, where ISO is not very attractive to developers. Methodologies like scrum and agile software development might be more attractive for them.
If your company produces only a few items, benefits of procedures are still in place.
Flexibility is indeed something you have less if you have strict procedures. When you need a lot of time to form these procedures, it take a lot of time and effort to change them. (time + effort = expensive)
The thing I learned is that if you want to have ISO procedures, first have a look at your company:
- Do you want to be innovative or do you have products that last through time?
- Do you rely on multiple products or do you only have a few?
- Is flexibility a key issue?
This is from a paper written by Debbie Hysell, who investigated the implementation of an ISO 9001 procedure in her company (OCLC Online Computer Library Center, Inc.)
The reason her company wanted an ISO certification was for the continuation of ensuring excellence and stability in providing reliable services to libraries around the world. They also want to assure that their services are customer-driven and that they promote continuous improvement.
The company had already made a lot of procedures, but had a lack of documentation describing them. This caused confusion, inconsistency and weak control of the electronic files their files.
In the paper she write how they implemented the ISO 9000 certification process and her view on the results. She tells us that her view on the process has been quite positive. The process has given her company:
- Written procedures approved by organization
- Written work instructions
- Well-defined checkpoints, testing, and quality records
- Easy access to the procedures and quality records of the entire organization
- Improved communication
- A document management system
She concludes with telling that managers and staff moving towards ISO 9000 certification have good reason to be exited and pleased. She also tells ISO 9000 requires a serious commitment of time, energy and financial resources by organizations that believe they have a strong future in international markets and their products, users and staff merit a quality management system.
The paper is written right after they implemented the ISO procedure. This means they can only show results of how they implemented the system. The real advantages and the return on investment are not yet shown.
The writer of this paper seems positive about the procedures and shows the key issues where ISO helped her company.
Keep in mind this article dates from 1998, more then 10 years ago. Maybe companies were thinking different back then.
This is the title of a scientific paper written by Silas Rahhal and Nazim H. Madhavji from Montreal, Canada. They did some research of how much work-effort a company has to do to meet the ISO 9001 requirements. The paper itself dates 1995.
(Due to copyright reasons I cannot place a link on this site)
The people who’ve written this paper try to analyze the effort using a statistical regression model based on a survey. They note that the effort a company has to do differs considerably from one organization to another, and any estimate ought to consider the organization specific stat of compliance.
The cost can be broken down into two parts:
- Internal cost: the total time-spent in preparation for meeting the requirements. From beginning to the end, you need to develop procedures, train your staff, audit activities…
- External cost: Predictable cost, often contractual and fixed.
The problem is that approximately 80% of the costs are internal costs, which are difficult to estimate. Different variables arise when implementing ISO 9000:
- The size of the organization
- Management commitment
- Management and employee capabilities
- Employees involvement
- Business complexity
- Degree of non-compliance to the standard
- number of sites included in the scope
Most of these parameters aren’t measurable in a good way. That is why this paper mainly focuses on the size of the organization (in employees) and the degree of non-compliance to the standard (how much work needs to be done, percentage of the IS0 9001 requirements that the organization has still to satisfy in order to become fully compliant)
Their conclusions are that meeting the requirements of ISO 9000 can be costly in time, effort and money. The cost and effort primarely depend on the current state of the organization quality system.
As written in their own conclusion. Meeting the requirements can be very costly in time, effort and money. However if your company already implements some kind of process management system, the effort to adapt an ISO management scheme is a lot less. With this last conclusion I wonder that adapting ISO in companies is still rewarded if they already have a high level of compliance?
Today I found this article written by Reg Clause, a field specialist in the ISU Center for Industrial Research and Service. The article is from 2001, but it’s still valid for today.
In general this article is more about how ISO stands against contiual improvement, and how it’s done.
This continual improvement model is the heart of the ISO 9001-2000 concept. As you can see on the image, both customer requirements and customer satisfaction is taken into account. It all starts with finding the requirements of the customer and making a product. After it is made you have to further measure, analyze and improve the product. This way you have a continual improvement model.
In short you have to do this to get your certificate at ISO:
- Document your processes that affect quality
- Retain records and data that describe the quality of the product or service.
- Ensure that your processes produce consistent quality
The sequence toward registration is this:
- Say what you do
- Do what you say
- Prove it with records and audits
- Improve it continually
The writer of this website also makes a comparison with the pdca cycle (also known as the Deming wheel) which is an iterative solution with four steps made for business process improvement. The four steps are: Plan Do Check Act
It is a very good thing to have some sort of continuous improvement system in your company, I think it can eventually save you a lot of money and makes you’re customers glad.
ISO takes improvement more into account, but I still don’t know if ISO is better as e.g. TQM or six sigma. This article shows how ISO does it, but it doesn’t give any numbers about how good it is. If I could get some numbers about it, then it would be certain that ISO is good or not so good for your company.
But what I personally think is that improving quality awareness within your company gets you very far.
A few days ago, I made an survey with a few questions about ISO within a company. My co-promotor at IMEC send it to a few coworkers to have more opinions.
The questions where:
- Does your company use ISO procedures?
Everyone answered ‘yes’
- How many contact do you have with ISO procedures?
Almost everyone answered ‘Daily’
- Do you have the feeling ISO is usefull when you’re doing the paperwork?
There is a big variation here (from 4 to 10 out of 10). But I conclude most people feel they are doing usefull work.
- Does ISO hold your work in?
I can conclude here that some people find it kind of obstructing, but not very hard.
- Since you work for the company, do you have the feeling ISO improves performance? In other words, do you think ISO takes care of continuous improvement?
Most people give ISO a much bigger score here than I expected. Apparently ISO does ensure a little continuous improvement.
- Does your company need a certificate as a supplier for other companies?
Much variation in these answers, which is weird, because everyone works at the same company???
This means no one actually knows for sure.
- Does your company demand a certificate from its suppliers?
I got a few people who say ‘yes’ and other who don’t know, so I think yes is the correct answer.
- Which of these other management systems do you know?
- Six Sigma
- Lean manufacturing
- Balanced scorecard (BSC)
- EFQM (European foundation for quality management)
I was curious if people know this types of systems, and they did, or at least they all know a few of them, balanced scorecard and six sigma score the best here
- Are you generally satisfied about ISO?
The mean is 3,5/5. So most people are satisfied, but I don’t think they like it very very much.
- You can give a small personal opinion about ISO if you want.
A person answered ISO is made to continuously improve systems based on previous results. An other person gave 4 terms which are needed to make ISO a plus for your organization:
- When an employee doesn’t have extra work
- When it is a part of the regular work-flow
- Managers can see the state of each project at every time
- When ISO is applied, co-workers can easily take work over from others without forgetting subtasks.
ISO is a plus for your organization. I think every big organization needs a quality management system. Employees find ISO a way to keep an overview of what they are doing. The key issue here is how much time employees have to put in it, the less, the better for them.
I now conclude my thesis makes the work of employees better by automating the ISO work-flow and giving them more time to do the things they need to do.
I made a little survey to question people about ISO. Once there are some results, I will post them on this blog
Scott Dalgleish, the chief operating officer at Spectra Logic Corp. tells how he finds ISO 9001 ineffective.
A study by the International Journal of Quality and Reliability Management supports his statement.
This study is performed in Spain on 800 different companies, some registrated at ISO, other in the process of registration and some non-registrated.
The study of the journal shows that companies with an ISO certification have a better performance then companies that don’t have a certificate.
BUT, (and maybe more important)… It also shows that companies don’t perform better once they have a certificate. The performance before they get it is equal to the performance after obtaining this certificate.
Mr. Dalgleish says that his company has a ISO certificate, but the only reason why is that his almost all of his big customers require it. He also makes a call to companies to stop requiring ISO certification from their suppliers.
An ISO certification is something that a lot of companies require from their suppliers. But it otherwise has little use.
Quality pays off, but taking a quality approach is unrelated to ISO 9000 registration.
The article shows the comment of some companies which obtained an ISO certificate. It shows why your company is not more attractive when you have it…
“Companies have spent a lot of money to comply with ISO’s popular management standards. Now, many wonder why they bothered.”
There are a lot of people who have experience with ISO certificates. The focus is on both how difficult it can be to get the certificate, but is also shows how little the payoff is.
An examples is:
A national park that manages guest services. They spent 300 pages of documents for certifications, 5 days of interviews, 18 months waiting and $115,000 on this certificate. After which they did not see a financial spike in their sales. On the other side, they probably improved the morale of their employees and they burnished the environmental standards.
- ISO certification is not equal to bigger sales
- Certifications is pricey
- ISO certification does not mean your quality improves over time
- Better quality management schemes exist (TQM, six sigma)
- Certification is more often a necessary condition to maintain current (financial) performance rather than a sure-fire way to improve performance.
To me it looks more like the certificate is something you need as a company, but not something to live for. The standards show you’ve done effort for quality management, but they do not mean the quality of your products improves over time. Other quality management systems like six sigma do take continuous improvement into account.
Almost everyone using the internet is aware of social networking… As a company or organization its a great way to gain interest of people and to get the word around. Now, what does the ISO know about this?
- They have a Youtube page: youtube
- On Facebook: if you want, you can find hundreds of fanpages or groups which have a connection to ISO
- I didn’t find anything on twitter and I didn’t search on the lesser known pages.
Be sure to check the Youtube page, it’s a handy way of getting an overview of ISO without reading a lot.
John Seddon (occupational psychologist, researcher, lecturer and Managing Director of the British management consultancy, Vanguard) is a man who preformed some research about the benefits of ISO 9000. He wrote a little article about it and published it, I definitely recommend you to read it here: Case against ISO 9000