‘Laserco’ is a high-tech manufacturer, employing 150 people. Five years ago, a senior director (now MD) wanted greater ‘discipline’ in the engineering function. Quality was chosen as a means.
The quality manager wanted to introduce continuous improvement but needed a start and felt that ISO 9000 would provide the foundations.
The organisation has three main functions/divisions: manufacturing, engineering and sales. Engineering had a pattern of high staff turnover and it was felt that the ‘wheel was continually being reinvented’ – the organisation did not retain ‘how we did it last time’. Another influence was that bigger customers were starting to ‘make noises’ about the need for a quality system.
They took advice from a consultant. They found his advice ‘dogmatic’. It was also found to be misleading – the consultant told them that traceability was a requirement of the Standard. They agonised over this for six months. Eventually, re-reading the Standard, they discovered that traceability was only important if the customer required it; theirs did not. They soon learned to work on their own interpretation of the Standard and not rely on the consultant.
They knew, as they went into the exercise, that they wanted to avoid too much bureaucracy.
Manufacturing found implementation to be very easy. The personnel in manufacturing were all used to working in a structured way; they used work tickets, time sheets and had a structured management information system (MRP). The focus in manufacturing was on writing down what they did. As this was happening the quality manager had to stop people in manufacturing from improving things – as they documented their procedures, people found obvious things to change. He was concerned that people should actually write down what they did (initially without instant modification). Having got the more complete picture, he then encouraged review and improvements which were seized fairly eagerly.
In Engineering, implementation was more difficult. The prime purpose of introducing ISO 9000 into Engineering was to establish a unified design process across the various groups. There was, prior to this, no predefined method. Furthermore the personnel in these groups had previously worked in fairly ill-defined environments. To a large extent this meant starting the implementation from scratch. There was, for example, an engineering change process and ISO 9000 implementation forced a review if it. People learned just why the engineering change process had to be so involved – there were so many consequences stemming from engineering changes. With effort, implementation produced ‘remarkable’ changes in engineering, mostly as a consequence of introducing procedures which would minimise the ‘reinventing of wheels’.
Consistent with their desire to minimise bureaucracy, the implementation team dumped their procedures manuals in favour of flow-charts. It kept the processes in focus in a simple and meaningful way.
The whole effort took two and a half years. Laserco claims reductions in time, reductions in errors and reductions in waste. These were not quantified during our discussion.
Their view now, five years on, is that ISO 9000 is the foundation for other things to happen. They felt that without it, they would have been unable to get a company-wide focus for the quality effort.
It was through the endeavours of two managers that this progress had been achieved. The two of them had to ‘make it happen’. They felt it took a lot of ‘getting through to people’, the MD’s interest waned at times (especially at end of quarter/year).
At the end of our discussion, the quality manager expressed the view that the whole process had one essential driver – the need to improve efficiency in an environment of a recession economy and headcount reductions.
Has ISO 9000 contributed to performance?
At the outset of this discussion, the efforts of the two people who behaved as ‘organisational entrepreneurs’ – working across organisational barriers to make things happen, should be recognised. It requires commitment and effort to make change in our organisations, usually because you are fighting the current culture or modus operandi.
The managers argued that ISO 9000 registration produced benefits. Processes were more clearly defined and that resulted in less waste or more efficiency. They had recognised and sought to avoid unnecessary bureaucracy, and even went a further step away from the norm by getting rid of procedures, using flow-charts to provide clarity of focus.
Without doubt, this is a case where much of the usual damage from ISO 9000 implementation has been avoided (for example excessive bureaucratisation and control through procedures). Should that lead us to declare it a success? ISO 9000, if it is to make a contribution, should improve economic performance, both internally in how the company works and externally in respect to the company’s competitive position.
The extent to which ISO 9000 can or will improve economic performance will depend on features of the Standard (and their interpretation) and features of the company’s current culture. For this case, it will be helpful to first consider the impact of the current culture on performance.
This culture has various components, some of which we have learned directly from the case study and some that we can guess at from the clues we are given. Let’s look at two:
Management by attention to output
That the top management’s attention wavers from quality at the end of financial periods is a sure sign that the company is run on output data. It will follow that departments have budgets, targets, variance reporting (this month versus last etc.) and it then follows that time will be given over to discussion, defending, promoting and surviving the ‘budget issues’.
Management works this way when it has no understanding of the concept of variation. Enormous quantities of time are given over to irrelevant and stressful activity. The company does not benefit, it loses.
The managers leading this implementation had continuous improvement as their long-term goal. Continuous improvement starts from an understanding of variation – it is not an unending series of little ‘fixes’ – and there is no measurement of variation anywhere in this system.
Manufacturing found ISO 9000 straightforward because the methods were similar to the methods in use; it is normal in manufacturing to have work instructions, job sheets and so on. By contrast, what is normal in high performance or World Class systems? One example works to four principles: single piece flow, pull not push, control in the hands of operators (including the right to stop the line) and ‘automatic stops’ on the line (if defective performance is automatically detected).
While this company had cut time for internal processes, the total order – fulfilment time had not changed and looked inefficient when ‘activity time’ was compared to ‘total time’.
The first fundamental of World Class thinking is to understand what matters to your customers. This company had no such data. ISO 9000 concentrates on ‘contract review’ (‘can we do what the customer wants’), customers don’t – they make their judgement of organisations from the total sum of transactions they have. This company has no idea what matters, other than internal opinion – and this is always found to be unreliable.
Another fundamental principle of World Class thinking is process management. In Laserco the work methods are functionally designed and controlled and, by implication, there is no true process management.
Has ISO 9000 helped?
The ISO 9000 advocates would say that it has and in this case we might have been persuaded to agree. After all, they have gained clarity, improved efficiency (a little) and avoided some common pitfalls. The avoidance of pitfalls is not a credit to ISO 9000, but to the two managers who implemented it.
Gaining clarity and improving efficiency are no more than the kind of gains sought by the founders of this movement in the Second World War (see Appendix 3). The result, then as now, is the control of output. But quality is not concerned with the control of output, it is concerned with the improvement of output.
What is worrying is that the managers in this system might tell you they’ve ‘done quality’, after all they went through the steps as directed and achieved registration. How would this community respond if they were told there is an enormous amount still to do and it requires a fundamental re-think of current operating assumptions? This is a system which does not know what matters to its customers, is therefore unable to turn such data into useful measures and shows no understanding of the importance and measurement of variation. This is not a quality system, it is a ‘command and control’ system. It is bound to be sub-optimised.
The chances are they would rationalise the current position – after all they have ‘got ISO 9000’ – and hence any real opportunity for performance improvement would be lost. And that is, perhaps, one tragedy associated with ISO 9000, people think they have ‘done quality’ and they haven’t even started.
Quality methods are diametrically opposed to methods used in functional, ‘command and control’ systems. This is a company which has avoided the worst of ISO 9000, and yet it has been unable to avoid the fact that ISO 9000 registration has led the management community to a place from which it will be difficult to influence more fundamental change. ISO 9000 has reinforced some aspects of ‘business as usual’, it has not been the start of a quality journey.
Even more disturbing is that this process took two years. A company of only 150 people could make a change to improve economic performance in months, not years. ISO 9000 has decreased the probability that change will be possible in this case. If this seemed a good case of ISO 9000 registration, we can only hope their competitors are as complacent.