raising the standard [continuous improvements]

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34 IEE Engineering Management | October/November 2005

Raisingthe

standardRaisingthe

standardContinuous improvement is the

only way to stay competitivesays Alan Keffler

Operational management


Has your company been forced to obtainapproval to quality managementstandards such as ISO9001 and ISO/TS16949? Have you achieved the certificatewithout any benefit? To be competitive inthe global market place, industry needs

to get added value from everything it does. Implementedeffectively, these standards will increase profitability andprovide greater customer satisfaction. The start pointshould always be your business processes. This articletakes you through how to go about implementing systemsto obtain these real benefits.

In some industries, customers usually state specificcontractual requirements for their suppliers to meet beforethey can even attempt to quote for new work. Typically thisincludes a ‘quality management system standard’, forexample ISO9001. Traditionally, companies’ quality systemshave therefore been aimed at meeting the requirements ofthese particular standards, such as ISO9001:1994, to gain a‘certificate on the wall’ to allow them to quote for newbusiness. This has often resulted in voluminous manuals,procedures and work instructions based around thestructure of the standard. Typically they do not define howthe business actually needs to operate effectively, are toolong to be read, and therefore do not improve businessperformance sufficiently to be seen as worth the effort usedin their creation.

With the new ‘process-based’ standards (i.e. focused onbusiness performance) such as ISO9001:2000 and theautomotive version based on it (ISO/TS16949:2002), this should all have changed.However, a lot of organisations have notyet achieved all or any of these benefits.

There are key steps that an organisationshould take to ensure that they doimplement the right system for theirbusiness, which gives them real benefit andgains them approval where required.

PLANNING THE PROCESSThe start point of a project (Level 1) shouldbe to take a step back and identify what thecompany actually does, or what its keyprocesses are. This can be done utilising anumber of different techniques, dependingon what best fits the organisation. Forexample, one way is for key members ofthe company to brainstorm all of thesimple activities that happen in theorganisation such as ‘raise order’, ‘receivepart’, ‘communicate strategy’, etc. These can then be puttogether into groups of related activities, a companytypically ending up with about 12-15 groups.

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Each group – or ‘key process’ – then needs to be given aname that best describes that particular activity to theorganisation, for example, ‘supplier management’,‘manufacturing’. It is important not simply to list out thetraditional, separate departments that we have had in thepast but to think about the process activities that go acrossthe company, from customer input, to customer output. Abox or icon/picture for each of these processes can then beput into a diagram, a ‘system map’, that shows the globalprocess flow of the business and dependencies betweenthese processes (see fig 1). This is most effective when it‘markets’ the company, for example, being based on the logoor product, and this document satisfies the need of theabove standards’ requirement to show the “…sequence andinteraction of the [company’s] processes”.

This ‘Level 1’ document now makes up a large part ofISO9001’s minimum requirements for a ‘quality manual’,the other two requirements being;● to define the scope of the management system (what the

company does, where, and what it does not do), and;● reference to any procedures, only six areas now being

mandated as definitely requiring documentedprocedures. These are document control, records,internal audits, control of nonconforming product,corrective action and preventive action.

ISO/TS 16949:2002 also requires training to be covered bya documented procedure. Thus the emphasis is no ➔

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System Yield Success

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Fig 1: System map for the company, ‘Systems Yield Success’. The organisation’sfunctions (red circles) are supported by the lower support processes (black circles)and the internal processes also interact with external forces.

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DFMEA PFMEA Control Plan Workinstructions

Drawing specs

Legisation/HSE

Customer requirementsECN/New product/CI

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Fig 2: Extract from a processmap for ‘GAF OriginalEquipment Ltd’. (DFMEA =Design Failure Modes andEffects Analysis; PFMEA =Process Failure Modes andEffects Analysis; ECN =Engineering Change Notes; CI= Continuous Improvement;HSE = Health, Safely andEnvironment)

longer on documentation – thick manuals that were notread – but it is now on the performance of the processes insatisfying the customer’s requirements.

VISUAL MAPPINGWe can now consider creating our ‘Level 2’ documents. Theeasiest way to do this is to define our processes usingsimple visual ‘process maps’. These outline, in up to about15 boxes, the inputs to the process, process activities andsequence and their outputs, with each activity identifyingwhich job function undertakes it. For each process we needto identify what the Key Performance Indicators (KPIs) are.These will demonstrate that the process achieves itsobjectives, i.e. is ‘effective’, but while making best use ofthe available resource, i.e. is ‘efficient’. For example, for the‘supplier management’ process mentioned earlier, wemight identify a cost reduction target in pounds,improvement in supplier rejects (% or ppm – parts permillion) and time to process a purchase order (hours ordays) as our KPIs (see fig 2 for an example from GAFOriginal Equipment Ltd, which designs and developsequipment for the commercial vehicle industry).

Once all of the processes have been defined, they needto be compared to any applicable input standards, asreferenced above, to identify any gaps to compliance withthe standards. This can be recorded in a cross-referencematrix, showing processes down one side against theclauses of the applicable standards along the top.

This can then be input back into the process maps toadd activities that were not currently being undertakenby the company, but are required by the standard(s) andthus the customer. Then the process maps are updatedand any additional KPIs agreed. Visual measures thenneed to be set up to display that the processes are beingmonitored and ultimately demonstrate that the processesare effective and efficient.

For example, a Quality Operating System (QOS) can beused, as is the case in a lot of the automotive industry, toshow four key aspects of the KPIs (see fig 3).

IEE Engineering Management | October/November 2005

1. The overall trend of a KPI is shown for the year, e.g. ppmreject each month against target in the first (top left)box.

2. A pareto graph then shows the biggest cause of theproblem over that year, then the next biggest cause andso on in the second box (top right).

3. The data for each cause for each month is displayedbelow and when input into a spreadsheet, this can beused to plot the two graphs mentioned in 1 and 2 above.

4. Finally, the actions that the company is taking to addressthe key issues need to be identified and progress againstthem is shown in the fourth box.

A standardised reporting mechanism such as this allowspeople across the business quickly to assimilate informationabout any of the KPIs on a visual management board or atmanagement meetings.

After all of this, a key task of producing a timing planneeds to be undertaken. This should contain key actions,with responsibilities for completing them, target dates andof course progress against the plan being tracked.

ACTION AND IMPLEMENTATIONThe next step is to implement this system, for example in apaper-based format, or in a user-friendly computer-basedsystem with hyperlinks from each box on one level. Forexample, the icons in the Level 1 system map would connectto the Level 2 process maps. Then from these process maps’activity boxes, supporting Level 3 documents can also belinked where it is deemed beneficial.

The company then needs to follow these processes, i.e.‘work to the system’. This would usually need to start withawareness training, outlining the benefits of the system,key elements of it and how to access the key documentssuch as process maps.

In starting to use the first version of the system’sdocuments, people working in the area can actually help tovalidate the content of the system. Sometimes missingprocess steps are identified that need adding in, but usually

Operational management


this first use of the system helps to fine tune it, starting thecontinuous improvement process.

The most important aim is to make using the systemeasier than not using it. Therefore the people using it doneed to be involved in its development and itsdevelopmental needs on an ongoing basis. One option is forthe entire system to be created in an HTML type language.This can then be put onto a server or network and accessedby everyone without the need for the network licences thatare required by specific software packages. All documentscan then be accessed easily with just a few clicks on thehyperlinks.

REVIEW AND CHECKThe actual performance measures achieved must bereviewed on an ongoing basis by the process owner and thepeople operating the process. This activity should feed intothe regular management activity. The management reviewshould not be an annual meeting taking all afternoon to seewhat happened months ago, often held justto satisfy the requirements of the standardand the third party assessor. It should be partof the way the management team runs thecompany and integral to any real meetingsbeing held anyway.

In addition to this activity, a key part ofthe ‘check’ process is having an effectiveinternal audit process. As the managementsystem has needed to change, so the internalaudit activity needs to change as well toensure that it actually adds value to theorganisation.

Traditionally, ‘compliance’ audits haveconfirmed that the company’s proceduresare being followed, but that did not mean thatwhat was happening was effective. However,process audits should be confirming that thecompany’s processes are effective and efficient as wellas confirming compliance to any standards required.Independent auditors need to analyse the process theyare going to audit and review its performance viaassessing the achievement – or not – of the KPIs.

They can then target where to spend their time,identifying why certain KPIs are not being achieved andhelping the people responsible for the area to take action,where required, on trends going in the right direction andultimately achieving the targets set.

Beyond this, the aim should be for these audits to addvalue and assist with continuous improvement in thecompany. They can also provide a review and prevent anassessor from outside the company issuing concerns. Thiscould be a customer or a third party assessor, which maynecessitate an extra visit to review corrective actions raised.

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FOLLOW UP AND RESOLVEWhere the targets set are not being achieved, appropriateactions need to be taken to get back on track. This shouldbe done as close to the process as possible, as soon after theevent as is practicable. If it can be done by the area eachmonth then this is preferable. However, sometimes it needsthe independent auditor to point out the key areas orconcerns to work on. Statistical tools, such as the paretographs in the Quality Operating System charts, can helpprioritise which concerns to tackle first. Then disciplinedproblem solving such as Ford’s Global Eight Discipline ‘8D’techniques will ensure effective identification of the rootcause(s), actions to be taken, and verification that theactions taken have been effective.

If the targets set are being achieved, consideration canthen be given to identifying continuous improvementactivity. Whatever was acceptable last year is not necessarilyapplicable now and there are likely to be even higherexpectations next year.

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3: A Quality Operating System (QOS) can be used to show four key aspects of the KPIsey Performance Indicators). Clockwise from upper left: the overall trend of the problemr the year; the causes of the problem that year; the collected data for each of the causesainst month; and the actions the company is taking to remedy the problems. Thisndardised reporting mechanism allows people to display the KPIs quickly and clearly.

We need to improve just to stand still, relative to thecompetition, and this has become even more importantwith the onset of the global marketplace and thecompetition now coming from low cost manufacturingcountries. Improving business performance and achievingapproval to standards, where required, is the only way thatwe will be able to bid for work in the global arena. ■

Alan Keffler of Systems Yield Success helps companies toimprove their performance while working towards achievingapproval to standards: www.systemsyieldsuccess.co.uk

IEE Engineering Management | October/November 2005 37

raising the standard [continuous improvements]

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