Thursday, October 13, 2005

Management is the basis for quality management

Quality management is fundamentally the same as quality of management. Then, if somebody tries to understand it, he or she should at first clearly recognize what is management all about. There is a huge amount of literature and other kinds of references dealing with management concept, theories, principles, and practices. That has made the whole topic very complicated. However, one of the most well-known and evergreen management model, so called Deming or Shewhart cycle, or PDCA model (see the figure), is very simple but nevertheless very useful also in the context of quality of management.

PDCA model

PDCA model describes how a consistent management consists of four consecutive activities:

  • P: Planning the business activities what should be done and what results should be achieved
  • D: Getting done the business obligations according to the plans
  • C: Checking what was done and what results achieved
  • A: Acting rationally taking into account the observations and results of the checking

PDCA model can be applied both in application of strategic and operational management of any organization. At the strategic management level one makes decisions and undertakes measures concerning the entire organization and considers especially the future competitiveness of the organization, and the operational level of management means decisions and measures to manage daily activities on operational sites.

In organizational environments the PDCA model may and should be applied in three different scopes:

  • Control: Managing daily operations in business processes in order to achieve the specified results of the doing. Normally rectifying nonconformities is carried out in connection with control. Control is based on operational plan and objectives. Control is fundamentally a rational activity on the basis of explicit facts.
  • Prevention and operational improvements: This means especially solving acute problems, preventing nonconformities, and finding / implementing operational step by step improvements in business processes. For continual improvement one can also use a well-known concept "Kaizen". Prevention and continual improvement are also very rational and facts based activities.
  • Breakthrough improvements: This includes innovating and implementing strategically significant changes in the way doing business. Breakthrough changes cannot be based only on facts and therefore it emphasizes needs from visions and measures of innovation that are mainly tacit (implicit) knowledge issues.

Top business leaders (senior executives) are responsible of the breakthrough improvements. Control, prevention, and small step improvement should be carried our by the responsibility of operational managers.

Tuesday, October 04, 2005

Quality assurance: A lot of disappointments but also new challenging opportunities

Quality assurance, QA, is to provide the customer with factual information concerning how well an organization can fulfil the requirements of an order or contract, and thus QA is to create and reinforce confidence and enhance satisfaction among the customers. QA is essentially a communication issue. In the ISO 9000 standardization QA aspects are focused on in the ISO 9001 standard.

Even QA should be realized in a way that is most efficient and suitable in the light of the business requirements and taking into account the competitive aspects of the market-place. That is also the real opportunity in using ISO 9001 standard. However, ISO 9001 standard-text considers only effectiveness of the QA but not at all efficiency aspects. In real business cases, however, the company itself must take also efficiency seriously into consideration. That means particularly the "How" -issues in ISO 9001 realization.

In QA between two parties the most natural and sound approach is to utilize QA agreements and related QA plans, for which ISO 9001 serves as a general model. Historically QA has been grounded in the requirements of major customers (e.g. defence, nuclear energy, automotive, etc. industries).

Certification or registration refers to indicating with a certificate that a product is or will be in accordance with a specific requirement (standard or specification). A certificate relates primarily to a product case and through that also to those activities of business processes determined to assure the specific product features. Certifications concerning product QA typically adhere to the standard QA model ISO 9001. The general kind of certification of quality management does not inform anything about the quality of a product or the business performance of an organization. Certification is closely linked with market and customer communication. A third party certification of a quality management system apart from a particular product and customer is questionable from the business benefits' point of view. Recently third party certification has lost remarkably its credibility and also certification business has decreased in several countries.

External certification in connection with ISO 9000 standards - if it is really needed - is only one of the means for QA and it can be a by-plot of a company's strategic quality approach. Only roughly one quarter of the companies using ISO 9000 standards are certified and many of them may have no intention of ever being certified. These companies want to utilize the standards internally in order to improve their business performance and to use them as general agenda for QA in contractual situations. Certifications have simply been granted with too big (and even an erroneous and deleterious) role in the media.

In fact, there are also different options for certification. A certification can be performed by the first party (the company itself, i.e. self-certification or self-declaration), the second party (customers), or the third party (a service company specialized in certifying services). The most genuine and natural way to proceed is self-certification, which has gained interest due to the flaws associated with third party certifying. However, self-certification always requires a strong personal and professional commitment and visibility to professional quality from the top business leadership of an organization. This is why certifying performed by an external third party may be a sign of weak, ineffective, and old-fashioned quality management and outsourcing this important management responsibility. When realized seriously the self-certification may provide for remarkable strengths compared with the third-party certification. Certifications provided by customers are especially recommended and a company should strive towards gaining certifications from their key referring customers. With regard to third-party certifications - should this become necessary in the light of marketing efforts - it is worthwhile to examine them by restricting them only to questions pertaining to safety, health, environmental protection, and product liability. Serious critisism can be directed at certifications made by third parties due to the fact that these often entail an emphasis on the business objectives of the company doing the certifying (certification body). This entails the commercialization of certification.

One cannot distinguish from the competitors only by leaning on general third party certifications. On the other hand, product features (including both goods and services) which take into account customers' needs and expectations do offer an opportunity to provide also superior QA services to the customer. Thus quality assurance can be seen as a value-adding part (i.e. a service-element) in company's products-offerings. The new e-business technology creates completely new cutting-edge solutions (e.g. "e-certificate") for quality assurance. E-certificate consists of Internet site(s) or portal solution providing for assurance that an item conforms to a standard or specification indicated by the certificate. It gives also an opportunity to personalize and create partnership-dedicated efficient real time and multimedia solutions with extranet technology.