Quality Standards

wo studies have revealed that over- attributable to numerous factors, some that all awareness of the ISO 9000 Inter- are obvious and inherent in our business Tnational Management culture, such as accelerated schedules and ISO 9000 System Standards among U.S. businesses is delivery requirements, increased labor still below 50 percent [1] [2]. This article costs, increased customer expectations, and standards are good is intended to increase general awareness international competition. Another factor for helping owners, shareholders, execu- that is significant in this evolution is the business practices tives, and project managers address “Human Factor.” Basically, people have inevitable decisions regarding the stan- pride in their work and in general do not that will improve dards. In particular, project managers are like to have it “inspected,” especially with faced with the daily responsibility for the potential fear of being wrong. communications, ensuring provisions exist for implementing The most significant factor with the requirements described in the standards entire issue is: Who is efficiency, and applicable to project-specific products responsible for product or service quality and/or services. throughout the processes of performing the profits while Currently, it is true that ISO quality work internal and external to each organi- standards apply to fairly well defined busi- zation? It is this very factor that is the root reducing errors, ness sectors and applications. However, cause for some continued confusion over over time these standards will prove their ownership of quality with many companies scrap, and rework. inherent quality improvement benefits for in U.S. business sectors. The most funda- any application. Also, as more owners, mental step in starting any quality manage- executives, and project managers recognize ment effort is to formally address this issue that baseline requirements in the standards so there is no doubt about the various qual- are merely good business practices that will ity-related roles within the company. The improve communications, efficiency, and primary tool of the Quality Professional for profits while reducing errors, scrap, and assisting the company with quality efforts is rework, the standards will automatically the quality management plan (discussed become prerequisites for managing pro- later). jects and operating companies. Project The three primary quality management managers will benefit by more accurately issues that most companies are currently measuring project quality performance. addressing for their own specific reasons are (TQM), International Quality Movement Malcolm Baldrige National Quality Award, The concept of quality management has and ISO 9000 Quality System Standards. rapidly evolved and matured during the Each of these has its own set of objectives, Paul W. Gladieux past decade. Quality, as it applies to the conditions and criteria. A simple review operations of a business, has moved for- and comparison of the following TQM ward from the classical “Inspection Func- principles, Baldrige values/concepts, and tion” (error detection) to the more modern ISO system elements reveals common qual- “Quality Management Systems” approach ity-related data as it applies to overall com- (error prevention). This evolution is pany performance.

22 PM Network • February 1995 Figure 1. Timeline Toward ISO 9000 Standards [6]

European Spain and Removal of Coal and Steel EC Greece Portugal Trade Community Established Joins EC Join EC Barriers ’51 ’58 ’81 ’86 EC – 92 ? ?

’49 ’57 ’73 ’85 ’87 ★ ★★ NATO Treaty of Rome Denmark EC Single European Act (SEA) Belgium Ireland White Amended Treaty France and U.K. Paper of Rome Germany Joins EC Italy Luxemburg Netherlands TC – 176 ISO 9000 ISO 9000 Formed Standards Standards Published Revised ’80 ’87 ’94

★ Treaty of Rome: Goal to create integrated community-wide market free of restrictions on movement of goods, services, people, and capital. ★★ SEA: Goal of completing the Single Internal Market by 1992 and restructuring decison-making procedures.

TQM/Baldrige/ISO Principal support for the program quality system registration. Achieving Total Quality Management. During the comes from The Foundation for the registration does not guarantee defect- early and mid ’80s many events took Malcolm Baldrige National Quality free products and services; however, it place that helped shape what is now Award, established in 1988. The award does demonstrate that a company has a generally accepted as TQM principles. is named for Malcolm Baldrige, who system in place for affecting and improv- Some of the events included The served as Secretary of Commerce from ing quality—a distinct competitive Department of Defense Master Plan on 1981 until his tragic death in 1987. The advantage. System development/registra- TQM, the Commerce Department’s award criteria framework addresses tion takes 9 to 24 months, depending on concerns with foreign competition, seven core values and concepts: leader- the company scope of operations. The numerous new books on workplace ship; information and analysis; strategic 1994 revised standards include guide- changes including Japan’s work quality planning; human resource lines and contractual models: processes, and the influences of U.S. development and management; man- Guidelines quality gurus W. Edwards Deming, agement of process quality; quality and ISO 9000-01 Guidelines on Selection Joseph M. Juran, Phil Crosby, and operational results; customer focus and and Use Armand V. Feigenbaum. The principles satisfaction. ISO 9004-01 Guidelines on Manage- of TQM include determine customers’ ISO 9000 Quality Systems Stan- ment/System Elements requirements; perform to customers’ dards. The five generic quality manage- Contractual Models requirement; implement defect preven- ment standards were developed by the ISO 9001 20 Quality Management tion systems; performance measurement International Organization for Stan- Elements (full scope) by cost of quality; zero defects as com- dardization (Technical Committee TC- ISO 9002 19 Quality Management pany performance standard; everyone 176) based in Geneva, Switzerland [3]. Elements accountable for meeting requirements The committee was commissioned in ISO 9003 16 Quality Management (total employee involvement). 1980 and the standards were published Elements Malcolm Baldrige National Quality in 1987. The standards (includes three Award. This award was created by Pub- for contractual definition) provide a For example, ISO 9001, Quality lic Law 100-107 and signed into law on basis for implementing and improving Management System Elements (20 full August 20, 1987 [4]. The Award Pro- quality management and quality assur- scope), includes: gram, responsive to the purposes of ance within any product or service 4.1 Management Responsibility Public Law 100-107, led to the creation company. Ultimately the standards pro- 4.2 Quality System of a new public-private partnership. vide the basis for a company to achieve 4.3 Contract Review

PM Network • February 1995 23 ■ ISO 9000

Figure 2. Timeline Toward Quality System Excellence

TQM ? ? Malcolm No Quality Meet ISO 9000 Baldridge World-Class System Specifications Standards Award System

Military ISOs Plus Deming Beyond Standards Industry-Specific Prize Deming Standards

??When Do You Implement TQM Principles?

4.4 Design Control require numerous products to be identi- standpoint (see historical key dates, 4.5 Document and Data Control fied with applicable CE Product Marks below). Also, ISO has not received the 4.6 Purchasing prior to entry into the European mar- visibility in the U.S. that TQM/Baldrige 4.7 Control of Customer-Supplied ket (CE—Communaute Europeene—is have, primarily because the perception Product a six-character label, the 3rd through is that ISO 9000 is only a requirement 4.8 Product Identification/Traceability 5th characters specify under which to perform work in Europe. Some 4.9 Process Control accrediting body certification was pro- companies have spent thousands of 4.10 Inspection and Testing vided) [9]. ISO 9000 quality system dollars trying to achieve Baldrige status 4.11 Inspection, Measuring, and Test implementation and registration in and then usually figure out that they do Equipment many cases will be the method used to not even have the basic quality man- 4.12 Inspection and Test Status verify, through documentary evidence, agement system that ISO addresses. 4.13 Control of nonconforming Product that products conform to specified Finally, the ironic part is that ISO will 4.14 Corrective and Preventive Action requirements. help provide the system framework for 4.15 Handling, Storage, Packaging, The standards have been adopted describing the quality data required for Presentation and Delivery by numerous countries around the TQM and Baldrige, even though ISO 4.16 Control of Quality Records globe and overwhelmingly adopted may not be a company requirement 4.17 Internal Quality and implemented in the EC. U.S. rep- (see timeline towards quality system 4.18 Training resentatives from the Department of excellence) [5]. 4.10 Servicing Commerce and Office of European It is important, for perspective, to 4.20 Statistical Techniques Community Affairs are concerned that have the following key dates in mind in American companies have not posi- the development of quality concepts: tioned themselves soon enough for EC-92 Timeline Toward ISO achieving registration (approximately Late 1800s Craftsman/operator 9000 Standards 10 percent of the U.S. export market quality control December 31, 1992 (EC-92), was the goes to Europe). However, some U.S. 1900–15 Foreman quality control date when many economic barriers companies that may not require regis- 1916–35 Inspection quality between the 12 European Community tration have recognized this trend and control (EC) nations were to be dismantled are positioning themselves for achieving 1936–55 Statistical quality control after decades of reform in Europe. “system compliance” in order to remain 1955–83 systems The results were to create a “single competitive with companies that do 1980 ISO 9000 Technical internal market” and new opportuni- achieve registration. Committee TC-176 ties for companies within a market (formed) population of 338 million. The impe- Timeline Towards Quality 1983 Total Quality tus for harmonization of standards is System Excellence Management detailed in the EC “new approach What is interesting about the interna- principles/practices directives” that target issues such as tional quality movement in the United 1987 Malcolm Baldrige product safety, worker safety, health, States is that the “system framework” National Quality Award environmental performance, and delineated in the ISO 9000 standards 1987 ISO 9000 Quality product liability. provides the groundwork for building Management System Hundreds of new product standards on TQM principles and Baldrige val- Standards are being developed in Europe as a ues/concepts. Yet the ISOs have fol- 1990 Empowerment/ result of the directives. This effort will lowed TQM/Baldrige from a timing self-directed work teams

24 PM Network • February 1995 Expectations and Execute a Quality Management Pro- company. There are a number of com- Based on the various principles, con- ject Plan That Evolves Into a Dynamic mon cost factors that should be consid- cepts, and criteria previously presented, Quality System.” ered on any ISO 9000 effort: common it is no wonder that many U.S. company The content of the plan will include cost factors; project planning/manage- owners, executives, and project man- information and items that will help ment; human resources and training; agers are frustrated with setting direc- guide the organization into the future materials and equipment; registrar tion and making commitments on one for ultimately developing, implementing fees; (if required); or more of the primary quality manage- and maintaining a quality management impact on work in-progress; suppli- ment issues. Adding to the frustration system that truly complements and er/subcontractor involvement; system are the timing of these issues, the sub- enhances overall operations. The plan is maintenance. jective cost and return on investment typically a dynamic document that It is suggested that management view factors, the potential impact on work changes if and when essential elements and manage the costs associated with an in-progress, and the fact that companies in the direction of quality management ISO 9000 effort as two types: project in the various business sectors are at dif- efforts change within the company. In and operations. Project (startup) costs ferent phases of involvement or com- effect, the quality management project include scope/field of application; devel- mitment. Some companies will recognize plan must become an integral part of opment; implementation; registration the long-term benefits and implement the overall company strategic business (or compliance). Operations (mainte- systems on their own, whereas others plan. nance) costs include registration mainte- will be required to do so based on cus- Typical quality management project nance; procedure/instruction revisions; tomer requirements. plan contents include project summary; inspections/audits/training; tests/special team members/responsibilities; current data requirements. Quality Management quality system vs. ISO; scope of regis- Current soft- Project Plan tration; resources (financial/human); ware programs used by many companies As cited previously in this article, each project schedule/milestones; progress provide an excellent method for moni- of the primary quality management reporting. toring the costs and reporting progress issues has specific concepts, principles, associated with the project phase. For and criteria that could be uniquely Cost Factors small companies a simple cost code applied to each company’s work prac- Initially, many individuals perceive ISO method can be used for monitoring pro- tices, processes, and culture. For a com- 9000 as new requirements that repre- ject costs. Also, software programs on pany to commit to moving forward with sent major changes in the way they run the market today provide an excellent just one issue, time and resources are their business (perceived as inherent baseline for starting the operations- required to effectively plan the project additional costs). For most companies related “cost of quality” measurement in order to successfully achieve imple- that perform well, implementing an ISO process. mentation. Historically, each issue takes 9000 quality system is merely an exer- a different amount of time for achieving cise in fully documenting company poli- Cost of Quality meaningful results through full imple- cies, procedures, and work instructions Many books and articles have been pub- mentation. Typical variables include throughout the various levels of the lished on the “cost of quality,” especially client requirements, company size, prod- organization (or upgrading an existing during the past 15 years. In the 1979 uct/service sectors, cultural issues/consid- system) and then routinely working in book by Philip B. Crosby, Quality is Free, erations, work in-progress, regulatory compliance with these documents. cost of quality was addressed and defined issues, employee attitudes. “Companies that perform well typically in three categories: prevention, appraisal, The initial focal point for any quality have 90 percent of the core information and failure costs [7]. In his 1984 book, management effort within a company required for implementing an effective Quality Without Tears, Crosby defined should be the development of a formal ISO 9000 quality system.” Cost of Quality in two areas: “price of quality management plan. In order to A number of cost factors are associ- nonconformance”—all the expenses prepare and execute an effective plan, ated with ultimately implementing and involved in doing things wrong, and top management must identify and fully maintaining an effective ISO 9000 “price of conformance”—what is neces- support individuals that will assist in Quality System. The most apparent sary to spend to make things come out developing and implementing the plan. question from a business perspective right [8]. In the latter, he is quoted as say- The plan should be as comprehensive as relative to cost is: When will the com- ing “The cost of quality has not been needed to address the full scope of pany reach a break-even point and used as a management tool because it quality management efforts, including begin to realize a return on investment? hasn’t been presented to management in milestones, as determined by manage- Considering the current economic con- terms it can understand.” ment. Modern Project Management ditions for some companies, this factor Measuring the cost of quality is not (MPM) methods should be used for is not to be taken lightly. The cumula- yet a mandatory requirement in the controlling, measuring, and achieving tive cost (and the cumulative profit) for ISO standards; however, it is a recom- the milestones—hence management implementing and maintaining an effec- mendation found in the ISO 9004-1 should adopt the approach “To Plan tive quality system will vary for each Guidelines, paragraphs 4.3 and 6.0. The

PM Network • February 1995 25 ■ ISO 9000

standard takes the position that “the cal- effective execution (vision, mission, culation and evaluation of costs associ- goals, objectives, phases, activities, ated with all quality elements and direction shared with all employees) objectives should always be an impor- • Resources – financial, human (inter- tant consideration, with the objective of nal/external), training, equipment, minimizing quality losses.” ISO 9004 materials definitions on cost of quality are in • High level of accuracy/availability of effect the same as those in Crosby’s company data for meeting scheduled book Quality is Free. milestones • Patience – set reasonable goals (com- Benefits pany culture/people issues are heavily There is a general consensus from involved). numerous companies that have achieved registration (or just system compliance) A Word About Commitment and within the ISO 9000 community at Full commitment from every single large that the benefits far exceed the ini- company member is the only real factor tial costs of implementing an ISO sys- that will guarantee the initial and ongo- tem. The most recognized benefits ing success of any quality management include increased profits; assurance of system effort. Good luck on your ISO contract compliance; increased market 9000 quality management system share; reductions in-errors/scrap/rework; efforts! improved communications/ productivity; teamwork/ employee involvement; iden- References tification of training needs; recognition 1. Cyndee Miller. 1993. U.S. Firms Lag in and quality system registration. Meeting Global Quality Standards (Grant Thornton, Survey Results). Marketing News Results - American Marketing Association, vol. 27, With any one of the efforts, as a mini- no. 4 (Feb. 15). 2. Quality in Manufacturing. (Electronics mum, a company will be on a contin- Publishing, Survey Results) 1992. San Jose, ued learning curve and discover CA: PRx, Inc. inherent self-improvements as long as 3. Quality Management and Quality everyone supports and feeds the effort. Assurance Standards: International Organi- The lines of communication typically zation for , ISO 9000 Through 9004, 1987 and ’94; American open and the work flow processes National Standards Institute/American Soci- improve. There is also a potential “fear ety for Quality Control, Q90 Through Q94, factor” associated with these quality 1987 and ’94. management issues that include feelings 4. Malcolm Baldrige National Quality of “What is buried in the wood pile?” Award Criteria, Public Law 100–107. 1987 (August 20). and “Do I really know what my daily 5. E.I. du Pont de Nemours & Co. responsibilities are?” Due to the wide 1989. ISO 9000 is Coming! Second Edi- array of human, administrative, and tion, p. 7. Quality Management & Technol- technical factors involved in any quality ogy Center. management effort, some companies 6. Intertek Services Corporation/Alan A. Griffin & Associates. 1991. EC-92 Events in will achieve success while others experi- an Evolving Process. ence failure. 7. Philip B. Crosby. 1979. Quality Is Free, Meeting TQM, Baldrige, and ISO pp. 119–126. New York, NY: McGraw-Hill results (separately or collectively) are Book Company. predicated on typical factors such as: 8. Philip B. Crosby. 1984. Quality With- out Tears, pp. 85–86. New York, NY: • Top management commitment and McGraw-Hill Book Company. involvement – these efforts typically 9. Daniel Byrnes. 1992. Exploring the represent some change World of ISO 9000. Quality (October). • Employee commitment and involve- ment Paul W. Gladieux is a principal with Glob- • Definition and delegation of authori- al Quality Management Associates, spe- ty and responsibilities with open cializing in assisting companies with ISO communications 9000 quality management systems devel- • Formal quality management plan – opment, implementation, training, assess- development, approval, revision and ment, registration, and maintenance.

26 PM Network • February 1995