The Foundations of a Sustainable Business

The ABCs of Structured Maintenance, a recent post to this blog, emphasized the importance of maintenance as a foundation for viable manufacturing operations. The following updated version of Cultivating Disciplined Operations, a post from October 2015, expands on the necessity for structure and discipline. — C.H.


Cultivating Disciplined Operations

In order for an organization to function effectively in a competitive world, a culture of disciplined operations is necessary. This does not mean the imposed discipline of a military boot camp. Rather, it means a voluntary coordination of efforts among all involved. As an ideal, consider a symphony orchestra, where a group of highly skilled musicians coordinate their personal talents to a mutually understood and desired end. Yes, a conductor does arrange the music and does direct the tempo. But it is the blended performances of the musicians that work the magic.

Cultivate Text Box“Cultivating” is the right word here. A voluntary coordination of efforts comes about through a culture of mutual respect, directed toward a mutually desired end. It is that culture that needs to be cultivated. Here, “mutual respect” means a sincere regard for the interests and aspirations of everyone involved, diverse though those interests and aspirations may be. “Mutually desired end” refers to a condition in which everyone involved can prosper indefinitely.

An initial assessment of how closely a given organization’s culture approaches one of mutual respect, directed toward a mutually desired end is pretty easy. Employee turnover rates, absentee rates, equipment downtime rates and OSHA recordable safety incidents can readily be compared with relevant norms. Apply Pareto’s rule: if your organization isn’t comfortably in the top 20% for each of these, your competitive posture is at risk. [1] Even if your numbers are all in the top 20% — or even the top 1% — remember that everything and everyone can always improve. Including your competitors, today and tomorrow.

Here are some areas that require constant cultivation:

>> Safety: In manufacturing, a top notch safety program is essential. The benefits of a pain free working environment are immediately clear to everyone. Cultivation of safe operating practices is fundamental to the cultivation of mutual respect. [2]

>> Maintenance: Equipment and facilities need be designed for operability as well as for throughput. Poor working conditions and dysfunctional equipment are antithetical to the cultivation of mutual respect.

>> Training: It is not reasonable to ask anyone to participate in manufacturing operations absent a clear understanding of what that individual is to do and how to do it safely and effectively. My personal preference is that written work instructions be used as a basis for training materials. Trainers should be trained in how to train others. Understanding should be confirmed by demonstration.

>> ISO 9001: The ISO 9001 Standard for Quality Management Systems provides a systematic framework for disciplined operations. It is worth studying, even in part. Implementing systems compliant with the ISO 9001 Standard is a substantial undertaking. However, the cultivation of disciplined operations that occurs while doing so is a substantial reward for everyone and a substantial step toward an organization that can prosper indefinitely. [3]


Chuck in FranceThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

 

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome.


[1] For more on Pareto and operating performance, see Operational Excellence – The Performance Curve, this blog, http://jerasustainabledevelopment.com/2012/05/24/operational-excellence-the-performance-curve/

[2] For more on safety and its importance, see On Safety and Sustainability, this blog, http://jerasustainabledevelopment.com/2013/10/24/on-safety-and-sustainability/

[3] For more on the ISO 9001 Standard and its application, see What’s Wrong With ISO?, this blog,  http://jerasustainabledevelopment.com/2012/07/05/whats-wrong-with-iso/  and Keeping Up With ISO, this blog, http://jerasustainabledevelopment.com/2014/08/28/keeping-up-with-iso/

The New ISO 9001 Version

ISO 9001 GraphicWhat’s Wrong With ISO? was posted to this blog over three years ago. [1] That post discussed the ISO 9001 Standard for Quality Management Systems and why companies choose to (or choose not to) implement and become certified to the ISO 9001 Standard. What’s Wrong With ISO? continues to be one of the most often read of the 200+ posts to this blog.

The ISO 9001Standard has now been revised and released as ISO 9001:2015. Companies certified to ISO 9001:2008, the previous release, will have about three years to revise their management system in accord with the new ISO 9001:2015 release, and to be recertified.

Capture - ISO Focus magazine coverIn August 2013, What’s Ahead for ISO? was posted to this blog to provide some insights as to what to expect in the new release. A mildly edited version of What’s Ahead for ISO? is republished below to provide a preliminary look at the new version. What’s Ahead for ISO? is based on a late draft of the 2015 version – the ISO 9001:2015 as published may differ slightly. The International Organization for Standards, the folks who create and publish ISO Standards, also offers a free on-line magazine that discusses ISO 9001:2015. [2]

 


What’s Ahead for ISO? (1 August 2013)

Products and Services

The earliest versions (ISO 9001:1987 and ISO 9001:1994) focused almost exclusively on tangible products. Since the ISO 9001:2000 version, services have received increasing attention. ISO 9001:2015 uses the term “products and services” to replace the term “products” throughout the Standard. This change makes it clear that the Standard is applicable to service businesses as well as to producers of tangible products. More importantly, in my view, is the recognition that “products” are defined by customers. The “product” that a customer buys is an array of tangibles and intangibles — in-spec widgets, technical services, warranties, packaging, delivery, relationships, perceptions and much more — except when there are no widgets involved. Consider the importance of the sound a car door makes when it closes!

In the current (ISO 9001:2008) and prior versions of the Standard, it has been possible to exclude requirements covering product development, in cases where a facility does not actually develop products: job shops, for example. The 2015 version may, practically speaking, limit the product development exclusion to tangibles, since the development of at least some intangible product aspects is usually local.

Context

The 2015 draft proposes two new requirements, both of which illuminate the context in which the organization operates. The proposed additions are: [3]

“The organization shall determine external and internal issues, that are relevant to its purpose and its strategic direction and that affect its ability to achieve the intended outcome(s) of its quality management system” , and 

“The organization shall determine

  1. a) the interested parties that are relevant to the quality management system, and
  2. b) the requirements of those interested parties”

These proposed requirements make it mandatory to explicitly think through and articulate these matters, assuring that they are addressed in the architecture of the management system. While these proposals are far from final, there is an easy (and free) way to begin right now. National Baldrige Award applications complete a five page Organizational Profile as a preface to their application. The Organizational Profile provides context, much as these proposed requirements do. You can download the questions that comprise the Organizational Profile and a completed sample for a smaller manufacturing firm. [4]

“Know yourself” is good advice.

Risk and Preventive Action

ISO 9001:2015 draft drops the long-standing requirement for a Preventive Action procedure, on grounds that the entire Standard is an instrument for prevention. Instead, the draft makes numerous references to risk assessment and risk management.

Explicit attention to risks and potential downsides is good business, especially when both the probability of occurrence and the potential for loss or disruption are considered. For that reason, this blog often mentions the use of Failure Mode Effects Analysis (FMEA) as a management tool. [5]

Incidentally, ISO is quite familiar with risk management. ISO 31000:2009, Risk management – principles and guidelines “provides principles, framework and a process for managing risk. It can be used by any organization regardless of its size, activity or sector.” ISO 31000 and its associated documents provide a good way to come up to speed on risk management.

For Smaller Manufacturers

The real question for smaller manufacturers is whether to utilize the ISO 9001 Standard, or not. For many, compliance with and certification to the Standard is a marketing necessity. For those interested in Sustainability — thriving in perpetuity [6] ISO 9001 (especially along with ISO 9004) offers a sound organizational approach, although there are other approaches. As mentioned earlier, consensus standards lag the state of the art. Simple compliance with the present standard is yesterday’s thinking.


As of 2012, 1,101,272 organizations worldwide have been certified to the ISO 9001 Standard. Also, 285,844 organizations have been certified to the ISO 14001 Standard for Environmental Management Systems. [7] The great majority of the manufacturing firms that are certified to the ISO 14001 Standard are also certified to ISO 9001. The ISO 14001 Standard has also being revised and reissued for 2015. The good news for those certified to both Standards is that form and format of the two Standards is much more consistent in the 2015 revisions. The bad news is that revising and recertifying to two Standards at the same time is a pretty stout piece of work.  … C.H.

Chuck at ReneThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.

ISO 9001 Graphic: www.dreamstime.com


[1] What’s Wrong With ISO? this blog, http://jerasustainabledevelopment.com/2012/07/05/whats-wrong-with-iso/

[2] ISO Focus magazine, November issue, available at www.iso.org/iso/aso_focus_113.pdf

[3] From ISO committee TC176/SC2 draft on revision to the ISO 9001 Standard, dated 3 June 2013.

[4] Download the Organizational Profile questions at http://www.nist.gov/baldrige/publications/upload/2013-2014_Business_Nonprofit_Criteria_Free-Sample.pdf

And the sample completed Organizational Profile at http://www.nist.gov/baldrige/examiners/resource_center/upload/2013_Collin_Technologies_Case_Study.pdf

[5] See both parts of Downside Up – Risk Management, this blog, http://blog.jerasustainabledevelopment.com/2012/09/05/downside-up—managing-risks-part-1/

And http://blog.jerasustainabledevelopment.com/2012/09/11/downside-up—risk-management-part-2/

[6] Werbach, Adam, Strategy for Sustainability, Harvard Business Press, Boston (2009) page 9.

[7] From the ISO 2012 survey, executive summary, available at: www.iso.org/iso_survey_executive-summary.pdf

Cultivating Disciplined Operations

In order for an organization to function effectively in a competitive world, a culture of disciplined operations is necessary. This does not mean the imposed discipline of a military boot camp. Rather, it means a voluntary coordination of efforts among all involved. As an ideal, consider a symphony orchestra, where a group of highly skilled musicians coordinate their personal talents to a mutually understood and desired end. Yes, a conductor does arrange the music and does direct the tempo. But it is the blended performances of the musicians that work the magic. — C.H.

Cultivating Disciplined Operations

Cultivate Text Box“Cultivating” is the right word here. A voluntary coordination of efforts comes about through a culture of mutual respect, directed toward a mutually desired end. It is that culture that needs to be cultivated. Here, “mutual respect” means a sincere regard for the interests and aspirations of everyone involved, diverse though those interests and aspirations may be. “Mutually desired end” refers to a condition in which everyone involved can prosper indefinitely.

An initial assessment of how closely a given organization’s culture approaches one of mutual respect, directed toward a mutually desired end is pretty easy. Employee turnover rates, absentee rates, equipment downtime rates and OSHA recordable safety incidents can readily be compared with relevant norms. Apply Pareto’s rule: if your organization isn’t comfortably in the top 20% for each of these, your competitive posture is at risk. [1] Even if your numbers are all in the top 20% — or even the top 1% — remember that everything and everyone can always improve. Including your competitors, today and tomorrow.

Here are some areas that require constant cultivation:

>> Safety: In manufacturing, a top notch safety program is essential. The benefits of a pain free working environment are immediately clear to everyone. Cultivation of safe operating practices is fundamental to the cultivation of mutual respect. [2]

>> Maintenance: Equipment and facilities need be designed for operability as well as for throughput. Poor working conditions and dysfunctional equipment are antithetical to the cultivation of mutual respect.

>> Training: It is not reasonable to ask anyone to participate in manufacturing operations absent a clear understanding of what that individual is to do and how to do it safely and effectively. My personal preference is that written work instructions be used as a basis for training materials. Trainers should be trained in how to train others. Understanding should be confirmed by demonstration.

>> ISO 9001: The ISO 9001 Standard for Quality Management Systems provides a systematic framework for disciplined operations. It is worth studying, even in part. Implementing systems compliant with the ISO 9001 Standard is a substantial undertaking. However, the cultivation of disciplined operations that occurs while doing so is a substantial reward for everyone and a substantial step toward an organization that can prosper indefinitely. [3]


Chuck in FranceThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

 

P.S: Contact me when your organization is serious about prospering in the globalized 21st century … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] For more on Pareto and operating performance, see Operational Excellence – The Performance Curve, this blog, http://jerasustainabledevelopment.com/2012/05/24/operational-excellence-the-performance-curve/

[2] For more on safety and its importance, see On Safety and Sustainability, this blog, http://jerasustainabledevelopment.com/2013/10/24/on-safety-and-sustainability/

[3] For more on the ISO 9001 Standard and its application, see What’s Wrong With ISO?, this blog,  http://jerasustainabledevelopment.com/2012/07/05/whats-wrong-with-iso/  and Keeping Up With ISO, this blog, http://jerasustainabledevelopment.com/2014/08/28/keeping-up-with-iso/

Risk Management and the Smaller Manufacturer – Part 3

Risk Management and the Coming ISO 9001:2015 Standard

This is the third of a three post series on risk management. Part 1 of this series provides an overview of risk management. [1] Part 2 of the series provides specific risk management suggestions for smaller manufacturers, especially the use of Failure Modes Effects Analysis (FMEA). [2] This post, part 3, focuses on the risk management aspects of the new ISO 9001:2015 Standard for Quality Management Systems.

The ISO 9001:2015 Standard

ISO 9001 GraphicISO, the International Organization for Standardization, organizes the creation of thousands of voluntary; consensus based global standards for business, commerce and technology. The ISO 9001 Standard for Quality Management Systems is likely the most widely known of those standards. Over a million firms and organizations in 170 nations have been certified as compliant with the ISO 9001 Standard.

ISO policy requires that existing ISO standards be reviewed and revised periodically. The current version of the ISO 9001 Standard was issued in 2008, hence is referred to as ISO 9001:2008. A new version has been under development for several years. It is expected to be released as ISO 9001:2015 later this year. The million-odd firms and organizations now certified to ISO 9001:2008 will have three years following the release of ISO 9001:2015 to revise their quality management systems and have them recertified to the new version of the Standard. [3]

Opportunity – The Flip Side of Risk

There are several significant changes in the new ISO 9001:2015 version. Perhaps the most obvious is a broad emphasis on risk management. The current version, ISO 9001:2008, requires that compliant quality management systems include a documented process for Preventive Actions – pre-emptive actions to reduce the risk of future product non-conformities. The new version drops the requirement for a documented Preventive Actions process. Instead, the ISO committee tasked with developing the ISO 9001:2015 version holds that risk management has been implicit in earlier versions. [4] The new version makes risk assessment and risk management explicit throughout the standard.

The same ISO committee points out that opportunity is the flip side of risk. Analysis and assessment of risk may well suggest opportunities for improvements. Consider this:

Objectives > Operating processes > Results

The organization’s objectives are realized as results by means of the operating processes that the ISO 9001 Standard describes. “Improvement” should be thought of as improvement in results relative to those objectives. “Opportunity is not always directly related to risk, but it is always related to objectives. By considering a situation, it may be possible to identify opportunities to improve.”

Practically speaking, it appears to me that the Failure Mode Effects Analysis (FEMA) discussed in a previous essay can provide a ready structure for complying with much of the risk assessment, opportunities identification, follow – through and documentation activity required by ISO 9001:2015. [5]

Some Food for Thought

Should your firm embrace ISO 9001:2015? If you are currently certified to ISO 9001:2008, a moderate amount of rework will be required to bring your existing quality management system into compliance. You will have three years in which to implement the necessary changes. Prior to undertaking that work, you may wish to evaluate your experience to date with ISO 9001 and its role in the accomplishment of your firm’s objectives.

Discipline and Sustainability: ISO 9001 is intended to promote disciplined operations. Disciplined operations promote uniformity in outputs, including product uniformity and throughput rate consistency. Uniform outputs improve competitiveness by improving customer satisfaction and by reducing wastes, hence costs. Competitiveness – the ability to persist financially in a globalized economy – is a prerequisite for Sustainability by any rational definition of that term.

Chuck - Vancouver Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington

(Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on weekly.

ISO 9001 Graphic from www.dreamstime.com


[1] See: http://jerasustainabledevelopment.com/2015/04/11/risk-management-and-the-smaller-manufacturer-part-1/

[2] See:  http://jerasustainabledevelopment.com/2015/04/18/risk-management-and-the-smaller-manufacturer-part-2/

[3] For more on ISO and the ISO 9001 Standard, see ISO’s website at www.iso.org. ISO also offers a publication entitled ISO 9001 for Smaller Businesses, available for sale at:  http://www.iso.org/iso/home/store/publication_item.htm?pid=PUB100313

[4] The ISO committee mentioned is Technical Committee 176, subcommittee 2. The references to risk management are from ISO/TC 176/SC2 Document N1222 (July 2014)

[5] Again, :  http://jerasustainabledevelopment.com/2015/04/18/risk-management-and-the-smaller-manufacturer-part-2/

 

Keeping Up With ISO

What’s Wrong With ISO? was posted to this blog about two years ago.[1] That post discussed the ISO 9001 Standard for Quality Management Systems and why companies choose to (or choose not to) implement and become certified to the ISO 9001 Standard. What’s Wrong With ISO? is one of the most often read of the 165+ posts to this blog.

http://www.dreamstime.com/-image19762255The ISO 9001Standard is being revised and will be republished, likely late in 2015. Companies certified to ISO 9001:2008, the current release, will have about two years to revise their management system in accord with the new ISO 9001:2015 release, and to be recertified. In August of last year, What’s Ahead for ISO? was posted to this blog to provide some insights as to what to expect in the new release. A mildly edited version of what’s Ahead for ISO? is republished below to help you anticipate the coming changes.

==============================================================

What’s Ahead for ISO?

From: 1 August 2013

International Standards

With the globalization of industry, it is critical to have a body of consensus standards that define materials, dimensions, manufacturing practices, etc., so that parts and products from around the world fit together and work together as intended. The International Organization for Standardization (ISO), through committees comprised of delegates from ISO’s member countries, creates and maintains such standards.

The ISO 9001 Standard for Quality Management Systems is perhaps the most familiar of ISO’s vast catalogue of Standards. Globally, there are over a million facilities certified as compliant with the ISO 9001 Standard.

ISO’s practice is to revise and reissue Standards every 6 – 8 years. The current version of the ISO 9001 Standard was issued in 2008, hence is designated ISO 9001:2008. The next revision is expected to be released in 2015. The committee charged with creating the next version has recently released a draft for public comment.

Achieving consensus among a committee of delegates from many different nations, industries and points of view is tedious work, as anyone who has worked on a standards committee knows. It needs be recognized that a global consensus is a lagging indicator of the state of any art. Consequently, revisions to a global standard represent concepts that are already widely accepted. That’s why it is useful to preview probable revisions to a standard that will not be final for about two years — if you are behind the state of your art in 2013, best not to wait until 2015 to react.

Here are the most significant changes from the ISO 9001:2008 Standard, as proposed in the current draft of ISO 9001:2015 —

Products and Services

The earliest versions (ISO 9001:1987 and ISO 9001:1994) focused almost exclusively on tangible products. Since the ISO 9001:2000 version, services have received increasing attention. The 2015 draft proposes to the term “products and services” to replace the term “products” throughout the Standard. This change makes it clear that the Standard is applicable to service businesses as well as to producers of tangible products. More importantly, in my view, is the recognition that “products” are defined by customers. The “product” that a customer buys is an array of tangibles and intangibles — in-spec widgets, technical services, warranties, packaging, delivery, relationships, perceptions and much more — except when there are no widgets involved. Consider the importance of the sound a car door makes when it closes!

In the current and previous versions of the Standard, it has been possible to exclude requirements covering product development, in cases where a facility does not actually develop products: job shops, for example. The 2015 version may, practically speaking, limit the product development exclusion to tangibles, since the development of at least some intangible product aspects is usually local.

Context

The 2015 draft proposes two new requirements, both of which illuminate the context in which the organization operates. The proposed additions are:[2]

“The organization shall determine external and internal issues, that are relevant to its purpose and its strategic direction and that affect its ability to achieve the intended outcome(s) of its quality management system” 

and 

“The organization shall determine

a) the interested parties that are relevant to the quality management system, and

b) the requirements of those interested parties”

These proposed requirements make it mandatory to explicitly think through and articulate these matters, assuring that they are addressed in the architecture of the management system. While these proposals are far from final, there is an easy (and free) way to begin right now. National Baldrige Award applications complete a five page Organizational Profile as a preface to their application. The Organizational Profile provides context, much as these proposed requirements do. You can download the questions that comprise the Organizational Profile and a completed sample for a smaller manufacturing firm. [3] “Know Yourself” is good advice.

Risk and Preventive Action

The 2015 draft drops the long-standing requirement for a Preventive Action procedure, on grounds that the entire Standard is an instrument for prevention. Instead, the draft makes numerous references to risk assessment and risk management.

Explicit attention to risks and potential downsides is good business, especially when both the probability of occurrence and the potential for loss or disruption are considered. For that reason, this blog often mentions the use of Failure Mode Effects Analysis (FMEA) as a management tool. [4]

Incidentally, ISO is quite familiar with risk management. ISO 31000:2009, Risk management – Principles and guidelines “provides principles, framework and a process for managing risk. It can be used by any organization regardless of its size, activity or sector.” ISO 31000 and its associated documents provide a good way to come up to speed on risk management.

For Smaller Manufacturers

The real question for smaller manufacturers is whether to utilize the ISO 9001 Standard, or not. For many, compliance with and certification to the Standard is a marketing necessity. For those interested in Sustainability — thriving in perpetuity [5]  — ISO 9001 (especially along with ISO 9004) offers a sound organizational approach, although there are other approaches. As mentioned earlier, consensus standards lag the state of the art. Simple compliance with the present standard is yesterday’s thinking.


As of 2012, 1,101,272 organizations worldwide have been certified to the ISO 9001 Standard. Also, 285,844 organizations have been certified to the ISO 14001 Standard for Environmental Management Systems.[6] The great majority of the manufacturing firms that are certified to the ISO 14001 Standard are also certified to ISO 9001. Through bad joss, the ISO 14001 Standard is also being revised and will be reissued for 2015. The good news for those certified to both Standards is that form and format of the two Standards will be much more consistent in the 2015 revisions. The bad news is that revising and recertifying to two Standards at the same time is a pretty stout piece of work.  … C.H.

Chuck at Rene 2 - August 2014Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.

ISO 9001 Graphic: www.dreamstime.com

[1] What’s Wrong With ISO? this blog, http://jerasustainabledevelopment.com/2012/07/05/whats-wrong-with-iso/

[2] From ISO committee TC176/SC2 draft on revision to the ISO 9001 Standard, dated 3 June 2013.

[3] Download the Organizational Profile questions at http://www.nist.gov/baldrige/publications/upload/2013-2014_Business_Nonprofit_Criteria_Free-Sample.pdf

And the sample completed Organizational Profile at http://www.nist.gov/baldrige/examiners/resource_center/upload/2013_Collin_Technologies_Case_Study.pdf

[4] See both parts of Downside Up – Risk Management, this blog, http://blog.jerasustainabledevelopment.com/2012/09/05/downside-up—managing-risks-part-1/

and

http://blog.jerasustainabledevelopment.com/2012/09/11/downside-up—risk-management-part-2/

[5] Werbach, Adam, Strategy for Sustainability, Harvard Business Press, Boston (2009) page 9.

[6] From the ISO 2012 survey, executive summary, available at www.iso.org/iso_survey_executive-summary.pdf

On Safety and Sustainability

Systematic Actions, Sustained Over Time

For manufacturers, especially smaller manufacturers, it may be difficult to see the value in pursuing Sustainability. The long term value — thriving in perpetuity [1]  — may be clear enough, but, as Lord Keynes pointed out, “in the long run, we are all dead”. The necessary efforts are considerable, so near term thriving needs to materialize.


Capture - OSHA Incidence RatesNot so long ago, Safety was regarded in much the same way. Some big companies — DuPont and Alcoa come to mind — demonstrated that Safety programs have significant benefits for employer and employee alike. Examples like DuPont and Alcoa, along with push from OSHA and workman’s comp providers, got just about everybody aboard the Safety bus. The results have been stunning, as this knocked-my-socks-off chart indicates.


Success with Safety programs demonstrates that systematic actions, sustained over time produce a significant and continuing stream of benefits. Safety programs provide zoomed in models for Sustainability initiatives. Build your Sustainability initiatives on your experience with Safety!


Here is an essay from a year ago that zooms out on that idea:


====================


What’s Green about Safety?

From: 1 November 2012


Safety and Sustainability


Of the seven billion people alive today, your firm probably affects the lives of your employees most. Demonstrating concern for the well being of your employees is a logical place to emphasize in working on the concern for humanity aspect of Sustainability. A truly excellent Safety program does that. And it does a good deal more:


Capture - Simpson Safety PosterA real Safety program is built on employee engagement. It goes far beyond regulatory compliance. The advantages to the employee (relief from painful accidents, possible disabilities and other work-related health issues) and to the manufacturing firm (relief from medical costs, lost time, workflow interruption, workforce morale issues, regulatory intervention and more) are clear to everybody, so the mutual motivation exists to support a high level of cooperation. Credibility gained from a good Safety program makes it easier to attain high levels of employee engagement in other initiatives, where the advantages to the employee (the advantages of working for a competitive, hence thriving company) may be less obvious.


With today’s high unemployment numbers, it is easy to forget that finding and retaining talent will be a defining issue — if not the defining issue — for prospering in the coming decades. Labor can be automated. Talent can’t. This means many sorts of talents and skills, manual as well as cerebral. Talented people are already in short supply, and that will get worse. The demographic trends are quite clear. Talented people have options: They need not and will not work in unsafe or unhealthy environments.


About Safety Programs


Safety needs to become a key component of an organization’s culture. If you are moving from a culture defined by compliance, Safety is a great place to start. Developing and implementing a meaningful Safety program is the logical way to proceed. Believe it or not, your friends at OSHA offer lots of useful resource information tailored for smaller firms. The OSHA small business web pages are worth becoming familiar with [2]. The OSHA Small Business Handbook  [3] is a “must have” free download. There are safety consultants available almost everywhere. Contact the Manufacturing Extension Partnership (MEP) office in your State [4]the MEP folks will either assist directly you or refer you to somebody local who can help.


My concern about Safety programs, like Quality programs or Maintenance programs, is that an organization is an interactive system. When aspects of a system are treated as independent entities, the system (that is, the organization) is not optimized. Zoomed in [5] views, as Safety programs are, need be balanced by integration into a zoomed out comprehensive management system.


One way to do this is to structure your Safety program such that aligns with the structure of an ISO 9001 Quality program, especially if you already have an ISO 9001 program. Globally, over a million facilities have ISO 9001 Quality programs. So, the ISO 9001 structure is rapidly becoming a de facto global standard. ISO 9004 provides guidance on how to extend ISO 9001 beyond its explicit requirements. Since the ISO 14001 Environmental Management standard already aligns closely with the ISO 9001 structure, the ISO 9001 structure offers a convenient platform for a comprehensive, integrated, zoomed out management system [6].


The OSHAS 18001 Occupational Safety and Health standard intentionally aligns with the structure of ISO 9001. OSHAS 18001 is formally a British standard. However, at least 50,000 facilities around the world use it. While it is possible to be certified to the OSHAS 18001 standard, smaller manufacturers may find it more useful as a reference model for the content of Safety program. A detailed summary of OSHAS 18001 requirements (hence the contents of a sophisticated Safety program) is available on-line, for free [7].


In summary, a safe and healthful workplace is an essential aspect of pursuing Sustainability — that is, of seriously striving to thrive in perpetuity [8].


Chuck - Blue Sweater 2Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)


P.S
— When it is time for your firm to seriously pursue Sustainability, contact me — C.H.

 

Note: This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.

Image: Safety poster courtesy of Work Place Planning Centre (U.K.), via Google Images


[1] Werbach, Adam, Strategy for Sustainability, Harvard Business Press (2009), page 9 

[4] Locate the MEP office nearest you at: http://www.nist.gov/mep/index.cfm

 

[5] “Zooming in” and “zooming out” is explained in Green and the Zoom Lens Mind, this blog:http://blog.jerasustainabledevelopment.com/2012/02/22/green-and-the-zoom-lens-mind.aspx

 

[6] For more on using ISO Standards as a basis for a comprehensive management system, see What’s Wrong with ISO?, this blog, http://blog.jerasustainabledevelopment.com/2012/07/03/whats-wrong-with-iso.aspx

 

[7] Download the OSHAS 18001 requirements at: http://www.18000store.com/ohsas-18000-requirements.aspx

 

[8] For more on thriving in perpetuity, see Thriving in Perpetuity, this blog: http://blog.jerasustainabledevelopment.com/2012/08/22/thriving-in-perpetuity.aspx

 

What’s Wrong With ISO?

A Million Organizations Can’t be Wrong… Can They?

http://www.dreamstime.com/-image19762255The International Organization for Standardization (ISO) reports that over one million organizations have been certified to the ISO 9001 Standard for Quality Management Systems — Requirements [1].

Constructing and implementing an ISO 9001 – compliant quality management system in a manufacturing facility is a formidable piece of work, especially for those that don’t have some sort of formalized, process – focused quality system already in place. Once in place and operational, an ISO 9001 – compliant quality management system requires continuing attention and upkeep. And, ISO 9001 compliance is usually certified by third – party registrars [2]. Certification requires third – party compliance audits, usually on a recurring basis, to confirm that the continuing attention does happen.

Why Bother?

There are two primary reasons why organizations construct, implement and maintain a certified ISO 9001Quality Management System:

  • Pressure from customers, the market, the home office, or other stakeholder prompts some organizations to do so. That is to say, they are reacting to external influences.
  • Other firms recognize that a process – focused system for assuring process output quality[3] is applicable to all business processes, hence to value adding activities in general. Control over output quality from value adding activities is, rather obviously, an important handle on adding value, hence on competitiveness. For such firms, an ISO 9001 system is a fundamental internal management tool.

Then What Happens?

Firms that are reacting to external pressures generally find their ISO 9001 system to be a rather annoying burden. The tendency is to do the minimum required to remain in the good graces of their third – party auditors (including customer auditors, along with compliance auditors). There is a “meet the minimum” mindset.

Those firms that recognize their ISO 9001 system as a fundamental internal management tool generally want to quantify internal benefits and to extend both the scope and the depth of the system that creates those benefits.

Where to Start?

ISO 9001 is intended as a set of basic requirements. Start by confirming that you are doing the basics well [4].

  • Begin by reviewing your Quality Manual in view of your experience since it was written. In particular, review your Quality Policy and your process for setting Quality Objectives. Quality Objectives should follow from Quality Policy, and progress toward achieving Quality Objectives should generate quantifiable benefits. Make your objectives and your progress toward those objectives clear and accessible.
  • Add a continuous improvements log to your documentation. When you change your system (meaning your business processes, how you operate your business processes, and/or your quality management documentation), you likely do so in order to improve. Log all of your improvements. Describe what you did, when you did it and why you did it. Also quantify the improvement, to the extent you can. You will find that the list of improvements grows quickly. Make the log accessible to everybody, so continuous improvement becomes apparent to all.
  • Take a hard look at your internal quality audit procedure. Audit for process effectiveness and for opportunities for improvement [5], not just for petty discrepancies. Done well, internal audit offers real insights for improvement.

Then What?


Once it is clear that continuous improvement is taking place, it may be time to increase the scope of your quality management system. There are several possibilities for doing this. Some, or all, may be appropriate for your situation.

  • You can add capabilities to your ISO 9001 system. For example, you might add Failure Modes Effects Analysis (FEMA) to your arsenal of continuous improvement tools. Or you could integrate your Safety program into your ISO 9001 management system. ISO 9001 provides the basics. You can add what makes sense to add in your situation.
  • ISO 9004:2009 Managing for the Sustained Success of an Organization is intended to provide guidance on how to extend your ISO 9001 management system. ISO 9001 and ISO 9004:2009 are designed to fit together seamlessly. Please notice that ISO 9004 does not set requirements, so compliance and certification are not at issue. ISO 9004:2009 is like a roadmap to organizational Sustainability. Like a road map, which roads you should take depend on where you are and where you want to go at any given time.
  • ISO 14001 Environmental Management Systems – Requirements with Guidance for Use specifically addresses how your organization interfaces with the natural world. ISO 14001 does pose requirements, and certification to the requirements of ISO 14001 is usually sought. An ISO 14001 compliant Environmental Management System is intended to be separate from, but structurally similar to an ISO 9001 compliant Quality Management System. Think of them as like two brothers who resemble each other but perform different tasks.
  • It is possible to use an ISO 9001compliant Quality Management System as a foundation for a Sustainable Operations Management System. Better yet, the transition from the basics to a comprehensive Sustainable Operations Management System can be accomplished step-by-step over time. Begin with a functioning ISO 9001system, then expand with ISO 9004 and/or ISO 14001. Additionally, there are at least two dozen other ISO guidance documents, each of which addresses specific aspects of sustainable operations. One or several might be useful as a system expands and matures.

The real point in all of this is that your business is composed of business processes. Business processes are intended to add value. Adding value is the life blood of your business. Management systems are tools for managing the outputs from business processes. Sharpen your tools.


Oh… There is nothing wrong with ISO, if you choose to use it.

Chuck at Rene 2 - August 2014Thoughtful comments and experience reports are always appreciated.


…  Chuck Harrington

(Chuck@JeraSustainableDevelopment.com)

 

P.S: When it is time for your business to pursue Sustainability, contact me — C.H.

ISO Graphic: Dreamstime, www.dreamstime.com


 

[1] ISO Standards are available on-line at www.iso.org

[2] The ISO organization does not certify compliance, nor is third-party certification required by the ISO 9001 Standard. 

[3] The term “quality”, as used here and in the ISO 9000 series of standards, refers to the “degree to which a set of inherent characteristics fulfills requirements” (ISO 9000-2005, para. 3.1.1), where the “set of inherent characteristics” refers to a specific process output. Hence the term “quality” can be applied to just about an “inherent characteristic” that management deems appropriate to control (including the cost of processing).

[4] If your firm has isn’t certified to ISO 9001, see Toward Systematic Management, this blog, at: http://blog.jerasustainabledevelopment.com/2012/01/25/toward-systematic-management/

[5] There are many books available on quality audit. I like Dennis Arter’s Quality Audits for Improved Performance, third edition, ASQ Quality Press, Milwaukee (2003). Also, you should be aware of ISO 19011 Guidelines for Quality and/or Environmental Management Systems Auditing, available at www.iso.org

A Sustainability Standard for Manufacturers

ULE 880

The Economist * recently referred to Sustainability as “a woolly term that refers partly to the welfare of employees but mainly to green strategies”. I’m not really sure what “woolly” means, which is exactly the point. There are broad definitions of Sustainability, such as “A sustainable organization fulfills its present functions and pursues its present objectives without compromising the ability of future generations to do likewise”. However, there is no operational definition that clearly distinguishes Sustainable firms from those that are not.

Many firms find that customers favor environmentally sensitive suppliers. Some customers express that preference informally, others (like the U.S. Government and Wal-mart) through specifications and preferred supplier programs. Further, in order for a manufacturer to be Sustainable, that manufacturer’s supply chain must be Sustainable.

So, who is sufficiently Sustainable and who isn’t is an important question. From this point of view, Sustainability resembles Quality – manufacturers need to identify suppliers that can be relied on to reliably provide high quality materials, parts or whatever. And they need suppliers that are organizationally Sustainable.

Within today’s global value streams, The ISO 9001 Quality Management System provides a common, verifiable international standard for identifying suppliers that have means in place to assure product quality. One way to define a Sustainable organization is through a corresponding standard for Sustainable Organizations.

Recognizing this need, UL Environment (a unit of Underwriters Laboratory) partnered with the GreenBiz Group (an on-line media company focused on Sustainability) to author such a standard — ULE 880: Sustainability for Manufacturing Organizations. The ULE 880 standard was drafted last year, offered for public comment (the comment period drew about 1,500 responses, including mine, representing about 30 nations), revised, reviewed and issued as an interim standard. The interim standard is being piloted (beta tested) this year by several manufacturing firms. Presumably, experience from the pilot implementations will be incorporated into a viable ULE 880 standard. As the interim standard is being piloted, procedures for third party audit and certification are also being developed.

Implementing the ULE 880 interim standard is a much bigger task than implementing ISO 9001. First, ULE 880 applies to an entire organization, not a specific facility, as ISO 9001 does. Even more important, the scope of ULE 880 is much broader than that of ISO 9001.

The structure of the ULE 880 interim standard owes precedence to the structure of the LEED standards for environmentally conscious building. It is based on an accumulation of points by demonstration of compliance on numerous topics, organized into five domains:

>> Sustainable Governance
>> Environment

>> Work Force

>> Customers and Suppliers

>> Community Engagement and Human Rights

Each of these domains includes a number of mandatory topics, on each of which some minimum number of points are required in order to be considered for certification. The total numbers of points scored in all five domains are summed. Certification can then be awarded on one of several levels, rather like bronze, silver and gold medals at a track meet. The levels of certification structure provides for demonstration of continuous improvement – certify at a lower level initially, then increase levels over time.

More information, especially regarding the topics covered in the five domains, is available at www.ulenvironment.com, tab Home > Services > Organizational > Sustainability >ULE 880 and at www.greenbiz.com/2011ForumNotes. Let me emphasize, however, that ULE 880 is still in pilot testing. It is subject to change and change is likely.

I’m not entirely comfortable with the ULE 880 standard as I currently understand it. First, implementation will be a really big project for most firms. Second, I think that a firm is either Sustainable, or it is not – I’m not sold on levels of certification. Third, in my view, for a firm to be Sustainable, it needs a durable competitive advantage which may well reside outside of the topics covered in the several domains this standard covers. Last, I would prefer a truly global standard: I would rather have an ISO standard than an American home brewed standard, even though ULE and GreenBiz have been responsibly diligent in the development of ULE 880.

The good news for smaller manufacturers is that ULE 880 has been specifically developed for larger manufacturers (using the U.S. Small Business Administration’s definitions). The bad news is that: (a) ULE 880 is an important precedent – future standards for smaller manufacturers are likely to follow the same general structure and sort of content. And (b) the ULE 880 standard encourages certified firms to require their suppliers to demonstrate their Sustainability – so, if your customers are bigger than you, and your customers become certified to ULE 880, then you can expect to be required to respond somehow or another. Perhaps this will be similar to the situation with quality management several years ago, when customers demanded ISO 9001 certification from their suppliers. ULE 880 or something much like ULE 880 is coming.

Chuck - Pacific 3Thoughtful comments are always appreciated.

…  Chuck Harrington

 

 


* See Schumpeter’s column, The Economist, 12 November 2011 issue, page 78. The column is entitled “Why firms go green”. The column answers the question its title poses by asserting that “more businesses see profits in greenery”. The column is well worth reading.