Certifications and Business Improvement Methodology
ISO (International Organization for Standardization) is the world's largest developer and publisher of International Standards. ISO is a network of the national standards institutes of 161 countries, one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system.
ISO is a non-governmental organization that forms a bridge between the public and private sectors. On the one hand, many of its member institutes are part of the governmental structure of their countries, or are mandated by their government. On the other hand, other members have their roots uniquely in the private sector, having been set up by national partnerships of industry associations. Therefore, ISO enables a consensus to be reached on solutions that meet both the requirements of business and the broader needs of society. As stated on www.ISO.ORG.
A business management strategy, originally developed by Motorola. Six Sigma seeks to identify and remove the causes of defects and errors in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase). Six Sigma's implicit goal is to improve all processes to that level of quality or better.
Six Sigma asserts the following:
- Continuous efforts to reduce variation in process outputs are key to business success
- Manufacturing and business processes can be measured, analyzed, improved and controlled
- Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management
A philosophy and a way of organizing and managing the workspace and work flow with the intent to improve efficiency by eliminating waste, improving flow and reducing process unreasonableness. 5S is a method for organizing a workplace, especially a shared workplace (like a shop floor or an office space), and keeping it organized.
The key targets of 5S are workplace morale, safety and efficiency. The assertion of 5S is, by assigning everything a location, time is not wasted by looking for things. Additionally, it is quickly obvious when something is missing from its designated location. Advocates of 5S believe the benefits of this methodology come from deciding what should be kept, where it should be kept, and how it should be stored. This decision making process usually comes from a dialog about standardization which builds a clear understanding, between employees, of how work should be done. It also instills ownership of the process in each employee.
Lean manufacturing or lean production is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product.
Lean manufacturing is a generic process management philosophy derived mostly from the Toyota Production System (TPS) (hence the term Toyotism is also prevalent) and identified as "Lean" only in the 1990s. It is renowned for its focus on reduction of the original Toyota seven wastes in order to improve overall customer value, but there are varying perspectives on how this is best achieved. Lean is often linked with Six Sigma because of that’s methodology’s emphasis on reduction of process variation.
Kaizen (Japanese for "continuous improvement") is a Japanese philosophy that focuses on continuous improvement throughout all aspects of life. English usage of "kaizen" is "continuous improvement" or "continual improvement." When applied to the workplace, Kaizen activities continually improve all functions of a business, from manufacturing to management and from the CEO to the assembly line workers. By improving standardized activities and processes, Kaizen aims to eliminate waste. Kaizen is a daily activity, the purpose of which goes beyond simple productivity improvement.
To be most effective kaizen must operate with three principles in place:
- Consider the process and the results (not results only) so that actions to achieve effects are surfaced
- Systemic thinking of the whole process and not just that immediately in view in order to avoid creating problems elsewhere in the process
- A learning, non-judgmental, non-blaming approach and intent will allow the re-examination of the assumptions that resulted in the current process
In 1992, Robert S. Kaplan and David P. Norton introduced the “Balanced scorecard”, a concept for measuring whether the activities of a company are meeting its objectives in terms of vision and strategy. By focusing not only on financial outcomes but also on the human issues, the balanced scorecard helps to provide a more comprehensive view of a business which in turn helps organizations to act in their best long-term interests. The strategic management system helps managers focus on performance metrics while balancing financial objective with customer, process and employee perspectives.
Implementing Balanced Scorecards typically includes four processes:
- Translating the vision into operational goals
- Communicating the vision and link it to individual performance
- Business planning; index Setting
- Feedback and learning, and adjusting the strategy accordingly
Single Minute Exchange of Die
Single Minute Exchange of Die (SMED) is one of the many lean production methods for reducing waste in a manufacturing process. It provides a rapid and efficient way of converting a manufacturing process from running the current product to running the next product. It is also often referred to as Quick Changeover (QCO). Performing faster change-overs is important in manufacturing, or any process, because they make low cost flexible operations possible. The phrase "single minute" does not mean that all changeovers and startups should take only one minute, but that they should take less than 10 minutes (in other words, "single digit minute"). Closely associated is a yet more challenging concept of One-Touch Exchange of Die, (OTED), which says changeovers can and should take less than 100 seconds.
In the realm of business, the concept of strategy maps was introduced in the U.S. by Robert S. Kaplan and David P. Norton. The strategy map was the answer of a missing tool between strategy and the balanced scorecard. It is the connection between a strategy paper and an operative implementation plan. The underlying principle was that you cannot manage what you cannot measure.
Based on continued experience with organizations that successfully implemented the balanced scorecard, Kaplan and Norton came to realize that there were two important factors that made organizations implement the balanced scorecard successfully -- the factors of focus and alignment. So the balanced scorecard has been evolving from a performance management tool to a comprehensive strategic management tool. Strategy maps are a way of providing a macro view of an organization's strategy, and provide it with a language in which they can describe their strategy, prior to constructing metrics to evaluate performance against their strategies.
Digital dashboards may be laid out to track the flows inherent in the business processes that they monitor. Graphically, users may see the high-level processes and then drill down into low level data. This level of detail is often buried deep within the corporate enterprise and otherwise unavailable to the senior executives.
Three main types of digital dashboard dominate the market today: stand alone software applications, web-browser based applications, and desktop applications also known as desktop widgets. The last are driven by a widget engine. Specialized dashboards may track all corporate functions. Examples include human resources, recruiting, sales, operations, security, information technology, project management, customer relationship management and many more departmental dashboards.
Digital dashboard projects involve business units as the driver and the information technology department as the enabler. The success of digital dashboard projects often rely on the correct selection of metrics to monitor. Key performance indicators, balanced scorecards and sales performance figures are some of the content appropriate on business dashboards.
Theory of Constraints
Theory of Constraints (TOC) is an overall management philosophy that aims to continually achieve more of the goal of a system. If that system is a for-profit business, then the goal is to make more money, both now and in the future. TOC consists of two primary collections of work: 1) The five focusing steps and their application to operations; 2) The thinking processes and their application to project management and human behavior.
According to TOC, every organization has at least one constraint which limits the system's performance relative to its goal (see Liebig's law of the minimum). These constraints can be broadly classified as either an internal constraint or a market constraint. In order to manage the performance of the system, the constraint must be identified and managed correctly (according to the Five Focusing Steps). Over time the constraint may change (e.g., because the previous constraint was managed successfully, or because of a changing environment) and the analysis starts anew.
Data mining is the principle of sorting through large amounts of data and picking out relevant information. It is usually used by business intelligence organizations, and financial analysts, but it is increasingly used in the sciences to extract information from the enormous data sets generated by modern experimental and observational methods.
A contract manufacturer ("CM") is a firm that manufactures components or products for another "hiring" firm. Many industries utilize this process, especially the aerospace, defense, computer, semiconductor, energy, medical, food manufacturing, personal care, and automotive fields. Some types of contract manufacturing include CNC machining, complex assembly, aluminum die casting, grinding, broaching, gears, and forging.
In a contract manufacturing business model, the hiring firm - typically an OEM - approaches the contract manufacturer with a design or formula. The contract manufacturer will quote the parts based on processes, labor, tooling, and material costs. Typically an OEM will request quotes from multiple CMs. After the bidding process is complete, the hiring firm will select a source, and then, for the agreed-upon price, the CM acts as the hiring firm's factory, producing and shipping units of the design on behalf of the hiring firm.
Many well-known companies use contract manufacturing as an alternative to operating and maintaining their own factories. Contract manufacturing can be used for anything from single components to a complete product. Printers, computers, and cellular phones are all examples of products that are made using this method.
In an international context, establishing a foreign subsidiary as a contract manufacturer can have favorable tax benefits for the parent company, allowing them to reduce overall tax liabilities and increase profits, depending upon the activities of the contract manufacturer.
ISO 9000 / 9001
ISO 9000 is a family of standards for quality management systems. ISO 9000 is maintained by ISO, the International Organization for Standardization and is administered by accreditation and certification bodies. The rules are updated, the time and changes in the requirements for quality, motivate change. Recently, on November 15, 2008, has made changes to the requirements of ISO 9001. Some of the requirements in ISO 9001 (which is one of the standards in the ISO 9000 family) include:
- a set of procedures that cover all key processes in the business
- monitoring processes to ensure they are effective
- keeping adequate records
- checking output for defects, with appropriate and corrective action where necessary
- regularly reviewing individual processes and the quality system itself for effectiveness
- facilitating continual improvement
A company or organization that has been independently audited and certified to be in conformance with ISO 9001 may publicly state that it is "ISO 9001 certified" or "ISO 9001 registered". Certification to an ISO 9001 standard does not guarantee any quality of end products and services; rather, it certifies that formalized business processes are being applied.
Although the standards originated in manufacturing, they are now employed across several types of organizations. A "product", in ISO vocabulary, can mean a physical object, services, or software.
ISO 14001 is a standard for environmental management systems to be implemented in any business, regardless of size, location or income. The aim of the standard is to reduce the environmental footprint of a business and to decrease the pollution and waste a business produces. The most recent version of ISO 14001 was released in 2004 by the International Organization for Standardization (ISO). The ISO 14000 environmental management standards exist to help organizations minimize how their operations negatively affect the environment. In structure it is similar to ISO 9000 quality management and both can be implemented side by side. In order for an organisation to be awarded an ISO 14001 certificate they must be externally audited by an audit body that has been accredited by an accreditation body.
- ISO 14001 Environmental management systems—Requirements with guidance for use.
- ISO 14004 Environmental management systems—General guidelines on principles, systems and support techniques.
- ISO 14015 Environmental assessment of sites and organizations.
- ISO 14020 series (14020 to 14025) Environmental labels and declarations.
- ISO 14031 Environmental performance evaluation—Guidelines.
- ISO 14040 series (14040 to 14049), Life Cycle Assessment, LCA, discusses pre-production planning and environment goal setting.
- ISO 14050 terms and definitions.
- ISO 14062 discusses making improvements to environmental impact goals.
- ISO 14063 Environmental communication—Guidelines and examples.
- ISO 19011 which specifies one audit protocol for both 14000 and 9000 series standards together.
AS9100 is a widely adopted and standardized quality management system for the aerospace industry. It was released in October, 1999, by the Society of Automotive Engineers and the European Association of Aerospace Industries. AS9100 replaces the earlier AS9000 and fully incorporates the entirety of the current version of ISO 9000, while adding additional requirements relating to quality and safety. Major aerospace manufacturers and suppliers worldwide require compliance and/or registration to AS9100 as a condition of doing business with them.
AS9000, Aerospace Basic Quality System Standard, was developed by a group of US aerospace prime contractors, including Allied-Signal. Allison Engine Company, Boeing, General Electric Aircraft Engines, Lockheed Martin. McDonnell Douglas, Northrop Grumman, Pratt Whitney, Rockwell Collins, Sikorsky Aircraft, and Hamilton Sundstrand. Significantly, the US government was not actively involved in the AS9000 standard's development. AS9000 was developed and issued under the auspices of the Society of Automotive Engineers.
Energy - PC242 ISO 50001
The first meeting of ISO’s new project committee PC 242 which is to develop an International Standard on energy management was held on 8-10 September in Washington, DC, USA.
The future ISO 50001 will establish a framework for industrial plants, commercial facilities or entire organizations to manage energy. Targetting broad applicability across national economic sectors, the standard could influence up to 60% of the world’s energy use. Read more
Food Safety - ISO 22000: 2005
The launching on 1 September 2005 of the ISO 22000 series, developed by ISO technical committee ISO/TC 34, Food products, signalled the arrival of a truly global option for ensuring safe food supply chains. Read more
Medical Devices - ISO 13485: 2003
Introduction to the Global Harmonisation Task Force (GHTF) for Medical Devices, an informal platform for regulatory authorities and representatives of industry from Europe, the United States of America, which goal is to provide a forum for national regulatory authorities and industry representatives in the field of medical devices to promote international convergence in regulatory requirements and practices. Read more
Supply Chain Security - ISO 28000: 2007
The ISO 28000 series of standards on supply chain security management systems, which have just been upgraded from their status of Publicly Available Specifications to that of fully fledged International Standards, will help to reduce risks to people and cargo within the supply chain. The standards address potential security issues at all stages of the supply process, thus targeting threats such as terrorism, fraud and piracy. Read more