This Month in News Digest

ISO Releases Joint Quality and Environmental Auditing Standard

The International Organization for Standardization has released the eagerly awaited joint auditing standard for quality and environmental management systems.

ISO 19011:2002, Guidelines for quality and/or environmental management systems auditing, replaces six older standards in the ISO 9000 (quality) and ISO 14000 (environmental) families. Its use will give organizations a more integrated and balanced view of their operations, making it an outstanding tool for continuous improvement toward business excellence, ISO claims. Use of the standard saves money and reduces the disruption that separate individual audits of both systems would cause.

Both families of standards emphasize the importance of audits as a management tool for monitoring and verifying the effective implementation of an organization's policy for quality and environmental management.

ISO 19011 provides guidance on both conducting internal and external quality and/or environmental management system audits and managing audit programs. ISO recommends the standard to auditors and organizations involved in auditor certification or training, certification/registration of management systems, and accreditation or standardization in the area of conformity assessment.

Improvements from the older standards have been added to ISO 19011. According to ISO, this standard recognizes more explicitly than the previous auditing guidelines that the competence of the audit team and individual auditors varies according to the nature, scope and complexity of the audit and that it's impossible to set uniform competence criteria applicable to all situations. ISO 19011 provides a framework enabling organizations to set their own competence requirements and related auditor evaluations processes.

ISO 19011 replaces ISO 10011-1, ISO 10011-2 and ISO 10011-3 in the ISO 9000 family and ISO 14010, ISO 14011 and ISO 14012 in the ISO 14000 family. It also completes the ISO 9000 "core series," which comprises the revised ISO 9000, ISO 9001 and ISO 9004 standards.

ISO 19011 was developed by a joint working group of ISO technical committee 176, Quality management and quality assurance, and ISO/TC 207, Environmental management. It is available in the United States from the American Society for Quality at www.asq.org.

E-Learning Complements Traditional Training

With all of the hype surrounding e-learning, you might surmise that traditional training is headed for extinction. Not true, according to a recent report released by the American Productivity and Quality Center. Its findings conclude that best-practice organizations use e-learning to complement classroom training, rather than replace traditional methods. The study, "Planning, Implementing and Evaluating E-Learning Initiatives," identifies best practices, challenges and opportunities for improvement in e-learning.

"While saving money is a common reason to conduct e-learning, true savings are achieved only if employees learn faster or better than they would using a traditional training approach," says Cindy Hubert, APQC's director of knowledge management and e-learning. "Whether a company needs to bridge the knowledge gap between retiring employees or it's dealing with reduced training budgets, all organizations can improve their learning capacity by acting on these findings."

The report shows that one stumbling block on the path to e-learning success is employee resistance to change. General Motors University, which the report identifies as a best-practice organization, addressed resistance to change by creating tools to enable process leaders to educate their employees about e-learning. These tools include a presentation, a video with testimonials from key organization leaders and leader/participant resource kits. Other statistical data, research analysis and organization-specific case studies are shared in the report.

The report identifies 11 best-practice organizations: Army Management Staff College, Autodesk Inc., Boeing, Booz Allen Hamilton, General Motors University, IBM, Intel, Memorial Hermann Healthcare System, Procter & Gamble, SCT University and Veterans Benefits Administration.

To view an executive summary or to order a copy of the report, visit www.apqc.org/pubs.

A Company's Most Challenging Asset: Its People

More than ever, a company's bottom line depends on its people, brands and technology as much as it depends on its more tangible assets, according to a recent study released by The Conference Board and sponsored by DDI and PeopleSoft. As an effect of this, investors (especially those in labor, public pension funds and social responsibility) are increasingly demanding information about human capital activities.

"More people are convinced that the way a company manages its employees makes a difference in the bottom line," says Stephen Gates, principal researcher at The Conference Board's Capabilities Management and Human Resources Strategies Research Unit. "But people are perhaps the most challenging of all assets to measure and manage. They contribute to the value of a company through what they can produce with their competence, relationship ability and values."

Eighty-six percent of surveyed companies say that their motivation for human capital measurement is to improve their bottom line. In turn, many senior managers are putting more pressure on human resources professionals to show how they contribute. These companies are upgrading their software to measure HR activity and can now supplement traditional financial measures with economic profit and human capital measures.

This is good news for investors, many of whom believe there is a direct link between human capital activities and long-term shareholder value. Investors express the desire to see their companies implement human capital reporting--notably in the areas of labor-management relations, turnover, training and competency, and diversity and equal opportunity programs. To illustrate their concern for human capital, shareholders have formed resolutions, pressured their governments for more disclosure and coordinated their demands for more standard reporting. There are also efforts among social responsibility investor groups to coordinate their demands.

The study indicates that, although shareholders are less concerned with absenteeism, productivity information or recruitment information, they're overwhelmingly interested in labor-management relations, retention information, training/competency and an equal-opportunity profile of the workforce.

On the other hand, many HR directors are hesitant to release human capital information when it has the potential to reduce management's flexibility--namely when HR directors are in the midst of contract negotiations with individual employees or unions. There is also fear among the HR community that lawsuits may arise, especially if there is a problem with their published human capital measures.

"It's not clear that investors understand the practical difficulties behind creating, collecting, aggregating and interpreting human capital measures," notes Gates. "An emerging issue for many companies will be which human capital measures should be reported in a way that can be meaningfully interpreted."

"Value at Work: The Risks and Opportunities of Human Capital Measurement and Reporting" also discusses how human resource managers intend to create human capital measures and how human capital measures affect incentive compensation plans. The study is based on a survey of 102 Fortune 500 and Europe 500 companies. For more information, visit www.conference-board.org.

Thinking Lean During Slow Business Growth

When business begins to rebound from an economic downturn, unmanaged growth can lead to waste. Although it's uncertain if U.S. businesses have seen the worst of the economic storm, Grant Thornton LLP is offering tips to stay lean while improving business.

"Lean growth is the order of the day," comments Paul Neblock, management advisory services senior manager at Grant Thornton's Detroit office. "Manufacturers need to be cautious about growing too quickly without a strong business strategy in place."

Companies should take time during a slow economic climate to understand their value stream, advises Neblock. "During a growth period, manufacturers need to have a good handle on their manufacturing and distribution capacity," he says. "It pays to be judicious."

"Tips for Lean Growth" can be found at Grant Thornton's Web site, www.grantthornton.com. The article offers the following tips:

Know your capacity. In order to expand smartly, companies must have a good sense of their manufacturing and distribution capacity. Companies can accomplish this by understanding their value stream and uncovering bottlenecks in the supply chain. The capacity constraint should be a specific work center, support process or facility constraint.

Define your core competencies. Slow economic times present opportunities to redefine core competencies and evaluate the company's direction. Explore new products and technologies and determine whether they would contribute to the organization. Use this time to remove obsolete technologies and products that no longer provide value to the organization or its customers.

Evaluate your suppliers. Sometimes a review of the value stream indicates that suppliers are the cause of company bottlenecks. Long lead times can lead to slow delivery and excess inventory. Manufacturers should work with suppliers that best serve the organization, seek solutions to the problem or identify new suppliers. Companies should strive for a collaborative relationship with suppliers, offering a win-win strategy.

Be choosy about adding capacity. Demand increases as the economy recovers, and there may be a need to add capacity in the manufacturing process and in key support areas. Companies should have a good handle on their existing capacity and core competencies before adding capacity. In some cases, outsourcing is the solution.

Manage payroll smartly. Perform a capacity or staffing model based on accurate value streams to determine your company's staffing levels at different levels of demand. This reduces the risk of too many or too few employees at any given time.

Grant Thornton LLP is a global accounting, tax and business advisory firm serving middle-market companies.

Canadian Quality Awards Presented

Canada's National Quality Institute presented its Canada Award for Excellence to seven Canadian organizations during the 2002 NQI Summit in Toronto. The award, much like the U.S. Malcolm Baldrige National Quality Award, recognizes organizations that have measured continuous improvement through a commitment to innovation, productivity, a healthy workplace and ethics.

All winning organizations have increased efficiency, expanded market share, added employment opportunities and enhanced international competitiveness. There are two award categories: Healthy Workplace Award and Quality Award. NQI also issued a Quality Award Certificate of Merit this year.

"In the last year, social, political and economic events have presented Canadian organizations with unprecedented challenges," notes Cameron Hyde, chairman of NQI and president of Xerox Canada. "The ones who are calm in the midst of the dramatic changes are likely the ones who have invested in the creation of a sustainable foundation for their organization. That is certainly true of this year's CAE winners."

The winners of the 2002 Healthy Workplace Award are:

Dofasco Inc., Hamilton, Ontario--One of Canada's largest steel producers, serving customers throughout North America with flat-rolled and tubular steel and laser-welded blanks.

NCR, Mississauga, Ontario--A leading global technology company that provides ATMs, retail systems, data warehouses and IT services.

Quality Award recipients are:

Dana Canada Inc., Spicer Driveshaft Group, Magog, Quebec--A global leader in the design, engineering and manufacture of products and systems for automotive, commercial and off-highway vehicle manufacturers.

Canada Post, Saskatoon Operations--A provider of physical and electronic delivery solutions.

Homewood Health Centre, Guelph, Ontario--A fully accredited 312-bed mental and addiction facility providing specialized programs.

Mullen Trucking, Aldersyde, Alberta--A leader in the Canadian trucking industry, coordinating the safe, reliable transportation of shipments throughout Canada and the United States.

The 2002 Quality Award Certificate of Merit went to CAE of Saint Laurent, Quebec. CAE is a leader in advanced simulation and controls equipment and integrated training solutions for customers in the civil aviation, military and marine markets.

NQI is an independent, not-for-profit organization that provides training and assessment services, personnel certification programs, and Progressive Excellence Program Certification. This year marks the 19th annual presentation of the Canada Awards for Excellence. The Healthy Workplace Award, sponsored by Health Canada, was initiated in 1999. To learn more about award criteria and judging, visit www.nqi.ca.

Quality Is Elementary, My Dear Watson

Elementary schools are outperforming secondary schools in their use of quality tools and approaches, according to a recent survey of U.S. public school principals.

The survey, which was sponsored by the American Society for Quality, also indicates that although quality is making inroads in education, the majority of principals (70 percent) believe that schools will be more likely to adopt quality improvement programs in the future.

Kenneth Case, ASQ's president-elect, and John Geraci, vice president of research at Harris Interactive, presented the survey results at the 10th Annual National Education Quality Conference held in late September in Columbus, Ohio.

Here are some highlights of the survey:

Six of every 10 public schools in the United States have a formalized quality improvement approach in place.

Elementary schools are more likely than middle and high schools to have formalized quality improvement programs in place.

Elementary school principals are more likely than middle or high schools to consider parents as stakeholders and to involve parents' feedback in shaping school improvement plans.

Ninety-five percent of the schools with formalized quality improvement plans reported that their plan includes measurable outcomes.

Eight of every 10 principals believe that improving standardized test score performance is extremely or very important.

Despite these results, principals are not as likely to measure their efforts in other areas that are important to them. For example, the study showed that although 85 percent of principals believe that improving teacher satisfaction and morale is extremely or very important, only 71 percent of their schools regularly gather quantifiable data about their efforts in this area.

"For the first time ever, schools are being held accountable for their improvement efforts through the No Child Left Behind Act," explains Case. "It was ASQ's goal to conduct a survey that would serve as a baseline measure to help monitor future progress in the area of quality improvement in our nation's schools."

"The survey shows that there are significant opportunities for improvement in education, particularly at the secondary school level and among new principals," adds Geraci. "Some aspects of the quality approaches used in business are in place, but progress needs to be made and measured in a uniform way."

The survey, conducted by Harris Interactive, recorded 401 public elementary, middle and high school principals throughout the United States. The data were weighted to represent all U.S. public schools.

Case in Point: Koalaty Kid

The American Society for Quality's Koalaty Kid initiative provides Baldrige-based training to educators who wish to improve their schools' performance in all aspects of learning, from reading to math to student attendance.

Since its inception in the early 1990s, more than 200 schools worldwide have become active participants, including a few junior high and high schools.

www.koalatykid.org

Quality Control Circles: A Way of Life at Yazaki North America

Thanks to innovative thinking from quality gurus like W. Edwards Deming, Shigeo Shingo, Joseph M. Juran and others, organizations from all over the world have several options when it comes to implementing a quality improvement initiative.

One such option is implementing quality control circles, which have proved enormously successful for Yazaki North America, a developer of advanced electronic technologies for vehicle applications. So successful, in fact, that the corporation has developed the Quality Control Circles Competition, highlighting the efforts of various teams throughout the organization's worldwide facilities.

Also called quality circles, improvement teams or quality teams, quality control circles consist of small groups of employees--usually 10 or fewer--that meet regularly to discuss solutions to quality-related issues. At Yazaki, the teams devise ways to improve quality, boost productivity, increase safety and enhance environmental preservation.

"Who better to evaluate the processes in our manufacturing plants than the employees who are engaged every day?" comments Marc Gattoni, quality director of Yazaki's Component Business Unit. "Quality is a highly competitive arena, and we must constantly improve in order to maintain our leadership position."

This year's Quality Control Circles Competition consisted of three manufacturing facilities--Circuit Controls Corp., El Paso Components and North American Components--that assembled teams to provide solutions and data to support their recommendations. Each facility selected its best circle and sent its members to a QCC Presentation Runoff at Yazaki's Canton, Michigan, headquarters.

The winning team--a circle from El Paso Components--was chosen to travel to Yazaki Corp. in Susono, Japan, to compete in the Circle of Champions competition, which will be composed of teams from Yazaki's operations in China, the Philippines, Mexico, Thailand and Australia. The winning team's solution will be recommended for implementation throughout all Yazaki organizations.

Now in its third year, Yazaki's quality control circle program has expanded to include more than 500 associates within the organization, and has more than doubled in the last two years.

Last year's winning team reengineered a production and process setup procedure that reduced line downtime by 53 percent and reduced environmental scrap by 66 percent. To learn more about the company, visit www.yazaki-na.com.

Industry News

MPACT Now Has Computer-Based Training Option

Integral Solutions Inc. has introduced a new computer-based training option to its Manufacturing Planning And Control Tool software.

The training is available in two formats: Trainer's Choice and Student's Choice. Trainer's Choice is a CD designed for training coordinators to train employees within the facility. Student's Choice is MPACT computer-based training over the Internet through ISI's QualityData Online portal. Details are available at www.integralsolutions.com and www.qualitydataonline.com.

TÜV America and 7 layers Inc. Establish Bluetooth Facility

TÜV America has established a Bluetooth laboratory at 7 layers Inc.'s facilities in Irvine, California. Bluetooth is short-range radio technology that allows electronic devices to wirelessly communicate across a limited distance.

The lab offers Bluetooth development, testing and qualification services, and houses a Rhode & Schwarz TS8960 RF testing system and a PTW60 system for protocol testing.

"The Irvine facility is now equipped to provide one-stop testing solutions utilizing the latest testing equipment," comments Stefan Butz, CEO of TÜV America.

More information is available at www.7layers.com.

Deming Research Seminar:

Feb. 24 and 25 The W. Edwards Deming Institute is sponsoring the Ninth Annual Research Seminar, slated for Feb. 24 and 25 at Fordham University, Lincoln Center, New York. Presentations will link Deming's management theories to applied and academic literature and the works of other theorists.

To attend the event, register online at www.deming.org/calendar/index.html. The Web site also contains a list of accepted papers to be presented.

Renishaw and Metrologic Sign Software Agreement

The Metrologic Group will develop its Metrolog II software to run on Renishaw plc's UCC1 universal CMM controller platform, and Renishaw will use the new software in its worldwide demonstration facilities.

"This is an important development in the further acceptance of the UCC1 controller as a leading control platform for the CMM industry," comments Ben Taylor, Renishaw's assistant chief executive. "Because Metrolog II software is an established product with a broad user base, CMM users worldwide will benefit."

The UCC1 controller optimizes the CMM/probe sensor interface for maximum part-checking speed and accuracy. Learn more at www.renishaw.com and www.metrologic.com.