Quality Standards Outlook
rectrectrectrectrectrectrectrectrect Picture
Picture Picture

You Get What You Pay For

We need to balance long-term
gains against short-term costs.

by Jim Mroz

In early November 1997, my house underwent an autumn ritual: A contractor came to check our heating system. Unfortunately, the inspection turned up a four-inch crack in a furnace plate that created the risk of carbon monoxide emissions -- and an inefficient heating system. Because of the furnace's design, the cost of replacing this plate nearly equaled the cost of replacing the entire furnace. It's a good thing I had renewed my home warranty that year because it covered most of the replacement cost.

However, I had to choose between a less expensive, less energy-efficient furnace or a more expensive, more efficient model. The contractor told me that with the more expensive furnace my wife and I would see energy savings that would pay for our expenses within a few years. Having to pay several hundred dollars beyond what the warranty covered made the decision more painful, but we chose the more efficient furnace.

In December 1997, representatives from 159 countries gathered in Kyoto, Japan, to create a global climate treaty. Whether or not the treaty is ever ratified by the U.S. Senate, the proposal aims at reducing worldwide emissions of six greenhouse gases, most of them attributable to inefficient energy use, as with my old furnace. If companies worldwide don't take voluntary steps to reduce their emissions -- as well as those produced by their products and services -- to help meet the proposed treaty's targets, governments in Europe, Japan and elsewhere most likely will adopt regulations forcing businesses to meet those targets.

What does my furnace and Kyoto have to do with your company and its use of ISO 9001 and ISO 14001? Whether your company has an ISO 9001-based quality management system or an ISO 14001-based environmental management system, what it considers in purchasing product and   services and/or in designing them for its customers is very important to the effectiveness of its management systems -- and its profitability.

     In 1997, ISO directed technical committees 176 and 207 -- the groups responsible for ISO 9000 and ISO 14000, respectively -- to coordinate revisions of these standards. There was concern that this meant integration, although what ISO has in mind is making the standards easier to use together within a company's integrated management system. Despite this restructuring, it's unlikely that the requirements in Clause 4.6, Purchasing, will disappear or that the standard won't require an evaluation of subcontractors.

What do ISO 9001 and ISO 14001 presently require of companies when they consider purchasing? In Subclause 4.4.6, Operational Control, ISO 14001 stipulates that a company must have procedures to ensure that the environmental aspects of product and services purchased from subcontractors satisfy the company's environmental policy, objectives and targets. A company with an EMS that conforms with the requirements of ISO 14001 doesn't have to purchase products or services to improve the energy efficiency of its operations unless such improvements are a policy, objective or target. Likewise, an ISO 9001-based QMS doesn't require a company to purchase the best product or services available unless the company's quality policy commits to making the best product for its customers.

It's up to management to decide what the company's policy, goals and objectives will be and then ensure its QMS and/or EMS contain procedures to meet them. Thus, a company can commit to purchasing energy-efficient equipment if its ISO 14001-based environmental policy, objectives and targets -- or its ISO 9001-based quality policy -- stipulates energy efficiency as a consideration in purchasing products and/or services.

Remember, you get what you pay for. What management must consider is whether the long-term savings from purchasing more energy-efficient equipment will pay for the increased cost. Management also must consider what effect more efficient equipment will have on production processes in terms of quality.

With QS-9000, equipment reliability and its maintenance is affected by the efficiency of equipment and its maintenance cost. Newer, more efficient equipment may pay for itself in reduced maintenance and energy use, increased accuracy and consistent performance (meaning less rework and nonconforming product) as well as reduced environmental impacts requiring remediation (a problem with or without ISO 14001).

Thus, we need to balance long-term gains against short-term costs and to consider how available choices affect customer satisfaction. I'll let you know how my winter 1998 heating bills turn out!

About the author

Jim Mroz is senior editor of The Informed Outlook, a twice-monthly newsletter providing information and guidance on ISO 9000, QS-9000 and ISO 14000, published by INFORM (International Forum for Management Systems Inc.), telephone (703) 680-1436, fax (703) 680-1356 and e-mail jmroz@qualitydigest.com.


[Home Page] [Current] [ISO 9000 Database ] [Daily News] [Phil’s Journal]
Quality Management] ['97 Past Issues]  [Quality Web] [Information ] [Advertising]
Classified Ads] [Subscribe] [Guestbook]

Copyright 1998 QCI International. All rights reserved. Quality Digest can be reached by phone at (530) 893-4095.

Please contact our Webmaster with questions or comments.

ISO9000 ISO 9000 TQM management quality QC QA teams QS9000 QS-9000 quality digest juran deming baldrige ISO9000 ISO 9000 TQM management quality QC QA teams QS9000 QS-9000 quality digest juran deming baldrige ISO9000 ISO 9000 TQM management quality QC QA teams QS9000 QS-9000 quality digest juran deming baldrige ISO9000 ISO 9000 TQM management quality QC QA teams QS9000 QS-9000 quality digest juran deming baldrige ISO9000 ISO 9000 TQM management quality QC QA teams QS9000 QS-9000 quality digest juran deming baldrige


e-mail Quality Digest