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Chuck Cimalore

Management

Building a Culture of Quality for Small and Medium-Sized Enterprises

Successful organizations are using ISO 9001:2015 to help drive top management’s priority to quality

Published: Tuesday, October 24, 2017 - 11:03

A culture of quality drives the policies, practices, and processes needed to accomplish an organization’s work. Building a culture of quality begins with embodying core values, guiding philosophies, behaviors, and attitudes that, combined, contribute to day-to-day operations. This culture builds over the decades as one generation of employees passes to the next. This is why transitioning an organization’s culture to embody quality requires commitment and deliberate management of the change process. It starts with quality process engagement across functions, which must be made a priority with top management.

ISO 9001, the international standard that specifies requirements for a quality management system (QMS), can help organizations to provide products that meet regulatory requirements. How does ISO 9001:2015 come into play in building a culture of quality? Top management is responsible and accountable for carrying out a certain number of activities themselves. For instance, clause 5.1.1 provides a list of activities top management needs to be involved with. Some of those tasks top management can delegate, some they cannot. ISO 9001:2015 helps bring together people at the highest levels into the quality management system. Leadership not only needs to promote quality management as a process but actually understand how all processes fit together.

An effective quality management strategy

What is an effective quality management strategy and how does it relate to ISO 9001? It’s a multi-year plan that aligns quality with strategic objectives through improvements across operational excellence initiatives. The “operational architecture” takes into account the IT infrastructure, with such systems as product life-cycle management (PLM) and enterprise resource planning (ERP), from an IT perspective as well as the “operational technology” on the shop floor and with in-service equipment. The strategic objective looks across operational excellence and operational architectures and delivers value to the business. This is the element to consider when building out your initiatives. Quality can clearly have an impact on how a company is able to innovate and achieve rapid market adoption. It can help an organization gain more market share because of its product differentiation.  

You must put together a transformation framework that helps define the strategies. You can have several initiatives going on at the same time, with process, culture, and technology initiatives occurring at different levels of maturity but still fit into a framework. 

Strategy framework

A strategy framework delivers a plan of action or policy designed to achieve a major aim. First off, the strategic objectives are set by the C-level where the organization re-imagines business process and service delivery. Next, there is operational excellence upheld by the business leaders within the organization that aims to realign people, process, and technology. 

In building the plan, functional managers must devise a business case to define immediate and long-term ROI. Once this is achieved, a software solution can be selected by information technology and operational technology (IT/OT) practitioners based on all the criteria developed and while seeking long-term partners. It is important to include culture-building activities. It is a pressure-packed scenario. 

Need for improvement

While it is important to be compliant, conformance isn’t necessarily the strategy to become compliant. Conformance doesn’t gain top management support, build culture, drive operational excellence, or meet performance objectives. In fact, LNS Research reports show that 92 percent of quality processes are not harmonized at the average-sized manufacturer. Almost 87 percent of companies do not have top management priority for quality. Approximately 77 percent of manufacturers do not have a culture of quality and 37 percent of manufacturers can’t meet objectives due to ineffective metrics. This is where the market stands right now. Meeting the minimum requirements to be a supplier doesn’t make a good supplier. 

So how does ISO 9001:2015 tie into this framework? First of all, quite often there can occur a positive or negative event that drives a business influence or pressure that forces action and response with a defined date and business owner. For instance, a manufacturer of biosensors and blood glucose monitors sought to create a safe, quality medical device for use worldwide, and that meant ensuring all country-specific and local standards would be met. The driving factor caused them to work with several external auditors and legal counselors to ensure compliance was achieved in every jurisdiction. The use of PLM software helped them to ensure all regulations were met and tracked throughout the product lifecycle of their medical device. It properly tracked all electronic signatures, providing electronic audit trails and history tracking, security controls, and reporting.

The PLM system supported ISO 9001 requirements and made the audit process streamlined. This is an event that drove a business response because it required someone in top management to own the follow-through of an action that directly influenced the business. For this manufacturer, ISO 9001 ties in well to this scenario. Any potential crisis in terms of achieving compliance and being fined was averted. Too often quality gets executive priority on the heels of some negative event or crisis that occurs to cause change. It is far better to get in front of that and to make changes to combat challenges prior to a crisis situation. Why not implement a quality initiative when everything is going well?

Building bridges, getting consensus

It is important to get executive sponsorship and management buy-in. Find out what the executive management team measures in terms of their key performance indicators (KPIs) and how effectively they are achieving key business objectives. Align your quality initiative to address the objectives of executive management, as that will help determine their buy-in to follow through on achieving the quality initiatives presented.

It can take a decade to build bridges between quality and other functions and create cross-functional processes if you are working on a bottom-up approach. If, on the other hand, you get an executive sponsor to help you deliver a top-down approach, you will typically get much faster results. 

A quality management maturity model

LNS’s research characterizes five levels in a quality management maturity model. It’s not a process model but rather an operational excellence model. At the top are “innovation leaders” driving the standards and expectations. Under that are the “agile” companies comprising involved people, processes, and technology, which are driven across the enterprise. Next comes the “harmonized” level, which embraces flexibility unified across the organization, and below that there is the “controlled” level that is repeatable within organizational, process, and/or technology boundaries. At the lowest echelon is the “ad hoc” un-standardized level displaying significant variation.  


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There is a direct correlation between the level at which an organization is operating and whether they have a top-down approach vs. a middle-up one. Numerous benchmarks and research studies support that top management sponsorship matters. Top management sponsorship boasts 2.6 percent more best practices adoption than those that don’t. It can drive all kinds of changes. When going through the scope of what companies need to achieve, it can be challenging to identify the right metrics to use. 

It’s important to shift from being a cost center to a value center. When organizations think about compliance, how they invest in quality comes into play. A major difference is that if the organization is a cost center, they will only invest the minimum they have to in order to achieve compliance. If the organization is a value center, then they will look to adopt quality into all areas. More investment comes to those who are directly aligned with business value. 

Key challenges

Core management principles of ISO 9001:2015 can help address key challenges for avoiding nonconformities during any certification audit and can help with a lot of the issues the LNS benchmark study uncovered. For instance, the study revealed that 37 percent of respondents reported that dealing with disparate quality systems and data sources, as well as having quality metrics not effectively measured, was problematic. Over 35 percent of respondents felt that quality was a department, not a responsibility. Almost 25 percent reported that they had no formal process in place for managing risk. More than 20 percent of all benchmark participants admitted that there was a lack of visibility into supplier quality and no defined process for continual improvement. There were 16 percent who answered that they had no formal process for capturing non-conformances. Overall there was a lack of executive support and audit/compliance management was dealt with on an ad hoc basis. These were all challenges that prevent an organization from achieving their quality objectives. 

The statistics show gaps in where the industry stands in the adoption of the core principles of ISO 9001:2015 which encompass customer focus, leadership, engagement of people, process approach, improvement, and evidence-based decision-making and relationship management. It was interesting to learn from the benchmark study that 89 percent of small and medium-sized enterprises (SMEs) do not have visibility into real-time quality metrics across functions and some 87 percent do not have top management executive buy-in for quality. With regard to the engagement of people, it would appear that 77 percent felt that they do not have a culture of quality adopted. There were 79 percent that did not close the loop on quality processes across design, manufacturing, and suppliers. Over 60 percent do not have any visibility into customer complaints and 55 percent haven’t established corrective and preventive action (CAPA) processes across the company.

There are systems that can be implemented to assist with quality, such as PLM software that encompasses quality management. For instance, EST Analytical found it is helpful to have a single engineering change, and quality control system to help meet ISO compliance. In EST Analytical’s case, they lacked control over their information because it was not indexed or linked. Using a PLM-based quality system, they created a more efficient and connected environment that would easily manage and track information and simplify data sharing across the company. The engineering/R&D, manufacturing, purchasing, quality, sales, and service departments use PLM for change management, bill-of-material management, quality management, training management, and project management to integrate various manual processes into a single automated system with traceability on all changes.

Successful organizations are using ISO 9001:2015 to help drive top management’s priority to quality. By doing so, it truly will help SMEs achieve operational excellence. Companies that are able to shift from conformance to performance will, in the end, gain a critical competitive advantage. 

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About The Author

Chuck Cimalore’s picture

Chuck Cimalore

Chuck Cimalore, the CTO and co-founder of Omnify Software, is an expert in web-based product life-cycle management (PLM) solutions for small to medium-sized enterprises (SME) and has helped original equipment manufacturers streamline development cycles, accelerate product innovation, and improve bottom-line profitability.