Module 6

Quality Systems
• ISO: ISO role; Functions of ISO, Quality System
Family Series ISO 9000; ISO 14000; ISO21000.
• Six Sigma: Features of Six Sigma, Goals of Six
Sigma, DMAIC, Six Sigma implementation.
• Supply Chain and Operations: Supply Chain
“KEIRETSU”, Core Competency, Relationship of
Operations and Supply Chain; Relationship of
Purchasing and Supply Chain; Sources, Service
Quality and Supply Chain.
 ISO: ISO role; Functions of ISO
• International Organization for Standardization
• 164 members
• 22500 international standards
• 100 new standards each month
• 249 Technical committees
 ISO
International Organization for Standardization
• Independent non-governmental organization
• A global network of national standards bodies
with one member per country
• Job is to make International Standards
• Coordinated by a Central Secretariat in Geneva,
Switzerland
• Not for profit organization
• Provides a platform for developing practical tools
through common understanding and cooperation
with all stakeholders
ISO Role

• We bring together experts to share

knowledge and develop International
Standards that provide solutions to
global challenges
• Is a document containing practical
information and best practice
• An agreed way of doing something or
a solution to a global problem
• Identify safety issues of products and
services
• Share good ideas and solutions,
technological know-how and best
management practices
• Make products compatible, so they
fit and work well with each other
Functions of ISO

Industry
• Become more competitive by offering products
and services that are accepted globally ∙
• Enter new markets easily ∙
• Raise profits by offering products with
increased quality, compatibility and safety ∙
• Reduce costs by not reinventing the wheel and
using available resources better ∙
• Benefit from the knowledge and best practice
of leading experts around the world
Functions of ISO

Regulators
• Harmonize regulations across countries to
boost global trade ∙
• Increase credibility and trust throughout the
supply chain ∙
• Make it easier for countries to outsource and
specialize
Functions of ISO

Society
• Wider choice of safe and reliable products and
services at competitive prices ∙
• Best practice and concerted action at the
organizational level to practically address
global challenges like climate change and
sustainability
Why ISO is Unique

• Global network. ISO members come from

virtually every country in the world.
• Our brand. ISO is recognized globally and
associated with confidence.
• Our integrity. We have been publishing the
standards the world needs since our creation
in 1947. Today, the ISO brand is recognized
globally.
Why ISO is Unique
• Our commitment to consensus.
• We work with more than 700 organizations and
over 100 000 experts from different industries and
sectors.
• Our partnerships. We work closely with the
International Electrotechnical Commission (IEC) and
the International Telecommunication Union (ITU).
• We also have a strategic partnership with the World
Trade Organization (WTO) to promote free and fair
trade.
How does ISO work
• ISO only develops a standard if there is a
market need for it.
• International Standards are created by the
people who will use and be impacted by them.
• We call them EXPERTS and they come from
industry, government, consumer
organizations, academia, nongovernmental
organizations, and more.
How does ISO work
• It is the MEMBERS’ role to identify the experts
and ensure an active voice for their country.
• The ISO Central Secretariat – ISO/CS –
coordinates the development process and
publishes the standards.
• ISO 9000 Family- Quality Management
Systems
• ISO 14000 Environmental Management
Systems
• ISO 21000 Information Technology –
Multimedia Framework
• https://www.iso.org/obp/ui/#iso:std:iso-iec:21000:-9:ed-1:v1:en
Quality System Family Series ISO 9000; ISO
14000; ISO21000
• ISO 9000 Quality Management System
• For organizations asking how to improve the
quality of their products and services
and consistently meet their
customers’ expectations.
• Addressing various aspects of quality management
and containing some of ISO’s best-known standards,
there’s the ISO 9000 family.
WHY ISO 9001?

• ISO 9001 sets out the criteria for a quality management

system and is the only standard in the family that can be
certified to (although this is not a requirement).
• It can be used by any organization, large or small, regardless
of its field of activity.
• In fact, there are over one million companies and
organizations in over 170 countries certified to ISO 9001.
• This standard is based on a number of quality management
principles including a strong customer focus, the motivation
and implication of top management, the process approach
and continual improvement.
• Using ISO 9001 helps ensure that customers get consistent,
good-quality products and services, which in turn brings
many business benefits.
 ISO 9000:2015 describes
the fundamental concepts and Principles

• organizations seeking sustained success through

the implementation of a quality management
system
• customers seeking confidence in an organization's
ability to consistently provide products and
services conforming to their requirements
• organizations seeking confidence in their supply
chain that their product and service requirements
will be met
ISO 9000:2015
• organizations and interested parties seeking to
improve communication through a common
understanding of the vocabulary used in
quality management;
• organizations performing conformity
assessments against the requirements of ISO
9001
• providers of training, assessment or advice in
quality management
• developers of related standards.
ISO 9001
• Is a standard that sets out the requirements
for a quality management system.
• It helps businesses and organizations to be
more efficient and improve customer
satisfaction.
Benefits of ISO 9001

• Assess the overall context of your organization

to define who is affected by your work and
what they expect from you.
• This will enable you to clearly state your
objectives and identify new business
opportunities.
• Put your customers first, making sure you
consistently meet their needs and exceed their
expectations.
• This can lead to repeat custom, new clients and
increased business for your organization.
• Work in a more efficient way as all your
processes will be aligned and understood by
everyone in the business or organization.
• This increases productivity and efficiency,
bringing internal costs down.
• Meet the necessary statutory and regulatory
requirements.
• Expand into new markets, as some sectors and
clients require ISO 9001 before doing business.
• Identify and address the risks associated with
your organization.
 ISO 9001 builds on
Seven quality management principles
1. Customer focus.
• Meeting – and exceeding – customer needs is
the primary focus of quality management and
• Contribute to the long-term success of your
enterprise.
• It is important to not only attract but also
retain the confidence of your customers, so
adapting to their future needs is key
2. Leadership.
• Having a unified direction or mission that
comes from strong leadership is essential
to ensure that everyone in the organization
understands what you are trying to achieve.
3. Engagement of people.
• Creating value for your customers will be
easier if you have competent, empowered and
engaged people at all levels of your business
or organization.
4. Process approach.
• Understanding activities as processes that link
together and function as a system helps
achieve more consistent and predictable
results.
• People, teams and processes do not exist in a
vacuum and ensuring everyone is familiar with
the organization’s activities and how they fit
together will ultimately improve efficiency.
5. Improvement.
• Successful organizations have an ongoing
focus on improvement.
• Reacting to changes in the internal and
external environment is necessary if you want
to continue to deliver value for your
customers.
• This is of paramount importance today
when conditions evolve so quickly.
6. Evidence-based decision making.
• Making decisions is never easy and naturally
involves a degree of uncertainty, but ensuring
your decisions are based on the analysis
and evaluation of data is more likely to
produce the desired result.
7. Relationship management.
• Today’s businesses and organizations do not
work in a vacuum.
• Identifying the important relationships you
have with interested parties such as your
suppliers – and setting out a plan to manage
them – will drive sustained success.
How do I get started ?
• Tip 1 – Define your objectives. Why do you want to
implement the standard ?
• Tip 2 – Make sure senior management is on board. It is
crucial that everyone – from the top down – is supportive
of the initiative and
its objectives.
• Tip 3 – Identify your organization’s key processes for
meeting your objectives as well as your customers’ needs.
Within each of these processes, make sure you
understand your customers’ requirements and can
guarantee that these are met – each and every time
How is the standard structured ?

• ISO 9001:2015 (the most recent version of the

standard)
• Clause 0-3 – Introduction and scope of the standard
• Clause 4 – Context of the organization
• Clause 5 – Leadership
• Clause 6 – Planning
• Clause 7 – Support
• Clause 8 – Operation
• Clause 9 – Performance evaluation
• Clause 10 – Improvement
 What is accreditation ?
• Accreditation is the formal recognition by an
independent party (generally known as an “
accreditation body ”) that a certification body
operates according to International Standards
– a form of certification of the certifying body.
 ISO 14001
• ISO 14001 is an internationally agreed
standard that sets out the requirements for
an environmental management system.
• It helps organizations improve their
environmental performance through more
efficient use of resources and reduction of
waste, gaining a competitive advantage and
the trust of stakeholders.
What is an environmental management
system ?
• An environmental management system helps
organizations identify, manage, monitor and
control their environmental issues in a “
holistic ” manner.
• ISO 14001 is suitable for organizations of all
types and sizes, be they private, not-for-profit
or governmental.
• It requires that an organization considers all
environmental issues relevant to its
operations, such as
– air pollution,
– water and sewage issues,
– waste management,
– soil contamination,
– climate change mitigation and adaptation,
– resource use and efficiency.
• ISO 14001 includes the need for continual
improvement of an organization’s systems
and approach to environmental concerns.
• The standard has recently been revised, with
key improvements such as the increased
prominence of environmental management
within the organization’s strategic planning
processes,
• Greater input from leadership and a stronger
commitment to proactive initiatives that
boost environmental performance.
ISO 14001 helps :

• Demonstrate compliance with current and

future statutory and regulatory requirements
• Increase leadership involvement and
engagement of employees
• Improve company reputation and the
confidence of stakeholders through strategic
communication
• Achieve strategic business aims by
incorporating environmental issues into
business management
• Provide a competitive and financial
advantage through improved efficiencies and
reduced costs
• Encourage better environmental performance
of suppliers by integrating them into the
organization’s business systems
 Examples of success with ISO 14001
• Organizations using ISO 14001 have found
success across a range of areas, including
reduced energy and water consumption,
• A more systematic approach to legal
compliance and an improved overall
environmental performance
 Premier Foods
Enhancing relationships with stakeholders and
staff
• “Since 2001, we have used ISO 14001 to make big
improvements such as increasing our organization’s recycling
rate.
• We have now been at “zero landfill” since March 2013 and are
recycling and reusing 100 % of our site wastes.
• We have continued to improve our relationship with
neighbours because we have the processes in place to
respond quickly to any concerns.
• Among other benefits, our processes and the appointment of
Green Matters Champions ensure that staff are
environmentally engaged and aware of the site’s potential
impact on the environment.”
 21000
• https://www.iso.org/obp/ui/#iso:std:iso-
iec:21000:-21:ed-2:v1:en
 ISO/IEC 21000
• ISO (the International Organization for
Standardization) and IEC (the International
Electrotechnical Commission) form the
specialized system for worldwide
standardization.
• ISO and IEC have established a joint technical
committee, ISO/IEC JTC 1.
 ISO/IEC 21000

• The vision for ISO/IEC 21000 is to define a

multimedia framework to enable transparent
and augmented use of multimedia resources
across a wide range of networks and
devices used by different communities.
• ISO/IEC 21000 series aims thus at defining an
open framework for multimedia applications,
where users distribute, consume, operate on
and transact with content represented as
Digital Items.
 Scope of ISO 21000
• This document specifies an ontology for representing
contracts in the Multimedia Framework formed for the
transaction of MPEG-21 Digital Items or services
related to the MPEG-21 Framework.
• Media Contract Ontology (MCO) aims to digitally
express agreements made in environments using
ISO/IEC 21000.
• These agreements are contracts for transactions of
content packed as Digital Items, as well as for services
provided around this content by means of a sematic
representation.
 MPEG
• The Moving Picture Experts Group (MPEG) is
an alliance of working groups established
jointly by ISO and IEC that sets standards for
media coding,
• Including compression coding of audio, video,
graphics and genomic data
• Transmission and file formats for various
applications
 MCO
• The MPEG-21 Media Contract Ontology
(MCO), a part of the standard ISO/IEC 21000,
is an ontology to represent contracts dealing
with rights on multimedia assets and
intellectual property protected content in
general.
• The range of contracts under scope are as
follows:
— contracts about transactions on rights for
the exploitation of content as MPEG-21 Digital
Items;
— contracts about the provision of MPEG-21-
based services, like delivery, identification,
encryption, search and others.
• However, MCO can also be used as electronic
format for contracts on the trade of media
rights beyond the MPEG framework.
What Is ISO 9000 vs. ISO 9001?
• Six Sigma: Features of Six Sigma, Goals of Six
Sigma, DMAIC, Six Sigma implementation
 Six Sigma
• Six Sigma is a method that provides
organizations tools to improve the capability
of their business processes.
• This increase in performance and decrease in
process variation helps lead to defect
reduction and improvement in profits,
employee morale, and quality of products or
services.
 Six Sigma
• "Six Sigma quality" is a term generally used to
indicate a process is well controlled (within process
limits ±3s from the center line in a control chart)
Six Sigma Six Sigma is a highly disciplined process that
helps us focus on developing and delivering near-
perfect products and services
Features of Six Sigma

• Six Sigma's aim is to eliminate waste and

inefficiency, thereby increasing customer
satisfaction by delivering what the customer is
expecting.
• Six Sigma follows a structured methodology, and
has defined roles for the participants.
• Six Sigma is a data driven methodology, and
requires accurate data collection for the processes
being analyzed.
• Six Sigma is about putting results on Financial
Statements.
• Six Sigma is a business-driven, multi-
dimensional structured approach for:
– Improving Processes
– Lowering Defects
– Reducing process variability
– Reducing costs
– Increasing customer satisfaction
– Increased profits
Key Concepts of Six Sigma

• Critical to Quality − Attributes most important to

the customer.
• Defect − Failing to deliver what the customer wants.
• Process Capability − What your process can deliver.
• Variation − What the customer sees and feels.
• Stable Operations − Ensuring consistent,
predictable processes to improve what the
customer sees and feels.
• Design for Six Sigma − Designing to meet customer
needs and process capability.
Goals of Six Sigma
• Find and eliminate causes of defects and
errors
• Reduce cycle times and cost of operations
• Improve productivity
• Better meet customer expectations
• Achieve higher asset utilization
• Provided an improved return on investment
 Six Sigma’s DMAIC methodology
• Used to improve the effectiveness and efficiency
of organizational processes across the industry
• “DMAIC” is an acronym indicating Six Sigma
business performance guidelines used to Define,
Measure, Analyze, Improve, and Control
business performance.
• A powerful tool to lead an organization to
stronger performance standards
• Can be skillfully used to streamline resources
and clarify business goals.
Define
• The main objective of this stage is to outline
the borders of the project.
– Stakeholders agree on the parameters that will
define the project
– Scope and budgetary items, as well as customer
needs, are aligned with project goals
– Team development takes place as the project
begins to take shape
Measure
• The main objective is to collect data pertinent
to the scope of the project.
– Leaders collect reliable baseline data to compare
against future results
– Teams create a detailed map of all interrelated
business processes to elucidate areas of possible
performance enhancement
Analyze
• The main objective is to reveal the root cause
of business inefficiencies.
– Analysis of data reveals areas where the
implementation of change can provide the most
effective results
– Groups discuss ways that the data underscores
areas ripe for improvement
Improve
• The main objective at the end of this stage is
to complete a test run of a change that is to
be widely implemented.
– Teams and stakeholders devise methods to
address the process deficiencies uncovered
during the data analysis process
– Groups finalize and test a change that is aimed at
mitigating the ineffective process
– Improvements are ongoing and include feedback
analysis and stakeholder participation
Control
• The objective of the last stage of the
methodology is to develop metrics that help
leaders monitor and document continued
success.
• Six Sigma strategies are adaptive and on-
going.
• Adjustments can be made and new changes
may be implemented as a result of the
completion of this first cycle of the process.
 Six Sigma Implementation Process

Project
• The best way to implement a Six Sigma program is
to start with a pilot project.
• You can identify a company process that generates
defects or has other problems, usually in
production.
• The process of identifying a pilot project has to
involve the people carrying out the work and
consider their input.
• Six Sigma only works when everyone is involved.
 Training
• The person leading the Six Sigma implementation
project has to be knowledgeable about Six Sigma
methods and principles.
• In Six Sigma terms, he must be a "black belt"
expert.
• In small businesses, one black belt for a pilot
project is usually enough.
• The business can hire a qualified new employee
or can train within the ranks.
• Training for black belt certification and
implementation of the pilot project may overlap.
 Team
• Once the company has chosen the black belt team
leader, it must assign team members who will help
with the implementation.
• The company has to consult the workers involved in
the pilot project.
• Some team members will become black belt leaders
for other company implementations, and many will
become green belt support workers who help the
black belt leaders.
• Good workers are needed on the team, but also to
run the Six Sigma pilot project after implementation.
 Plan
• The team has to plan the implementation under
the leadership of the black belt.
• The aim is to put in place an organizational
structure that streamlines the target production
process to reduce defects.
• The black belt identifies problem areas, and the
workers who carry out the work help with
solutions.
• The plan details the measures the team proposes
to reduce waste, increase worker efficiency and
eliminate bottlenecks.
 Execute
• Six Sigma requires an initial effort and is then a
continuous process.
• The pilot project has to set up the initial steps and
put in place the organization for continued
application.
• The team makes the necessary changes according
to the plan and then puts in place a black belt to
run it.
• Green belts help with operation according to the
new plan and take responsibility for specific
aspects.
 Evaluate
• At the completion of the pilot project, an evaluation
details what worked well and where there were
problems.
• The workers involved are a key source for evaluation
criteria and parameters.
• The company now has at least one qualified black belt
and several candidates.
• The evaluation is the basis for a continued application to
other areas of company operations.
• In a small business, a second round can probably
encompass all the remaining production activities.
• A third round can extend Six Sigma principles to services
such as design and human resources.
 Operations Management include
• Operations has a more internal
company focus relative to supply
chain.
• Operations managers make key
decisions on design, production,
planning, workflow, and staffing.
 Responsibilities of
Operations Management
• Directing and coordinating production, pricing, sales, or
distribution of products
• Managing finance activities including sales and other data
• Evaluating performance data to make appropriate decisions
regarding productivity, cost control, and improvements
• Managing staff, work schedules, and assigning specific duties
• Directing and coordinating budget activities
• Determining products to be sold based on forecasts of
customer demand
 Supply Chain Management

• Supply chain management work more

externally than operations management.
• Supply chain managers are expected to have
an understanding of working with suppliers,
logistics, and customers all over the world.
• Make key decisions on suppliers, coordinate
purchasing, warehousing, and forecasting.
Responsibilities of SCM
• Forecasting demand for materials or products
• Creating supply plans to ensure availability of raw materials
• Evaluating suppliers and determining the effectiveness of
multiple supplier strategies
• Evaluating risks to supply chains and suppliers as well as
troubleshooting issues in the chain
• Analyzing inventories to determine how to increase inventory
turns, reduce waste or optimize customer service
• Managing activities related to purchasing, inventory control, and
warehousing
• Coordination of supply chain with other functional areas, such as
sales, marketing, finance, production or quality assurance
• Manage supply chain staff
 Keiretsu
• Keiretsu is a Japanese word for a grouping of
enterprises with interlocking commercial
relationships and shareholdings.
• Keiretsu member companies have reciprocal
share ownership and may also procure from each
other to create reciprocal trading relationships.
• There is some debate about whether keiretsu are
as prevalent as they once were, although notable
keiretsu such as Sumitomo and Mitsubishi still
trade successfully
 Keiretsu
• Keiretsu is a Japanese term referring to a
business network made up of different
companies, including manufacturers,
supply chain partners, distributors, and
occasionally financiers.
• They work together, have close relationships,
and sometimes take small equity stakes in
each other, all the while remaining
operationally independent.
Keiretsu
What are Keiretsu

• Is an organizational structure that is comprised

of several aspects:
– Financial – cross shareholdings
– Managerial – Exchanging of management expertise,
advice, training
– Trade – preferential treatment given to partner firms
– Exclusion – keeps foreign competition out of
domestic economy
– Political – tightly interwoven relationships with
government
– Social – “old boys network” of presidents and senior
executives
 Core competency
• A core competency is a concept in
management theory introduced by C. K.
Prahalad and Gary Hamel.
• It can be defined as "a harmonized
combination of multiple resources and skills
that distinguish a firm in the marketplace."
• Are the foundation of companies'
competitiveness.
What Are Core Competencies?

• Core competencies are the resources and

capabilities that comprise the strategic
advantages of a business.
• A modern management theory argues that a
business must define, cultivate, and exploit its
core competencies in order to succeed against
the competition.
 Three conditions a business activity must meet in
order to be a core competency:
1. The activity must provide superior value or
benefits to the consumer.
2. It should be difficult for a competitor to
replicate or imitate it.
3. It should be rare.
 Core competencies of established
and successful brands
• McDonald's has standardization. It serves nine
million pounds of French fries every day, and every
one of them has precisely the same taste and
texture.
• Apple has style. The beauty of its devices and their
interfaces gives them an edge over its many
competitors.
• Walmart has buying power. The sheer size of its
buying operation gives it the ability to buy cheap
and undersell retail competitors.
 3 key characteristics of a core competency

• It must provide superior value (e.g., benefits)

to the customer or consumer.
• It should provide potential access to a wide
variety of markets.
• It should not be easy to replicate or imitate.
Sources of core competencies

• People
• Capital
• Brand equity
• Assets
• Intellectual property
 Relationship of operations and supply chain
• The roles of the supply chain include
measuring, planning, and managing the links
in the production chain.
• The supply chain is therefore an extensive
process of all the activities involved in the
production levels.
• The operations management is on the other
hand the management of the processes in
the production levels.
• The supply chain looks into the links between
the chain levels while the operations
management looks into the processes at each
level of production.
• A review of the relationship between the
decisions made in the supply chain and those
made in the operations management indicates
the dependence of the operations
management on the supply chain.
• The operations management on the other
hand makes decisions regarding the plans and
organization of the production process.
• The supply chain gives the directive of what is
to be produced and When it is to be
produced
• Operations management makes
arrangements to ensure that the production
process is efficiently planned
• OM - Implemented to meet the targets
predetermined by the supply chain
 Relationship of purchasing and
supply chain
• Purchasing is the process of acquiring the
goods your company needs for its business
model.
• Supply chain management is the process of
turning those goods into products and
distributing them to customers as efficiently
as possible.
Sources of SCM
Service Quality and SCM