Preparing for an ASQ Certification Exam

If you are planning on taking one of the ASQ certification exams, congratulations.  You have made an excellent decision, the process of becoming certified strengthens your career progression and solidifies you professionally.  There are many ways to prepare for the exam and over the years we have observed people approach the exam in many different ways.  Some prefer to study on their own, some like to study with other people and some prefer to have a structure of class environment to help them along.  We have been associated with the ASQ Certification exams and  preparation courses for over fifteen years.  That experience has provided us an understanding of what works and what doesn’t when preparing for the exam.  We have learned a solid approach to passing the certification exam involves a four step process we call material – testing – modification – repetition.

Material  means you know what material the exam covers and you study and learn the material. Testing means you test yourself on what you’ve learned.  Modification is taking the results of the testing and strengthening the areas you are weak in.  Repetition is simply doing it over and over.  Do not do in once a week, do a little bit every day. The continuous repetition is what cements the knowledge within you.  

The first thing you should obtain is a summary of the material you need to study.  This material is called the body of knowledge for the specific ASQ Certification Exam you are preparing for.  You can obtain the  ASQ Certification body of knowledge for the certification exams at the ASQ website.  The BOK or Body of Knowledge not only explains what is covered, but it gives you the weighting of each area and the level of cognition for each area of the BOK.  The cognition level is very important to understand because you do not need to know everything very well.  Some areas of the BOK you will only have to remember or recall and some you will have to be able to analyze and apply.  Spend some time reviewing the BOK and become very familiar with it.  Once you have completed reviewing the BOK, you should find reference materials.  An excellent source of material are the primers from the Quality Council of Indiana.  The primers developed by the Quality Council of Indiana provide good, broad coverage and are aligned very well with the ASQ BOK.  We have used the primers for many years for our preparation courses.

One of the downsides of the primers is their lack of detail relative to other reference books.  If a topic exists that requires supplemental information to the primer,  ASQ’s website provides a wide selection of reference books for the ASQ certification exams. 

Another method you can employ is to take a refresher course or a preparation course for the exam.  They are offered by various ASQ sections throughout the country as well as ASQ National in Milwaukee.  The benefit of a refresher course is that you will be provided with the materials  and you have an instructor who has knowledge of the material teaching you.  This avenue can save on time down the road.  You don’t have to take a preparation course, you can achieve the certification on your own.  It’s a personal decision for people similar to hiring a consultant when implementing ISO 9000.

After you have the material and have studied it, the next thing you want to do is test yourself.  The primers from the Quality Council of Indiana has sample questions included and you can purchase an extra CD of questions.  This is a very good tool.  There are sample exams online at ASQ.  If you are a member, you can take a sample certification exam online with ASQ.  You can also purchased a bank of questions from ASQ.  The important thing is to test yourself after you have studied the material to assess how well you understand the material.  Do not glance over the material and immediately go to the sample exams.  When you test yourself, ensure it is a timed exam.   This gets you conditioned for the actual ASQ exam, which is timed. 

The next step after testing is modification.  After testing yourself you will understand what you are strong at and what you need help with.  You should modify your studying to compensate for this.  If you are studying for the Certified Quality Engineer exam and you find that you are weak in the quantitative methods, you know you have to spend more time in this area or change the way you have been studying.  If you are very strong in statistical tools but are weak in the management and leadership area, you may want to study in that area.  You must also commit the proper amount of time to an area within the body of knowledge consistent with its weighting on the exam.  For example, on the Certified Quality Engineer exam, Management and Leadership will have 15 questions while Quantitative methods will have 45 questions on the exam.  You probably don’t want to commit the same amount of time to both sections because they are not equally represented on the exam.

The last step or phase of the preparation is repetition.  Your study habits or pattern must have a constant repetitive focus.  Do not approach this by studying one day a week for six hours.  It is much better to study an hour a day for six days.  The goal is to build momentum and confidence leading into the exam.  You can’t accomplish that by only putting effort in on one or two days a week.  You will forget a big part of the information.  We recommend trying to do a little everyday.  If you miss a day or two, that’s alright, but your habit should be to study some everyday.  If you commit to that you will see the rewards long-term. 

However you choose to study for the ASQ Certification exam, we wish you the best of luck.  It is a great decision to take the exam and better yet pass it.  

Demystifying Six Sigma

When you pull the curtain on the great and powerful Oz, you’re left with a simple man using smoke and props to cultivate an atmosphere of power and supreme knowledge.  I find the same similarities with six sigma. 

 

I can still recall the heightened anticipation I felt, back in the fall of 2000 as I was getting ready to visit a plant that was utilizing six sigma.  Being a devout quality professional for 18 years and committed to the cause, the very thought of being exposed to the six sigma methodology was as exciting as a trip to Cancun for spring break is for a college student. 

 

The six sigma presentation was being conducted by a trained black belt, I was most definitely in the presence of greatness.  This was the equivalent of a youth hockey player going to a lecture by Wayne Gretzky.  As the presenter neared the end and the truth unfolded before me, I felt empty and disillusioned.  The project being explained saved in the vicinity of $200,000 annually and should not be taken lightly, but it was how it was saved.  To make a long story short a process wasn’t capable so the tolerance was  opened up.  The widening of the tolerance was verified to not compromise product integrity and allowed for the elimination of extensive sorting and rework, which is where the savings came from.

 

I stood there in disbelief and thought, “this is six sigma?”  When I worked as a quality engineer, this was my job.  This type of activity was done all the time.  I’ve been utilizing a structured problem solving methodology my entire career complimented with the quality tools to solve problems and save money.  Jack Welch didn’t put me on the fast track.  I did not see articles about what I or my peers were doing showing up in every quality trade magazine, the Wall Street Journal, Business Week and the New York Times.

 

I immediately thought, there’s got to be more to this that I’m not seeing.  I continued to read as much as I could on the subject.  About a year later I was asked to attend six sigma green belt training.  Not the pinnacle of six sigma training, but I was on the cusp.  Green Belt is not a  Master Black Belt or a Black Belt, but I was getting in the door to finally see the great and powerful Oz.  It was at the completion of the training, my initial thoughts on six sigma were solidified.  I leaned nothing new, the techniques being taught are the same ones that I have used for years.  The methodology is basically the same.  It’s been repackaged, called something different and gained a whole lot of notoriety.  But when you take off the bow and rip the fancy wrap away, it’s still structured problem solving utilizing a variety of quality tools that have been around for a long time.

 

 

I was performing design of experiments both classical and Taguchi methods when my instructors were figuring out who they were going to prom with.  I got in a heated discussion with the statistics instructor regarding Taguchi methods for experimental design.  If you ever want to tick off a true statistician, bring up Taguchi methods.  They don’t like that the Taguchi approach because it does not include all the runs a classical design would.  I’ve used it many times with great success and saved a great deal of time over clasiscal approaches to experimental designs.    

 

I recall my early years of quality engineering being devoted to problem solving and process improvement.  The process utilized included the following steps:

 

1. Define the problem
2. Observe the process
3. Develop potential causes or solutions
4. Select a cause or solution
5. Verify selected cause or solution
6. Implement solution
7. Review and revise

 

Define the problem

This step is paramount and often times requires collecting data to arrive at a good problem statement.  It makes sense that you have to measure the process in order to understand what its current performance is and what levels of improvement are realistic.  Are you seeing any similarities yet? 

 

Observe the process

This is critical to understanding how the process works and how it functions.  Not how it should work or how it was meant to work, but how it actually works.  Some of the applicable tools are process flow, value stream mapping, run charts, histograms and paraeto charts.

 

Develop potential causes or solutions

Utilize fault tree analysis, brainstorming, cause and effect diagrams to develop a list of potential causes of the problem or potential solutions.

 

Select a cause or solution

From the list of potential causes or solutions you must now pick one.  This process can be as simplistic as multi-voting or as complex as a design of experiment.  The goal is to whittle down the list to a key contributor.

 

Verify the selected cause or solution

In the old days, prior to six sigma we would verify the potential solution prior to a full scale implementation.  We would run a test or sample run to prove out the selection prior to spending more resources on the implementation.

 

 

Implement the solution

After the potential solution is proven effective through testing and preliminary evaluation, you implement it.

 

Review and revise

This is where you monitor the process to ensure you receive the results you were looking for and implement actions to sustain them over time.

 

If you look at the above problem solving steps, you’ll find they are very similar to those of the six sigma DMAIC model.  Six Sigma is not innovative, it is repackaging of what has existed for many years.  The tools are the same, flowcharting, interrelationship diagrams, design of experiments, QFD, ANOVA, blah, blah, blah.  

 

Now we have lean six sigma.  Six sigma wasn’t enough so it’s been energized and put on steroids with lean.  I recall when a couple of lean six sigma consultants came through our facility and asked me “are you guys doing lean?”  I thought, that is the stupidest thing I’ve ever heard.  Forgive me, but I was trained on lean when it was called TPS or the Toyota Production System.  Lean is not something you do.  Testing and inspecting is something you do, lean is a philosophy or culture that grips an organization and flows from the top.  It drives a mentality of continually improving and eliminating waste within an organization.

 

These guys continued through the facility and pointed out areas where we can save money and become leaner.  Wow, there you have it, the great and powerful Oz has spoken.  There are opportunities for improvement in our facility?   I did not know that.  Good job Sherlock, that’s the first rule of lean, there is ALWAYS room to improve.  It reminds me when
Toyota’s top executive visited a
Toyota plant in
Canada and asked the management team what their problems were.  The team was proud and quick to display charts and graphs depicting how well the plant had been doing and reflected the operational excellence of the plant.  They also communicated to the Toyota executive that they didn’t really have any big problems they were working on, as they have been solved.  The
Toyota executive looked at the charts, looked at the management team and said “no problems, no good.  If you have no problems, I don’t need management”.  This exemplifies the foundation of lean, it’s a culture and philosophy, not an activity. 

 

The philosophy and culture of lean drive activities associated with continual improvement.  Within the structure of a lean company, everybody is a problem solver.  All employees are trained in the concepts, you don’t rely on the chosen few who are the master black belts or black belts. 

Energize your Internal Audit Program

Planning for the Internal Audit

The key to an effective, thorough and value added internal audit is in the preparation.  If internal auditors are spending one to two hours preparing for an internal audit, it is not enough time.  To properly prepare for an audit, it should take twice to three times that.  If the actual audit time will take an hour, there should be at between two and three hours spent in preparation.  A good rule of thumb to spend about two and half times as much time in preparation as the audit will take.  Often times, auditors plan for a two hour internal audit and spend 1 hour preparing which leads to them running out of questions about 30 minutes into the audit.  I can’t stress this enough if you want to be a successful internal auditor or manage a successful internal audit program then make certain you spend adequate time in preparation for the audit.

This sounds easy, but it is actually very difficult.  The major obstacles to allocating enough time for preparation are time restrictions placed on the internal auditors.  Chances are they have other responsibilities aside from internal auditing that compete for their precious time.  One method to help remove that obstacle is to have as many trained internal auditors as possible to spread the work load.

Effective planning for an internal audit requires following a few simple steps that are listed below.

1. Learn the process (turtle diagram)
2. Identify the interfaces with the standard
3. Document review (compliance to standard)
4. Identify process interfaces
5. Identify potential process failure modes (pFMEA)
6. Value stream map process to breakdown activities
7. Review old audits
8. Develop audit questions
9. Develop audit plan.

1. Learn the processBefore you can audit a process you must become familiar with it.  You need to learn how it is supposed to work, what it supposed to do, what are the inputs, outputs, activities, resources and controls.  The first step would be to create a turtle diagram of the process (This may have already been done by the organization as part of their documentation, or in previous audits).
A turtle diagram looks at the suppliers, inputs, activities, controls, resources, outputs, and customers.   A turtle diagram is laid out such that the process activity is a box in the middle, the inputs come in from the left and outputs exit from the right of the box.  The supplier is listed in the upper left hand corner and the customer is listed in the upper right hand corner.  The controls are above the process activity and the resources are below the process activity.  The feedback loop is an arrow from the output to the input.

Let’s do an example of a turtle diagram for a process.  For this example, the process will be one that applies to about every business in some way and that’s purchasing. 

Inputs:
This is what the process needs for the activity.  It can be in the form of information or a product.  For this example the inputs are: Demand (what is driving the purchase), Quantity, Type, Specifications and Requirements, Due date and Budget (how much can be spent).

Supplier:
This is who is supplying the inputs to the process.  The supplier can supply information or a material product.  For our example the supplier would be whoever is specifying what to purchase, when to purchase and how many to purchase.

Process Activity:
This is the process.  There are a number of associated tasks contributing to the process.  For our example the process activity is purchasing

Outputs:
This is the result of the process.  It can be information, energy or material.  In our example the output of the purchasing process is the desired product or service delivered when needed.  For our example it could be a product like a computer or piece of test equipment.  It could be information such as a failure analysis, training materials, book or manual.  It could also be a service such as mowing the grass, doing the laundry or processing payroll.

Controls:
These are the items that regulate the rate at which inputs are converted to outputs.  Without controls, the process would operate continuously generating the output.  The controls for our example could be the material requirements planning software, the purchase requisition approval process and inventory analysis.

Resources:
These are the items used or consumed in the process activity.  It could be people’s time, machine time or money.  For our example, the resources would be the buyer or purchasing agent, money, the representative for the company supplying the product or service and possibly other support functions who have input for the purchase.    Additional resources are in the form of computers, material planning software, phones, fax, office space, etc. 

Customer:
The customer is the group that takes the output and uses it.  It is most likely used as an input to another process or as a resource. 

Feedback Loop:
This is the mechanism used to monitor the process.  What metric is used to tell the process owner how the process is performing and when action needs to be taken to correct it.  For a purchasing process it could be supplier performance, dollars spent, on-time delivery or receiving inspection information.
2. Identify the Interfaces to the Standard

The interfaces are the points where the process intersects the standard.  In simple terms it is where the requirements of the ISO 9001:2000 standard are applicable to the process being audited.  The easiest way to accomplish this is to use a matrix with the elements of the standard on one axis and the process name on the other. 
 
To better discern the interfaces of the process to the standard you could break the elements down into the sub elements.  For example, 7.2 Customer Related Processes is comprised of 7.2.1 Determination of requirements related to the product, 7.2.2 Review of requirements related to the product and 7.2.3 Customer communication.   The left side of the matrix would become larger, but you would have a more definitive intersection of the process and standard.  This activity provides you with the understanding of what areas of the standard apply to the process.  You will be developing questions to ensure compliance to the standard and this tells you what areas of the standard to focus on.

3. Document Review

The document review section requires reading and understanding the associated documentation for the process you are auditing.  Start with the level 1 document, the quality manual.  The quality manual should provide an overview of the process and should describe how the process fits into the overall quality system.  The quality manual will explain what processes feed the process you are auditing and what processes are supported by it.  It will describe the interaction and interrelationship of processes within the quality system. 

The main output from the review of the quality manual will be an understanding of all the processes that make up the quality system and how they interact.  The quality manual should provide a good description of how the processes work.

Next, review the level 2 documentation or procedures.  Procedures should describe the process in more detail than the quality manual.  There could be many procedures outlining the quality system, or there could be the minimum required by the ISO 9001:2000 standard, six.  The six required procedures are:

  Control of documents
  Control of records
  Internal Audits
  Control of nonconforming product
  Corrective action
  Preventive action

Since the ISO 9001:2000 standard requires less documentation than previous versions of ISO 9000, there may not be as many procedures to evaluate.  In this case the document review portion will be reduced.   During the document review of the manual and procedures your are trying to understand the process and the system and ensure the requirements of the standard are met.    
4. Identify Process Interfaces

Process interfaces are the “hand off” points from one process to another.  This is where the previous process in providing an input to the audited process and the audited process is providing input to another process.  How are process interfaces different from inputs and outputs?  An input is the deliverable the process uses and the process interface describes how and when the deliverable is achieved.  For example, an input into the purchasing process is the requirements of the purchased item.  Looking at the process interface we want to understand how are the requirements delivered to the purchasing process, when are they delivered and by whom?   In essence we are not looking at do the requirements exist, but are they clearly defined and understood by the process using them.  We want to investigate are the requirements delivered on time and are they accurate?

On the output side, we will look at those things the purchasing process provides to other processes.  Clearly one output is the purchased item on time, to specification and in the correct quantity.  Another consideration is how is it moved from purchasing to receiving and inventory.  There are other outputs of the purchasing process used by other processes.  One could be supplier selection for the item purchased.  Engineering or Quality may need to interface with the supplier and if the selection process is delayed, it could affect the design, or ability to qualify the product.

Understanding the process interfaces can lead to some audit questions concerning how smooth the hand off is between processes.
5. Identify Potential Process Failure Modes

Another tool we want to utilize is the pFMEA, which stands for “process failure modes and effects analysis.  You may have some background in FMEA’s and you may not.  Either way is alright because we are not going in depth in the FMEA process.  An pFMEA is a method to identify potential problems with a process before the process is implemented.  It is a preventive measure that aims to resolve problems before they occur.  For our purposes we will be concerned with the process function, the failure mode and the cause of the failure mode.  Below is an example of an pFMEA for the purchasing process:

Process Function      Failure Mode      Potential Cause               
get good product       bad  product       requirements not understood
                                                                  supplier is not capable
                                                                  not inspected enough
       

product on time        product is late    lack of capacity
                                                                 ordered late
                                                                 supplier out of product

low total cost             too costly            excessive rework
                                                                 excessive freight
                                                                 excessive testing

       
pFMEA’s are an exhaustive approach that generates a large quantity of potential audit directions.  By evaluating the prospective problems associated with a process, you can develop audit questions and an audit approach to ensure the potential problems are addressed.  This can lead to some findings that can have positive impact on the quality management system.      

6. Value Stream Map the Process
If you really want to energize the efficiency factor of your internal audits, then conduct a value stream map.  Value stream mapping is a lean manufacturing tool that aids in finding the activities in the process that are non value added.  Similar to the pFMEA example we will approach this tool in an overview so it can be used but we won’t go into great detail and explicit flowcharting that a lean project might require.  Lean initiatives would include takt time, inventory, etc, we will not include those for this use of the tool.  For this purpose you will flowchart the process activities and look for steps that could be eliminated or reduced.

7. Review Old Audits

A key source of information to develop your audit strategy is to review old audits.  Review both internal and external audits if available.  Look for areas of weakness or where findings were noted and see if action has been taken and if it’s still effective.  In reviewing an old audit of purchasing you find that there was a nonconformity written for the buyer not conveying to the supplier all of the requirements of the product.  Based on this you may want to gear some of the audit to see how effective the process is now at conveying the requirements to the supplier.
8. Develop Audit Questions
What we want to do now in the planning process is develop some questions based on the excercises listed above.

1. Turtle Diagram generated questions
How are the requirements for the purchased item documented and communicated?
Who specifies a budget and who monitors it to ensure it is not exceeded?
What training has the purchasing agent received and what is scheduled?
How is inventory monitored to ensure correct purchases at the right time?
What is the measure of the process?  Who monitors it?  What are the planned results and what happens when they are not achieved?

2. Interface with the Standard generated questions
Is there a procedure or work instructions describing the process?
Is the purchasing process covered in the quality manual?
Does the current process reflect what is documented?
How does the purchasing agent know what their responsibilities and authorities are?
Do they know and understand the quality policy and quality objectives?  What does it mean to them?
How are suppliers selected and rated?  Is it effective?
How are purchased items evaluated when received?
What happens when a purchased item is received and does not meet requirements?
Who reviews the data from the purchasing process?  Does the data get delivered to management?
How has the purchasing process been improved?  Has it shown improvement and what is currently being done to improve it.

9. Develop Audit Plan
Up to now you have developed an understanding of the business process you will audit, you have also used various tools to identify some audit questions or paths.  Now we will take this one step further and develop the audit plan.  The audit plan is your playbook for the audit.  If you fail to plan, then you plan to fail.  This statement couldn’t be any more true than in the auditing functions.  You develop the audit plan based on the questions and who you will audit.

Based on our previous work, we will develop our audit plan as follows:

Auditee:  Purchasing agent

1. Explain to me how the purchasing process works?
Verify that it is consistent with whatever is documented.
Document what is said, does it match what you had perceived?  If not make adjustments in your audit plan.  
2. How are the requirements for the purchased item documented and communicated to you?
Pick a critical purchased part and look for evidence of requirements being specified.  Are they clear and do they communicate the quantity, time frame and budget?       
3. How are the requirements communicated to the supplier?
Look for records that the supplier has acknowledged the requirements or was sent them.  You can also later review the incoming inspection or records relating to problems with this part, quality, delivery, quantity or price, this can be a reflection of how well they understand the requirements.  
4. How are the suppliers selected?
Look for evidence they followed their process and verify the effectiveness based on complaints or issues with the product. 
5. How is it verified the suppliers are capable?
Look for evidence that someone evaluated them for ability to meet the requirements.  Can they produce to the specifications?  Was capability studies done?  Do they have the capacity?

You can continue this process to develop a larger audit plan.  You can even develop questions and expected responses for other people such as engineering, quality, manufacturing, material control, etc.  It depends upon the scope of the purchasing process and who is involved. 
 

Improving Management System Internal Audits

The purpose of internal audits is to continually improve the management system.  When I refer to management system, I mean quality, environmental or your business management system.  In either case the internal audit should be a intricate part of the management system you are utilizing.  Most often the internal audit process or function is under utilized and viewed as a necessary evil in order to meet the requirements of a quality standard.

The time constraints on individuals makes it harder to free employees up to plan, execute, document and follow up an internal audit.  The effort to transition internal audits to improvement based, does not make that issue any easier.  In order to conduct a meaningful, effective audit that promotes and facilitates continual improvement, the auditor must spend an adequate time preparing.  The preparation of the audit dictates how effective it will be.

If we want to improve a process, what is the first step?  In all my years as a quality practitioner, I have heard and deeply believed that the first step to improvement is measuring.  If something is not measured, you should not expect to improve it.  The first step to improving the internal audit process is to measure it.  How do you measure it?  The internal audit process is a ratio that relates the relative importance of the findings or results of the audit.  To keep things easy to understand, let’s break the findings down into three categories and they are not major, minor and opportunity for improvement.  The three categories are effectiveness, improvement and compliance.

Describing these three factors with an equation we have the following:

                       V = (E + 2I)/C

Where V = the audit value, E= the number of findings associated with effectiveness, I= the number of findings associated with improvement and C= the number of compliance related findings.  The resulting equation will yield a value or index you can use as a reference measurement, the higher the index the more improvement focused the audit activity is, the lower the number reflects a focus on standard compliance.

I am not suggesting to disregard compliance to a standard, I am contending the focus of the audit should be improvement, effectiveness and compliance.  Too often compliance is the single biggest focus when conducting audits.  There is not much value in finding out that an employee did not complete a form correctly on a given day.  An isolated one time event is useless as a tool to improve a management system.  The point to remember is that whatever the auditors are focused on is what they will find.  If the focus is on compliance issues, that is what is found.  It’s similar to going bass fishing, you may catch a pike, but for the most part you will tend to catch more bass.

The effectiveness factor relates to those findings associated with improving the effectiveness of the management system.  Effectiveness is the gap between where your current performance lies and where you should be or the expected results.   A company has a expects to have 20 customer complaints per month, based on history.  During an audit, the evidence shows  the last few months have had customer complaints of 35, 48 and 55.  Further investigation uncovers the largest contributor to customer complaints is “poor technical support”.  Therefore, findings associated with improving the technical support will improve the effectiveness of the system as will those findings associated with the lack of effort in analyzing the root cause of customer complaints.   These types of findings are much more beneficial to improving the management system than one that documents one customer complaint out of hundreds, had no follow up activity.

The improvement factor is associated with findings that improve the overall management system.  That seems a bit simplistic but it relates to improving the expectation of the management system.  Using the same example above, lets say the customer complaints have been running at about 20 per month or right around the expectation.   Further analysis of the complaints uncovers the major cause to the complaints is “poor technical support”.  An improvement in technical support results in an improvement in the quality system.

A relatively new management system would experience a larger number of compliance issues as opposed to improvement or effectiveness findings.  If your management system is matured several years and you are still experiencing a large number of compliance findings,  you should evaluate the audit process.   Chances are, the auditors are finding compliance related findings because that is what they were trained to do and it is the easiest thing to find.  If you dig hard enough you can find an instance where a human made a mistake.

The audit value indicator is a measure that can be used to monitor the health and direction of the audit activity.  A continual creep in the audit value could indicate the auditors are focused more on improvement and effectiveness findings or it could mean they have neglected compliance related issues, which is not healthy either.  The audit index is a method to measure the internal audit function, because the first step to improvement is measurement.

  

Drive Decisions with Data

It sounds easy and well understood as best practice, but allowing the data to drive decisions is often times difficult.  Personal agendas, beliefs or past practices can infiltrate the conversation and provide alternative thinking.  Good sound data is the best decision making tool.  Whether related to a personnel decision, business process or outsourcing decision, accurate, valid data is the key.What is good data?  Many managers believe it is that which supports their gut feel and opinion, however, good data is objectively collected, effectively analyzed and acted upon.  Objectively collected data is that which is not contaminated by factors other than pure randomness.  If there are external, assignable causes present within the data you could be directed to false conclusions.  For example, let’s assume we have a transactional process where we are monitoring errors in the number of transactions completed.  We started tracking the data in January 2006 and the data is as follows:                                  

              Jan   Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov   Dec
Errors     20    18     21     22    25     25    31    28     35    38     38     37

In reviewing the above data one can easily see a moderate trend upward.  I realize this is basic and I am not questioning your statistical intelligence.  The intent of using data is not the utilization of a Monte Carlo study, design of experiment, multiple regression or response surface methodology.  I am referring to simple, basic statistical tools that can go a long way in driving correct, congruent decisions.  Referring back to the data above, anybody can tell you have an unfavorable upward trend that requires some immediate attention, right?  Not so fast my friend. Before you claim yourself winner of the “Jump to Conclusions” game, consider this, in May, torn documents were added to the list of errors, prior to that they were not counted.  Torn documents average 5 per month.  In September, a customer complaint added another error code to the transaction process.  Timeliness of the transaction was included as an error code in September.  Prior to that it was not counted as an error.  Timeliness or the transaction errors average about 10 per month. 

With the new error codes included the data looks like this:

             Jan   Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov   Dec
Errors    35     33    36     37    35     35    41    38     35    38     38     37

That looks a little different.  You may conclude that the increase in transactional errors was caused by the change in the error coding.  There was no change in the transactional errors, there was a change in the measurement method.  There is a difference.  This sounds basic, but often times measurement methods and data integrity are not understood and false indications are recognized.

Once we have ensured the data is objectively collected, now you must analyze it.  Take a look at the data below, which represents rpm’s of a motor:
                                                                     4600      3400
                                                                     3200      4400
                                                                     3400      3600
                                                                     4600      4400
                                                                     4400      4200
                                                                     3400      3400

Looking at the data, not much initially jumps out.  however lets put it into a simple histogram.

                                                                      RPM       Occurences 
                                                                     3200            1
                                                                     3400            4
                                                                     3600            2
                                                                     3800            0
                                                                     4000            0
                                                                     4200            2
                                                                     4400            4
                                                                     4600            1
                  
Hmm, that looks a little different.  Somewhat appears as if there could be two distributions occurring.  A bimodal distribution could be the result of many causes, either way it requires further investigation.  My point is not to insult your statistical intellegence, my objective is to reinforce the power that lies in simple statistical tools.  Basic data analysis can go a long way in discerning fact from fiction when it comes to what the data is telling you. 

There is a place for more advanced statistical tools and they are invaluable, however these basic tools have a distinct advantage when they can be applied.  For one, they are simple to use.  With some initial training, the basic statistical tools can be utilized with good effectiveness.  Number two and most important they are easy to understand.  Top management can understand and grasp average, run charts, histograms, pareato charts and the other basic statistical tools.  Try getting your point across when you’re blabbing on about a two way analysis of variance or an F-test.

When the job you need to complete, entails putting a nail in a 2×4, you don’t need a hydraulic, computerized numerical controlled force application device, a hammer will work fine.           

Transition from Quality Management System to Business Management System

Many organizations develop and maintain a quality management system.  The system was created out of an internal desire, customer requirements or simple need.  The quality management system is an excellent building block for a company to grow from.  The problem with quality managment systems is that they do not evolve and morph into anything different, they remain a quality management system.

The ISO 9000 series of quality management standards is an excellent choice when starting from the ground up implementing a quality management system.  The eight principles of ISO 9000 provide the foundation upon which a solid quality managment system can be developed, deployed and mantained.  When you achieve that where do you go?  Many are left with an empty feeling that ISO 9000 is a bit simplistic for their needs and they require more demanding criteria, such as TQM or Baldrige criteria. 

Both TQM and Baldrige criteria are good directions to choose for advancing management of your business model but your first step should be to move you quality management system to a business management system.   If you are managing a quality system separate from the rest of your business and you are looking at lean, six sigma, kaizan or any of a number of improvement strategies, STOP.  I am not suggesting these other improvement activities can’t help, they most certainly can, but before you embark on them I would suggest you create a business management system. 

A business management system applies all the requirements of your ISO 9000 quality management system to the rest of your business.  I know it is not a requirement of ISO 9001 but are you looking at improving or meeting the minimum requirements?  Incorporate the strategic planning process into your business management system.  The strategic planning process would include strategy development and deployment.  You should have a process for this and a metric that indicates how the process is performing.

The next section of your business to get incorporated within the business management system is the accounting processes.  There are multiple processes occuring within accounting that go uncontrolled, monitored or improved.  If you doubt this, at the next staff meeting try to determine the true costs of some of the products or services you provide.  Then try to assign costs to the transactional activities occurring within your business.  In order to understand the accounting processes you must measure them, be able to predict the output and continually improve them.

The next portion to be included within the business management system is sales and marketing.  You won’t find them mentioned in ISO 9000.  But chances are, you have those processes and activities occuring within your business model.  Again, there must be metrics combined with actions to continually improve the performance.  

Once you align the business activities and processes along with measurements for them you will be able to discern improvement plans.  It will be very clear what areas require activites for improvement and for corrective action. 

Implementing ISO 9000

You may be in a position where your customers are demanding you implement an ISO 9000 quality system or you would like to do it for the benefits it can provide your organization.  You don’t have the resources to hire a consultant to help you.  Can you achieve this task on your own, without the help of a consultant?  Yes.  You can do it with the resources you have.

Will a consultant provide you a better quality system than you can implement yourself?  No.  I say that not as a disrespect to consultants but because quality systems are ever evolving and developing.  It’s not where you start that is important it’s where you’re going and where you end up in a year or two down the road.  A consultant can expedite the process and save you a great deal of time.  What takes you a day to do and figure out, a consultant can do in an hour or two.  Based on this, why would anybody hire a consultant?  The same reason some people hire someone to mow their yard and do their landscaping, they don’t have the time or they want it done quickly.

You’re in a position to implement ISO 9000 but you can’t afford the cost of a consultant, what do you do?  The first thing is to gain information.  You need to become educated in the ISO 9000 standards and what they mean and their intent.  Whether you hire a consultant or are choosing to implement a quality system on your own you need to purchase the following list of standards:        

ISO 9000:2005      Fundamentals and vocabulary
ISO 9001:2000      Requirements
ISO 9004:2000      Guidelines for performance improvements
ISO 19011:2002    Guidelines for systems auditing
ISO 10014:2006    Guidelines for realizing financial benefits

You can obtain these standards from the International Organization of Standardization (ISO), American Society of Quality (ASQ) and the American National Standards Institute (ANSI).Here’s the most important piece of advice I can give you, once you have purchased these standards, READ THEM.  Find yourself a quiet place and read them.  Read them several times.  The reading is dull and the wording is somewhat confusing, it’s alright, read them.  These are international standards, not a John Grisham novel.  You’re not going to be riveted to the reading and hardly waiting to get back to it. You may find yourself more confused after reading them, that is fine, keep reading.

 After a several readings, it will begin to make sense to you.  You will gain a new understanding of what the standards are saying and begin to realize what needs to be done and how to do it.  Now you’re to the point where you understand the standard and what needs to be done.  If you ever question anything or are not quite sure, refer to the standard.  Go back and read it again.  The first thing you need to do is provide an overview for your top management.  If you can’t afford to buy some training, (it’s fairly inexpensive), then provide the training yourself.  Chances are, your top management knows significantly less about ISO 9000 than you do.  That makes you an expert and should you travel greater than 50 miles you’ll be referred to as a consultant.

Your training to top management should answer the following questions, what is ISO?, what is it going to do for us? why are we implementing it? how much is this going to cost us and how long will it take? how are we going to do it?  what role does top management have?  Here’s a starting point for your answers.

What is ISO?  ISO 9000 is an internationally recognized quality management systems standard.  It’s premise is based on knowing customer requirements and continually enhancing customer satisfaction.  This is achieved by developing key business processes, monitoring them with metrics against objectives to ensure effectiveness and putting forth effort to continually improve those processes. What is it going to do for us?  The adoption of an ISO 9000 quality system allows us to consistently provides products and services to our customers that meet there expectations and continually enhance their satisfaction.  Why are we implementing ISO 9000?  Chances are it’s one of two reasons, one is your customers are requesting it or two you are interested in achieving the results in can provide. 

How much will it cost and how long will it take?  If you complete it internally you can plan on it taking about a year (depending on your size and available resources) and it won’t cost you anything other than what you are currently paying people.  You should plan on spending about $1,100 – $1,300 dollars for one person to go to internal auditor training.  That person can then train the rest of your designated internal auditors.  The registration audit will be $5,000 – $6,000 and the surveillance audits run $3,000 per year.  Roughly, you’re looking at a one time cost of $9,000 and annual cost of $3,000.

How are we going to do it?  We will perform a gap analysis to determine our deficiencies and develop an implementation team from that.  We will track the progress of implementation.  What role does top management have in ISO 9000?  Top management has the biggest role.  That group is responsible for the planning, development, maintenance and improvement of the system.  Top management is expected to be actively involved in reviewing the designated process metric data and making decisions based on that data. After you train top management, you must assess where you are now.  There are most likely processes in place that are being done even without documentation.  Write down all of your key business processes, accounting, purchasing, human resources, customer service, etc.   After you get them written down, now you need to flowchart them out to document how they work.  A simple downward flowing flowchart in one column with responsibility in another column and the last column has records. Once you get them documented, now go through the standard and write down any process, clause or section of  the standard that your current process does not address.  These are the gaps in your system.  They are the areas the standard states needs to be addressed that you are not.  Once you have this, put it into a document where you can track the action against who is responsible and time line agreed to.  Similar to this:

           Action                               Responsible                   Date      
Develop internal audit process          Joe  F.                      11-14-06

Train internal auditors                      Tom C                       12-18-06

After you have transferred the actions needed into the above format, you have developed your implementation plan.  Ensure this plan is reviewed and monitored by top management frequently.  They must be kept in the loop.  At some point of the implementation you will want to train the entire workforce on ISO 9000.  Work out a schedule that is flexible.  It does not have to be extremely detailed, but gives them a good understanding of what it is, why you’re doing it, how it impacts them.  Good luck, you can do it.

Outsourcing to China – Avoiding the Hidden Costs

In boardrooms across the country, executives are frenzied about the opportunity provided with outsourcing products from high cost, high overhead manufacturing facilities in the United States to the low cost region of China.  In an effort to contain costs, many organizations are flocking to China to harvest the fields of low cost labor.  When you think that they pay $150.00 per month to an employee working six, 10 hour days you shake your head in disbelief and say “sign me up”.  The outsourcing strategy to China is a sound one and needs to be utilized by anyone who is involved within manufacturing.  The decision to outsource is one that should be analyzed thoroughly and to realize the true savings is to understand the true costs.

There is an unbelievable number of factories in China capable of producing all kinds off different products, with new plants going live everyday.  Past experience has proven that the contract manufacturers in China have a definite niche within manufacturing and there competitive advantage is insurmountable within their niche.  Their niche centers around the mass production of an easy part.  An easy part is the product manufacturing equivalent of a slam dunk in basketball.  An easy part has low complexity, a static design and tolerant to special cause variation.  Tolerance to special cause variation indicates a product produced that is not to design intent will perform as intended without, a significant reduction in reliability and is not noticed by the customer.

The characteristics of a complex part is the basketball equivalent of a three point shot.  The part is complex, has a dynamic design that continues to change and improve and worse yet offers little latitude for process variation.  The fluctuations in process variation and introduction of special cause variation translate into noticeable reductions in performance and reliability.  If your strategy is to outsource a difficult part to China, you can do it successfully, you need to modify you current quality system to ensure success.

As quality systems evolved in the United States, a transformation occurred from a vertically integrated inspection based operation to a systems based core competency operation.  Years ago, the quality initiative was a dedicated group of inspectors who policed a production focused environment where designs were completed in obscurity and tossed to manufacturing at the last minute to meet launch dates.  We have matured to the point where most of the problems are identified and corrected in the design phase by incorporating FMEA’s, Design for Manufacture and the input of all affected functional areas.  We incorporate metrics to monitor our processes and indicate when improvement or corrective action is needed.  Not all US manufacturer’s quality systems are at the same level, but on average the maturity and effectiveness of them has increased over the years.  Subsequently, when dealing with a domestic supplier you have a general understanding of what  you can expect.

A Chinese supplier has a quality system similar to those prevalent in the United States in the 1960’s.  They are extremely production motivated, heavily inspection based with little or no effort focused on process improvement, data driven decisions or process control.  These obstacles are not insurmountable with adaptation of a quality system to counteract these issues.

A system must be in place to monitor the process and product constantly, from design phase through launch and throughout production.  The design phase requires a group to work with the Chinese supplier to gain an understanding of their process capabilities and key features of the design.  At the launch or pilot build, you should have representatives there to monitor the product and process.  Evaluation of process capabilities, test results, data analysis and process improvements is the focus of this team.  Once production is approved, you must execute some level of surveillance that includes periodic visits to review the quality system, data reporting, test results, process change validation and component changes. 

In order to facilitate the successful launch of a difficult product with a Chinese contract manufacturer, you must allocate various resources to their facility to execute the quality activities that would normally be completed at your own facility.  Doing this minimizes your added costs of outsourcing to a Chinese manufacturer.

There will be numerous costs added when doing business with a Chinese supplier.  Cost number one is inventory.  You are not shipping this stuff from two states away, it is literally on a slow boat from China and there will be lots of it.  Cost number 2 is sort and rework.  Depending how well you execute the quality activity mentioned above determines how much cost you absorb here.  If you neglect communicating and interfacing with the Chinese during the design, pilot run and ongoing production and allow their quality system to drive the results, you should budget generously in your sort and rework account.

Cost number 3 is shipping.  Again, this is not coming from across town, are you accounting for that cost or is it buried in your abyss of overhead.  Cost number 4 is obsolescence.  With a dynamic design, the changes are inevitable, however the Chinese are not purchasing components on a small scale and when a change is made they cannot react quickly without obsoleting already purchased components.

Sourcing a difficult part to China can be achieved with the same quality system approach you would utilize at your facility.  You must go over there and see it through.  It will not happen on it’s own and they will not utilize the tools and techniques necessary to ensure a new product launch and ongoing design changes occur without issues.