Business Sustainability: Going Beyond ISO 9004:2018
By Alka Jarvis and Paul C. Palmes
()
About this ebook
Leaders must be ready to adopt the thinking that there is no such thing as long-term competitive advantage anymore, due to the constantly changing landscape, and they will have to repeatedly redefine and redesign business strategies to survive.
ISO 9004:2018 represents a major contribution in the application of sound business and quality management systems practices, but authors Jarvis and Palmes will help you go beyond” it with the current widely used state-of-the-art technologies and practices described in this book. They have spent years evaluating where mature and successful organizations are heading, whether they are small or large, and are among the group of experts who developed ISO 9004:2018.
Topics covered include disruptive technologies, culture for sustained success, organizational identity, leadership, process management, and more.
Alka Jarvis
Alka Jarvis has 30 years of experience in software engineering, including 19 years spent in implementing quality management principles. Her background encompasses telemetry, cloud, IoT, customer experience, product and process quality, industry standards, corporate knowledge management, and training. Cisco’s first and only Distinguished Quality Engineer and a Fellow of American Society for Quality (ASQ), Alka has worked in a variety of capacities for Fortune 500 companies such as Apple, Bank of America, and AT&T, and she is a 22-year veteran of Cisco. A frequently invited speaker on quality assurance topics at international as well as domestic events, she has been an adjunct lecturer at Santa Clara University in computer engineering for the past 23 years. Her subject matter expertise is reflected in the eight books she has authored on the topics of customer experience and expectations, software engineering, quality management standards, and telemetry. Alka is also an instructor for the software engineering courses at the University of California Santa Cruz and Berkeley extensions and won Silicon Valley’s “Corporate Woman Advocate of the Year” award for her accomplishments in the software quality field. ASQ recognized Alka by publishing her achievements in their “Who Is Who in Quality” article. In her role as the chair for nine years, representing the United States to the Technical Committee 176 for the International Organization for Standardization(ISO), she has been instrumental in the development of the 2000, 2004, 2008 versions of ISO 9001 and 9004 quality management standards. Alka was a member of the drafting committee and contributed in the writing of the latest ISO 9001:2015 version and is an ISO lead auditor, certified by Exemplar Global of United States for the past 23 years. Named as an expert on Industry 4.0/Smart Manufacturing, she represented the American National Standards Institute (ANSI) and the United States in the strategic advisory group to the ISO’s Technical Management Board at an international level. Alka serves as the chair for the U.S. Standards Group Council; was a member of ASQ’s Learning Institute Advisory Board; served as president ofthe Bay Area Quality Assurance Association (BAQAA); has been an Applied Total Quality Advisory Board member for University of California Berkeley Extension; an advisory board member to the Certificate Program in Continuous Improvement & Quality Management at the University of California Santa Cruz Extension; board member of the Quality Assurance Institute; an advisory member for ASQ’s 2015 and 2016 International Conference on Quality Standards; and Vice President of Indian Business and Professional Women. In her spare time, Alka enjoys mentoring and coaching students and young professionals to achieve their full potential in their aspirations. Having passion for food and fine wine, she spends endless hours on weekends discovering elegant restaurants in San Francisco and nearby Napa Valley with friends.
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Business Sustainability - Alka Jarvis
Business Sustainability
Also available from ASQ Quality Press:
Quality Experience Telemetry: How to Effectively Use Telemetry for Improved Customer Success
Alka Jarvis, Luis Morales, and Johnson Jose
Achieving Customer Experience Excellence through a Quality Management System
Alka Jarvis, Luis Morales, and Ulka Ranadive
Process Driven Comprehensive Auditing, Second Edition
Paul C. Palmes
The Magic of Self-Directed Work Teams: A Case Study in Courage and Culture Change
Paul C. Palmes
Navigating the Minefield: A Practical KM Companion
Patricia Lee Eng and Paul J. Corney
The Certified Software Quality Engineer Handbook, Second Edition
Linda Westfall
Introduction to 8D Problem Solving: Including Practical Applications and Examples
Ali Zarghami and Don Benbow
The Quality Toolbox, Second Edition
Nancy R. Tague
Root Cause Analysis: Simplified Tools and Techniques, Second Edition
Bjørn Andersen and Tom Fagerhaug
The Certified Manager of Quality/Organizational Excellence Handbook, Fourth Edition
Russell T. Westcott, editor
The Certified Six Sigma Black Belt Handbook, Third Edition
T. M. Kubiak and Donald W. Benbow
The ASQ Auditing Handbook, Fourth Edition
J.P. Russell, editor
The ASQ Quality Improvement Pocket Guide: Basic History, Concepts, Tools, and Relationships
Grace L. Duffy, editor
To request a complimentary catalog of ASQ Quality Press publications, call 800-248-1946, or visit our website at www.asq.org/quality-press.
Business Sustainability
Going beyond ISO 9004:2018
Alka Jarvis and Paul C. Palmes
ASQ Quality Press
Milwaukee, Wisconsin
American Society for Quality, Quality Press, Milwaukee 53203
© 2018 by ASQ
All rights reserved. Published 2018
Library of Congress Cataloging-in-Publication Data
Names: Jarvis, Alka, author. | Palmes, Paul C., 1948– author.
Title: Business sustainability : going beyond ISO 9004:2018 / Alka Jarvis and
Paul C. Palmes.
Description: Milwaukee, Wisconsim : ASQ Quality Press, [2018] | Includes
bibliographical references and index.
Identifiers: LCCN 2018023193 | ISBN 9780873899727 (soft cover : alk. paper)
Subjects: LCSH: Total quality management. | Quality control—Management. |
Industrial management.
Classification: LCC HD62.15 .J396 2018 | DDC 658.4/013—dc23
LC record available at https://lccn.loc.gov/2018023193
ISBN: 978-0-87389-972-7
No part of this book may be reproduced in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher.
Ray Zielke: Director, Quality Press and Programs
Paul Daniel O’Mara: Managing Editor
Randall L. Benson: Sr. Creative Services Specialist
ASQ Mission: The American Society for Quality advances individual, organizational, and community excellence worldwide through learning, quality improvement, and knowledge exchange.
Attention Bookstores, Wholesalers, Schools, and Corporations: ASQ Quality Press books, video, audio, and software are available at quantity discounts with bulk purchases for business, educational, or instructional use. For information, please contact ASQ Quality Press at 800-248-1946, or write to ASQ Quality Press, P.O. Box 3005, Milwaukee, WI 53201-3005.
To place orders or to request ASQ membership information, call 800-248-1946. Visit our website at http://www.asq.org/quality-press.
Printed on acid-free paper
List of Figures and Tables
Figure 1.1 Excellence models most frequently used globally.
Figure 1.2 Process approach.
Figure 1.3 Evidence-based decision making.
Figure 1.4 Main skills required to practice in an evidence-based way.
Table 1.1 NPS categories, scores, and descriptions.
Figure 1.5 Some of the impacts of return on relationship (ROR).
Figure 1.6 Organizational context.
Table 1.2 Sector-specific standards.
Figure 2.1 Deming improvement wheel.
Figure 3.1 Needs and expectations of interested parties.
Figure 3.2 SWOT and interested parties.
Figure 4.1 Organizational identity.
Figure 4.2 Necessary foundation of mission, vision, and values.
Figure 6.1 Internal stakeholders.
Figure 6.2 Key benchmarking activities.
Figure 6.3 Process dependencies.
Figure 7.1 Competence connections.
Table 7.1 Training table.
Table 7.2 Commodities and partnerships.
Figure 8.1 Activities and data.
Figure 8.2 The seven steps of a closed-loop root cause analysis process.
Figure 8.3 Benchmarking checklist.
Table 9.1 Successful plan versus not successful plan.
Table 9.2 Traditional technology versus disruptive technology.
Figure 9.1 Process components.
Figure 9.2 Learning process components.
Figure 9.3 Concepts and design.
Figure 9.4 Concepts, design, and risks.
Figure 9.5 Learning/innovation process components.
Figure 9.6 Project estimation and post-project assessment.
Figure I.1 Maturity levels.
Table I.1 Maturity level snapshot.
Table II.1 Levels and descriptions of scoring: example 1.
Table II.2 Levels and descriptions of scoring: example 2.
Figure IV.1 SWOT analysis.
Table V.1 Active national business excellence awards.
Acknowledgments
This work would not have been possible without hundreds of hours contributed by worldwide quality experts. It is their dedication and zest for weaving through numerous discussions that generated many excellent ideas and approaches for business sustainability and a positive customer experience.
We wish to thank Sunita Chulani for her contribution of the Quality Award section, and Karen Snow for working with us on the assessment models.
The project’s success is also due to ongoing and unwavering support from our publisher, Ray Zielke, and our managing editor, Paul Daniel O’Mara, and we thank them for their guidance and patience.
Chapter 1: Introduction
Implementation of a quality management system (QMS) such as ISO 9001:2015 will define foundational quality, while ISO 9004 encourages organizations to go beyond the fundamental QMS requirements to be able to address all the challenges today’s business environment is faced with.
Sustaining the techniques required to have widespread brand recognition of your company and surpass the competition is becoming tougher with constant changes in technology, customer needs, customer expectations, the global economy, and other ongoing fluctuations in various business sectors. Companies that constantly keep an eye on competitive advantages and continually reinvent have the biggest potential for long-term sustainability. Most leaders and their executive teams strive to create organizations where employees want to be fully engaged, dedicated, and excited to come to work. A problem, however, is in thinking that only one company-wide competitive advantage will connect and resonate with everyone throughout the organization. Using a one-size-fits-all approach is an ill-advised solution and will not draw the needed market share. In order to gain new business and obtain an edge over their competitors, leaders must establish a strategy to obtain information from internal and external sources and develop a company-wide approach. However, the leaders must be ready to adopt the thinking that there is no long-term competitive advantage, due to the constantly changing landscape, and they will have to repeatedly redefine and redesign competitive advantage to survive.
Competitive advantage as it existed in the 1970s and 1980s is no longer valid. Two examples that come to mind are Kodak and Xerox. In the case of Kodak, its core business was film, and when cameras went digital and literally converted into cellphones, the cameras once used to take photos became obsolete as consumers changed from printing pictures to sharing them online. There are complex reasons for Kodak’s downfall, however, an easy explanation is that Kodak was so blinded by its competitive edge that it missed the rising popularity of digital technologies. Xerox was also way ahead of the game, and owned a large share of the copier market. As the lines between printers and copiers blurred, and low-priced copiers and competition from Hewlett-Packard came on the market, Xerox was too late in recognizing the market transitions and adapting to the changes.
At the same time, two companies who are constantly revisiting strategies, products, and required attributes to stay ahead are Coca-Cola and Procter & Gamble. Both of them have enjoyed long-term success and have tremendous power behind their brands. Among many other reasons for this, one of them is they are continuously monitoring and improving their brand marketing to stay ahead of other market competitors.
There is a big technology shift in the marketplace, and you will have to expand your vision to delight customers and determine how you can optimize the technological as well as the industrial disruptions to ensure an ongoing incremental increase in customer satisfaction.
Even if you are best-in-class, there are others who are constantly trying to achieve excellence, and your number one position as best-in-class can be affected negatively if you are not on top of what is required to remain ahead in the industrial race. The Internet has made it easy for small or large competitors to be more global and more disruptive by lowering their price and reducing profit margins. This is putting businesses under tremendous pressure to be better decision makers, adopt ongoing changes faster, and stay abreast of varying trends in customers and the economy.
To have long-term success, your strategic plan and competitive advantage must be continuously examined and, if necessary, reinvented to separate you from the competitors. As you read through the chapters, you will understand why we emphasize that in order to excel and operate a risk-free continuing business, many of these changes must be considered, regardless of the size of the company. In order to go beyond, we need to also understand the disruptive technologies that are affecting companies.
Please note that throughout this book we will use the word products
to refer to both products and services.
1.0 The Disruptive Technologies
Let us discuss the many technical challenges and innovations that are impacting organizations worldwide. Technology trends are important for any business venture as they have an impact on how your customers can reach you, and influence growth by offering new products. To be successful, heighten the positive experience of customers, and provide products that will make users successful, you will have to address, implement, and navigate through the changes we have listed, and many others that need our attention. In their book Quality Experience Telemetry (2018), Jarvis, et al. emphasized and elaborated on digital design, digitization, the Internet of things (IoT), cloud computing, machine learning, and telemetry. They have identified these as technological tipping points for productivity and growth to increase agility, enhance productivity, and substantially improve processes.
With the present trade environment and world awareness of superior brand products, all these technologies play a critical role in achieving sustained success of businesses, and not just for large companies, but also small businesses who may be suppliers to the large companies and are also able to beat the competition and gain market share. Simple networking capabilities can give a small business the look and appearance of a large, successful, revenue-generating corporation. Technology empowers organizations to service customers efficiently, assists in producing better products more quickly, and enables them to grow faster. It also helps in connecting the consumers and the companies that offer products, data analysis for faster decision making, and precise manufacturing of products. Since technologies change, companies who want to stay abreast need to constantly evaluate new technologies and adopt them. Bear in mind that this has large risks but larger rewards.
We will now review some of the key technologies that have had a huge impact in today’s economy. These technologies cannot be ignored for the long-term survival of any company:
• Cloud computing
• Big Data
• Connecting everything (Internet of things)
• Digitization
• Security
• Telemetry
• Artificial intelligence (machine learning)
• Social media
1.01 Cloud Computing
Cloud computing has taken the business world by storm. It is a way to store data and use computing services—servers, storage, databases, networking, software, analytics, and more—over the Internet (the Cloud
) instead of your computer’s hard drive. The traditional way of buying software from a company and using it until the next version is released will soon become a thing of the past. With the cloud, you can also do backups and recover data, host blogs and websites, deliver software on demand, build models based on statistical data, and much more. There are several companies who offer services for cloud computing, known as cloud providers, who charge you based on your usage of their services. The advantages are that you do not need data centers or space to store your data and you also do not need resources to run the data centers. All this is done by another vendor, with the cost of operations and maintenance passed along to your company. Cloud computing has eliminated the need to buy huge machines and upkeep them. It is becoming much simpler for all types of businesses, whether large or small, to subscribe to cloud services and have their data readily available and accessible from any point around the world.
1.02 Big Data
The term Big Data may be new, but the concept of collecting information for better decision making is old. These days, Big Data is on the top of mind
for many executives, and the process involves collecting a variety of data such as:
• Both structured and unstructured information
• Numeric data in traditional databases
• Video
• Audio
• Stock ticker data
• Financial transactions
• Social media
• Business transactions
• New media
• Machine to machine communications
In summary, it is comprehensive and integrated enterprise information management capability for improving data-driven decision making in order to gain insights that result in better and strategic decisions. Appropriate data such as product usage, product downtime, product ship time, duration it takes the product to arrive at the customer site, and so on, is collected and analyzed by data analysts or data scientists and other decision makers in the company. With the required knowledge and competency, these analysts and scientists are able to provide visibility to accelerate innovation, drive decision making, change business processes, and ensure availability of resources to continually improve, thus demonstrating value to the organization.
If the data are not handled with care, it can add to the complexity of a corporate IT environment. In addition, as described above, since the data come from different sources and in different formats, it is challenging to transform them into a meaningful action plan by correlating relationships. However, it is necessary to address this in order to stop the data from quickly spiraling out of control.
The most important aspect is not how much data you collect, but how the data are used for improvement opportunities such as cost reductions, increasing productivity, and offering enhanced services. Through the combination of data and analytics, business-related activities can be achieved, such as:
• Risk analysis and risk-based thinking
• Root cause analysis, corrective and preventive actions
• Improving features of products based on customers’ usage patterns
• Increasing or decreasing support staff based on customer buying patterns
Literally all sector-specific businesses are involved in the use of Big Data, one way or the other. Following are a few examples:
• Banks. The financial industry is faced with security issues. In order to prevent fraud, they evaluate data coming from countless sources. This not only provides an ability to detect fraud but provides the ability to understand customer satisfaction and offer new services.
• Government. Critical information on traffic congestion, crime, immigration, housing, and so on, allows the government to address these issues, economic pressures, privacy, and many others, and facilitate public safety.
• Education. Armed with the data, universities and school systems are able to develop better curricula to provide the knowledge needed in today’s fast-paced education environment. They are able to develop courses and prepare students based on market needs.
• Retail. Consumer buying patterns are constantly changing due to economic and social pressures. To manage customer expectations and stay ahead financially, the retail industry is using Big Data to make decisions on new innovations, time to market, geographical areas in which to introduce new products, particular consumer groups to target, and many other critical decisions.
1.03 Connecting Everything
Connecting various objects via network for collection of data and analysis is known as the Internet of things (IoT). The easiest and highest-level definition of IoT is given by the Internet of Things Global Standards Initiative: The Internet of things is the network of physical objects or things
embedded with electronics, software, sensors, and network connectivity, which enables these objects to collect and exchange data.
Smart cities are developed with many integrated concepts of IoT, including connected wearable devices, connected cars, and smart houses. All these generate data about activities and performance that can be processed and utilized for better performance, better service, or better yield. Hyperconnectivity of powerful, tiny devices—that are put in office buildings, homes, restaurants, museums, bridges, cars, and other logical points and collecting large amounts of data—is utilized to promote productivity and predictive delivery of products with quality outcomes.
1.04 Automation (Digitization)
The competitive business environment requires agile methods to lower operation cost by utilizing the process of automation to convert existing manual processes to digital processes. One such simple process that comes to mind is obtaining approvals from various internal stakeholders. (Note that ISO 9004 mentions the term stakeholders as interested parties, refer to section 3.1 for a complete definition.) Getting approvals, if done manually, may take hours or days. In the event it is automated, the approver is notified via use of a software application system to approve the document, which takes a split second. Even the reminder to approve is sent in a similar way, thus saving time and effort.
The automation challenge relates to the sheer volume of processes and data collection that can be automated. The activity involves determining the type of data that should be collected, automated, transported, and stored, taking the storage and maintenance costs into consideration. At the same time, identifying the actions necessary to evaluate the results from the automation is also time- and resource-consuming.
With automation, companies are able to provide intelligent interfaces between the users and the company, thus cutting down expenses related to the middle men,
that is, physical ordering department or customer support call center. At the same time, product companies are shifting to platform companies, where they have the entire digital ecosystem established to deliver the best customer experience. Products are autonomously put together in a factory, complete with an invoice, and then shipped to customers without human intervention. They are able to track things better, control quality, and cut down time to market. Granted, the product companies are not going to vanish, but they will face increased competition from companies that provide a digital experience with greater accuracy.
Each activity identified in the ISO 9004 self-assessment can be digitized, thus increasing reliability by eliminating human intervention. In the fast-paced business environment, digitizing many of the day-to-day activities is a large contributor toward sustainability.
1.05 Security
In the business world, we have addressed processes for the past 30-plus years. But now we have to deal with online data, which are more precise. These data need protection so that they are not hijacked, misused, changed, or published without permission. Security and awareness are also vital to safekeeping your customers and your business to avoid unwanted penetration through the fabric of your IT infrastructure by hackers, or breaches involving personal information.
Security is not considered nice to have
as the alternative can cause tremendous disruptions and turbulence. For this reason, it is also required by law. Here are a few examples:
• Sarbanes-Oxley Act and Gramm-Leach-Bliley Act: financial institutions
• Federal Information Security Management Act (FISMA): federal government
• Sarbanes-Oxley Act: publicly traded companies
The Internet, which has benefited all of us, really comes with a