WELCOME TO Quality Management

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WELCOME TOQuality Management
Ken Manicki Sr. Program Manager Office of Science
Technology NM Economic Development Department

• NEW MEXICO
• ECONOMIC DEVELOPMENT DEPARTMENT

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Quality Management System

• Why the need of a Quality Management system?
• Prior to 1970-Primarily National Business
• Companies would send out audit teams
• After 1970-Global Business
• Companies from Europe Asia would not send
  audit teams. Require a Management System

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What is a Quality Management System?

• An effective management system is the structure
  that defines an organizations goals, policies
  and procedures and the process by which they are
  maintained and improved.
• It requires documented processes, clear-cut
  responsibilities, ongoing training, internal
  checks for compliance, a way to correct
  noncompliance, management reviews and continual
  improvement.
• The critical aspect of a management system is
  that all elements work cohesively toward the
  stated objectives.

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Quality Management System

• Benefits
• Provides a framework for existing quality
  functions and processes
• Operational Effectiveness
• - Consistency across the organization
• Improved Customer Relations
• - Consistent approach to complying with
  customer
• quality requirements
• Continuous Improvement
• Accountability

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Quality Management System

• 4 Pillars of a Quality Management System
• Management Support
• Procedures
• Internal Audit
• Corrective action

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Quality Management System

• There are two recognized Quality Management
  Systems
• Malcolm Baldrige Quality Award
• ISO 90012000
• Other systems to be considered
• Capability Maturity Model (CMM)
• Six Sigma

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MALCOLM BALDRIGE AWARD

• All Businesses are place into 3 categories
• Business
• Education
• Health Care
• A U.S. Award Program by DOC through NIST
• Only two winners per category per year
• A winner can not apply for 5 years
• A winner is not audited during the 5 years
• Not recognized 2 Winners/year No Audit

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MALCOLM BALDRIGE AWARD

• Improves organizational performance by
  facilitating knowledge transfer
• Focus on improvement of methods and overall
  business results
• Evaluates by identifying strengths and
  improvement opportunities
• Scoring indicates maturity of systems

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ISO 90012000

• A series of Quality Management standards accepted
  by over 150 countries including Mexico, Canada,
  the European Community, and Asia
• Major U.S. companies and Agencies of the U.S.
  Government requirement
• A set of requirements and guidelines defining an
  effective quality management system
• A basis for assessment and registration
• Customer will ask for Certificate Number and
  possibly Quality Manual and Audit reports

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Capability Maturity Model (CMM)

• Initiated in Response to the Request of the U.S.
  Government to Provide a Method for Assessing the
  Capability of its Contractors
• A Framework that Describes the Key Elements of an
  Effective Process
• Serves Two Major Purposes
• Guide Process Improvement Efforts in a Software
  Organization
• Assist With Identifying Contracting Organizations
  That Are Qualified to Perform Software Work

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Capability Maturity Model (CMM)

• Method for Evaluating the Maturity of an
• Organization 5 Levels
• Initial Follows little or no rules
• Repeatable Successes are repeatable
• Defined Use the same rules
• Managed Using precise measurements
• Optimizing Quantitative feedback

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Capability Maturity Model (CMM)

• Covers Practices for Planning,
• Engineering, and managing Software
• Development and Maintenance
• Improve the Ability of Organizations to
• Meet Goals for Cost, Schedule,
• Functionality, and Product Quality

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Six Sigma

• A Total Management Philosophy OR
• Simple Process Improvement Effort
• Data Driven Decision Making
• Relates to the Mathematical Defects in a
• Process

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Six Sigma

• Focus on Systematically Eliminating the
• Defects so They Can Get as Close to
• Zero Defects as Possible
• Six Sigma 3.4 Defects /Million
• Two Sigma 308,537 Defect/Million

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Six Sigma

• Fundamental Principle to Improve
• Customer Satisfaction by Reducing
• Defects
• Methodology Consisting of 5 Steps
• Define Measure Analyze Improve
• Control

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Six Sigma

• Steps Required
• Have a Stable Process
• Determine the Biggest Problem
• Assign the Best People
• Provide all the Necessary Tools
• Allow Unlimited Time

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ISO 90012000

• Fast Facts
• ISO - Greek, from isos, Equal- for all types of
  business interpretation in 150 countries
• Originated in 1987
• Certificates issued worldwide
• 93 27,816 companies in 48 countries
• 03 567,985 companies in 152 countries
• Certificates issued in North America
• 93 1,201 companies, 893 in the U.S.
• 03 55,265 companies, 41,571 in the U.S.
• Certificates issued in New Mexico
• 03 110 companies

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ISO 90012000

• Benefits
• Reduce process complexity and variability
• Promote the layout and documentation of key
  processes and procedures
• Provide a foundation for continuous improvement
• Ensure that good business practices are
  consistently applied and customer satisfaction is
  achieved
• Improve staff involvement in the ownership of
  processes and train new staff

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ISO 90012000

• Only 6 Procedures Are Required
• Control of Documents
• Control of Records
• Internal Audit
• Control of Nonconforming Product
• Corrective Action
• Preventive Action
• You Will Probably Have More

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ISO 90012000

• Based on eight Quality Management Principles
• Customer focused organization
• Understanding customers needs, striving to
  exceed their
• expectations
• Leadership
• Establishing direction, unity of purpose,
  and a supportive
• work environment
• Involvement of people
• Ensuring that all employees at all levels are
  able to fully use
• their abilities for the organizations
  benefit
• Process approach
• Recognizing that all work is done through
  processes, and
• managing them accordingly

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ISO 90012000

• System approach to management
• Expands on the previous principle in that
  achieving any
• objective requires a system on
  interrelated processes
• Continual Improvement
• As a permanent organizational objective,
  recognizing and
• acting on the fact that no process is so
  good that further
• improvement is impossible (Six Sigma)
• Factual approach to decision making
• Acknowledging that sound decisions must be
  based on analysis of
• factual data and information
• Mutually beneficial supplier relationship
• To take advantage of the synergy that can be
  found in such
• relationships

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ISO 90012000

• Why Consider ISO vs. Baldrige as
• a Quality Management System
• Rationale
• International U.S. recognition of ISO 9000 as a
  Standard Management System
• Customer requirement / need
• Registration structure in place
• Flexibility of the standard
• Do As I Say Say As I Do and Document it

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ISO 90012000

• Why Consider ISO vs. CMM as
• a Quality Management System
• Driven by Similar Issues and Have the
• Common Concern of Quality and Process Management
• ISO Primary Focus in the Customer-Supplier
• Relationship to Reduce a Customers Risk in
  Choosing
• a Supplier
• CMM Focus is on the Supplier to Improve the
  Internal
• Software Process

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ISO 90012000

• Why Consider ISO vs. CMM as
• a Quality Management System
• ISO Has a Broad Scope that Encompasses Hardware,
• Software, Processes Materials, and Services
• CMM is Specific to the Software Development
• ISO Audited by a Third Party at Lease Once a
  Year
• CMM Allows Self-Assessment

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NEW MEXICO 9000
NEW MEXICO ECONOMIC DEVELOPMENT DEPARTMENT
Honeywell FMT
Los Alamos NATIONAL LABORATORY
TRAINING PROGRAM Winner 2004 Innovation Award
Council of State Governments-Most Innovative in
U.S.A.
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NM 9000 Program

• Promote acceptance of ISO 90012000 as the
  quality management standard within the State of
  New Mexico.
• Establish a program for New Mexico small
  businesses which results in ISO 90012000
  compliance for participants at a very affordable
  cost.
• Create an environment in which New Mexico
  manufacturers are synonymous with the word
  quality.
• New Ideas. New Technologies. New Mexico.

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NM 9000 Program

• Will Provide
• Coursework training material on ISO 90012000
• Classroom facilities for all classes (16
  sessions-every other week-3 hours or 8 sessions
  every 4 weeks-6 hours) and consultation
• ISO Certified Lead Auditors to work with you on
  implementing your ISO 90012000 Quality
  Management System explain the Standards
  critique your procedures
• Certified Internal Auditing class included at no
  additional cost

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NM 9000 Program

• Average Return on Investment
• Average benefit of ISO 9000 Registration
• is a 6 increase in sales!
• AIAG 1998

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NM 9000 Program

• Benefits of ISO 9000 Certification
• 76 Process/Quality Improvement
• 75 Better understanding of jobs and tasks
• 54 Reduced parts per million (PPM)
• defects (average reduction of 46)
• 54 Fewer parts returned
• 53 Reduced cost of non-conformance
• 47 Improved on-time delivery AIAG
  1998

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NM 9000 Program

• Average Cost in 1998 for ISO Compliance
• Preparation Costs
• Consultants
• Training
• Software
• 120,000
• 2 1/2 3 Years to Complete
• (Consultant 100/hr x 8hr x 25/year 20,000 _at_
  150/hr 30,000)

AIAG 1998
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NM 9000 Program

• State of NM by 2000 census has 42,686 businesses
• 95.6 have less then 50 employees (40,813)
• 87.3 have less then 20 employees (37,274)
• Can not afford 120,000 or take 3 years

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NM 9000 Program

• Fees are based on annual gross receipts
• Annual Gross Receipts Fee
• -0- to 99K 1,000
• 100K to 499K 3,000
• 500K to 999K 5,000
• 1Million and above 6,000
• Per IRS, costs to obtain maintain ISO
  Certification are Tax Deductible as a Business
  Expense

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NM 9000 Program

• At completion, 1 year or less, your company will
  be ISO 90012000 Compliant
• At completion, third-party Gap Audit paid by NM
  9000 conducted by a Certified ISO Auditor
• (The audit only assures ISO compliance. ISO
  registration and all associated fees are
• the responsibility of the company)
• Successful completion of Gap Audit, companies
  will receive a 50 fee refund (500-3,000) and a
  Certificate signed by the Governor
• (500-3,000 vs. 120,000 1
  Year vs. 3 Years)

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NM 9000 Program

• ISO Registration Process
• Registration is achieved by passing a formal
  audit conducted by a registered ISO 9000 agent
  (RAB)
• Audits usually include 2 phases
• Phase 1 Quality system documentation review
• Phase 2 On-site audit-Compliance to your
  procedures and the ISO Standard
• Once you have passed the audit, a certificate is
  issued and the company is listed as registered
• Surveillance audits are conducted at regular
  intervals, at lease once per year, for continued
  registration

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NM 9000 Program

• Cost of ISO Certification
• Company With 20 Employees
• A 3 Year Contract With A Registrar 5,000.00
• Refund From NM 9000 Program - 3,000.00
• Additional Funds Required For
• ISO 90012000 Certification
  2,000.00
• Total Cost to Company 5,500.00 - 8,000.00
• (1,000 - 1,500 for surveillance audits)

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New Mexico 9000 Program

• Achievements
• 2000-2002 classes 61 companies participated-18
  are ISO Certified 29.5
• 2000-2003 classes 80 companies participated-over
  550 new expansion jobs created
• Companies have chosen New Mexico for relocation
  because of New Mexico 9000 program
• Program funding is one-half revenue retained from
  participating companies

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New Mexico 9000

• Software Companies That Have Participated in the
  New Mexico 9000 Program
• ABBA Technologies
• Digital Migration
• Orion International
• Software Solutions Unlimited

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Thank You!
For More Information Contact Ken Manicki Phone
505.827.0563 Fax [phone] Email
kennethm_at_edd.state.nm.us