Homework 2
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Choose one of the three process improvement initiatives (CMM, ISO 9000, SPICE) and review the advantages and disadvantages of using it in a small organization and a large organization. Include references for your research including two references to conferences specifically dealing with that initiative. Please remember that references need to be authoritative, i.e., another student is not an authority generally.

    The ISO 9000 family of standards have been developed to assist organizations of all types and sizes, to implement and operate effective quality management systems. ISO 900 outlines the fundamentals and the process approach for establishing a quality management system (QMS). ISO 9001 documents the requirements for the QMS so that the end product is consistent with what is committed to be provided to the customer. Requirements include Management responsibility, resource management, process management, supplier management and continual improvement. ISO 9004 provides guidelines for performance improvements. The International Standard promotes the adoption of a process approach when developing, implementing and improving the effectiveness of a quality management system, to enhance customer satisfaction  by meeting customer requirements.

 

   ISO 9000 FOR LARGE ORGANIZATION

     My employer, SBC, Inc. is the second largest local phone company in the USA. It operates such companies as Ameritech, Southwestern Bell, Pacific Bell, Nevada Bell, SNET  and Cingular Wireless. Currently SBC is in the process of implementing ISO 9000 with some parts of the company already certified and the others to be certified in the near future. For a company of this size, the implementation of ISO 9000 is a major undertaking, and the fact that it is being done signifies that the Company Management clearly sees many advantages of standardization. In internal documents distributed to employees the Company pointed out following advantages of the ISO 9000 implementation:

Consistency and standardization across all functional work areas.

Processes which affect services and products are continually monitored in order to prevent problems which could jeopardize customer satisfaction.

Provisioning and maintenance processes for core network services are managed by ISO 9000 registered centers and supporting interface agreements.

Processes are documented and controlled.

Provides means of identifying and resolving problems and preventing their recurrence.

End to end processes are monitored to ensure supplier compliance to stated measures.

Management review serves as a formal process to ensure all levels of the organization are engage in the effectiveness of their quality system.

Training requirements are established to ensure that employees have the training they need for their job.

All of the above advantages lead to:

Service improvements

Expense reduction

Revenue Protection

Customer Positioning

Platform for Continuous Improvement.

    Due to the significant variance of the operations SBC decided to implement ISO 9000 in stages, starting with Network Operations Centers and departments responsible for Network Maintenance and Provisioning and moving down to Local Facility Operations, Loop Electronics and Special Services. One of the major advantages of the ISO 9000 standardization described above is consistency in the way different parts of the company operate. Every part of SBC has its own way of performing its functions. Currently the practices differ even between day and night shift at the same department. When ISO 9000 is implemented, technician will be able to work the same way anywhere in the company.

    The only disadvantage of the ISO 9000 implementation is the cost. The cost includes training and certifying internal auditors, generation of documents, training employees and management and other associated expenses. However, the costs are easily outweighed by the realized savings from the customer satisfaction and streamlining of operations.

NOTE: For this part of the assignment I was referring to internal SBC documents.
            "ISO 9000 Overview"
            "Network Operations Center ISO 9000 conference May 2,2001"
I have hard copies of those documents in my possession and will provide them upon request.        

ISO 9000 FOR SMALL ORGANIZATION

    In their article ISO 9000 for Small Companies published in the Quality Digest Online Magazine Nancy Callaghan and Les Schnoll discuss advantages and disadvantages of implementing ISO 9000 in a small business, especially in a company with less than 150 employees. Among the advantages they cite:

ISO 9000 helps to manage business growth while maintaining control of quality.

Documentation of the company's quality management system.
 Reduction and variability resulting both from documentation and the use of statistical techniques to monitor the system.
Using their registration to help develop and expand business, particularly those areas where registration is a prerequisite for doing business.
Reduction or elimination of customer audits.
Increased profitability/reduced costs.
Improved communications, both internal and external.
Greater awareness of quality by employees, accompanied by enhanced pride in their jobs and contribution to the company's quality system.
Provision of training to all personnel.
Ability to remain/become competitive in the markets.
Realization that meeting the requirements is not rocket science but common sense.
 Elimination of redundancy.

Many businesses trying to implement ISO 9000 encounter following problems:

Lack of resources
Money
Personnel
Time
Poor Quality of External Consultants
Lack of executive commitment and overall support

In her article Polyguard bolsters quality, productivity with ISO 9000 system sysprocess Margaret Allen adds following advantages to the list:

Higher perceived quality.
Greater customer demand. 
Greater employee quality awareness.
Increased operational efficiency.
Reduced scrap expenses.

Newsletter from New Jersey MEP backs up the ISO 9000 benefit list with numbers:

An evaluation of the results of ISO 9000 Registration on the Return of Investment, from McGraw-Hill, reveals significant annual cost savings and internal and external benefits associated with companies implementing ISO 9000.

 Cost Savings

Average: $117,000

Range: $25,000 - $500,000

One-time savings in addition to annual savings

 Average: $77,000

Percent of respondents citing the following internal benefits:

88% - Better documentation

83% - Greater quality awareness by employees

53% - Enhanced internal communication

40% - Increased operating efficiency

Percent of respondents citing the following external benefits

 83% - Higher perceived quality

70% - Competitive advantage

56% - Reduced customer audits

29% - Improved customer demand

For large as well as small businesses ISO 9000 brings numerous advantages an significant return on investment.

 

e-mail Mikhail Viron

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