Archive for January, 2015

Key Manufacturing Trends for 2015

Thursday, January 22nd, 2015

Welcome to 2015!!

Here we are in 2015, and many of you are looking at ambitious New Year’s resolutions and goals. Let’s take one final look at the key trends that kept U.S. manufacturing in the news in 2014, and will continue to be driving factors for business growth in 2015.

Technology

Technological advancements improved manufacturing in many ways in 2014. Additive manufacturing (otherwise known as 3D printing) and robotics in particular dominated the news. Although both have been around for quite some time, breakthroughs are allowing these technologies to become more affordable and accessible for small and midsized U.S. manufacturers. These advancements will help companies innovate, reduce production costs, and deliver more customization, higher quality, and better total value in the marketplace.

Industry growth

The year 2014 was a critical year for U.S. manufacturers. We experienced a lot of industry growth and now find ourselves increasingly optimistic for more of the same in 2015 and beyond.  Consider the following data from the latest Federal Reserve report:
U.S. manufacturing output rose 1.1 percent in November 2014, which was the largest increase in nine months.
• Utilities production, which addresses the demand for heat, water, etc., increased 5.1 percent.
• Factory output has now exceeded pre-recession levels. 

Exporting

Ninety-five percent of the world’s customers live outside the United States, and manufacturers were catching on to this crucial opportunity in 2014. Exporting allows manufacturers to increase sales, introduce new product lines, diversify customer portfolios, test innovative approaches, and grow their customer bases.  U.S. International Trade Data reported that October 2014 exports of capital goods were the highest on record at $47.7 billion.

Employee training and retention

Improving worker skills and creating more diverse workplaces are ongoing challenges that reflect changing demands in the manufacturing workplace. In 2014, we focused more attention on these important issues to address requirements from enhanced technology and new processes. Although more work remains to be done, we are spreading the message about the importance of employee engagement initiatives to secure top talent, and introducing new programs to enlist the next generation of workers to U.S. manufacturing.

 

What manufacturing trends is your company following this year?   Let us Know!! 

 

True Culture of Quality

Sunday, January 4th, 2015

 

This Month

Events
 
Lean and Six Sigma Conference March 2-3, 2015 Phoenix, AZ.  See you there!  
 
Free ISO 9001:2015 Revision Webinars.  Advanced SES Registration Here

 

 

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  • Operational and Quality Systems
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Improved Profits and More!

Our newsletters provide information on business management systems and process improvement methods. These systems include ISO 9001 QMS, AS9100 Aviation, Space and Defense, ISO/TS 16949 Automotive, ISO 27001 Information Security, ISO 13485 Medical Devices, ISO 14001 Environmental Management Standard, and others. Subjects include performance improvement methods such as Six Sigma, Lean Enterprise, and other topics of interest to our readers.

If you have any questions regarding content, or have a subject of interest for a future newsletter, please let us know.

True Culture of Quality

financial-planner.jpg Many organizations state quality goals. But true effectiveness requires an accompanying commitment to various cultural elements such as leadership, a compelling vision, companywide shared values, pervasive behaviors, and complementary performance metrics and incentives. It is only when an organization exhibits these and related components that it can be said to exhibit a true culture of quality.

Partnering with ASQ, Forbes Insights (publisher of Forbes Magazine) conducted a global survey of 2,291 executives and managers in 2014. Of particular note, the survey was executed across two major segments, one featuring Forbes Insights panelists and a second featuring ASQ members.

Industry demographics related to the study included:

26% Manufacturing

11% Financial services

11% Technology

10% Healthcare

7% Consumer goods

5% Industrial products

5% Transportation

Paulo Sampaio, a professor of quality engineering and management in Portugal involved in the study discusses what can happen absent a culture of quality

“We find cases where a company will be using the tools and the methodologies of quality, but there’s no true culture of quality.” Companies, will, for example, “say they have adopted ISO 9001 standard because someone above them in the supply chain demands it,” says Sampaio. “They’re using these tools because someone told them they have to.” So these companies “put some procedures in place and then, once a year, just before their audit, they clean up the factory.” And because there is no sustained commitment to quality, there is no culture of quality, so “they do not attain anything close to the full value of the standard,” says Sampaio.

What are the vital components of a true culture of quality?

Quality Values

An organization’s “values” can help individuals at all levels make better and more responsible decisions relating to issues of quality. The study results reflected only 61% describe their quality values as clearly stated, with again roughly equivalent findings for both senior executives and quality professionals. However, the figure rises to 76% among self-described world-class organizations and again falls for both Europe- and Asia/Pacific-based companies to 50%. Finally, only half, 50%, say such values are clearly understood throughout the organization.

Quality Vision

A quality “vision” is a clearly articulated business case-

a strategy-mandating how the pursuit of quality advances an organization’s objectives and elicits buy-in from senior executives. However, only 60% say their quality vision is clearly stated, with comparable findings for both quality professionals and senior executives. The figure, meanwhile, descends to 52% for European companies and to 51% for Asia/Pacific companies.

Leadership

Strong leadership, it has already been suggested, is essential to developing and sustaining a culture of quality. But here, only 60% say their management supports the quality vision and values unequivocally.  Meanwhile, the gulf between senior executives and

quality professionals reappears here. Specifically, only 54% of quality professionals say their management is unequivocal in its support of quality vision and values compared with 67% of senior executives. The numbers increase to 81% among world-class

businesses but again fall to 52% among those based in

Europe.

Further Study Key Findings

Though 48% overall say that customer needs are the key driver of their quality programs, the figure rises to 71% for world-class companies. In addition, though only 24% overall say their organizations are highly effective in identifying customer needs and expectations for quality, the figure more than doubles to 52% for world-class companies, highlighting another area where attention may be needed.

Only 24% overall strongly agree that they actively involve customers in formal quality discussions, rising to 47% among world-class businesses.

Conclusion

A culture of quality features a handful of readily visible components:

  • Clearly engaged and unwavering senior management support for quality initiatives.
  • Clearly articulated company vision and values
  • Active and ongoing engagement with customers to identify and address current and evolving needs.
  • Performance expectations throughout the company that clearly link to quality goals.

To download a PDF of the study and learn what you can apply to your organization, visit the Forbes Insight Website.

A3 Problem Solving Method

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We are continuing this month with our Lean Digest Review on the  “A3 Problem Solving” method. 


The A3 method is based on Toyota’s “A3 Problem-Solving Report,” which is designed to produce a high-level understanding of a process and how it fits together with surrounding efforts within an organization. With A3, individuals or small teams diagram a process or problem using only what they are able to fit on a standard, A3-sized piece of paper (approximately 11″ x 17″). This method requires that the team communicate effectively to depict the process simply, and results in a high-level view of the current steps in the process. A3 is a fundamental problem-solving tool that can be used at all levels of an organization. 

WHY IT’S USEFUL

The A3 Process helps people engage in collaborative, in-depth problem-solving that addresses the root cause of problems and allows teams to provide structure to problem-solving and maximize learning. The team, having improved its problem-solving capacity and gained a more complete understanding of the process, then uses the view of the process created on the paper to identify areas for improvement. This process helps agencies to identify areas for quick improvement, and to flag areas for potential future improvement efforts.

Implementation Process

Typical Duration: The A3 analysis can be conducted in as little as a few hours.

An individual or small team completes the following steps to conduct an A3 problem analysis:

1. Identify a problem or need.

2. Conduct research to understand the current situation.

3. Conduct root cause analysis.

4. Devise countermeasures to address root causes.

5. Develop a target state.

6. Create an implementation plan.

7. Develop a follow-up plan with predicted outcomes.

8. Discuss plans with all affected parties.

9. Obtain approval for implementation.

10. Implement plans.

11. Evaluate the results.

Follow these steps and transfer the results onto the A3 form. The completed form will include the background of the problem, the current condition of the process, root-cause analysis of the problem, the target state, an implementation plan and countermeasures, including a future action plan.

For more information and a working example provided of an effective A3 method, please contact us.    

 

AS9101E Aerospace Standard

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Described by the International Aerospace Quality Group (IAQG) as ‘An enhanced audit approach for evaluating process-based management systems’, AS9101, Revision E Aerospace Standard ‘Quality Management Systems, Audit Requirements for Aviation, Space and Defense Organizations’ will now be in use by certification bodies (CBs) in this new year.

Not widely known by some AS9100, AS9110, AS9120 certified  companies, this document standardizes the requirements for conducting and reporting aviation, space and defense related audits. In short, it describes the process by which CBs conduct audit activity. Specifically, it gives direction to the auditor regarding:

  • Definitions of major and minor non-conformances
  • How to conduct the different phases of an audit (stage I, stage II, surveillances, re-assessments)
  • What to review on each and every audit
  • How to audit special processes
  • What to take into account when planning for an audit
  • How to conduct and opening and closing meeting
  • How to document the effectiveness of a process
  • Issuing and managing non-conformances written during the course of an audit

With the introduction of Rev E it is clear that successful audit results will depend on the judgment of the auditor (based on objective evidence) as to whether or not ‘process effectiveness’ has been measured appropriately and objectives (‘planned results’) achieved. The focus will be on the actual processes and the extent to which quality objectives have been achieved in line with those processes.

After implementation of AS9101E, what you will see is a significant change to the forms on which we document the audit results. For example, as you can see below the Appendix A Objective Evidence Report (OER) has been eliminated and instead, your auditor will document evidence to support his or her audit conclusion on forms 2 and 3 of AS9101E. Though the OER form is no longer, the objective of recording objective evidence remains.

AS9101E (new document)

AS9101D (superseded document)

Form 1 – Stage 1 audit report

Appendix F

Form 2 – QMS process matrix report

Appendix D

Form 3 – Process effectiveness assessment report (PEAR)

Appendix C

Form 4 – Nonconformity report

Appendix B

Form 5 – Audit report

Appendix E

Form 6 – Supplemental audit report

Appendix G

The major change is the new PEAR form (AS9101E form 3).  This form not only includes sections for the documentation of the inputs and outputs of each of your product realization processes (all processes in section 7 of the standard) but also requires the auditor to document your KPI’s (Key Performance Indicators), targets and values for each of these processes.  The terms KPI’s, targets and values indicate the need for actual numbers, so for those processes that reside within section 7 of the standard,  the expectation is that you will have measurable values associated with the measurement of each of these processes.

We know that auditors will intensify their focus on process management. They will expect to find that quality and business performance objectives determined by the organization are monitored, measured and the results analyzed, keeping in mind the critical objective of continual improvement. Quality professionals need to identify, with senior management, which processes and critical success factors can be usefully measured by key performance indicators (KPIs) or other convincing process measurements.

If you’re an AS9100/9110/9120 certified organization and are seeking internal audit improvement or assistance with these new requirements, let us know. We also provide full services to all these standards and more.

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In the News
Coming Soon: ISO 9001:2015 Revision and Update Webinars and Workshops

Sustaining Edge Solutions will be conducting webinars and workshops in 2015 on the subject of the future ISO 9001:2015 Risk-Based QMS Standard. Who’s going to be affected by this future revision? Customers, supply chain, certified companies, end users, consumers, certification bodies, auditors, regulatory agencies and You!

Sign-up now and we will notify you of future dates in advance.   

Manufacturing Outlook Positive for 2015

Manufacturers are increasingly positive as 2014 comes to a close, with 83 percent expecting revenue growth next year, up from 64 percent of manufacturers who anticipated growth in 2014, according to results of the ASQ 2015 Manufacturing Outlook Survey

And their positivity is well earned, with 75 percent of manufacturers actually experiencing revenue growth in 2014, up from 65 percent in 2013.

Manufacturers still face challenges however, with 41 percent citing the economy as their greatest hurdle, followed by the shortage of skilled workers, at 26 percent, according to the survey. Other hurdles identified by respondents include, “competition,” “falling crude oil prices,” “managing growth,” and “raw materials shortages.”

“Driven by gains in 2014, it’s encouraging to see manufacturers’ positive outlook in revenue growth for 2015,” said ASQ CEO William Troy. “Manufacturing is a key industry of economies worldwide and the use of performance excellence and quality systems can help organizations accelerate their growth by improving efficiencies and increasing customer loyalty.”

More expect salary increases in 2015

While 49 percent of respondents to the outlook survey conducted in late 2013 expected a raise in 2014, 69 percent of respondents to the most recent outlook survey expect salary increases in 2015. Twenty-nine percent of respondents expect no increase in salary, while 2 percent expect a salary reduction.

In addition to salaries, 41 percent of respondents expect their organizations to hire additional staff in 2015, while 46 percent anticipate their organization maintaining current staffing levels. Only 13 percent expect a decrease of staff.

Culture of Quality Measurement Tool

As long time active senior members of the American Society for Quality, we want to bring our readers attention to an ASQ online self-assessment tool that will help organizations evaluate their culture of quality – identifying strengths and opportunities that can be converted into actionable steps to accelerate business performance.

The tool is part of ASQ’s and Forbes Insights’ culture of quality research study conducted earlier this year (see our current main topic).

The self-assessment tool measures 10 essential characteristics of a successful and sustainable quality culture, including customer engagement, quality vision and values, and leadership commitment. Upon completion of the self-assessment, users are provided a downloadable scorecard and results summary that can be used to educate and persuade their organization to take action.

 

Visit the ASQ Website to take this short assessment to receive a culture of quality report card.  

 

Training Courses

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Don’t see a course or schedule that fits your needs?  Contact us.

 
Welcome to 2015! What skills will you be improving this year? Areas rated very important for business professionals:
  • Client Relationship Management 78%
  • Integrating Project and Change Management 77%
  • Rapid Implementation and Continuous Improvement 69%
  • Strategic Performance Measurement 66%

Best regards,

Walter Tighe and SES Team
Sustaining Edge Solutions, Inc.
Toll Free 888-572-9642