Investing in Process Improvement

Sustaining Edge Solutions, Inc. Newsletter

Performance Improvement Solutions for Your Business                              February 2012

This Month
* Investing in Process Improvement
* Study Shows Positive Baldrige Results
* Audit Definitions- ISO 19011
* In the News
* Training Courses


Healthcare Systems Process Improvement

February 18-21, 2012

Las Vegas, NV



February 27-28, 2012
Phoenix, AZ


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


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


Investing in Process Improvement


During these challenging economic times, many companies are under pressure to cut costs in response to lower revenues and decreased margins. Many are cutting costs haphazardly, for example letting people go (and the institutional knowledge with it) when they should be streamlining their business processes to become more efficient, enhance results, and achieve sustainable success.


When times are good, many companies create a “surplus to  process requirements” based on immediate needs.  More inspection and non-value-added steps that result from high volume needs may not work in a reduced economy.  There is no room for redundancy and cost cutting must be focused on waste reduction.  Organizations need to streamline costs yet still provide optimal value through exceptional product or service quality.


Investing in process improvement while cutting costs may seem counterintuitive, however by studying how the process is producing the desired output you can scale back and still meet your requirements and the customers needs. A well designed and executed improvement effort will always identify non-value-added activities for elimination, where those dollars saved can be used for other purposes and positively impact customer satisfaction. On the flip side, rash decision making and cost cutting can produce a detrimental effect on your business disappointing customers and reducing your revenues.


How can your organization improve processes to face the economic downturn?
  1. Identify the critical processes that produce the most value to your customers.
  2. Communicate with your customers and involve them with defining (or redefining) their needs and wants and adjust your outputs accordingly.
  3. Understand how your processes work.  Dissect your processes and identify the critical variables, inputs into outputs.  For example, people, material, methods, environment, hardware, software.
  4. Establish and/or review the criteria used for the operation of your processes For example, performance metrics related to process outputs, key variables, documentation used, or not used effectively, training effectiveness or lack of training validation.
  5. Use Lean tools and methods to aggressively eliminate waste in these processes.  For example, 5S, value steam mapping, error proofing, kaizen, visual management or kanban.
  6. Follow-up with Six Sigma tools to minimize process variation and improve the accuracy and predictability of your processes.  For example, process mapping, QFD, FMEA, control charts and SPC methods.
  7. Make process improvement a constant within your organization.  Reward people for their ideas and ensure they provide the highest quality product and service. This requires leadership determination and organizational commitment.
In the proactive mode, the organization that recognizes the need to continually improve its processes to meet the challenges of the future, even in poor economic times is successful.  Successful organizations understand this – let it work for you and your organization.
We can help your organization produce tangible improvement results, Contact us.



Study Finds Baldrige Criteria Results in Cost Savings

During the years 2007 through 2010, there were 322 applications for the Malcolm Baldrige National Quality Award. These 322 applications were from 273 firms and organizations; the 49 additional applications were repeat applications from some of the 273 firms and organizations. The 273 firms and organizations that applied for the Award from 2007 through 2010 were asked by the Program Office to participate in a study of the benefits they received through the Award application process.


Specifically, each firm or organization was asked to complete a Web-based survey instrument. A total of 45 firms and organizations responded to the survey request-a response rate of 16.5%-and the results from an evaluation analysis based on those responses are discussed in this report.


Using a counterfactual evaluation method, three categories of social benefits have been quantified from the responses of 45 Award applicants to a Web-based survey.  These categories

  • the counterfactual cost savings of the applicants because it was not necessary for them to incur the investment costs to achieve on their own the same level of benefits from their performance excellence strategies as they realized from the availability of the publicly funded Baldrige Performance Excellence Program,
  • the gains to consumers from greater satisfaction from higher quality products because the Baldrige Criteria were available and used,
  • the gains to the economy from saving scarce resources (because successful performance excellence strategies not only enable higher quality products or services but also lower the costs of providing them) because the Baldrige Criteria were available and used.

The benefit-to-cost ratio of 820-to-1-using only the benefits for the surveyed group of applicants for the National Quality Award since 2006 but using all of the social costs of the Baldrige Program-certainly supports the belief that the Baldrige Program creates great value for the U.S. economy.


The Baldrige Performance Excellence Program, with the imprimatur of national leadership and a prominent national award presented by the President, creates great value that could not be
replicated by private sector actions alone.


The entire report is available in PDF at the NIST website.



Audit Defintitions According to ISO 19011:2011


The ISO 19011:2011 audit guidance standard has revised audit definitions, expanded related notes, and added new definitions. Some examples of these changes are described below.


The definition of audit: a systematic, independent, and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which the audit criteria are fulfilled. Its revised note clarifies that the purpose of an internal audit may be to confirm the effectiveness of the management system or to obtain information for the improvement of the management system. The note adds that in a small organization, independence can be shown by freedom from responsibility for the activity being audited or freedom from bias and conflict of interest.

The definition of audit findings: the results of the evaluation of the collected audit evidence against audit criteria. A note states audit findings indicate conformity or nonconformity. A new note under audit findings clarifies that findings can lead to the identification of opportunities for improvement or recording good practices. Another new note says if the audit criteria are selected from legal or other requirements, the audit finding is termed compliance or non-compliance (instead of conformity or nonconformity).

The definition of audit client: the organization or person requesting an audit. Its note states that in the case of an internal audit, the audit client can also be the auditee or the person managing the audit program. The note also says requests for external audit can come from sources such as regulators, contracting parties, or potential clients.

The definition of competence: the ability to apply knowledge and skills to achieve intended results. The related note states that ability implies the appropriate application of personal behavior during the audit process.


The new definition for guide: a person appointed by the auditee to assist the audit team. The new definition for observer is: a person who accompanies the audit team but does not audit. Its notes add that an observer is not a part of the audit team and does not influence or interfere with the conduct of the audit. It says an observer can be from the auditee, a regulator, or other interested party who witnesses the audit.

The new definition for management system: a system to establish policy and objectives and to achieve those objectives. The related note states a management system of an organization can include different management systems, such as a quality management system, a financial management system, or an environmental management system.


Purchase ISO 9001:2011 Guidelines for auditing management systems at the ANSI Standards Store.



In the News


Personal Health Data Protected by New ISO Standard


ISO has published a new technical specification which will increase protection of personal health information processed, stored and transferred by computer systems for subsequent use by clinicians and others in healthcare organizations. ISO/TS 14265:2011, Health informatics – Classification of purposes for processing personal health information, defines a set of high-level categories of purposes for which such personal health information can be processed.


ISO/TS 14265:2011, provides a framework for classifying the various specific purposes that can be defined and used by individual policy domains (e.g. healthcare organizations, regional health authorities, jurisdiction countries) as an aid to the consistent management of information in the delivery of healthcare services and for the communication of electronic health records across organizational and jurisdictional boundaries.


For more information see the ISO News Page.


AIAG PFMEA Fourth Edition – Still the Best


The AIAG FMEA manual defines FMEA as “an analytical methodology used to ensure that potential problems have been considered and addressed throughout the product and process development process. FMEAs are an effective tool to quantify risk so it can be analyzed, prioritized, mitigated, or eliminated.” FMEAs can be applied in all types of organizations, including manufacturing and service.


Risk is generally quantified by using a risk priority number (RPN), which is calculated by multiplying ratings for severity (S) of problem by likelihood of occurrence (O) by likelihood of detection (D), or S × O × D = RPN. Use of arbitrary thresholds, for example, RPN > 40, is not recommended. Organizations should be working the highest priority risks regardless of the rating criteria or values. High severity ratings should always be addressed.


The FMEA manual indicates that the FMEA scope “establishes the boundary of the FMEA analysis.” The scope can be system, subsystem, or component. A system consists of many subsystems, which consist of many components. The links and interactions among parts within the scope, as well as with other subsystems or systems, also must be addressed.


Purchase PFMEA Fourth Edition at the AIAG Store.

Training Courses

To see the course description, schedule, and on-line registration click on the course title below. We deliver onsite training for these courses and customized training to fit your specific needs.  We offer group discounts.

View all our Courses


View Our Web Based E-Training Courses


ISO 9001 Quality Management


Understanding and Implementing ISO9001:2008

ISO 9001:2008 Process Based Internal Auditor

Documenting Your Management System


AS9100 Aviation, Space and Defense


Understanding and Implementing AS9100C (9110 &9120) Aviation, Space and Defense

AS9100C:2009 Process Based Internal Auditor

Documenting Your Management System


ISO/TS 16949 Automotive


Understanding and Implementing ISO/TS16949:2009 Automotive

ISO/TS16949:2009 Process Based Internal Auditor
Documenting Your Management System


ISO 14001 Environmental

Understanding and Implementing ISO14001:2004 Environmental
ISO14001:2004 Process Based Internal Auditor

Lean Enterprise and CI

5S Five Pillars of a Lean Workplace Organization
Continuous Process Improvement
Lean Six Sigma
8 Disciplines (8D) of Problem Solving


ISO 13485 Medical Devices


Understanding and Implementing ISO 13485:2003 Medical Devices
ISO 13485 Process Based Internal Auditor


ISO 27001 Information Security


Understanding and Implementing ISO 27001:2005 Information Security
ISO 27001 Process Based Internal Auditor


All courses can be delivered at your company. Don’t see a course, location, or date that fits your needs?

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