Iso 9001 2000 standard

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					Iso 9001 2000 standard

A Knowledge@Wharton article based on joint research with the Harvard Business
School says now may be the time to re-evaluate the corporate efficacy of process
management and tailor them to the right applications. Studies show that misapplied
process management can hinder companies and dull innovation. "In the appropriate
setting, process management activities can help companies improve efficiency, but the
risk is that you misapply these programs, in particular in areas where people are supposed
to be innovative," notes Mary Benner-management professor at Wharton.

Process management methodologies focused on continuous improvement such as TQM
(the work of Dr. Deming), surfaced in the 1980s in the US after the Japanese adopted it
successfully. In 1960 the Emperor of Japan awarded Dr. Deming the Second Order
Medal of the Sacred Treasure for his help in transforming Japanese industry. Six Sigma
started at Motorola and became popular in the mid-1990s due to GE's visible efforts. The
basic premise is to improve quality to only three defects per million through systematic in
processes improvement, and careful statistical measurement of outcomes.

The ISO 9001:2000 international standard specifies requirements for a Quality
Management System overseeing the production of a product or service. It is not a
standard for ensuring a product or service is of quality; rather, it attests to how well
processes work, and how they will be managed and reviewed. Earlier incarnations of the
standard were heavily criticized for the internal focus on extensive documentation, but
like all things worth doing the standard evolved to the current 2000 much improved
version. Continual improvement, leadership involvement, and customer satisfaction are
pivotal components of the standard.

Six Sigma is similar to TQM in its focus on techniques for solving problems and using
statistical methods to improve processes. But whereas TQM emphasizes employee
involvement organization-wide, the Six Sigma approach is to train experts (known as
green belts and black belts) who work on solving important problems while they teach
others in the company. The publicized success of GE after Jack Welch adopted Six
Sigma (to which he devotes a chapter of his book "Winning"), more than a quarter of the
FORTUNE 200 followed suit. Yet not all firms were able to find the same magic.

In fact, of 58 large companies that have announced Six Sigma programs, 91 percent have
trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm
Qualpro . Critics say that one of the chief problems of Six
Sigma is that it is narrowly designed to fix an existing process, allowing little room for
new ideas or an entirely different approach. All that talent-all those best and brightest-
were devoted to, say, driving defects down to 3.4 per million and not on coming up with
new products or disruptive technologies.
An inward-looking culture can leave firms vulnerable in a business world that is
changing at a breakneck pace-whether it's Craigslist stealing classified ads from local
newspapers or VoIP threatening to make phone calls virtually free. Innovation is "a meta-
stable entity," says Vishva Dixit, Vice President for research of Genentech, who oversees
800 scientists at a company that has created some of the most revolutionary anticancer
drugs on the market. "Nothing will kill it faster than trying to manage it, predict it, and
put it on a timeline."

No business can afford to focus its energies on its own navel in that environment.
"Getting outside is everything," says GE's Immelt (who still deploys Six Sigma). From
the day he took over as CEO, he says, he knew the company would need to be "much
more forward-facing in the future than we ever were in the past." He explains: "It's not
about change. It's about sudden, abrupt, and uncontrollable change. If you're not
externally focused in this world, you can really lose your edge."

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