Quality systems in Asia

In Europe in the early nineties, the implementing of ISO 9000 quality management systems in a business was considered to be a major part of the quality guarantee to customers. It took a decade before this became fully integrated into the business culture in developed economies and a similar time frame may be required in Asia. By the time the standard was reviewed in 2000, the concept of quality management had moved further a field to Asia and, especially, to China. China is a key leather supplier and manufacturer of leathergoods with hundreds of companies declaring the 'ISO 9000 Badge'. There are many authorities issuing certification in China, both internationally recognised and local organisations. ISO accreditation is well established and well serviced here in Asia but is the concept of quality really embedded in the business culture of Asia? Quality is a given in the modern global product package - no matter where products are manufactured or purchased. The customer expects the goods on time, on price and on quality no matter what. So after a few years of practical experience, how is the ISO 'badge' working in the Asian marketplace? Is the ISO badge really a guarantee of quality or not? The 2000 revision of the standard moved the targets and obligations from the regimented (and rather 'paper heavy') first issue to now encouraging the certified company to 'enhance customer satisfaction through the effective application of this system'. This has to be a laudable objective giving scope for interpretation (and misinterpretation). Are the factories brandishing this accreditation really hitting the target? Quality systems emerged originally from the engineering sector; companies in this field are the most comfortable with the rigours and challenges of installing, maintaining and using systems to improve quality management in a production business. This is clearly true of the leather sector where the auto leather sector (and their customers) use ISO 9000 as well as their own systems (eg QS 9000) every day and have moved far beyond the basic requirements of ISO 9000. Most tanneries producing auto leather have several accreditations to different quality systems; their own QA Departments and independently accredited laboratories to carry out the routine testing required to demonstrate compliance to customer requirements. Other sectors are not so developed and it is towards the other key leather sector areas that this article is targeted (shoe, upholstery and leathergoods manufacturers). Many companies wear the badge of ISO 9000 certification but how deep into the organisation does the concept of quality exist? The approaches given below are definitely within the spirit of what is expected from an accredited company. The ideas expressed here could be considered as the 6 Cs! - CEO, Culture, Communication, Commitment, Compliance and Customer responsibility. Chief executive officer (the Boss) One of the most difficult objectives to achieve in QA management is securing the CEO's support for the implementation of any management system. Often the Boss considers it a good idea but leaves it to the quality team to get on with the job. This is a recipe for disaster and has been observed in all types of businesses (including tanneries). Without regular input from the CEO the system can drift away from both corporate objectives and quality objectives and become at best a mere paper chase, at worst a total waste of time. It should be easy in China because the management style, in general terms, is hierarchical. Of course, there are always exceptions but, generally, the CEO dictates 'what goes' in Asian companies. However, he is also involved in all aspects of the business and finds it hard to spend too much time on the intricacies of QA systems (until something goes wrong!). The writer has experienced several issues where the CEO is too distant from the day-to-day operations to be really involved with the routine operation of quality issues. The Asian business philosophy thrives on cost competitiveness and the cost of implementing quality management is often seen as a negative (cost) rather than a positive (benefit). How many Asian business cards do you see with the word 'quality' in the job title? It is imperative that customers ensure that their requirements are communicated clearly to the manufacturer - this is best done at the highest level. So to ensure the most effective commitment to quality by the manufacturer, be sure to enlist the CEO when presenting your needs, this way there is a much better chance of them being met. Culture and Communication In the complex supply chains operated by purchasing departments in Europe or USA, an understanding of the different business cultures in each zone is imperative. The purchasing office might be in the USA, the marketing department in Hong Kong or Korea, the manufacturing location in China or Vietnam. So not only is bridging the culture gap an issue but the language of communication also plays a key role in ensuring the factories making the product, get the right message. Often the front line supervision (key people in making the product right first time!) are the last to know - in fact they are not the front line - often more like 'the end of the line'. Many in developed economy facilities may say 'there may be nothing new in this'. Even within 'one site manufacturing plants' communication of objectives and methods can be hard, as global business communication chains are much longer, often in different languages, this adds another layer of complexity to quality management. By the time the expectation reaches the key people, it might have been conveyed in three languages through several offices, eg from English to Korean and then on to Chinese. The old party game of Chinese whispers, where one transfers verbal ideas from one person to another and subsequently finding out what the last person understands, always creates interesting changes to the meaning. How messages are received and subsequently understood, is a pertinent matter for business communication. Verbal and written English is now very good in China and has developed a lot in the last ten years, but comprehensive understanding of instructions can still often miss the mark. Misunderstandings abound. The message here is 'understand the culture' and ensure that your communication is first rate. Issuing an instruction is no guarantee of its being understood or if understood, carried out. Commitment to Quality This is probably the least understood part of the system. One company recently believed that in order to 'improve quality - all our suppliers should be ISO accredited!' They themselves were not! This demonstrates a clear lack of commitment to quality management on both sides of the commercial transaction. Insisting that vendors or manufacturing units become accredited to ISO without commitment to quality management on both sides will not succeed. There is a popular misconception that certification to any quality standard automatically brings better quality. This is not true, especially in Asia. Commitment from both sides of the business transaction is required, applying the rules on one side only will not work. Commitment - in allocation of the necessary resources (people and money), targeting the correct issues to ensure quality and removing the barriers to poor quality is vital to ensure the payback on quality management investment. The cost of quality is often quoted as being of the order 15-20% of turnover. This means there is much scope to find the resources within the business and also to offer a good pay-back for investment in quality management. The cost of quality can be measured in re-work, lost orders, airfreight to meet delivery schedules and many others. The bottom line is that quality should pay for itself and not be a burden on the business. This concept is still in its infancy in China and frequently misunderstood. As you read this article take just one minute to quickly assess how many quality issues you know of in your business and add up how much they cost (the level of re-work, rejected goods in stock, customer complaints etc). It probably adds up to a significant amount of money and is worth attending to. Compliance This is the simplest concept of the 6 C's to comprehend. If a product is correctly defined (eg 1.5mm black leather in product X to conform to Y standard) it very easy to determine product compliance through measurement. There are problems in product compliance in all sectors not just our own leather sector. Recently in China it was reported that some textile goods did not meet the local requirements (for restricted substances and physical performance). This is relatively easy to determine and easy to measure. The damage that this type of negative press exposure can create is huge, but in the complex supply world we operate it was clearly overlooked. One Chinese manufacturing unit of leather sofas, indicated that some countries (who shall remain nameless for obvious reasons) had no specifications or standards whatsoever for product(s) being manufactured in China. The company said that provided the product looks good and the price is right then it can be shipped. This is clearly a recipe for disaster and an accident waiting to happen. So much so that the Chinese company developed their own standards and specifications to ensure their product met expectations in the market place. The preparation and application of product specifications (and of course adherence to these) should be a given within any well managed quality system. Sadly, this relies as much on the customer (either providing such information or accepting vendor specifications) as it does on the supplier - which brings us to the last C. Customer responsibility Clearly meeting the customer's expectations is the responsibility of the vendor or manufacturer. However, the customer has a major role to play in determining what is required; specifying this in a clear language, ensuring the customer understands the requirements and then measuring performance against this. The benefits of sourcing in the low cost production economies of Asia are blatantly obvious and here to stay. The management of this business (as is the management of quality) is in its infancy. However, the customer, as well as the vendor, must develop systems that provide the benefits, without the risk (ie take responsibility). Not there yet? The issues identified in this article indicate that there are gaps in the efficiency of some quality systems. Some are merely badges and not much more. Just now, QA management is in its infancy in China. Accreditations to ISO are common but using this system as the basis for moving to the next level will require time (in exactly the same manner as in Europe in the 90s). Customers have a responsibility and working with some of the 'soft' issues (the 6 Cs) outlined here will undoubtedly improve quality management in Asia in the next few years. To reap the benefits of the low cost manufacture and to minimise the risk, ensure communication at the highest level is of the highest quality. Be sensitive to the culture you are working in. Ensure that your commitment is equal to your suppliers and help them understand your needs.