Implementing a Quality Management System A Financial Perspective

Implementing a Quality Management System A Financial Perspective By Cecil D. White World Quality Day Symposium – Nov. 10, 2011

Presentation Topics 1 Defining the QMS? 2 3 4 The benefits? The Costs? Is it worth it?

What is a Quality Management System? Policies, Processes Procedures

What is a Quality Management System? Required for planning and executing business processes To meet customer requirements Accredited to International Standards by a Registrar ISO 9001: 2008 is an example

A Cultural Transition

A PHILOSOPHY

Change

It Requires …. . 1. 2. 3. 4. 5. Leadership Determination Resilience Commitment Engagement

Requires Leadership

RESILIENCE

How to Engage your Employees?

It Requires …. . 1. 2. 3. 4. 5. Trust Inspiration Openness Training Incentives

Create a Trusting Environment

Be Inspirational

Be an Excellent Communicator

Create a Learning Evironment

Offer Rewards & Recognition

What are the benefits?

Success Determined by State of Preparedness Size of Organization Complexity of processes

ISO STANDARD 10014: 2006 Quality Management Guidelines for realizing financial and economic benefits

A Strategic Choice Effective Application of ISO 9000 QM Principles = Financial & Economic benefits Financial benefit results from cost-effective management practices within the organization. Economic benefit results from improvements in the overall worth and health of the organization.

ISO 9001 Management Principles 1. Customer Focus 2. Leadership 3. People Involvement 4. Process Approach 5. Systems Approach 6. Continual improvement 7. Factual Approach to Decision Making 8. Mutually Beneficial Supplier Relationships

Derived Benefits improved profitability, improved revenues, improved budgetary performance, reduced costs, improved cash flow, improved return on investment, increased competitiveness, improved customer retention and loyalty, improved effectiveness of decision making, optimized use of available resources, heightened employee accountability, improved intellectual capital, optimized, effective and efficient processes, improved supply chain performance, reduced time to market, enhanced organizational performance, credibility and sustainability.

Realization of Benefits INPUTS PROCESS OUTPUTS

The Inputs 1. Customer Focus 2. Leadership 3. People Involvement 4. Process Approach 5. Systems Approach 6. Continual improvement 7. Factual Approach to Decision Making 8. Mutually Beneficial Supplier Relationships

The Process Assess requirements, Plan activities, Allocate appropriate resources, Implement continual improvement actions, Measure results to determine effectiveness,

Output / Result Financial Benefits improved profitability, improved revenues, improved budgetary performance, reduced costs, improved cash flow, improved return on investment,

Increased Productivity

Everyone Wins

Everyone Wins

What are the costs?

Costs Determined by State of Preparedness Size of Organization Complexity of processes

Costs 1. Registrar 2. Internal

Registrar 1. Auditor’s Fees & Expenses 2. Application Fee 3. Registration Fee 4. Initial Assessment 5. Registration audit 6. Surveillance Audits 7. Re-registration

Internal Cost 1. Sensitization 2. Gap Analysis 3. Training 4. Documentation 5. Implementation 6. Internal Audits 7. Consultant

Beware of The Iceberg Effect Only 10% Visible

Is it worth it?

Implementing ISO 9000: 2001 A Case Study

NHF 2003 Government Agency Startup company Provision of benefits Customer base – 150, 000 Single location Employees - 34

Steps to ISO 9000 Certification 1. Hire Quality Management Consultant 2. Conduct Gap Analysis 3. Establish Quality Policy 4. Redefine Business Processes => 3 Core Processes Individual Benefits Institutional Benefits Health Promotions

Steps to ISO 9000 Certification 5. Company Wide Quality Seminar 6. Prepare Quality Manual (electronic records) 5. Quality Policies 6. Quality Objectives 5. 21 Procedures 7. Establish Quality Metrics 8. Prepare Work Instructions

Steps to ISO 9000 Certification 9. Quality Training for ALL 9. Audit Training (34 employees) 10. Appoint Lead Auditors 11. Conduct Pre-Assessment Audits (2) 12. Contract Registrar ISOQUAR Ltd (2005 – 2009) NCBJ (2009 – present)

Steps to ISO 9000 Certification 13. Registration Audit 13. Audit Training (34 employees) 14. Conduct Internal Audits 13. 2 per year 15. Surveillance Audits 13. 2 per year 16. Re-Registration Audits 2008, 2011

How much does it cost? • First Year – US$ 18, 000 • Annual – US$ 5, 000

How much does it cost? • First Year – US$ 18, 000 • Annual – US$ 5, 000

Our Experience A QMS involves more that HARD measures of quality SOFT Measures Teamwork Empowerment Management style Working environment

Lessons Learnt 1. Shift in Management Philosophy 2. Culture of Continuous Improvement 3. Training is Key 4. Effective Communications 5. Recognition of Achievements 6. Results in Improved Productivity

NHF UPDATE Expansion through Merger Mature organization Provision of benefits, Supply Chain, Retail Pharmacy Customer base – 450, 000 Multiple Locations Employees - 250

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