Achieving Operational Excellence through Integration of Management Systems
We live in a fast moving economy with a rise in innovation and excellence. As such organisations are needing to stay abreast of technology and information in order to uncover efficiencies needed to achieve and sustain operational excellence.
The need for an organisations to operate efficiently in a demanding world has once again opened the way for ‘think-tanks’. An ongoing search for solutions!
Lets investigate some of those demands and how solutions have evolved.
Customer demand: Every industry, no matter the type has customers. What is the expectation of a customer? To obtain products and services which satisfy their need and expectation. In response to this the ISO 9001 standard was developed, a standard by-which, if companies operated according to the standard they could meet their customers demands.
Employees: Every organisational workplace, no matter the activities, has health and safety hazards. Again ‘think-tanks’ got together to develop various standards, OHSAS 18001, being the most prominent, for companies to implement into their organisations in order to identify and mitigate those hazard, thereby reducing the risk of injury and ill health to their emloyees and others.
Public: Operational activities, whether drilling into the ground for oil, operating machinery in the manufacture of products, or burning lights in a coporate environment, to provide services to its customers, reduce natural resources and pollute the environment. This infringes the fundamental right of every person, to a clean and healthy environment. This again led to the development of ISO 14001, for organizations to implement, to help them improve in their environmental performance.
Regulatory Authorities: All these demands, which name but a few, have led to the need for governments to intervene and regulate organisational activities. This places a further demand onto an organisation’s limited economic resources to comply with these regulations.
The Internal Standards Organisation (“ISO”) has been instrumental in providing solutions for organisations to manage their quality, environmental and health and safety (“QEHS”) activities in order to improve their performance in these disciplines.
Economic Efficiency and Profitability
Like most things every solution has the potential of creating scenarios, which require more solutions. In this case, the need to improve QEHS performance can have a severe impact on the economic efficiency of an organisation, thereby placing financial strain on the company, hindering its ability to effectively implement the standards.
As companies grow, the need to obtain and maintain efficiency in the execution of operations, becomes a defining factor in sustainability and profitability. The main objective is to investigate areas of the business open to duplication, error and risk, which can add a huge finanial burden onto the financial obligation towards operational excellence.
Integration of Management Systems is a Better Solution
What we will look at here is how the newly structured ISO standards will help organisations to operate more efficiently. We will look at ISO 9001, ISO 14001 and the soon to be ISO 45001.
Management systems were previously introduced and implemented into organisations, in a silo’d manner. This led to the need for a champion for each of the three disciplines resulting in numerous duplications and inefficiency. Click for more detail on silo’d inefficiency.
Integrating Management Systems
Understanding the need for efficiency and operational excellence calls for consolidating time, reducing risk and refining resources. ISO has re-structured the ISO standards to provide for, and steer companies towards an integrated approach, in order to facilite this. Lets look at how this is done…
The high level structure of ISO 9001:2015; ISO 14001:2015 and the soon to be ISO 45001:2016 has been uniformly designed to place a high level of responsibility and accountability on top management. No longer can a member of low level management, or as in some cases, no level of management at all, be given the sole responsibility, without the required level of authority, to implement and manage the ISO standard requirements.
Understanding the Context of Your Organisation
In order to plan for and implement any of the standards, an understanding of the context of the organisation is required by management. The context includes internal, external and environmental issues, and leads to the identification of all interested parties and their expectations, including compliance obligations, and how this impacts on the organisations management system. This, together with defining the management system scope, a company’s goals and vision, and documenting a commitment statement in the form of a company policy, form only a small part of management involvement in the organisation’s management system. Click for more detail on Management Responsibility.
Re-structuring to a Risk-Based, Process Approach
For many years the ISO 9001 standard called for a process approach, focusing on customer satisfaction. The approach to ISO 14001 and OHSAS 18001 was always risk and legal compliance based, with a “standard element” approach to a company’s activities. The re-structuring of the Standards have resulted in all the Standards now being risk-based, emphasising compliance obligations, with a process approach. This is a huge step forward for Environmental and Health and Safety, forcing companies to develop interactive processes in order to manage their activities. For companies who already implement ISO 9001, this is not new, however, processes, which already exist, can be expanded to include the environmental and health and safety activities. This means that only those processes, which are unique to ISO 14001, and/or IS0 45001 (when this is published), need to be added to their management system. On the other hand the current need for identifying risks in ISO 9001, is a process which was always required by the other two Standards and can now be expanded to incorporate both business and product risks. Click here for more detail on the Proccess Approach.
Optimisation leads to Efficiency
So, where does optimisation lie?
The integration of quality, environmental and health and safety activities into one management system streamlines the processes to provide for time-saving in a number of areas.
There will always be a certain level of risk involved in operations, however, the aim is to investigate and find ways to reduct risk. By integrating the management system, the process owner must take responsibility for all disciplines within the process, thereby reducing the risk of undefined responsibilities for activities. This further reduces risks such as duplications, version control, lack of awareness and competence, to name a few.
Providing sufficient resources in order to effectively implement the requirements of a management system spans across, financial, technical, skills, and human resources. Economically this is always a challenge, especially in smaller enterprises. By integrating the management systems a number of these resources can be consolidated. Aside from the economic benefit, this can also contribute to avoiding duplication and reducing risk.