Journal of Scientific & Industri al Research Vol. 62, December 2003, pp 11 3 1-1 137

Information Technology for Quality and Business Management System Optimization

A G Roy l, S S Biswas l, P U Baxi2, R G Dhaneshwar2 and A N Mahaj an2*

IU HT Plant, Dynamix Dairy Industries Ltd. , E-94, MlDC, Bhigwan Road, Baramati 413 133

Received: 29 May 2003; accepted: 07 October 2003

Quality management systems (QMS) such as, ISO series of international standards have emphasized on the fact that organizations should design their QMS to efficientl y generate, process, store, and deliver appropriate document and data on quality and business performance to the top management, functional managers, and the entire human resource at each of the operational level within the organ ization . If QMS data were managed manually, quality and business management processes wou ld slow down thereby reducing benefits to the organization. This paper, therefore, elaborates on appropriate app li cation of information technology as a quicker method for analyzing QMS data to achieve better tearn/project management and optimi zing quality and business processing systems, ther.!by ensuring efficiency and protitability of each functi onal unil of an organization so that overall performance and profitability of the organi zation can be monitored, measured , and cont ro lled efticientl y to run a smart business.

Keywords: In formation technology, Quality management , Business management

Introduction

Survival and growth of any organization IS

indubitably dependent on quality of products, activities, and services offered by the organization to its customers. The quality management in fact is an essential component of a sound business enterprise. To survive and grow in the competitive global market, every business enterprise has to continually adopt cos t-effective production and quality evaluation technologies, susta inable business practices, and management principles in its organization. For thi s purpose every organizati on has to apply systematic, disciplined, and quantifiable approach to development , operation, and maintenance of its quality and business management acti vities . The need for promoting quality management as a holi stic approach dea ling with the health of the total business has always been recognized worldover.

A progress ive organization should develop quality management (QM) system to promote its business management system in fo llowing stages:

* Author for correspondence Email : pbaxi2003@yahoo.com

2 eelam Associates, QMS consultants , C- 2 1, Rohan Prarthana, Behind CIL, Kothrud, Pune 4 1 I 029

Stage 1 - Initial , QM system is ad hoc with a few processes defined and success depending on individual effort.

Stage 2 - Repeatable, Basic management system processes are established to track cost, schedules and functionality. The necessary process discipline is in place to repeat earlier success on systems with similar applications.

, Stage 3 - Defined, QM process Jor both the

management and technical activities is documented , standardized and integrated into an organization wide QM process. All systems use documented and approved version of the organizational procedures for developing and supporting products. All characteristics defined in Stage 2 are included .

Stage 4 - Managed, Detailed measures of QM process and product quality are collected. Both QM process and products are quantitat ively understood and controlled using detailed measures. These include all characteristics defined in Stage 3.

1132 J SCI IND RES VOL 62 DECEMBER 2003

Stage 5 - Optimizing, Continuous process improve­ment is enabled by quantitative feedback from the process and from testing innovative ideas and technologies. Thi s stage includes all characteristics as defined in Stage 4.

Quality Management Systems (QMS) have been evolved essentially to promote business management in above five stages since 1960.

Evolution of Quality Management Systems (QMS) to Promote Business Management

Unti I late 1970s, leading organizations in the developed countries employed Product Quality Management Systems (PQMS) in manufacturing acti vities as a part of their business I. By late 1970s, several European countries had developed quality standards that followed the NATO AQAP I model2. In 1979 the Briti sh Standards Institution (BSI) published BS Standard 5750 on quali ty management and quality assurance.

ISO 9001: 1994 to ISO 9003: 1994 QMS Standards

By 1987, International Standards Organization (1S0) with the involvement of a technical committee TC 176, leq the development of ISO series of standards to enable cross-border transparency and harmoni zed global quality standards). Thi s series of ISO standards underwent a major revision in 1994, culminating in the popular series of ISO 900 I : 1994 to ISO 9003: 1994 standards4

. These standards fequired that all departments use documented and approved version of the management and technical procedures integrated into organization wide QMS . Thus, it is assumed that customer sati sfaction is assured by preventing non-conformity at all stages from production to servicing. These standards emphas ized on establishment, implementation , and maintenance of qu ality system documentation such as quality manua l, procedures, work inst ruction s, and records as ev idence of management commitment and compli ance of the qual ity management system standards. Organizations appointed a member of the management, genera ll y a quality manager as a management representat ive who irrespecti ve of other responsibilities was ass igned responsibility to establi sh, document , implement, and maintain QMS. Although everyone in the organi zati on was in vo lved in implementing QMS, it invariabl y created ' Islands of qua lity exce llence' within the organization rather

than promoting quality management as a holi sti c approach dealing with the health of the total business. It did not incorporate any quantitati ve evaluation of performance and scope for continual improvement and hence did not foster techniques, which lead to continual improvement through simplification of physical and admjnistrative processes.

Organizations that developed and implemented these series of ISO standards could 'Define the ir quality management system' and achieve Stage 3 level of quality and business management maturity.

ISO 9001: 2000 QMS Requirements

The third edition of ISO 900 I : 2000 cancels and replaces the second edition (ISO 900 I : 1994) together with ISO 9002 : 1994 and ISO 9003 : 1994 (ref. 5). This standard in addition to quality assurance of product lays emphasis on need fo r enhanc ing customer satisfaction. Quality is considered as a fundamental corporate goal and long-term task of strategic relevance. In addition to qu ality of products and services it considers quality of processes, working life and external relation s as a key to success. Detailed measures of management and technical processes are collected, quantitative ly understood and controlled using detailed measures. The sys tem in vo lves rational analysis of processes, quality planning, integration of all corporate resources , and quantitative evaluation of performance and scope for continual improvement, using PDCA or Pl an-Do­Check-Act cycle. The QMS based on thi s standard is intended for third party audit and certifi ca ti on.

This standard advocates that an organization should establi sh, document , implement, and maintain a QMS and continually improve its effectiveness through process approach to its management activities, provis ion of resources, product rea li zati on, performance measurement, and analysis and improvement.

Thus, organizations that develop and implement ISO 9001 : 2000 standard could be ex pected to 'Manage their quality management system' and achieve Stage 4 leve l of quality and business management maturi ty.

ISO 9004: 2000 QMS Standard - Guidelines for Performance Improvements

ISO 9004: 2000 standard is fo rmatted on ISO 900 I : 2000 standard 6. It uses tools and tec hniques brought together in an integrated package that makes

ROY e/ a t .: IT FOR QUALITY & BUSINESS MANAGEMENT SYSTEM OPTIMIZATION 11 33

business unit from a definition of business to detailed action plan for achieving sustained competiti ve ad vantage with the customer. It is recommended as a guide for organi zations whose top management wishes to move beyond the requirements of ISO 900 I : 2000, in pursuit of continual improve ment of performance. It is, however, not intended for third party audit and certificati on.

Thi s standard advocates that an organi zati on should establi sh, document, implement and maintain a QMS and continua lly improve its effectiveness as per ISO 900 I : 2000 but should a lso make specific reference to the fo ll owing quality management princ ipl es as a dri ver fo r business growth :

(i) Customer focus

( ii ) Leadership

(i i i) In volvement of people

(iv) Process approach

(v) Systems approach

(vi ) Continual improvement

(v ii ) Factua l approach

(v iii ) Supplier re lati onship

T hus, organizati ons that develop and impl ement ISO 900 I : 2000 standard could be expected to 'Optimi ze the ir quality management system ' and achi eve Stage 5 level of quality and business management maturity. Indu stries can a lso integrate QMS based on these standards with other internati onal QMS standards like IS 15000: 1998, an Indian Standard that is technica ll y equi va lent to the HACCP sys tem (Hazard Analys is Critical Contro l Point) for food hygiene and safety in accordance with Codex Alimentariu s Commi ss ion Standards Alinorm 97113A (ref. 7).

Role of Informati on Techno logy in Qua lity and Business Management System O ptimi zati on.

In every organi zati on, top management pl ans, orgal1\ zes , and contro ls management acti vities , prov ision of resources, product rea lization, and measurement of its qua lity and business operations. Top management , functi onal managers and the entire human resource at each of the operational level within the organi zati on works as per logica ll y pl anned sequence of processes to convert resources into products fo r the nex t process in the sequence with the a im of fina ll y de li vering product, as required by the customer. Throughout thi s cycle of organizationa l

operation a lot of information is generated in the form of documents and data. Effi c iency and effecti veness of each process depends on the effi c iency and effec ti veness of document and data generati on, ana lys is, and availability.

Study of Evolution of Quality Management Syste ms (QMS) to promote business management ampl y reveals that each such standard heav il y emphas izes on systemati c docume ntati on and data generati on, analys is, and ava il ability. In order to achieve optimum benefit , organizati ons should design and integrate informati on techno logy software and tools to effi c iently generate, process, store, and deli ver appropriate document and data on quality and business management sys tems to the top management, functi onal managers, and the entire human resou rce at each of the operational level within the organi zat ion.

B roadly speaking, quality and business management performance in any bus iness organization can be enhanced by opt imi zing the fo llowing key areas that bring about the de ired output:

( i) The QBMS processes are des igned to accept an input(s) and produce the des ired output(s) that could we igh the producti vity.

(ii ) The most in va luable resource, human resource, should bring about favorab le conditions to enable effecti ve Process Management to work as pe r the planned schedule .

It is, therefore, implied that stringent measures taken in these areas would produce a cascading effec t o f overa ll cost reducti ons, greater effi cacy, and increased profit s.

The a im should be to look at how wou ld [T resource be of practica l advantage to an indust ri a l ente rpri se. Scheme I reveals such a prospec t.

In absence of soft ware and tools provided by IT , manua l generation, processing, storage, retri eval and application would slow down the qua lity and business management processes reduc ing the benefits to the organization.

Quality and Business Management System (QBMS)

A sound QBMS must rest on an organi za ti onal commitment to qua lity. The bedrock that supports QBMS is the quality focus. T ota l quality management

1114 J SCI IND RES VOL 62 DECEMBER 2003

~I Organization 4 ..

Customer Supplier ~ .... ...

1 .~

Functional l...or.. Top Management ..... .. Management managers & HR

~

Intelligence ...... ...

reVIew

.~ ~~

~Ir .. -

Management .... .~ Information Technology Products

activities .... ...

QBMS Process- Document • and Data bank Management

J~ J~

" ,Ir

" .. Resource ... Product .. ... management

... realization

... Measurement & Analysis

Sche llle I - Shows IT resource advantages to an industri al enterprise

and s imil ar philosophies foster a continuous process improvement culture, and thi s culture ultimate ly leads to the deve lopment of increasingly more mature approaches to QBMS .

The foundati on for QBMS is a set of Quality and Business Management Processes that ho ld the technology and other functi onal laye rs together and enab le rat ional and time ly development of QBMS. A QBM process defines a framework of a set of Key Process Areas (KPAs) that must be established for effec ti ve de l i very of the product. KP As form the bas is for management contro l of QBMS and establish the contex t in which technica l and manageria l methods are appli ed, work products (mode ls, documents, data, repon s, fo rms, etc) are produced, mi lestones are estab li shed, and quality and business operati ons are ensured and changes are properly managed.

QBM S methods encompass a broad array of tasks that inc lude ana lys is, des ign, procedures, and testing of organizati onal acti vities that support quality and business management in an organization.

QBMS tools such as records and fo rmats prov ide support to QBMS Processes and methods. When too ls are integrated so that one tool can use the info rmati on created by another tool , a system for the suppon of quality and business management is es tabli shed.

A QBMS can be characteri zed, as shown in Figure I .

A QBMS process is established by defini ng a small number of QBM functi ons that are applicable to the organizati on. Many QBM task sets - each a co ll ection of QBMS work tasks, QBM milestones, de li verable QBM outputs, e tc. - enabl es the QBM functions to be characteri stic of the organi zation and the requirements of the organizati ona l management and other human resource. Support act i vities such as QBM process management, which overlay the QBMS process, are independent of any one-QB M fun cti on and occur throughout the QBMS process.

In a g iven QBMS process, KPAs are asso­c iated with each criti cal QBM fu nc tion . Each KPA is described by identifying the followin g chara­cteri stics:

• Objective - The overall objecti ve that the KPA must achieve.

• Commitments - The functi onal teams' in tent to meet the objecti ve as pl anned.

• Capabilities - Those things that must be in place (organizationally and technica ll y) to enable the organizati on to meet the requirements.

ROY el al.: IT FOR QUALITY & BUSINESS MANAGEMENT SYSTEM OPTI MIZATION 11 35

QBMS Process

QBM Functions • Corporate management • Customer support and management • Resource management -• Product realization • Measurement, analysis and improvement

QBM Task Sets • Quality and business work tasks • QBM milestones • Deliverable QBM outputs, etc.

Support activities • Quality and business tracking and control • Formal technical and commercial reviews • Product quality assurance • Product des ign management • Document preparation and production • Risk assessment and management

Figure 1- Qual ity and business management system

(I ) QBMS Definition Phase • Essential tasks - The specific tasks requi red to achieve the KPA functi on.

• Methods for Monitoring Implementation -The manner in which the acti vities are monitored as they are put into place .

During thi s phase the system-des igner and the organization attempts to identi fy what:

• Methods for Verifying Implementation -The manner in which proper practices fo r the KPA can be veri fied .

Each of the KPAs is defined by a set of Key QBM Practices that contri bute to sati sfy ing its obj ecti ves. The key practices are po li cies and ac ti vities that must occur before a KPA has been fu ll y insti tuted . T hose key practices or component key prac tices that offer the insight into whether the objecti ves of a KPA have been achieved are defined as Key QBM Indicators.

QBMS involves analys is, des ign, constructi on, ve rificati on, and management of technical and general management systems. QBMS is managed by focusing on defini tion, des ign and development , testing and support phases as fo ll ows:

(a) Is the desired system's objec ti ve?

(b) Is the time frame in which the object ive shall be achieved?

(c) Inputs are avail able?

(d) Outpu ts are to be generated based on the inputs?

(e) Perfo rmance is des ired?

(f) User Interfaces are to be es tabli shed?

(g) Validation criteria are required to define a successful sys tem?

(2) QBMS Design and Development Phase

During thi s phase the sys tem-des igner and the organizati on attempts to define how:

(a) Data are to be constructed?

(b) Info rmation is to be processed th rough the syslem?

1136 J SCI IND RES VOL 62 DECEMBER 2003

(c) Function is to be implemented within QBM framework?

(d) Procedural details are to be implemented?

(e) Interfaces are characterized?

(f) Design will be translated into regul ar production?

(g) Test ing will be performed?

(h) To enable flexibility for future modi­fications and enhancements?

(3) QBMS Testing Phase

During thi s phase the system-designer and the organizati on verifies if:

(a) Real-time simulation s yield output in conformity with the targeted outputs.

(b) All desired va lidations have been incorporated into the system.

(c) E rror correcti ons do not inadvertently affect ex isting system functionality.

(d) Data security has been ensured and access ri ghts effecti vely incorporated.

(e) System passes vo lu me/s tress tests .

(f) All sub-processes/modul es pass the integration tests.

(4) QBMS Support Phase

During this ph ase the system-des igner and the o rganization focu ses on:

(a) Modifications required as QBMS evo lves .

(b) Enhancement of the QBMS to accommodate add iti onal features and functions that will provide enhanced benefit to the organization or the users.

(c) Changes to QBMS prompted by environmental factors brought about by changing organi zat iona l requirements so that they can be more easi ly corrected, adapted and enhanced .

(d) Troubleshooting.

(e) Training of end-users.

IT Solutions for QBMS optimization

(1) Graphical User Interface for Team/Project Management

GUI provides a user-interface to facilitate a common platform, which would achieve the followin g:

(a) A task tracking platform that provides a daily-basis monitoring of tasks , schedules and percentage of target obtained for the day .

(b) Daily/weekly reports on the task distribution and task comple ti on.

(c) Team management.

(d) Top down analysis (Higher leve l managers can supervise the progress of the project at hand).

This can be further customized to achieve organizational special needs.

(2) Business Process Optimization System

BPOS is customized software that gives:

(a) On-line informati on to the CEO about efficiency and profitability of each functional unit of an organi zation so that overall performance and profitability of the organization can be monitored. measured, and controlled to run a smart business. Some reports that could be of interest are:

(i) Daily transact ion report.

(i i) Failed transacti on report (Customi-zation of errors).

(iii) Monthly report.

( iv) Throughput report.

(v) All transacti ons (successful , fail ed, error, etc) report.

(b) Reducti on in inspection and compli ance costs:

(i) Technical stati st ics generated for technicians to enable them to take online correc ti ve actions and thereby reduci ng cost in terms of time and materia l.

( ii ) Graphical representation to give a quicker picture about the performance of the process.

(c) Cost reduction per function by providing information to the CEO and finance controller performance of each function and financial s at a g lance,

(d) Quicker method to avo id post mortem exercises like meetings of functional heads, analys is of reports , financ ials, etc.

ROY et al.: IT FOR QUALITY & BUSINESS MANAGEMENT SYSTEM OPTIMIZATION 1137

SI No. Key process indicator (KPI )

Table 1- Details of key performance indicators

Unit of measure Perfonnance as percentage of target

1.0 Process control

1.1

1.2

Master schedule attainment

Line efficiency

2.0 Quality management

2. 1

2.2

First time quality

First release quality

3.0 Cost control

3. 1

3.2

3.3

3.4

3.5

Raw materi al vari ance

Packaging material vari ance

Spare parts consumption

Standard versus actual utility consumption

Stand ard versus actual manpower consumption

4.0 Human resources management

4. 1

4.2

Reduction in over time cost

Reduction in absenteeism

to identify cause of the inefficiency and cost overrun.

(i) Rai se alarms to indicate emergency measures need to be taken care of before a huge loss is incurred in the process at hand.

(ii ) Present real-time graphs and charts to show the performance of the process so that measures can be taken pro-actively if performance seems to be going out of control or under par.

Industrial Experience of IT Application in Quality and Business Management System

Application of IT support systems combined with QMS as per ISO 9001: 2000 to quality and business management systems in manufacture of milk and fruit products using Ultra High Temperature Treatment (UHT) technology, resulted in improved

Per cent

Rs

Per cent

94 .8

> 100

94.7

> 100

Positi ve trend

Posit ive trend

Positi ve trend

Positi ve trend

Positive trend

48

95

Key Performance Indicators corresponding to all round performance improvement as given in Table I.

References

Cliffe R W, Unstead Joss M & Maull R S, New directi ons for TQM , Proc First Eur Conf Educat, Trainin g Res TQM, (1990) 197-204.

2 ITC/lSO, ISO 9000 QMS : Gllidelines f or entelprises in developing countries, Geneva, 1993.

3 ISO 9000: 1987 - Qualit)' management and qllality assurance standards - Guidelines fo r selection and use issued by ISO, Geneva.

4 ISO 9002: 1994 ·- Model fo r quality managemelll system in production, installation and servicing.

5 ISO 900 I: 200D - Qualit}' managelllen t svstems -requirements.

6 ISO 9004: 2000 - QMS standard - gllidelines fo r pe1fonnal'lce impro vements.

7 IS 15000: 1998 - Food hygiene - Hazard analysis and critical control point (HA CCP)- system and guidelines fo r its application.