In the flourishing economy of just a few years ago, winning customers and generating profits was the name of the game for American manufacturers. However, faced with an economic slump, companies' priorities have shifted from "getting the biggest piece of the pie" to "waste not, want not."

Now, more companies are looking at programs and methodologies that aim to cut costs, reduce waste, increase efficiency, and retain customers -- a strategy commonly known as lean manufacturing.

The Commerce Department's Census Bureau reports that in the second quarter of 2001, manufacturing corporations' profits (seasonally adjusted, after tax) reached $23 billion. This is down $49.6 billion from the second quarter of 2000, indicating the bottom-line impact that slow times have had on U.S. manufacturers this year.

"A sluggish economy has placed enormous competitive pressure on manufacturers to bring the best new products to market faster, better, and cheaper than before, but without sacrificing quality," explains CEO and president of the New Jersey Manufacturing Extension Program (NJMEP) Robert Loderstedt. "To accomplish this, they need to troubleshoot all areas where defects and waste exist. Any factor that contributes to profit losses and inefficiencies must be identified and corrected."

However, lean manufacturing is far from a quick-fix solution. It requires building a lean enterprise from the bottom-up, taking into consideration all departments -- from accounting, to upper management, to the production plant. Once that is managed, organizations still have to target their suppliers, and convince them to get lean. "This process can take anywhere from two to 10 years," Loderstedt says.

So, what is the most efficient way to build and implement a lean enterprise? ISO 9000, according to industry experts. While it's not a necessity for establishing a lean enterprise, there are a number of advantages to having an ISO 9000, or similar Quality Management System (QMS), in place.

"ISO 9000 is an excellent framework for organizations to use for building a lean enterprise. It disciplines organizations to document, review, and streamline their processes, making it easier to reduce costs, inventory, and waste, as well as improve quality and efficiency -- all of the things that define lean," Loderstedt explains.

"ISO 9000 enables companies to assess the level of quality throughout the entire organization according to tangible criteria," adds Mike Delpha, vice president of operations for Prism eSolutions, an international provider of ISO 9000 training, consulting, and Web-based support products. "Once areas for improvement have been identified, the company can then use the ISO 9000 standards as a guide for achieving their quality objectives." Delpha is a veteran of the process-improvement industry with 29 years of experience in quality and supply-chain management.

Among the major benefits, achieving ISO 9000 certification enables organizations to develop a lean enterprise by:

• Motivating employees;


• Increasing operational efficiency;


• Improving quality of products and processes;


• Streamlining communications;


• Lowering costs;


• Reducing waste; and


• Minimizing the number of defects.

These, as well as other ISO benefits, are well documented. AIAG and McGraw Hill report that companies with ISO and other types of quality/environmental systems in place experience savings equivalent to 6% of sales in the first year after being certified. Additionally, 54% increase market share, and an impressive 56% decrease cost of quality (the ratio of produced goods versus defects).

Getting Started

Because implementing a lean enterprise requires organizations to do a complete system overhaul, ISO 9000 is the ideal place to begin. Thanks to new support tools, such as certification techniques and software, companies can become ISO 9000-certified more quickly and affordably than ever before. To help you get started on your own journey toward quality excellence, Delpha offers the following time- and cost-saving tips:

Get Solid Commitment from Top Management

Achieving ISO 9000 certification requires a great amount of dedication and understanding from top management. The quality management team responsible for establishing and managing the ISO 9000 program within an organization must thoroughly understand the standards and be committed to making the rigorous changes needed to bring current operations into compliance with the standards. The management team should also recognize that ISO 9000 is not a final solution. Instead, it's a framework for continual improvement of processes and products. Lack of management commitment is one of the biggest culprits for slow and expensive implementations.

Form a Diverse Internal Auditing Team

The audit to determine how current operations measure up to ISO 9000 standards should be headed by a team comprising representatives from a cross-section of departments within the company. This will ensure that when quality objectives are established, they are based on the needs and goals of every internal department, from finance and accounting, to product development, to production, to customer service. Each area representative will serve as the catalyst for implementing quality within their department, training and empowering staff, and managing ongoing improvements as defined by feedback from departmental personnel and customers. Processes and procedures can then be fine-tuned accordingly. Internal quality audits should be planned and scheduled to take place at least once per year.

Hire an Outside Consultant

ISO 9000 certification can be a long and trying process without proper guidance from a team of quality-management experts. Hiring an outside consulting team will help ensure that certification is well planned and smoothly implemented. These experts will:

• Prepare the organization for the ISO audit;


• Help the firm interpret the standards of its business;


• Set realistic quality objectives and a timeline for achieving those objectives;


• Expedite procedures and processes; and


• Correctly manage training, communication, documentation, and projects.

Criteria to consider when selecting a consulting team are industry track record, number of industries served, strength and size of company, and average timeframe of successful implementations.

Select an Internationally Recognized Registrar

When it comes time to select a registrar to perform the quality audit and issue the ISO 9000 certificate, it's important that the registrar be internationally recognized. To qualify for this, it must be approved by an official accreditation service, such as the United States Registrar Accreditation Board (RAB). Otherwise, the "certification" performed by the registrar may hold little or no value. Also, beware of non-accredited certification bodies that offer help for achieving ISO 9000, or award "certificates," without performing a full assessment of your system. Your consulting team can guide you through the selection process and prevent you from spending too much money on hidden registration fees. Registrars typically charge between $5,000 and $25,000, depending on the organization's size, to perform the ISO 9000 audit.

Combine On-Site Consulting and Technology for Best Results

Traditional on-site quality management consulting services can be labor-intensive and expensive. Meanwhile, generic software packages used for self-directed ISO 9000 implementation are typically ineffective when applied alone. The best strategy is to combine on-site consulting services with a software package that delivers document management, training, collaboration tools, and project management in a single platform. Purchasing such comprehensive software cuts costs by avoiding the need to invest in multiple software products from different vendors.

Prism's equation™ is a robust software product that takes this integrated approach to ISO 9000 certification. It significantly reduces implementation time and costs and allows companies to focus on continual improvement. Companies can install the software on their network or access it via an ASP for anytime, anywhere access. Meanwhile, an on-site consultant is on hand to oversee the entire process. There are particular steps during implementation that require an on-site consulting team. The initial audit, for example, requires the expertise of a quality-management team to ensure that the quality objectives defined are realistic and attainable.

Develop a Lean Documentation System

One of the top mistakes that companies make when implementing an ISO 9000 program is over-documenting their systems. The audit cannot troubleshoot how many documents exist within a QMS, only the content of each document. Therefore, before creating a new document it's important to ask yourself these questions:

• Will the document help prevent quality problems? Is there a simpler way to accomplish this task?


• Can this information be combined with an existing document?


• Can a process be changed in order to eliminate the need for this document?


• What are the implications of not including the document?


• Is the information stated in this document mandated by law or necessary for prudent business operations?

ISO 9000 training software can also help cut the documentation clutter by providing a template for organized, concise, and easily updateable electronic documentation.

Establish a Timeline and Adhere to It

When researching the applicability of ISO to your organization, some things to consider are the level of commitment to improving quality, amount of funds and resources available for the project, and end-users' training schedules and availability. Once you have made the commitment to develop an ISO 9000 QMS, it's important to establish a timeline for achieving your firm's objectives. Your consultant can help you develop a realistic timeline. Depending upon different variables, an efficient implementation will typically take between 8 and 12 months; upgrading to the ISO 9001:2000 standard will take about 4 to 6 months.

Based on your firm's goals, you may choose a more or less aggressive implementation plan. ISO 9000 software gives users greater freedom for implementing and managing a QMS. Web-based platforms offer users on-demand access to ISO 9000 support and training and generally result in faster implementations.

Take Advantage of the New, ISO 9001:2000 Standard

The new ISO 9001:2000 standard offers a number of advantages to help make the certification process simpler. Benefits include:

• Greater applicability to all types of organizations and industries;


• Easier to use and more understandable format;


• Clearer connection of quality management systems to company processes;


• Provision of a natural evolutionary approach to improved company performance;


• Greater focus on continual improvement, customer satisfaction, and resource management;


• Closer compatibility with other management standards, such as ISO 14000;


• Provision of a consistent basis to address needs of companies within specific sectors; and


• Easier-to-implement, more flexible documentation requirements.

The new standards make ISO 9000 implementation more adaptable, and conformance less rigid, resulting in a faster, more convenient, and less expensive certification.

Following these steps can help turn your company into a lean, mean fighting machine that's ready to tackle the surprises of an uncertain economy.