History - The 1994 EC 'Time Bomb'

Marc

Hunkered Down for the Duration
Staff member
Admin
#1
From [email protected] Sun Dec 25 14:22:18 1994
Date: Fri, 16 Dec 94 19:54 MST
From: Mike Backes <[email protected]>
To: [email protected]
Subject: timebomb.txt

AUTHOR(s): Zuckerman, Amy

TITLE(s): EC drops ticking time bomb. (European Commission's policy on ISO 9000 quality program; includes related article)

Summary: The EC's Directorate-General III for Industry may soon recommend that the EC reduce its commitment to the ISO 9000 quality certificate program, and replace it with a uniquely European quality assurance program. There are indications that European industrial firms are losing interest in ISO 9000.

Industry Week
p44(5)
May 16 1994 v243 n10
DESCRIPTORS: Quality of products_Standards
Quality control_International aspects

THE EFFECTIVENESS OF ISO 9000 as a tool to drive quality is being questioned by a senior standards policy group for the European Commission (EC). And that has sparked a storm of controversy in the European Union--formerly the European Community-over how best to utilize quality methods to breed international competitiveness.

Senior policy officials in the EC's Directorate-General III for Industry--a high-level EC standards regulatory group--are calling for creation of a European-wide quality program that could include a European quality award. And they are talking about deemphasizing certificate programs, which could prove a ticking time bomb for ISO 9000.

(The ISO 9000 international quality assurance series, in practice worldwide since 1987, has the EC's sanction and was designed as a guideline to help companies produce top-notch products.)

However, the Directorate-General regulatory group is now arguing that ISO 9000 and other such certificate programs are not helping European firms infuse quality into their organizations. Thus, the group wants to deemphasize ISO 9000 certificates and reemphasize quality practices.

In addition, the Directorate-General wants the pursuit of quality to be entirely voluntary. To this end, these EC officials have held private talks with multinational corporations based in Europe. Multinationals, they say, are being urged to work with their suppliers on quality matters rather than coerce them into earning ISO 9000 certificates, as is now the case with some global corporations.

Even so, officials say that they have no intention of shutting down the ISO 9000 certificate program, or even regulating it. They insist that their intent is to reorient European companies to the pursuit of quality rather than the pursuit of certificates.

But the implications of this proposed policy shift toward the pursuit of quality, not certificates, could be lethal for members of the ISO 9000 community-- those multitudes of consultants, registrars, and standards institutes peddling ISO 9000 services.

The ISO 9000 certification program has become "big business," says Antonio Silva Mendes, an official in the EC in charge of quality policy. "Those who are passing the message that ISO 9000 certification is very, very important are consultants who want to implement quality systems," he contends. And they are far too often focused on profit and not focused enough on creating quality. "We have been trying to get out the message that quality-systems certificates are not mandatory--that this is one option. If we leave the situation as it is we will lose all credibility. It's good to have a certificate, but for what?"

"We must put things back into perspective," asserts Jacques McMillan, head of the quality-policy unit for Directorate-General III for Industry. "Certification is becoming a market in itself. The EC is performing a service to the Community by putting things into proper perspective. We have no axes to grind. We don't consult, certify, or draw up the standards."

In addition, enthusiasm for ISO 9000 may be on the wane. Industry has complained about the high costs of the program and its lack of regulation. Members of the Geneva-based International Organization for Standardization (ISO), national accreditation bodies, and industry leaders have been discussing ways to improve the standards series and increase regulation of this free-wheeling, flee-market program.

Even ardent supporters of the ISO 9000 program in Europe have been admitting that the standards, as currently written, are too vague, are too costly, and do not necessarily breed quality. As Willen Deken, deputy secretary of the Dutch Council for Certification (RvC), has pointed out, that vagueness leaves companies prey to registrars and consultants who often charge hefty fees to "interpret" the standards.

Moreover, members of the ISO have echoed industry complaints that the ISO 9000 series is not tied directly enough to product standards. "It is possible to have _ an ISO 9000 system and still manufacture poor-quality products," wrote Neil Cook, ISO executive assistant for special projects, in the July/August 1993 issue of the ISO 9000 News.

Revisions to the standards, mainly affecting the computer software

industry, were supposed to be adopted at the beginning of this year. It appears that the ISO will not officially sanction these changes until summer or fall. Large-scale changes, including additional guidelines for industry and the service sector, are not expected until 1997.

Now, with the EC directly entering the picture, what has been a simmering pot of concern appears to be coming to a boil. The mere mention of deemphasizing earning of certificates is sending shock waves through European ISO 9000 circles-especially those that benefit financially from the ISO 9000 certificate program, which is just about everyone associated with the standards series.

For instance, Lloyd's Registrar Quality Assurance--one of the world's most prominent registrars--called INDUSTRY WEEK, concerned that this article might prove negative to the certificate program. That was before anything was written.

Why all the fuss? After all, ISO officials such as Juichi Nagano, head of the ISO Forum, have been criticizing companies for ignoring ISO 9004--the quality-implementation aspect of the series-and jumping for the prize, the certificate. And a new report put together by Lloyd's reports many benefits for companies large and small that have earned ISO 9000 registration through their auspices. Could it be that if ISO 9000 is to be made entirely voluntary, which it is not for some suppliers of multinational corporations, companies would not pursue registration?

The ISO in a position paper has responded by asserting its relationship to the EC: "The current state of affairs is that the EC has adopted ISO-based standards and guidelines for its quality policy. ISO supports this approach and considers this a means of opening markets, since non-European suppliers are able to use standards in whose development they were able to participate through the framework of ISO." The EC's move is taking place against a preexisting backdrop of concern over ISO 9000.

In the Netherlands, the RvC, one of the world's most influential ISO 9000 national accreditation bodies, has been at the forefront of a movement in Europe to infuse credibility back into the ISO 9000 program through creation of more industry-specific ISO 9000 standards and a crackdown on unaccredited registrars.

But even Mr. Deken seems aghast at the EC's suggestions. To remove the emphasis on earning a certificate, he argues, would mean a return to "the old high-cost system" in which "company assessors go to their suppliers and do assessments themselves. What was needed in the past and will be needed in the future is some evidence that suppliers are complying with standards ."

Yet many small and mid-size companies in Europe are complaining that the ISO 9000 system of third-party assessments places the costs squarely on the suppliers. A recent independent poll commissioned by the Dutch magazine Management Team and conducted by the Amsterdam polling firm Inter/View shows that many European companies might not pursue ISO 9000 certificates without customer pressure (see Page 46).

In the meantime, Tito Conti, president of the European Organization for Quality (EOQ), has publicly criticized the emphasis on certification in the January edition of Corporate Quality Casebook. Mr. Conti writes that "the issue at stake is not certification, but the creation of a sound, essential, nonbureaucratic quality system.

"The first risk connected with an improper use of ISO 9000 standards and with the present rush towards certification," he says, "stems from the fact that too often the emphasis is placed on obtaining certificates... rather than on building a solid quality-management and quality-assurance system, according to ISO 9004."

It was in January, with the efficacy of the ISO 9000 certificate program already being openly questioned, that the EC issued its opening salvo on quality. This is when the EC senior policy group released Mr. Mendes' 10-page report entitled "Elements of a Community Quality Policy."

Very much a first draft, the report is slated for official European Council debate in June with implementation of some outgrowth of this report not expected until the end of the year.

In the report, Mr. Mendes and his colleagues call for promoting a European Quality Award that is currently sponsored by the Brussels-based European Foundation for Quality Management (EFQM). It also encourages "dialogue and cooperation in terms of partnerships between subcontractors and clients--multinational corporations--placing orders."

THE REPORT RECOMMENDS THE European Organisation for Testing & Certification (EOTC) play a central role in the new European quality policy. EOTC is an EC-backed organization whose aim is to unify the multitude of quality organizations operating in Europe under the ISO 9000 and other quality banners.

Mr. Mendes makes it clear that despite the widespread growth of ISO 9000 and other quality programs, European companies still lag behind Americans and Japanese on the quality front. "There is one thing which our competitors... (particularly Japan and the United States) are handling effectively: quality, in the broadest sense of the word," he writes.

In calling for creation of a Europeanwide quality program to reinvigorate private- and public-sector quality efforts on the continent, the report mentions use of ISO 9000 standards, as well as other quality tools such as Total Quality Management.

Since January, the EC's line on the ISO 9000 certificate program appears to have toughened, if comments by both Mr. Mendes and Mr. McMillan are any indication. During the course of several interviews in March and April both officials made it clear that the EC is not concerned with the future of the ISO 9000 certificate program or any standards certificate program. What concerns them is the competitiveness of European industry.

Mr. McMillan points out that an ISO 9000 certificate "doesn't get you to the market or make you competitive .... One reason to come up with a European quality policy is to put things straight. We've got to stop telling people they must go for certification systematically, that they must have an ISO 9000 certificate. All those tools--ISO 9000, quality awards--are just tools. But people think of them as an end in themselves."

It's the unregulated, rampant commercialization of the ISO 9000 certificate program that the EC appears to be targeting for elimination--by humiliation at the very least. Mr. McMillan says the EC has no plans at this time for regulating ISO 9000 or other certificate programs. On the other hand, the EC has every intention of persuading companies to work on quality rather than focusing on earning ISO 9000 certificates.

"We know absolutely that people want the certificate and are not interested in the quality program," explains Mr. Mendes. "The message we're trying to pass on is that enterprises should look at quality systems for their internal purposes first of all."

He says the EC has not publicized its quality report because "it's very much a first draft that we're circulating now through EOTC to EC ministries. We're trying to speak to professionals and members of industry and government. It's only towards the end of the year that we'll come out with anything formal.

"We're not trying to create a new system or new structure in quality or to regulate anything," adds Mr. Mendes. "We want to put together all the new initiatives already in existence within the Community to get a unified strategy. The policy will be decentralized. We could use EOTC or EOQ for private initiatives and will use different EC commissions and departments" (for implementation).

This senior policy group is currently conducting a survey on how companies use ISO 9000 certificates and for what purposes.

Several other developments could also directly affect the ISO 9000 program. John King, director-general of the EFQM, has hinted at a possible collaboration between his group and the U.S. Commerce Dept., sponsors of the Malcolm Baldrige National Quality Award. And the British Standards Institute has launched its long-awaited program aimed at small companies.

"There is a need to correct the way the importance of testing and certification has been exaggerated," says Mr. McMillan. "More and more people are beginning to say what they have been thinking about ISO 9000 rather than keeping quiet."

IMPLICATIONS OF THE EC STING

EUROPEAN Commission officials have little light to shed on the possible impact of their proposed European-wide quality program on the ISO 9000 industry.

Jacques McMillan, head of the quality policy unit for the Directorate-General III for Industry, doesn't predict the EC's proposals will be the death of the ISO 9000 standards series, which he calls "a very useful tool." Still, he says, the EC is intent on spearheading a reemphasis on quality progress and a deemphasis on certificates and testing.

On the other hand, he refuses to comment on whether a move away from certificates and testing will mean a reduction in the number of businesses pursuing ISO 9000 certification. But it is evident to ISO 9000 watchers that the ISO community, as it is now structured, is clearly endangered. "A certain percentage of certificates would certainly go away" if the program were strictly voluntary, says Willen Deken, deputy secretary of the Dutch Council of Certification. The survey by Amsterdam polling firm InterNiew supports his opinion.

Of the 423 companies interviewed-- which represented a statistical group of 80,000--only 27% of the small businesses considered ISO 9000 quality certification necessary to conduct business. And of the 27% that would pursue ISO 9000, the reasons given were customer demand or competitive advantage, not the quality benefits the program allegedly offers. In the midsize category, 49.7% of the companies were pursuing ISO 9000 certification because of customer demand and 37.2% for marketing reasons.

Thus, it appears most companies get certificates because another company wants them to do it--rather than to get the certificate, per se. Whether an ISO certificate would prove worthless without EC's seal of approval is less clear.

"What will happen will be a period of evolution whereby the ISO 9000 certificates will be tailored to more core business practices," suggests Rob Starbuck, program manager for Business Strategy International in London, which monitors quality developments in Europe. What will emerge, he predicts, will be a model based on the European Quality Award--which emphasizes leadership, continuous improvement, and customer satisfaction.

One thing is certain: The EC's actions are putting a lie to the old saw that an ISO 9000 certificate is a requirement of doing business in Europe. And Mr. Starbuck suggests that companies keep their eye on Europe and aim for quality. If they work only to obtain a certificate, he agrees, it may be a costly process with an unclear future. Amy Zuckerman is a cofounder of IN/EXInformation Export, Pelham, Mass. David Biederman, coprincipal of IN/EX assisted in the research.
 
Elsmar Forum Sponsor
A

Alan Cotterell

#2
It never ceases to amaze me when I hear a debate on the environment, and no mention of ISO14000 (The Environmental Management System Standard). Obviously the consumer is unaware of the implications for sustainable development in it. The Quality movement similarly needs consumer awareness to drive it. Until consumers are 'ENCOURAGED TO SHOW PREFERENCE TO ISO9000 CERTIFIED SUPPLIERS' we will go nowhere.

A campaign to educate the public in the advantages of using 'certified' suppliers is needed. Consumer groups such as the Australian Consumer Association are notably ignorant of ISO9000/ISO14000/AS4804, much to the detriment of society generally.
 
A

Andy Bassett

#3
My first reaction when i scanned this article was ABOUT TIME. ISO is on the way out.

Personally i would clap my hands, and try to persuade many of my customers to go down the Business Excellence Model Route (Europes answer to the Malcolm Baldridge Award).

Then i saw the date...if i understand this correctly the article was published in 1994, and although i have heard many prophecies about the death of ISO, the standards juggernaut just seems to keep rolling on.

Regards


------------------
Andy B
 

Marc

Hunkered Down for the Duration
Staff member
Admin
#4
I didn't believe QS would last. ISO 1400x is finally picking up steam (somewhat because of the somewhat recent 'big 3' requirements).
 
A

Aaron Lupo

#6
What doesn't make sense to me is that EN documents are on their way out and they are adopting the ISOdocuments?
 
A

Aaron Lupo

#8
Marc,
I know Harmonization/Globalization is the reason. What I was trying to say was I thought it was funny how that article referred to ISO standards becoming obsolete and yet it is the EN documents that are adopting the ISO standards. Lets face it the EN documents pretty much repeats what ISO said.

P.S. Yes I know that article is very old.
 
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