New ISO Program

[SpinDr99]

I'm starting an ISO-9001 program in a company that's been around for 80 years. They've hit some hard times after COVID. Probably two of their biggest challenges, is that we have NO idea what products cost to make. I'm attacking this through the ERP system to FINALLY get routers onto the production floor. The second biggest challenge (which I need your input on) is the attitude problem with the production personnel.
The personnel have little to no oversight and are enjoying this way too much. I'm only with the company a month now and I'm getting extreme kickback getting them to understand and accept ISO. This is being driven by a lackluster management who just doesn't want to get firm with the employees, and also being driven by a new customer.
I come from over 20 years in small to large manufacturing companies and have several ISO standards (3 Lead Auditor certifications) worth of experience.

My question: Has anyone been in a similar situation where manufacturing personnel refuse to accept ISO? How have you approached this? There are almost NO SOP's or WI's and I've written quite a few since arriving. People don't understand product identification on the floor, quarantine, procedures (because they all seem to change to the floor personnel) and would rather verbally train new people than work from a document. Management seems driven towards certification but are totally in the dark in addressing the personnel issue.

Your input to approaching this problem would be greatly appreciated!

 

[Kronos147]

My question: Has anyone been in a similar situation where manufacturing personnel refuse to accept ISO? How have you approached this? There are almost NO SOP's or WI's and I've written quite a few since arriving. People don't understand product identification on the floor, quarantine, procedures (because they all seem to change to the floor personnel) and would rather verbally train new people than work from a document...

Remember that the idea to embrace the requirements of ISO 9001 was a strategic decision by top management. This MUST be communicated to the organization. Any resistance then points to this mandate/communication.

Then comes the biggest role of someone in your position, you must be the quality cheerleader. You must point out the why (mandate), the how (we are just going to document how we do things), find the gaps (gap analysis), and then sell the organization on the simple ways your organization can create effective records of conformity while doing what they already do.

Example, if you always ship with a paper shipper, maybe now require a signature and filing a copy with the work order.

What not to do it change things radically and add layers of paperwork and non-value activity to a process that is otherwise effective.

Good luck, and report back!

 

[Ed Panek]

" we have NO idea what products cost to make" I'd challenge that.

The primary accounting document that shows the Cost of Goods Sold (COGS) is the Income Statement

Revenue (Sales)

Less: Cost of Goods Sold (COGS)

= Gross Profit

Less: Operating Expenses (Rent, Utilities, etc.)

= Operating Income

If you want finer granularity, just reduce each value to Revenue of that product - COGS of that product - operating expenses for that product. They MUST KNOW this. Any business has this information. It's basic business 101.

 

[Bev D]

Perhaps the OP meant that they don’t know the cost of poor quality. Also if they have a lot of different skus/products finance may just peanut butter the costs…I’ve seen this many times especially when a ‘sloppy’ production group isn’t keepign up with ERP entries as tehy are supposed to.

I would also add that it is rarely the operators that are pushing back but the supervision/management that is pushing the push back.

In any account the best way is to start slowly, involve the operators and frontline workers in writing any work instructions, routers, Procedures, etc. keep it simple and keep all of the boilerplate gobbledygook out of any documentation. (As an early TV cop always said: “just the facts ma’am, just the facts”)

And read all of the relevant ISO ‘stuff’ here BEFORE you go and write any new documents.

 

[Michael_M]

I'd challenge that.

Less: Cost of Goods Sold (COGS)= Gross Profit

Less: Operating Expenses (Rent, Utilities, etc.)= Operating Income

Your equation just says if the company is making a profit, not how much each part is costing to make which is what the OP originally said. You can still be profitable even if 9 of 10 parts cost more to make than the sale price.

 

[emilymadsen]

I would go very slowly and have a lot of presence on the production floor. Think of it more as a mentorship approach rather than "we're changing and you better get on board." We know that ISO just makes good business sense, but it is hard to see that from the other side.

 

[Sidney Vianna]

Has anyone been in a similar situation where manufacturing personnel refuse to accept ISO?

Over the last 30 years of existence of the Cove, the issue of lack of management support towards the implementation/formalization of a management system has been discussed, literally, hundreds of times. The gist of it is: without true management support and involvement, no sustainable implementation is possible. There is a reason 9001 is referred to as a MANAGEMENT system standard.

The other point worth remembering is: forget ISO. There is no ISO system, no ISO manual, procedures, etc. There is a quality system that is a subset of a the business operating system. Workforce will always resist something they don’t understand, see no value and means change. People don’t like change.

 

[Golfman25]

Been there and done it.

First thing you must do is ceremoniously burn your ISO standard. Get rid of terms like ISO, Quality, KPI, Statistics, etc. Understand that 80% of the ISO standard is common sense business practice. The fact that your company has been around for 80 years means they do have something there.

Next sit down and do an analysis of what you have in place already. Take the standard clause by clause and map it to what is currently done.
And don't say "nothing." There is something. You may not like it. You may not think it's formal enough. But there is something.

Once you have that, you can start to work on formalization and improvement. But NEVER, NEVER, NEVER write something up and hand it to the employees and say "we are going to do it this way." Pick an area, get a group of employees, and discuss what you have, what is needed and how to make it better and easier for them to do their jobs. Work from there.

I can give specific examples if you're stuck on certain areas. Good luck.

 

[Bev D]

Agree with Sidney that saying ISO, ISO, ISO is the road to failure. You are implementing improvements to the system to improve quality and profitability.

One clarification is that people will resis change that is forced upon them and they cannot see how it makes their life better.*. People embrace change that they choose because they want the new way. Otherwise we would never leave our parents home, go to ‘college’, get a job, change jobs, get married and we certainly have children!
*of course there will always be those you cannot get on board adn you will have to deal with them differently.

 

[Golfman25]

OK But the claim was "We have no idea how much it costs to make a product we sell" If thats true how did they set the sale price?

You'd be surprised. A lot of people "guess." There is also the point that the market actually sets the sale price.

But, I think he was thinking in terms of job costing using actual costs. That requires a whole bunch of data collection and review.