chapter 1.4 global supply chain quality and international quality standards

BNN40703Quality Assurance and Quality Control in

Biotechnology

Prepared By: Dr. Nadirul Hasraf Mat Nayan

CHAPTER 1CONCEPT OF QUALITY

Chapter Overview

CHAPTER 1: CONCEPT OF QUALITY

CHAPTER 1.1: Introduction to Quality

CHAPTER 1.2: Differing Perspective On Quality

CHAPTER 1.3: Quality Theory

CHAPTER 1.4: Global Supply Chain Quality and International Quality Standards

CHAPTER 1.5: The Importance of Quality in Biotechnology

Chapter 1.4Global Supply Chain Quality

and International Quality Standards

Chapter Overview

CHAPTER 1.4: GLOBAL SUPPLY CHAIN QUALITY AND INTERNATIONAL QUALITY STANDARDS

CHAPTER 1.4.1: Introduction

CHAPTER 1.4.2: Managing Quality For The Multinational Firm (MNF)

CHAPTER 1.4.3: Quality Improvement: The American Way

CHAPTER 1.4.4: Quality Improvement: The Japanese Way

CHAPTER 1.4.5: ISO 9000:2000

1.4.1: Introduction International trade has existed since the existence of Roman, Greek,

Egyptian and other great empires.However, the volume of international trade exploded after World War

II and has continued to reach tremendous levels.Nowadays, the watch we wear, the computer we use, or the car we

drive, probably are not produced in the country we live. The nationalities of products are even obscured as companies

become more internationally dispersed.Hence, the task of managing quality is affected by this increased

globalization.

1.4.2: Managing Quality For The Multinational Firm (MNF) Firms must now cope with more diversity than in the past.

One of the causes of this diversity has been the increased emphasis on international trade.

Firms use a variety of mechanisms in globalizing:i. Licensing

ii. Partnering

iii. Globalization

iv. Exporter

1.4.2: Managing Quality For The Multinational Firm (MNF)

i. Licensing

ii. Partnering

Licensing involves the sale of same product with another trade mark in different countries.

Through licensing, firms are able to reach international markets without having to establish international supply chains or marketing arms.

Firms also seek international markets through joint ventures or partnering. This agreement is reached when two firms have technology, products, or access

to markets that each other wants. In this case, the Deming attribute of trust is key to a successful working

partnership.


iii. Globalization The benefits of licensing and partnering were that the exporting firm did not have to

globalize to make sales in international markets.

However, they did this at the cost of sharing profits with other firms.

Globalization means that a firm fundamentally changes the nature of its business by establishing production and marketing facilities in foreign countries.

These firms are referred as multinational corporations.

However, when these firms globalized, they significantly change the physical environment, the task environment, and the societal environment in which they operate.


Global Factors That Affect Quality-Related Decision

Quality Management

Physical Environment

Social Environment

Task Environment


a. Physical Environment By changing their physical environment, firms locate themselves near to

or far away from natural resources.

Example:

The advantage of saving costs is often overemphasized when a firm decided to change the physical environment.

Semiconductor firms requiring large amounts of water will not locate in Saudi Arabia or arid parts of Mexico. They will probably locate their firms in one of Asian countries to be close to ready supplies of water as well as expanding markets.


b. Task Environment The task environment of the firm has to do with operating structure that

the firm encounters when globalizing.

The economic structures, skills of the employees, compensation structure, technologies and government agencies all vary when globalizing.

Technological choices also vary as firms globalize.

What works at home may not serve customers adequately abroad.


c. Social Environment The social environment facing globalizing corporations refers to cultural

factors such as language, business customs, customer preferences, and patterns of communication.

The cultural factors facing globalizing firms are often the most complex and difficult issues encountered.

Example:

In some European countries, McDonald's sells wine with their meals because it is the European habit to drink wine with meals.


iv. Exporter Another means of entering international market is not to globalize, but to

become an exporter.

Exporters produce their products and ship them internationally, incurring high shipping costs but avoiding many problems, such as loss of control associated with globalization.

However, success on a multinational scale may be more difficult to attain for exporters because they never develop the marketing expertise and logistical capabilities associated when entering foreign markets.

1.4.3: Quality Improvement: The American Way America has been called the birthplace of modern quality

management because it is home to Deming, Juran and others quality gurus.

The U.S military was one of the early adopter of many quality technique.

Originally, the main interest in quality in the U.S was in the application of statistics to solve quality problems.

However, in recent years, the approach has become more behavioural as teams.

1.4.4: Quality Improvement: The Japanese Way The Japanese must be credited with raising worldwide quality to a

new level of competitiveness.

In 1970s, the Japanese started to create competition through quality as their automobiles and electronic products were exported world wide in huge numbers.

Using quality as a competitive weapon to win orders in the marketplace, the Japanese provided an example for the rest of the world that has benefited producers and consumers all over the world.

1.4.4: Quality Improvement: The Japanese Way Japanese Contributions to Quality Thought

i. Lean ProductionTwo views emerge in the literature that pertain to lean production.

The first view of lean is a philosophical view of waste reduction.

This view asserts that anything in the process that does not add value for the customer should be eliminated.

Given this view, quality problems cause scrap and rework and are wasteful.


i. Lean ProductionThe second view of lean is a systems view stating that lean is a group of

techniques or systems focused on optimizing quality processes.

An example of this view is the lean production system refined by Toyota Motor Company and spread to the rest of the world.

Combining the philosophical and systems views, lean can be defined as ‘a productive system whose focus is on optimizing processes through the philosophy of continual improvement’


ii. Japanese Total Quality Control (TQC)The TQC approach requires attention to detail in every aspects of the

process.The TQC is made up of 5 core variables:

i. Visibilityii. In-Process Inspectioniii. N = 2 Techniqueiv. Total Involvement of Workforcev. The Five S’svi. Preventive Maintenance

1.4.4: Quality Improvement: The Japanese Way Japanese Total Quality Control (TQC)

i. Visibility In Japanese approach to quality, problems must be made visible before they can be

addressed.

Among the approaches to improving quality is inventory reduction.

Excess work-in-process inventory has the effect of hiding problems and therefore, it is eliminated.

Another visibility technique the Japanese use is called andon, or warning lights.

Whenever defect occurs on the production line, the production line is stopped. Then workers from the production line al converge on the production line where the warning light went off. Once the cause is discovered and fixed, only the work will resumes.


ii. In-Process Inspection

With in-process inspection, all work is inspected at each stage of the process, and the workers inspect their own work.

This approach gives workers the authority to make quality-related decisions.

This approach is in direct contrast to the American approach of inspecting quality at the final stage of production through a quality department specialist.


iii. N = 2 Technique

The N = 2 technique is a alternative to acceptance sampling.

In traditional acceptance sampling, when a company receives a shipment from its supplier, the shipment is sampled and determination is made whether the shipment should be accepted or rejected.

Usually, an acceptance sampling plan involves rules such as:

If 2 or fewer defects, accept the lotIf more than 2 defects, reject the lot


iii. N = 2 Technique

The n = 2 technique involves developing and maintaining a close relationship with suppliers so that it is know if the supplier's processes are in statistical control.

If the supplier's processes are in control and capable, and if the first and last pieces in the lot meet specification, then it is concluded that the entire lot of materials will meet specifications.

Therefore, only a sample size of 2 (the first and last pieces) is needed for acceptance inspection.


iv. Total Involvement of Workforce

The Japanese are masters at gaining organizational commitment to quality.

By deploying quality improvement throughout the organization, each personnel become responsible for the aspects of quality they influence in a day’s work.

This includes vertical deployment and horizontal deployment of quality management.

a. Vertical deployment means that all levels of management and workers are actively involved in quality.

b. Horizontal deployment means that all departments are involved in quality.


iv. The Five S’s

The five S’s are a sequential process that companies follow to literally “clean up their acts.

Many Japanese firms have adopted the five S’s in an effort to improve the quality of their operations.

The S’s are:

a. Seirib. Seitonc. Seisod. Seiketsue. Shetsuke


iv. The Five S’s

a. Seiri:

b. Seiton:

c. Seiso:

Organizing by getting rid of the unnecessary. This may include old files, forms, tools, or other materials that have not been

used within the past 2 or 3 years.

Neatness that is achieved by straightening offices and work areas.

Cleaning plant and equipment to eliminate dirtiness that can hide or obscure problems.


iv. The Five S’s

d. Seiketsu:

e. Shetsuke:

Standardizing locations for tools, files, equipment, and all other materials.

This often involves colour coding and labelling areas so that the materials are always found in a standard location.

Discipline in maintaining the prior four S’s


vi. Preventive Maintenance (PM) The idea behind preventive maintenance is that the worst condition a

machine should ever be in is on the day you purchase the machine. By maintaining scheduled maintenance and improvement to equipment,

machinery actually can improve with age. Example:

With preventive maintenance, heavy, unscheduled maintenance is still performed by shop engineers and specialist.

However, regular cleaning, fluid changing and light maintenance are handled on a regularly scheduled basis by the people who operate the machinery.

In the 1980s, the Toyota Kamigo Plant 9 in Japan won the Deming Prize with aged equipment.

1.4.5: ISO 9000:2000

ISO is the Organization for International Standards of Geneva, Switzerland.

The Greek word isos means equal.

The ISO standard was developed so that an international standard for documentation of quality systems could be applied in many different cultures.

Furthermore, the ISO standards are very broad and non-specific, so they can be applied to many different industries.

ISO 9000:2000 Introduction

1.4.5: ISO 9000:2000

To effectively use the ISO standard:

ISO 9000:2000 Introduction

i. Firstly, firm need to plan their processes.ii. Then, the firm need to follow those processes.iii. Next, the firm need to ensure that those processes are effective.iv. After that, the firm need to correct deficiencies in current

processes.v. Finally, the firm need to continually improve the processes.

1.4.5: ISO 9000:2000

On the worldwide basis, ISO 900:2000 has had a much more significant impact than any of the quality standards or recognitions in terms of the number of companies that have implemented the approach.

The focus of ISO 9000:2000 is for companies to document their quality systems in a series of manuals to facilitate trade through supplier conformance.

Once the quality system is documented, ISO 9000:2000 registration states that there is a quality system in place and the quality system is being adhered to.

ISO 9000:2000 Basics

1.4.5: ISO 9000:2000

The ISO 9000:2000 is made up of three standards. They are:

ISO 9000: 2000 Basics

i. ISO 9000:2000 – Quality management systems: Fundamentals and vocabulary.

ii. ISO 9001:200 – Quality management systems: Requirements.

iii. ISO 9004:2000 – Quality management: Guidelines for Performance Improvement.

This specifies the requirements of a quality management system. These requirements are used for internal implementation, contractual purpose, or

third-party registrations.

This broader document provides guidelines for objectives that are not included in ISO 9001:2000.

These include continual improvement and enhancing overall performance.

1.4.5: ISO 9000:2000

They are eight principles that provide the foundation for ISO 9000:2000 :

Quality Management Principles Underlying ISO 9000:2000

1. Customer focus2. Leadership3. Involvement of people4. The process approach5. A systems approach to management6. Continual improvement7. Factual approach to decision making8. Mutually beneficial supplier relationship

1.4.5: ISO 9000:2000

The ISO 9000:2000 Registration Process


Step 1:Inquiry Step 2:

Contract Step 3:Phase 1

AuditStep 4:

Certification Audit Step 5:

Process Audit Step 6:Final Audit Step 7:

Rolling Certification Audits

1.4.5: ISO 9000:2000

Step 1: Inquiry

Step 2: Contract


The client contacts registrars to investigate the terms for registration. The prospective client then makes a final selection of a registrar with whom

he or she is comfortable.

In this process, registration steps are determined, and a price is negotiated. A client-signed quotation or purchase order leads to the first stage of the

certification process. Some clients may wish to have a pre-assessment or gap-analysis audit.

1.4.5: ISO 9000:2000

Step 3: Phase 1 Audit

Step 4: Certification Audit


At this stage, the registrar performs an onsite audit of the documented quality system against the applicable standard.

Every elements of the ISO 9000:2000 standard is audited several times during the registration process.

A representative sample of an organization’s business processes are chosen for audit.

The audit program is a valuable tool that provides a clear and mutually defined process and snapshot of auditing-past, present and future.

1.4.5: ISO 9000:2000

Step 5: Process Audit

Step 6: Final Certification Audit


This step is optional. In this step, the client may choose business processes for auditing to the applicable

standard, allowing the client to learn and experience the registrar’s auditing methods and style.

Once the client’s documented quality system has met the applicable standard, the registrar will conduct an audit to determine the system’s effective implementation.

This may involve interviewing the process owners and responsible personnel as designated in the documented quality system for processes chosen from the audit program.

1.4.5: ISO 9000:2000

Step 7: Rolling Certification Audits


These are sometimes referred to as surveillance audits.

At this step, the registrar returns on either 6-month or annual cycles.

chapter 1.4 global supply chain quality and international quality standards

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