Greetings again… In Part 1 we identified the influencers, those parties who help make policy. Now let us look at the drivers behind those influencers.
Step 3 Understanding your Business Drivers
Business drivers are the factors that influence or direct an organization’s strategy and goals and therefore its business needs. These are different for each business and management identifies their organization’s major drivers in different ways.
Top Management will want to know how the QMS will affect the organization’s business drivers. The “management representative” and the implementation team members need to work to ensure management understands these impacts by presenting information in terms that are important to management. Some examples of some general drivers are:
Understand your business drivers – Financial
Financial drivers are typically the key drivers for business success. The impact on financial drivers by the QMS and improved efficiency will usually play a large role in system acceptance. These drivers should be identified and quantified to the extent possible to determine the potential impact on the organization’s financial health. Impacts can be verified or more accurately quantified during data collection and assessment activities.
Understand your business drivers – Legal
Many of the quality issues that can impact legal business drivers are closely linked to environmental or safety issues. Consequently, an effective quality management system can mitigate a potential legal burden associated with environmental impacts or safety hazards. Relevant legal issues surrounding design and use must also be identified. Once identified, procedures and communication channels are implemented to ensure legal and regulatory compliance requirements are addressed, relevant data is collected and appropriate documentation is completed.
Understand your business drivers – Social
Social pressures can be as daunting as financial and legal issues. A quality management system can help address social issues as well as provide evidence of an organization’s efforts to maintain its reputation. Many of the public concerns are related to environmental and safety issues, but there are others that are important. Some of these may include:
- Occupational Health & Safety
- Environmental stewardship
- Corporate Social Responsibility
- Information Security
- Energy Management
Pressures can be exerted by local communities, trade associations, environmental groups, employees, and government entities, just to name a few. An organization should identify the relevant issues and install the systems necessary to minimize negative impacts and communicate the positive efforts being made to address them.
Understand your business drivers – Internal
Internal influencers have already been discussed, but there are also internal business drivers that impact an organization’s strategy and drive its business needs. Internal drivers are generally controlled by the organization and reflect the needs of an internal stakeholder, but can be a response to an external driver. These drivers should be identified as to how they relate to the needs and interests relative to quality. Relevant internal drivers can include:
- Employee satisfaction – Employees want to do a good job and operate in a good working environment. Improving quality makes the process more efficient and can result in an improved operating environment by reducing the Cost of Quality.
- Productivity – As operations are improved, raw materials are consumed more efficiently, they become more productive. Productivity is output over input; as output increases or input decreases, productivity is improved. An improved working environment promotes improved employee morale, more output relative to input, and improved operational control.
- Technology – Advanced technologies are typically more cost effective and may improve the process or operation. In addition to improving efficiency, advanced technologies can also result in improved operational flexibility and better control.
- Maintenance – Regular maintenance is critical to maintaining equipment operating efficiency, which results in better performance. It also promotes improved reliability, better schedule adherence, better utilization, and extended equipment life.
- Organization development goals – Strategic goals by the organization to be the best, the first, the most efficient, the biggest producer, etc. drive the organization to include operational efficiency as a component of their management system. Financial, legal and social drivers all play into the organizational goals; and the role quality addresses those drivers.
Identify the relevant internal drivers, determine how they interface with the organization’s quality management and put in place the appropriate systems to address these connections.
Understand your business drivers – External
- External drivers are typically outside the organization’s control. There are many external groups or stakeholders that could have an interest in the organization’s activities and / or QMS and help drive the organization’s direction. Their interest could be reflected through financial, legal or social drivers. The external groups that have or can have an impact on the organization should also be identified, and appropriate procedures and communication channels installed to address the needs and interests of these groups relative to organizational efficiency and effectiveness. A QMS can help with addressing these needs and interests. Some of the influencing groups could be:
- Stockholders – Obviously, stockholders are interested in the profitability of the organization and in measures that reduce costs. They are also interested in the business operating legally and addressing relevant social issues, and they expect to be provided a measure of assurance of the business’s long term viability.
- Lenders – Lenders want their money back with interest. A quality management system is a tool for the organization to address continual improvement thereby improving profits and efficiencies and enhancing long term existence.
- Customers – Customers want value-added. Reducing costs and improving efficiencies allow high-quality products and services to be offered at the lowest price, thus improving the organization’s competitiveness.The continual improvement component of a quality management system can help an organization improve efficiencies and reduce costs.
Suppliers – An efficient supply chain is important to competitiveness. An important component of supplier selection and maintenance is a commitment to continual improvement including quality, delivery, cost, availability and responsiveness. A quality management system can help with supplier selection. The presence of a quality management system would be one indication of a supplier’s commitment to continual improvement.
- Public – The public in general as well as many public groups can be drivers for an organization’s operation. Both can provide pressure relative to product safety, resource conservation, alternative energy sources, and the like. Public utilities can impose requirements that must be addressed. A QMS can help an organization address these issues and provide evidence of its efforts.
- Government – An quality management system can help an organization address existing regulations and plan for future government regulations. It provides the system to help the organization identify and address relevant government codes and laws.
Once influencers and drivers have been identified, you will need to determine the ‘space’ within which your organization operates. Like an onion, these ‘layers’ (boundaries) may be relatively transparent and difficult to clearly define, it will be up to you to determine the boundaries between that which you can control and that which you cannot. And, my friends, be ready to explain to an auditor where these boundaries lie. Anon.