Quality management report - May Fair Industrial Co. ltd.
Presented by: Alfred Yeung
(Administrative Executive)
Foreword
The year 2005 is coming. The Hong Kong's economy is recovering in a healthy speed. "Strong economic ties with the Mainland, especially with the Pearl River Delta (PRD), now form one of Hong Kong's fundamental strengths."(Hong Kong Government 2004) The Closer Economic Partnership Arrangement (CEPA), bring a great advantage for Hong Kong companies.
"The Agreement eliminates substantial trade and investment barriers between Hong Kong and the Chinese Mainland."(TDCTrade.com 2003) Two hundred and seventy-three types of products, which is including plastic products (toys) and metals products, can enjoy tariff-free importation, which is qualified as "made in Hong Kong" (30% value-added rule). As consequence, CEPA attracts a large number of foreign companies to setup their distribution centre in Hong Kong, which is the step stone toward China market. These are the business chance for local companies to do business with those international organizations.
Getting these opportunities must satisfy the customers' needs. Good preparation is the key aspect that about get the chance or not. The grade of quality is the definition of good preparation; and the International Organization for Standardization's ISO 9000:2000 serious is the way to upgrade the quality.
Table of Contents
Foreword 1
Table of Contents 2
. Summary 4
2. Introduction 5
2.1 Company Background 5
2.2 Company Structure 5
2.3 Business Review 6
2.4 Business Outlook 6
2.5 Things to concern 6
3. ISO 9000 Overview 7
3.1 Comparison 8
4. Implementation of ISO 9001:2000 10
4.1 General 10
4.2 Quality Management System 11
4.2.1 Establish Quality System 11
4.2.1 Document Quality System 11
4.2 Management Responsibility 12
4.3.1 Management commitment 12
4.2.2 Satisfy the customers 12
4.2.3 Develop the quality policy 12
4.2.4 Planning 13
4.2.5 Control 13
4.2.6 Management review 13
4.3 Resource Management 14
4.3.1 Supporting of quality resources 14
4.3.2 Provide quality personnel 14
4.3.3 Infrastructure 15
4.3.4 Environment 15
4.4 Product realization 15
4.4.1 Monitor realization planning 15
4.4.2 Customer-related process 16
4.4.3 Product design and development 16
4.4.4 Purchasing 17
4.4.5 Operational activities 17
4.4.6 Measuring and monitoring devices 18
4.5 Measurement, analysis and improvement 18
4.5.1 General 18
4.5.2 Monitor and measure quality 18
4.5.3 Control of nonconforming product 19
4.5.4 Analyze of quality information 19
4.4.5 Improvement 20
References 21
. Summary
Our company has already passed the worst four years. As one of the most famous company of design and manufacturing of paints and thinners in Hong Kong, we need to keep our advantage of our brand name and increase our market share in the coming future.
The competition of the market is increasing day by day. The customers are no longer concerning only about the price, but also the quality of the products. Especially when the price of the raw materials, fossil fuels by-product, is rising continuously. The customers tend to switch between competitors for better services, products and prices. Therefore, it is the time for us to enhance our company's competitiveness and the customer loyalty by upgrading our quality. To achieve this goal, the first step we must do is to qualify our company for a quality award, which is ISO 9001:2000.
The report is going to emphasize on the benefits ISO 9001: 2000; what should we do to get it. The report will also consider the long run of the business by introducing the extension of ISO 9001: 2000, which is ISO 9004: 2000.
At last, the report will also explains the barriers for implementing the ISO 9001: 2000, which will specially focus on the language problem.
2. Introduction
2.1 Company Background
May Fair Industrial Company Limited (May Fair) is a well known coating company in Hong Kong. May Fair is developed in 8-1-1978, which originally is chemical materials trading company. In 1983, May Fair started to produce there own coating, which was the "Cabinet Coating" serious. In middle 1980's, May Fair established the manufactory in Dong Guan, China.
As at September 31 2004, the company has employed approximately 350 employees, and established three main production lines (Plastics Coating, Baking Enamel and Architectural and Protective Coating.)
2.2 Company Structure
2.3 Business Review
Guang Dong, Mainland China and Hong Kong are the major market of our business, which is fifty fifty, with few clients that from Singapore and USA after the CEPA arrived. There are two typical products, Plastics Coatings and Baking Enamel, share the 70% of the revenue. After the CEPA affective, the demand of these two products tends to rise even more.
The third major product, Architectural and Protective Coating, is gradually recognized by the major buildings constructors, well known by building services' field.
2.4 Business Outlook
Due to the implementation of CEPA, cancel the tariff for products that "Made in Hong Kong", many organizations establish there distribution centre in Hong Kong. The demand of our products, Plastics Coating and Baking Enamel, is forecasting to be rise 20%. The demand of minor products that can be used on plastic and metal, like Industrial Coating, tend to increase as well.
On the other hand, the potential market of Architectural and Protective Coating is huge. The Housing department of Hong Kong Government is recruiting more coating suppliers for the re-paint of public housing and building. To earn the government tenders, quality of the products are crucial.
2.5 Things to concern
As mentioned before, the customers tend to switch between competitors. The only way to keep the current clients and establish new business is to satisfy their needs. To ensure the satisfaction of our customers, we need to fulfill their requests, provide good services and good quality of ...
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On the other hand, the potential market of Architectural and Protective Coating is huge. The Housing department of Hong Kong Government is recruiting more coating suppliers for the re-paint of public housing and building. To earn the government tenders, quality of the products are crucial.
2.5 Things to concern
As mentioned before, the customers tend to switch between competitors. The only way to keep the current clients and establish new business is to satisfy their needs. To ensure the satisfaction of our customers, we need to fulfill their requests, provide good services and good quality of products.
For us, as a coating company, to ensure the match of the colours, the variety of products, and the durability of our products are the key things need to concern; and these are the answer of the customers' satisfaction. To ensure these, we need to develop a quality management system apply to all aspects for products development and customer services. The ISO 9000: 2000 is the answer.
3. ISO 9000 Overview
The ISO 9000 standards are a group of formal international standards, technical reports, technical specifications and web based documents on Quality Management and Quality Assurance. It is a fundamentals and vocabulary of system of controls used by million company world wide as a combination of good management practice. The standards are developed by the International Organization for Standardization, which is the world's largest developer for standards.
The International Standards which ISO develops are very useful. They are useful to industrial and business organizations of all types, to governments and other regulatory bodies, to trade officials, to conformity assessment professionals, to suppliers and customers of products and services in both public and private sectors, and, ultimately, to people in general in their roles as consumers and end users.(ISO, 2004)
The International Standards ISO 9000: 2000 are including one certification, ISO 9001: 2000, and one non-certification, ISO 9004: 2000. International Standards ISO 9001: 2000 is the version of ISO 9000 for organizations that do R&D as well as "production." On the other hand, "[ISO 9004: 2000 is the] guidelines for performance improvements Provides guidelines beyond requirements of ISO 9001 - it is not a guide to implementation of ISO 9001." (ISO Standards Bookshop, 2002)
Figure 3.1 Relationships of ISO 9004: 2000 and ISO 9001: 2000 (Alfred Wong 2004, Slide 36)
3.1 Comparison
The following chart is the brief comparison of ISO 9001: 2000 and ISO 9004: 2000.
Figure 3.2
Principle
ISO 9001
ISO 9004
Customer Focused Organization
Assure conformance to defined customer requirements. Ensure effective response to customer feedback.
Understand current and future customer needs and expectations. Address customer loyalty. Measure customer satisfaction and act on it.
Leadership
Set and deploy policy and verifiable objectives, provide resources and establish an environment for quality.
Establish vision, direction and shared values. Set challenging goals and implement strategies to achieve them. Coach, facilitate, and empower people.
Customer Focused Organization
Assure conformance to defined customer requirements. Ensure effective response to customer feedback.
Understand current and future customer needs and expectations. Address customer loyalty. Measure customer satisfaction and act on it.
Leadership
Set and deploy policy and verifiable objectives, provide resources and establish an environment for quality.
Establish vision, direction and shared values. Set challenging goals and implement strategies to achieve them. Coach, facilitate, and empower people.
Process Approach
Establish, control and maintain documented processes.
Explicitly identify internal / external customers and suppliers of processes. Focus on use of resources in process activities, leading to effective use of people, equipment, methods and materials.
Figure 3.2(Continue)
Principle
ISO 9001
ISO 9004
System Approach to Management
Establish and maintain a suitable and effective documented Quality Management System.
Identify a set of processes in a system. Understand their interdependencies. Align the processes with the organizations goals. Measure results against key objectives.
Continual Improvement
Through management review, internal / external audits and corrective / preventive actions, continually improve the effectiveness of the Quality Management System.
Set realistic and challenging improvement goals, provide resources and give people the tools, opportunities and encouragement to contribute to continual improvement of processes.
Factual Approach to Decision Making
Management decisions and actions pm the Quality Management Systems are based on the analysis of factual data and information gained from reports on audits, corrective action, nonconforming products, customer complaints and other resources.
Decisions and actions are based on the analysis of data and information to maximize productivity and to minimize waste and rework. Effort is placed minimizing cost, improving performance and systems. Develop mutual trust, respect and commitment to customer satisfaction and continual improvement.
(Quote from Alfred Wong (2004), Tutorial Notes)
3.2 The benefit of ISO 9001:2000
The benefits of ISO 9001:2000 can be defined as the benefits of QMS. It can increase the satisfaction and loyalty of customers, which consequentially increase the good will of the company and the revenue as well. Nevertheless, enhancing the quality of the management, also increase the efficiency; as everyone know "Time is money", in other words, it reduce the cost.
Beyond these, the obvious benefit of ISO 9001:2000 is the step stone of becoming a government materials supplier. Therefore, we must do it.
4. Implementation of ISO 9001:2000
4.1 General
Implementing the ISO 9001: 2000 need to follow the step of implementation guideline in five aspects, which are the following:
* Quality Management System
* Management Responsibility
* Resource Management
* Product Realization
* Measurement, Analysis and Improvement
These five aspects are the processes of developing a Quality Management System (QMS) of ISO9001: 2000 and are based on the "Plan, Do, Check, Act" (PDCA) strategy. The figure 4.1 (Alfred Wong, 2004) illustrate the idea of ISO 9001: 2000.
Figure 4.1 Model for ISO9001:2000
4.2 Quality Management System
4.2.1 Establish Quality System
* Development
. Identifying the processes that make up the quality system.
2. Describing the quality management processes
* Implementation
. Use quality system processes.
2. Manage process performance
* Improvement
. Monitor process performance.
2. Improve process performance.
4.2.1 Document Quality System
* Development
. Establish documents to implement the quality system.
2. Establish documents which consider what May Fair does.
* Quality manual
. Record the procedures
2. Explain the processes' interaction
3. Identify the scope of the quality system
* Control of documents
. Approve documents before distribution
2. Review and update the document when need and re-approve it
3. Keep and identify the revision status of documents
4. Screen documents of external sources
5. Prevent miss use of ancient documents
6. Keep documents in healthy condition
* Maintenance of records
. Use records as evidence of the fulfillment of requirements.
2. Set up a guideline to control the records
3. Ensure the availability of records
4.2 Management Responsibility
4.3.1 Management commitment
* Promote the importance of meeting the customer requirements, the statutory requirements and the regulatory requirements.
* Develop the company's quality policy, quality objective
* Provide resources to implement the quality system
* Perform management review
4.2.2 Satisfy the customers
* Identify customer requirements
* Meet customer requirements
* Enhance customer satisfaction
4.2.3 Develop the quality policy
. The management must ensure that
* it meet the company's purpose;
* it stresses on the necessary on meeting requirements;
* it makes promise of continuous improve the QMS
2. The management must manage the quality policy
* is communicated and understood within the company
* is reviewed and is still suitable
4.2.4 Planning
. The management must setup the quality objectives and ensure that
* they are set for suitable areas and at organizational levels
* they are support the quality policy
* they are measurable
2. The management must plan
* The development of the QMS
* The implementation of the QMS
* The improvement of the QMS
* The modification of the QMS
4.2.5 Control
. The management must
* clarify and communication the responsibilities and authorities
2. Appoint management representative to
* oversee the QMS and report on the status of the QMS.
* support the improvement of the QMS
4.2.6 Management review
. Review quality management system for
* evaluating the performance of the quality system.
* evaluating whether the quality system should be improved.
2. Check management review inputs to examine
* audit results.
* product conformity data.
* chances to improve.
* feedback from customers.
* process performance information.
* corrective and preventive actions.
* changes that might affect the system.
* previous quality management reviews.
3. Create management review outputs to
* improve the quality system and the products
* address resource needs.
4.3 Resource Management
4.3.1 Supporting of quality resources
. Identity quality resource requirements to
* support the quality system.
* enhance customer satisfaction.
2. Provide quality system resources to
* support the quality system.
* increase customer satisfaction.
4.3.2 Provide quality personnel
. Hire competent personnel to ensure that the personnel have
* the right experience, education, training and skills
2. Support competence to
* define acceptable levels
* uniqueness and evaluate the effectiveness of training and awareness needs
* distribute training and awareness programs
* maintain a record.
4.3.3 Infrastructure
. Clarify the needs of
* building, workspace, and associated utilities
* software and hardware
* equipment and support services
2. Maintain the good conditions of
* the buildings, workspaces and associated utilities
* software and hardware
* equipment and support services
4.3.4 Environment
. The management must
* clarify and manage the needed work environment to ensure products meet requirement.
4.4 Product realization
4.4.1 Monitor realization planning
. The management must plan the product realization processes to
* define product quality objectives and requirements.
* define product realization needs and requirements.
2. Develop product realization processes for
* realization documents
* realization record keeping systems and
* Develop approaches to control quality during product realization.
4.4.2 Customer-related process
. The management must identify
* customers' product requirements for us
* the requirements that are dictated by the product's use.
* the requirements that are imposed by external agenise and we want to meet.
2. The management review customers' product requirements
* before we accept orders from customers.
* to maintain a record of our product requirement reviews .
* to control changes in product requirements.
3. Communicate with the customers to
* build up a process to control communications with customers.
* implement the customer communications process.
4.4.3 Product design and development
. Plan the design and development
* to define the product design and development stages.
* to clarify design and development responsibilities and authorities.
* to manage interactions between design and development groups
* to update the design and development plans as changes occur.
2. Identify the design and development inputs to
* specify product design and development inputs.
* document product design and development input definitions.
* check product design and development input definitions.
3. Produce the design and development outputs to
* create product design and development outputs.
* support design and development outputs before release.
* use design and development outputs for control purpose
4. Perform and record the product design and development reviews and their verifications
5. Conduct and record design and development validations
6. Manage the design and development changes to
* identify, document, re-evaluate, verify and confirm the changes in product design and development.
* approve changes before implementation.
4.4.4 Purchasing
. Control purchasing process to ensure that purchased products meet requirements and suppliers meet requirements.
2. Document product purchases to
* record when the products being purchased
* specify the requirements
3. Verify purchased products at our own and suppliers' premises
4.4.5 Operational activities
. Control production and service provision, processes, information, instructions, equipment, measurements and activities.
2. Validate production and service provision to prove that
* special processes, process personnel or process equipment can produce expected out puts.
3. Identify and track the products to establish and maintain the product identity, and identify the status of it. As well as record the identity of the products when required.
4. Protect property supplied by customers to identity, verity and safeguard property supplied to us by the customers.
5. Preserve the products and components during internal processing and final delivery.
4.4.6 Measuring and monitoring devices
. Identify what should be monitored and measured
2. Define the appropriate monitoring and measuring devices to perform and record the calibrations
3. Calibrate monitoring and measuring devices that perform and record calibrations.
4. Protect monitoring and measuring devices from unauthorized adjustment and damage.
5. Validate monitoring and measuring software
6. Revalidate monitoring and measuring software when necessary.
7. Cooperate the monitoring and measuring devices to ensure that the products are met requirements.
4.5 Measurement, analysis and improvement
4.5.1 General
. Plan corrective processes that will be used to assure, improve the system.
2. Use corrective processes to demonstrate conformance and improve QMS.
4.5.2 Monitor and measure quality
. The management needs to
* identify the ways to monitor and measure customer satisfaction.
* monitor and measure customer satisfaction.
* use customer satisfaction information.
2. Plan and perform regular internal audits for
* setting up an internal audit program.
* developing an internal audit procedure.
* planning the internal audit projects.
* performing regular internal audits.
* solving problems discovered during audits.
* verifying that problems have been solved.
3. Use suitable methods to monitor and measure the processes and take action when the processes fail to achieve expected results.
4. Monitor and measure product characteristics by verifying that product characteristics are being met; and keep a record of product monitoring and measuring activities.
4.5.3 Control of nonconforming product
. The management must develop a procedure to control nonconforming products such as:
* Define how nonconforming products should be identified and handled.
2. Identify and control the nonconforming products to
* reduce or correct product nonconformities.
* prevent the delivery or use of nonconforming products.
* eliminate the inappropriate use of nonconforming products.
3. Re-confirm that the nonconforming products that were corrected to prove that corrected products are meeting requirements.
4. Control nonconforming products before delivery or use
5. Maintain records of nonconforming products to prove the product nonconformities and the actions taken to deal with nonconformities.
4.5.4 Analyze of quality information
. The quality management information needs to be
* define the information we need to evaluate and improve our quality system.
2. Collect quality management system data for
* monitoring and measuring the suitability and effectiveness of our quality system.
3. Provide quality management information about our customers, suppliers, products and processes.
4.4.5 Improvement
. The improvement can be done by using the audits, quality data, quality policy, quality objectives. The management reviews, corrective action and preventive action can also generating improvements
2. Correct actual nonconformities by
* reviewing our nonconformities.
* figuring out what causes our nonconformities.
* evaluating whether we need to take corrective action.
* developing corrective actions to prevent recurrence.
* taking corrective actions when necessary.
* documenting the results of our corrective actions achieve
* examining the effectiveness of our corrective actions.
3. Preventing potential nonconformities by
* detecting potential nonconformities.
* recognizing the causes of potential nonconformities.
* studying the effects of potential nonconformities.
* assessing whether we need to take preventive action.
* contributing preventive actions to eliminate causes.
* taking preventive actions when necessary.
* recording the results that our preventive performance achieve.
* inspecting the effectiveness of our preventive actions.
5. Barriers of the implementation
5.1 Culture
The definition of culture is "the collective programming of the mind which distinguishes on group or category of people from another". (Prof. Greet Hofsted, 1993) There is the gap between the western and Chinese management culture. The culture of the traditional Chinese management system, "[which] in the Western view this lack of system". (Prof. Geert Hofstede, 1993) However, the globalization effect is gradually filling this gap.
The international enterprises are dominated the major city of China, such as Shenzhen, Shanghai and Beijing. They bring the western style of management to the Mainland China. The Chinese organizations absorb it and use it; therefore the culture barriers are minimized day after day.
Additionally, most of our management members studied in the western country for a long period of time. And actually, our company are running some sort of quality control, although in small scale, our labours will be easily adopted after appropriate training.
5.2 Language
The International Organization for Standardization (IOS) has translated the ISO 9001:2000 standard into Chinese version. They allow the trainer to use the Chinese to teach the training programme; therefore the language is no longer the barriers. The IOS also over the training seminars in different region, it helps to reduce the language as well.
5.3 Others
Although the people of the Mainland China accept the western management style, there still have some barriers. These barriers include corruption and illegal trading, which are the resistance of implementing the QMS.
6. Conclusion
In conclusion, I, as the member of the company, will strongly support the implementation of the quality management system. The ISO 9001:2000 is the most appropriate and easiest way for doing so.
It is not only improved the efficiency and effectiveness of our company internally; it also enhance the customers' satisfaction and loyalty. In other words, it increases the competitiveness of our company.
For our future development, the ISO 9001:2000 is the great foundation. After the implementation of it, we can follow the guideline of ISO 9004:2000 to further enhance our system, of course the company.
The last but not less, the QMS is the trend of the world. Sooner or later, we can either follow it or say "good bye" to the market. Therefore, as the recovery of Hong Kong economy and the launch of CEPA, it is the chance for us to implement our QMS and develop our foundation.
References
Hong Kong Government. "Commerce and Industry." Hong Kong 2003 Yearbook (on-line). http://www.info.gov.hk/yearbook/2003/english/chapter05/05_00.html (2004)
TDCTrade.com. "CEPA and Opportunities for Hong Kong" http://www.tdctrade.com/econforum/tdc/tdc031002.htm (20 October, 2003)
ISO "Why Stands Matter" About ISO http://www.iso.org/iso/en/aboutiso/introduction/index.html (16 Feb, 2004)
ISO Standards Bookshop "The BS EN ISO 9004:2000 Standard" ISO 9004 http://www.iso-standards-international.com/iso-9004.htm (2002)
Hong Kong Housing Authority and Housing Department, "Procurement Principle", http://www.housingauthority.gov.hk/en/businesspartners/procurement/0,,1-0-0-0,00.html (2004)
Alfred Wong, 2004, "Overview of ISO 9000: 2000", Tutorial Notes, Slide pp. 13, 36-39
Professor Geert Hofstede, 1993, "Cultural Constraints in Management Theories", pp. 6