Management№ 1 July 2018

One day in May 1924 Walter Shewhart, an employee of the US electrical engineering company Western Electric, walked into the office of George Edwards, the head of the company’s receiving department. The short memorandum that Shewhart showed his superior that day became the foundation of a whole new management discipline, which we now call quality management.

Human factor

Shewhart’s foundational work on quality management was assisted by two colleagues at Western Electric, William Deming and Joseph Juran.

The chief tool used the quality manager is statistics. Shewhart’s control chart used mathematical calculations to determine whether defective goods were due to random or systematic failure. The goal was extremely simple: to completely eliminate second type of failure. This was to be achieved through a cycle of four steps: Plan–Do–Check–Act (PDCA).

Deming developed the PDCA cycle and formulated three axioms on which quality improvement is based. First, any activity can be improved. Second, efficiency requires fundamental changes to the product life-cycle. Third, a company’s senior management must assume responsibility for these changes.

Juran proposed a model of continuous quality management encompassing market research, product development, preparation and production, process and quality control, sales, after-sales service and disposal. Juran worked in Japan after the Second World War, teaching quality management for senior and middle managers.

By the mid-1960s, Juran became aware that his former pupils were generating some interesting ideas of their own. He tried to interest American corporations in them, but they were not yet ready to accept total quality management. TQM makes every employee, from assembly-line worker to top executive, responsible for eliminating defects. As a result, by the 1970s, Japanese companies were offering products of unprecedented quality, which left competitors reeling.

Thanks to the introduction of quality management systems, by the 1970s Japan had become a technological leader in many industries

Steps towards standardisation

In 1982 the UK Department of Trade and Industry published a report warning of the country’s declining role in world trade. British-made goods were sub-standard, even though the world’s first national standard for quality management systems (British Standard 5750) had been adopted by the UK in 1979.

In 1983 the government of Margaret Thatcher threw its full weight behind a campaign for adherence to BS 5750. The slogan was: "Quality is too important to leave to your quality manager". Thousands of training videos and teaching aids were distributed to businesses. BS 5750 became the basis for the ISO 9000 international standard, which was adopted in 1987.

Over time, various industries decided that their operations were too specific to be properly covered by universal documents and developed their own quality management standards. Aerospace companies have AS 9100C, car makers follow ISO/TS 16949, telecommunications equipment manufacturers use TL 9000 (unique in describing paradigms for certain products), while ISO 13485, ISO/IEC 90003:2004, and ISO/TS 29001 set the standards for medical equipment, computers, and oil and gas equipment, respectively.

Certification of quality management systems is carried out by specialised companies, which are accredited with the relevant national and international standards organisations. The total global market for testing, inspection and certification services is estimated at over USD 140 billion.

Seven touchstones

ISO 9001, which superseded ISO 9000 in 2015, describes seven quality management principles: customer focus, leadership, engagement of people, process approach, improvement, evidence-based decision-making and relationship management.

By certifying its quality management system, a company can boost customer loyalty, reduce regulatory risks and enable continuous quality improvement through internal audit and monitoring of key indicators. An ISO 9001 certificate is mandatory for admission to many markets.

As of December 2016, there were 1.1 million certificates of compliance with ISO 9001 in force worldwide and more than 500,000 certificates of compliance with analogous industry standards.

Russia adopted a national standard – GOST 40.9001-88 – with effect from 1989. The first Russian companies to certify their quality management systems were those with joint ventures with large Western companies. The spread of quality management practice in Russia slowed in the 1990s, but then gathered pace as Russian business strengthened and competition became more of a factor, both domestically and on foreign markets.

All Metalloinvest enterprises hold certificates of compliance (COC) with ISO 9001. The process was led by OEMK, which began work to design and certify a quality management system in 1993. Within two years it had successfully obtained a COC from the German certification specialists, TÜV Berlin-Brandenburg.

OEMK has since obtained confirmation of compliance with the requirements of new versions of ISO 9000 (dated 1994, 2000 and 2002). In 2003 it obtained an ISO 14001 COC for its environmental management system. In 2006 OEMK achieved OHSAS 18001 certification of its occupational health and safety management system.

All Metalloinvest enterprises hold certificates of compliance (COC) with ISO 9001

Lebedinsky GOK and Mikhailovsky GOK, and Ural Steel achieved compliance of their quality management systems with ISO 9000 standards from 2005–7. This was made possible by an intensive programme of information and training seminars for heads of business units and key specialists, and testing of employees responsible for the implementation of quality management systems. The companies also put in place procedures to monitor suppliers, assess the effectiveness of training events, collect information on customer needs, automate measuring equipment, and eliminate product defects. In addition to ISO 9000, Ural Steel has obtained a COC with the automotive standard ISO 16949.

By having a certified quality management system in place, a company gives objective assurance to all of its partners that it consistently delivers products that meet the most stringent requirements of its customers.

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