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15 March 2013

Excellence, Quality and their Costs

This post is also available in: Spanish

Business Excellence is only possible if the Quality concept permeates all actions that are performed in an organization. This holistic approach to Quality involves all the people that are in some way related to the entity: employees (of any level), suppliers, subcontractors, customers, collaborators, etc.

The Benefits of Quality

In a highly competitive global market, Quality is essential.

Certifications can be important for most companies because they act as a guarantee to new customers, but the entity that truly pursues Excellence must ensure compliance with all regulations (internal, external, voluntary and mandatory).

The implementation and strict compliance of a Quality Management System based on Business Excellence will provide the elements, methodology and strategy to achieve a high degree of satisfaction for all the people that in some way contribute to the organization, internally or externally.

Complying with Quality – the Issues

The present concept of Quality suggests a considerable increase in management costs.

The need for a QMS is real, as is the need to implement and strictly comply with the different quality regulations concerning each particular company. This can be very demanding on resources and the cost is often beyond the capabilities of the company.

As advances have been made to improve Quality Management, compliance costs have duly increased. This has made it increasingly difficult for the company management to find a balance between the undoubtable Quality benefits and the costs necessary to keep up the high level of compliance that is required.

Business Excellence through the use of a Tool and a Methodology

The automation of business processes ensures strict compliance with Regulations, reducing management costs to a minimum.

A Tool

Business Process Management (BPM) is the cornerstone of both ISO regulations and the EFQM Excellence Model.

The Business Process Management model allows automation and optimization of the operations in any kind of organization, breaking down overall activity into sets of ‘Processes’. These Processes represent operating areas that are relatively independent but are linked to each other. They can be analyzed with detail and their repetitive actions, both those regarding systems and those where users intervene, can be automated to optimize time, opportunities and costs, without losing the ability to adapt constantly and quickly to changes. They also preserve the coexistence of secure methods to facilitate active and critical human intervention in the processes with the necessary flexibility.

 Using a BPM Suite, the entity’s Quality policy is transformed into automated management processes. Scrupulous compliance with regulations is the natural result of using this system, because the system itself induces compliance as it marks the steps to follow.

A Methodology

With a BPM Suite, Quality can be managed on three levels, which are compatible and can coexist simultaneously, using the most appropriate level at all times.

1. The Traditional System

Until now, administration of the Quality Management System has been separate from the other productive activities. The Quality area has been dedicated to the creation and modification of documents and procedures related to quality, records, measurements and periodic verifications, nonconformities, corrective and preventative actions, audits, meetings, training, etc.

Now, all of these actions can be optimized using a BPMS.

2. Inclusion in the entity’s Operative Processes

By implementing the QMS within a BPM Suite, Quality becomes seamlessly integrated with the other productive and administrative activities performed in the entity.

With BPMS the Quality procedures are integrated in the company’s general management processes, because the Quality area will intervene in the design of the different work Processes. This ensures that the processes adhere to all Regulations, including the tasks to be performed for their compliance, and they also take into account the corresponding Business Rules, both Textual (instructions in the tasks performed by users) and Automatic (performed by the system with no human intervention).

Thanks to the process automation, any technical and specific Quality instructions will not just be lodged in the memory of the person who has to apply them, or jotted down on a piece of paper for their consultation, but will form part of the Processes that execute each one of the entity’s tasks. Thus, company activities will be “bound together” and the regulation requirements met by default.

The management’s awareness of the Quality policy will be reflected in the actual design of the administrative processes, and maximum involvement of all the corresponding users will be achieved, as they have to follow these processes out of necessity.

3. Quality Management using Processes

Using a next-generation BPM Suite with advanced management capabilities, Quality Management can progress even further.

This does not just involve designing processes with the Regulations in mind, but also including the quality assurance Controls and the Actions (many of them automated)that should be performed in the few noncompliance cases that may occur.

In practice, the need to amend the Documentation, Records, Nonconformities, Corrective and Preventative Actions, etc. arises from the company’s daily activities (business processes) and, with BPMS, these amendments can be made in the exact moment that they arise.

For example, if the Quality Department considers that a Nonconformity case should be generated for a specific type of complaint where the customer is right, the “Customer Service” process will be configured so that, in this event, the BPMS will automatically generate the Nonconformity record. This record will then be included, also automatically, in the Quality Department’s Nonconformity Management. The BPMS will also perform any other actions that have been deemed necessary in these cases (Customer Notification, Corrective or Preventative Actions, etc.).

This way, at the relevant moment, the corresponding actions will be launched automatically to ensure strict compliance. This implies a drastic reduction in risks, work (cost) and response times, to the point where complying with Quality assumes practically no additional work to what is already performed in the company’s day-to-day activities.  

Furthermore, with BPMS external users can also participate in the company processes, receiving and sending tasks. Thus, the application and control of regulations also affects subcontractors, suppliers, equipment or containers, carriers, customers, partners, agents, etc. ensuring fully integrated Quality compliance.

The BPM Suite is in charge of recording and displaying the real situations (times, delays or advances, deviations from patterns, costs, etc.) to the users responsible for the processes and the company management, while these Processes are running, without waiting for subsequent audits. This information is housed in the Dashboard, which is where the BAM (Business Activity Monitoring) and BI (Business Intelligence) are monitored. Using this data as a basis, the system is continuously improved modifying the processes and business rules to achieve the highest possible optimization.

This work system can also be applied to all the other internal and external regulations that are applied in the entity (Environment, Occupational Safety, Data Protection, etc.), making them fully and seamlessly integrated.