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Brent Stephens
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The important issue about “Quality Management” is not “making allowances” for the problem, but rather fixing the source. The quality trainer for a large management consulting company that I used to work for has a wonderful illustration to make this point. He described a company that manufactured a particular product, and in their “quality control process” somehow calculated that a quality inspector picks up 80% of the “bad” items. So they had 3 inspectors, the first supposedly picked out 80% of the “bad” items, the second picks out 80% of the 20% that were (supposedly) missed, and the third picks out 80% of the 4% left from the 20%, giving them a 99.2% “quality guarantee”.

This might ensure that the customer has a .8% chance of receiving a poor product, but missed the whole point of the exercise with high scrap and waste ratios. What ISO aims to do is to identify problem, and set up a sequence for DEALING with the problem, NOT side-stepping it. The company listed should be listing what the “bad” products faults were, where they originated, and then needed to set about correcting them.

There are two schools of thought on the origin of the term “ISO” – some believe that it originates from the Greek word “iso” – meaning quality, while others purport that it stands for the International Organization for Standardization, which was formed in London in October 1946. Whatever the origin of the name, it was formed with the primary intent of setting quality standards. If a company has an ISO9000 certification you can expect their product – or service – to meet a certain standard, a sort of “guarantee” of quality. Many European companies require that non-European companies become ISO9000 certified before they do business with them, as it gives them some idea of the quality standards the company sets, without having to physically inspect your business themselves. This makes the ISO9000 an internationally recognized standard.

The “Big Three” USA motor car manufacturers took the ISO standards and adopted their own QS9000 standards, and are now requiring their suppliers to conform to these standards. The major difference was that where ISO9000 is broad in requiring quality controls, QS9000 is more specific with set standards, as it is for a specific industry. (This meant that a six-inch high ISO9000 manual became an 18inch high QS9000 manual!)

How does it apply to the recycling industry? It is very applicable. Instead of sending out parts in the “hope” that they are “good”, ALL parts will have to be tested in some way to ensure fewer returns. While a 10-20% return rate is commonplace and somewhat “acceptable ” within the industry, this will no longer be the case. This will put pressure on the sales personnel; interchange systems and operations managers to ensure a lower returns ratio.

Can recyclers get a full ISO9000 certification? In order to enable as many companies as possible to gain certification, different levels have been set. They are described as:
ISO9001 – involving the design, development, production, installation and servicing.
ISO9002 – involving only production, installation and servicing
ISO9003 – involving only conformance to specified requirements, assured by the supplier at final inspection and testing.
The recycling industry therefore lends itself toward ISO9003 with the possibility that those who rebuild cars in addition might qualify for ISO9002 if they offer servicing.
As the URG6/7/8000 accreditation program is based upon ISO9000, getting URG8000 ensures that your company meets a high standard. You then have the choice of pursuing the internationally recognized ISO9000 accreditation should your company so choose.
CSI rating
As you go through the CAR Gold Seal and URG6/7/8000 accreditation process, you will notice the (CSI) Customer Satisfaction Index requirement in Gold Seal and URG8000. URG8000 lists under Performance Measures 4.20.14 “Submit documentation that you have an independent agent who conducts customer satisfaction surveys on your behalf.”

This is an integral part of the quality process, which any developing company should have. No doubt you have encountered it when you purchased a new car or had your car serviced at a dealership. You would have received a telephone call or a mailed survey where you could express your opinion either ANONOMOUSLY or IDENTIFYING YOUR NAME. One of the services we offer, as a company, is the conducting of surveys. As a company, we made the decision to primarily conduct our surveys from an anonymous standpoint, as we felt that the customers would be more apt to outline problem areas, (and for the most part have found this to be true). We discuss the details of what was said with the company we are doing the survey for, as far as possible - without disclosing who said it -, as it is not a “witch hunt” – the aim is to inspect the work being performed and identify problem areas that need correcting. In my training classes I often relate the poor experience that I had with Blue Haven Pools. It took them 4 months to finish the pool, they did not respond to faxes, return phone calls or treat the customer in any manner consistent with “best management practices”. To cap it all, the customer has NO RECOURSE! There is an 800 number, which is always busy, and if you are lucky to get through, are not very helpful to say the least. There is no address to write to, no President to approach, no fax to send a complaint to, you are stuck with the branch you are dealing with.

Their business plan appears to be based upon 2 premises. 1) Their customers will build one pool a lifetime, therefore repeat business is not an issue, 2) They are essentially a large marketing company who use sub-contractors to build the pools, and so decline accountability as it was the sub-contractors who did the work. The point is YOU HAVE NO RECOURSE (other than suing, which takes time, money and effort and primarily provides further income for the legal profession). From this illustration, the value of a CSI survey is evident, as it is possible that their upper management is unaware of these problems. Middle management tend to adopt a “CYA” approach, which an independent CSI survey will ‘circumnavigate” as the results should go directly to the president. For this reason a “Quality Manager” on an organization chart also reports directly to the president of the company.

Offering a CSI program, especially through an independent agent would identify problems with a salesperson, driver, or in packaging and shipping. Together with our mystery shopper program, this fits in well with our company motto: “People do what is inspected, NOT what is expected!” It is not enough to assume that because you set high standards, that you are meeting them. Your customer PERCEPTIONS are what you get measured on.

Action plan: We highly recommend that you become URG and ARA members, as unity is strength, and with the changes happening in the industry, you can share knowledge, get ahead, and stay ahead. We further recommend that you contact your local membership secretary and make sure that your other contacts are members. In a recent conversation with an owner, they mentioned that currently the industry has 6% of the market share of parts used to repair motor vehicles. With the entry of LKQ and Ford, this is predicted to grow to 12% and two things are expected to happen: Firstly, they bring added credibility to the marketplace; secondly, they bring increased expectations to the marketplace. Your product now HAS to be of a superior quality, or your returns ratio will become bigger. You can make the choice – go for a piece of the bigger pie – OR stand to lose what piece of the pie you currently have. It is your choice, but your quality standards WILL make the difference.

Brent W. Stephens is a project manager with a Masters Degree in Social Sciences. He worked for George S. May International Company and International Profit Associates, Inc. prior to opening his own management consulting company, CE Corporation in 1996, incorporating as Consulting Expertise Corporation in 1999. When the business was closed in 2001 due to personal circumstances, close to 80% of their client base were auto recycling facilities. He was a freelance contributor to the Premium Parts magazine.