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By Bijan Dastmalchi of Symphony Consulting, Inc. and Richard Vermeij of Arena Solutions 

When it comes to the RoHS (Restriction of Hazardous Substances) Directive, good things do not come to those who wait. This directive, which severely limits the use of six hazardous substances—most notably, lead (Pb)—in products shipped to the European Union (EU), is set to take effect in July 2006. Similar requirements will take shape in China, Taiwan, Japan, and other countries in the near future. While July 2006 may seem far away in today’s fast paced business environment, the scope and magnitude of the transition leave little to no room for error. And those companies that are unprepared risk getting caught in the supply chain “perfect storm” named RoHS. 

We have identified the seven most common pitfalls that can strongly affect the transition to RoHS compliance:

1. “Passing the Buck” to Suppliers
2. Exempt vs. Non-exempt Products
3. Resource Allocation
4. Component Compatibility, Identification and Availability
5. Supplier Due Diligence
6. Delayed Action
7. Data Management and Reporting

“Passing the Buck” to Suppliers

The electronics industry’s adoption of an outsourced manufacturing model, coupled with the technology downturn of 2001, have resulted in staff reductions at the original equipment manufacturers (OEMs). As electronics manufacturing services (EMS) companies and other suppliers in the extended supply chain continue to offer services to supplement their manufacturing core competencies, OEMs will continue delegating their operational activities to these companies. With RoHS, however, this becomes a complicated proposition. OEMs must take full responsibility for the successful transition of products as well as the mitigation of all risks in the supply chain—risks that can lead to revenue shortfall, attributable to either a non-compliance event or lack of product availability. 

The RoHS Directive states that the “Producer,” which is defined as the company that manufactures and sells the product under its brand name, is responsible for compliance under the directive. In some cases, the importer of record can be designated as the “Producer.” However, it is widely believed that the repercussions associated with non-compliance can also adversely affect the company whose logo appears on the product. For example, if a product is found to contain a banned chemical, the OEM’s products may be removed from the market, and the company may face severe fines if the non-compliance event is due to negligence or willful misconduct. Consequently, OEMs are requesting that their suppliers (including EMS companies and component suppliers) submit “Certificates of Compliance” that will confirm their products’ compliance with the RoHS Directive. However, in the event of an inadvertent error on the part of the supplier, the OEM will still be held accountable, and may not only have to remove its products from the shelves, but also have to pay the aforementioned penalties. So the fact that suppliers may prove to be entirely at fault has no bearing on what happens to an OEM’s non-compliant products. Even if suppliers are contractually obligated to replace non-compliant products, nothing can replace the lost revenue opportunity for the OEM. 

Therefore, we recommend that OEMs assign their own resources to fully manage – even micromanage – the transition of their products. These resources should be mobilized to the point that OEMs are completely confident that they’ve mitigated non-compliance issues and product availability risks. 

Exempt vs. Non-exempt Products 

Exemption is perhaps the most misunderstood and misperceived issue regarding the RoHS Directive. No electronics hardware manufacturer will be unaffected by this regulation, exempt or not. That’s simply because component suppliers are switching most of their products to become compliant and EMS providers are splitting their capacity between RoHS-compliant and RoHS non-compliant lines. And while some manufacturers may be able to benefit from an exemption, RoHS will still affect their businesses strategy. 

The RoHS Directive considers products manufactured for certain industries, such as military and medical, to be exempt until further notice. Additionally, specific substances are exempt from certain applications, such as the use of lead in solder for networking infrastructure products. These exemptions, however, provide a false sense of security for the companies that manufacture these exempt products. In fact, we believe that companies that can leverage exemptions will be more adversely affected than those who must comply with the RoHS Directive in full. 

Many U.S.-based OEMs build products that are not shipped to the EU, and therefore assume their products are exempt. However, countries such as China, Taiwan, and Japan, along with 27 states are currently developing legislation that will follow the example of EU. A case in point is California, which will adopt the EU’s RoHS Directive in January 2007 (only six months after the EU’s effective date) across a narrower scope of “covered electronic devices.” 

It’s important to realize that RoHS is here to stay, and that it will only gain momentum over time. Companies should accept this reality and develop a RoHS migration strategy for all of their products. Some competitors are also capturing the opportunity to classify their products as “green” purely for marketing reasons. Toshiba, for example, recently released its first RoHS-compliant laptop well ahead of the EU’s deadline, gaining the praise of various environmental groups. 

Resource Allocation 

In evaluating large, mid-sized, small, and start-up companies, it is evident that RoHS-readiness is highly size-dependent. While most large companies have completed their plans and are in the execution mode, the majority of mid-sized and small companies are just beginning the planning phase. Meanwhile, the majority of start-up companies have yet to begin planning. And while some start-ups have begun the self-education process, few have taken concrete steps towards evaluating their products and supply chain. 

Why is there such a wide gap? The reason is simple: resource availability. Although RoHS compliance is not yet an operational urgency that will require immediate “firefighting,” we believe that this will change as component availability problems begin to surface as early as Q4 of 2005. 

Organizations must educate themselves across functions and departments on the RoHS Directive, and understand its impact on their products and supply chain. Executives must understand the wide-ranging organizational impact of RoHS, assign financial and human resources, and help clear the path to execution and compliance. 

Component Compatibility, Identification and Availability 

Companies are expected to be on the receiving end of an unprecedented level of part change notices, which will be sent by component manufacturers. Since there are no industry standards driving the change from non-compliant to compliant components, each component manufacturer has taken a different approach to managing this transition. 

According to a research study conducted by Avnet and Technology Forecasters, approximately 72 percent of the component suppliers surveyed stated that they intend to create new manufacturer part numbers to identify lead-free parts. However, the terms “RoHS-compliant” and “lead-free” are not the same. 

Compatibility in form, fit, function, and manufacturing process is another critical problem. Manufacturers must address a host of key questions. Is a RoHS-compliant component the same as a lead-free component? What defines RoHS compliance and according to whose criteria? For instance, a board mount component may be designated as “lead-free,” but will it withstand the higher temperature profile of the reflow oven in a RoHS-compliant surface mount manufacturing process? The component might be compliant from an environmental standpoint, but not compatible with the higher temperature manufacturing process. 

Finally, the issue of availability comes into play. As component suppliers begin to prune their legacy products, many components will no longer be available in a non-compliant form. 

Consequently, OEM companies will need to manage compatibility, identification, and availability risks systematically in the supply chain, and take immediate steps towards transition. We emphasize the term “systematically,” as it may only take one missed component to necessitate rework, or even cause shipment delays. Keeping track of these changes on a Microsoft Excel spreadsheet—the typical approach at many companies—will inevitably lead to mistakes and countless, wasted hours of human effort. Instead, companies must leverage robust product data and compliance management tools that are designed to manage the volume of change to which they will be exposed. 

Supplier Due Diligence 

The RoHS Directive requires that companies exercise due diligence by validating that their supply chain partners are shipping RoHS-compliant products. To meet this need, OEMs are now frantically collecting “Certificates of Compliance” from their suppliers to provide to EU authorities upon request. However, OEMs incorrectly assume that, once they have collected these documents, they are clear of the due diligence requirements. Nothing could be further from the truth. These certificates are informational only, and do not pass responsibility from the “Producer” to the supplier. 

These certificates are not enough for a company to demonstrate that it has met the due diligence requirements of the legislation. That’s because all suppliers are not equal in terms of the risk they pose to an OEM. Consequently, an OEM must apply a consistent methodology in classifying its suppliers as “high risk,” “medium risk,” and “low risk.” The OEM must also take necessary steps to demonstrate due diligence. For example, the risk associated with a brand-name semiconductor manufacturer is not the same as that of a small “mom-and-pop” cable assembly shop in China. Therefore, if lead or cadmium is found to be present (beyond the acceptable levels) in such a cable assembly, showing a “Certificate of Compliance” from the supplier does not release the “Producer” of the responsibility for compliance. Moreover, it is widely believed that once an OEM ends up on the “radar screen” of the EU compliance authorities, it is likely that its products will continue to be subjected to on-going inspections. 

Delayed Action 

Many executives believe they have enough time to address the challenges posed by RoHS by the July 2006 deadline. Unfortunately, there are several reasons why this is false. 

First, the dynamics of an outsourced supply chain, and the lead-time associated with each value-added step, leave no room for error. The combined effect of channel lead-times, transformation lead-times, and component lead-times (particularly in the case of semiconductors), coupled with transition planning and execution, means the EU’s deadline is very quickly approaching. 

Some companies are hoping that the legislation deadline will be extended, or that EU authorities will not have the bandwidth to inspect all products shipped for compliance. However, it’s unlikely the RoHS deadline will be extended. Smart, savvy companies know better than to bet their revenues on an extension. 

Data Management and Reporting 

RoHS regulations clearly make the OEM responsible and liable for meeting RoHS requirements. The OEM must demonstrate compliance by submitting appropriate technical documentation to the EU law-enforcement bodies. In order to do so, proper data management will be critical. 

In the worst-case scenario, the size of a company’s data could nearly double. Additionally, with RoHS regulations in place, companies will need to manage one or two new documents per RoHS-compliant part number. Omitting a single item in the review process may cause an entire product shipment to be non-compliant. It is important to remember that inspectors will not necessarily understand the structure of each and every product that OEMs ship to the EU. However, inspectors will be well trained in scanning for information completeness and accuracy, focusing on parts that typically require attention (for example, jumpers, BGAs, substitutes, and solder used for PCBAs). 

Some lead-time almost always separates the date of manufacture of a product and its shipping dates. During this lead-time, the product may go through several revisions. That’s why it is critical to keep track of a product’s revision history. Tracking revisions accurately shouldn’t be a responsibility that falls to the EMS. Rather, tracking changes is so fundamental to the product configuration and associated compliance, that it’s imperative for OEMs to track this vital data themselves. 

Conclusions 

The RoHS Directive is a fundamental change in how products are manufactured. And its reach is expected to expand well beyond the EU. Already, China, Taiwan and Japan, along with several U.S. states have adopted, or plan to adopt, similar legislation to ban the use of hazardous chemicals in electronic products. RoHS requires sound, well-considered and proactive measures. In the case of the RoHS Directive, good things will not come to those who wait. 

Bijan Dastmalchi is the Co-founder and President of Symphony Consulting, Inc., a Silicon Valley supply chain consulting firm. Richard Vermeij is the director of Product Marketing at Arena Solutions, the leading on-demand PLM vendor.

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By Deborah Porto and Michael Smith, PhD. 

(This article is adapted from ”Re-Making Furniture Making at Hickory Chair Company” by Deborah Porto and Michael Smith, PhD, in Target, volume 22, number 1, First Issue 2006, pp. 16-34.) 

Imagine that you are “the sales guy” for an old business in an even older industry. Imagine that you have watched many colleagues either go bankrupt or take their operations offshore. 

Now imagine that the company president suffers a heart attack and dies suddenly. You have never worked in the plant, but suddenly you’re the new president. You quickly determine that the organization is in declining health. Sales are falling, and you know that something must be done. 

Your colleagues say you cannot continue to make your product in the United States. Everyone is taking their production offshore. For you, this isn’t an option, but how will you make it work? 

This was the reality that faced Jay Reardon when he became president of the Hickory Chair Company in Hickory seven years ago. Since then, Reardon discovered the resources within himself and the employees to not only turn the company around, but also enable the company to keep operating in the United States. 

Hickory Chair Company continues to transform the way it does business. The leadership has inspired the employees to believe in the future of the company and in their personal ability to mold that future. 

The EDGE

Reardon explains that the company is doing EDGE (Employees Dedicated to Growth and Excellence). It’s not lean manufacturing or the renowned Toyota Production System (TPS). “It is the Hickory Chair business system,” Reardon said. “It is a business system that engages employees to make their work safer and easier so that our customers can be sitting comfortably in the chair or sofa they order in their house.” EDGE has led to shorter cycle times, reduced waste, higher quality and faster product shipment.

Reardon, his staff, and employees have been aided in developing EDGE by their experience with TPS. They followed its spirit as they redesigned furniture-making processes. 

Jeff Liker writes in his book, “The Toyota Way,” about the spirit of TPS: “The more I have studied TPS and the Toyota Way, the more I understand that it is a system designed to provide the tools for people to continually improve their work. The Toyota Way means more dependence on people, not less. It is a culture even more than a set of efficiency and improvement techniques. You depend upon the workers to reduce inventory, identify hidden problems, and fix them. The workers have a sense of urgency, purpose, and teamwork …” This description applies to Hickory Chair and EDGE. 

People Not Tools

Much of the literature on how to implement lean manufacturing discusses tools and their application. The organizations most successful at transformation, however, have designed tools that fit their specific needs and have not force-fit lean tools to all situations. Lean tools may be the visible portion of a lean transformation, but they are dependent on the more invisible foundation of a culture that supports new ways of thinking. 

We believe from our observations that this is Hickory Chair’s unique accomplishment. They have developed a foundation of a people based culture -- respect, responsibility for problem solving, and total involvement with improvement. 

Without this foundation, initial gains from lean tools will be temporary. Tools alone might provide brief relief, but without new thinking based in a supportive culture, the tools do not support continuous improvement. Ultimately, the use of lean tools without leadership-spurred cultural transformation appears doomed to fail.

Employees are Hickory Chair’s “secret weapon.” This is also the secret weapon that every business already has, and success does not require a search for either capital or new employees. What is required is the persistent, energetic, and disciplined pursuit of a new way of thinking grounded in ideals, values, a vision of the future, and good storytelling ability to unlock and use the skills of your existing employees. 

“You’ve got to have faith in people,” Reardon said. “The creativity of our employees has been there all along. As we gained momentum with our improvement projects and recognized our employees’ early successes, more of our employees have become involved and developed great ideas for even more improvements. Hundreds of little things are better than one home run. We see this as a continuing journey. As you achieve each new threshold, it gives you perspective about new opportunities.” 

Deborah Porto is the director, applied research, Industrial Extension Service, North Carolina State University in Waynesville. She can be reached at deborah_porto@ncsu.edu or 828-452-3794. 

Michael Smith, PhD, is an assistant professor of management and international business at Western Carolina University in Cullowhee. He can be reached at mesmith@wcu.edu. 

Suggested Readings 

Dennis, Pascal. Lean Production Simplified. Productivity Press, New York, 2002. 

Liker, Jeffrey. The Toyota Way: 14 Management Principles From The World's Greatest Manufacturer. McGraw Hill, New York, 2004. 

Ohno, Taiichi. Toyota Production System Beyond Large Scale Production. Productivity, Inc., Portland, OR, 1988. 

Porto, D., & Smith, M. (2006). "Remaking Furniture Making at Hickory Chair Company." Target, 22(1), 16-34. Reprinted with permission from AME. 

Spear, Steven and H. Kent Bowen. “Decoding the DNA of the Toyota Production System”. Harvard Business Review. September-October 1999. 

Spear, Steven J. “Learning to Lead at Toyota,” Harvard Business Review. May 2004, Vol. 82, Issue 5, pp. 78-86. 

Womack, James P., Daniel T. Jones, and Daniel Roos. The Machine that Changed the World. Rawson Associates, New York, 1990. 

Womack, James P. and Daniel T. Jones. Lean Thinking. Simon and Schuster, New York, 1996.

By Mac McNulty 

HazWOPER is not the trade name for some fast food chain hamburger. It is an acronym for a regulation written as an interim standard in 1986 and became final (mandatory) in 1991. HazWOPER stands for Hazardous Waste Operations and Emergency Response. 

It was mandated by Congress in 1986 when Congress passed SARA (Superfund Amendments Reauthorization Act), which charged the Occupational Safety and Health Administration (OSHA) to come up with standards to train people who will cleanup hazardous waste and materials. OSHA promulgated several CFRs (CFR stands for Code of Federal Regulations) for both the construction and general industry. 

Since federal, state and county agencies are not subject to OSHA standards, the U.S. Environmental Protection Agency (EPA), which all have to abide by, wrote a standard two paragraphs long, and to paraphrase it says everybody who has to cleanup a Superfund site or respond to a chemical release must have either a site-specific safety and health plan or an emergency response plan, and train personnel, prior to them commencing the work. 

HazWOPER has three areas of concern. The first one is actual Superfund cleanup sites, voluntary cleanups (to sell the property), or closure of a permitted hazardous waste storage facility at a company. The level of training required will depend on the type of tasks the individual will be executing and the potential of exposure to hazardous materials. 

The first level consists of 40 hours (hence 40-Hour HazWOPER) of offsite training and then three days of onsite supervision. It is for anyone who will be working in a potentially dangerous environment or will be supervising someone working in said environment. This would typically be employees for environmental consultants or engineers, asbestos and lead abatement workers, or remediation workers. Occasionally, I get an environmental manager from industry who are designated the emergency coordinator or in charge of the company’s spill response program. 

The second level of training is 24 hours in length, with one day of supervision. It is for occasional site workers who will not be exposed to health hazards above a permissible exposure limit. This is the minimum level for government inspectors to get on to any cleanup site or Treatment, Storage, and Disposal Facility (TSDF), such as a hazardous waste landfill or incinerator. 

Regardless of which level of initial training is received, OSHA requires an annual refresher of eight hours of training to maintain qualification. 

The second area of concern in HazWOPER is the TSDFs that handle hazardous waste. The training needed is a minimum of 24 hours in length with an annual 8-hour refresher. Training should include emergency response procedures and equipment. 

The final area HazWOPER covers is emergency response regardless of where it happens. There are actually five levels of training in this section; depending on the response effort to be taken:

• First Responder Awareness Level – 1 to 2 hours
• First Responder Operations Level – minimum 8 hours
• Hazardous Materials Technician Level – minimum 24 hours
• Hazardous Materials Specialist Level – 24 hours plus
• On-Scene Incident Commander – 24 hours plus Ops Level

Awareness level is for companies that need staff to report spills but take no further action other than to leave the area. Operations level training is for staff that is expected to response to a spill with the intent to make sure the area is evacuated and secured. Next, they may take steps to minimize the size of the spill safely. They may shut off a valve at a distance from the spill. But they are not to plug, patch or otherwise stop the release at the source of the spill. The training required to stop a spill at the source is the HazMat Technician level. The annual refreshers for these vary in length depending on the level of initial training received.

We presently offer the 24-hour and 40-hour HazWOPER, as well as the 24-Hour Technician classes as open enrollment workshops. At the end of this month, I will be conducting the first Incident Commander class for industry. I can provide all of the above training to companies, except for the Hazardous Material Specialist level. We are doing 8-hour refreshers and 24-hour Technician workshops for facilities presently.

Mac McNulty has more than 20 years experience in the areas of chemistry, safety and health, and remediation/emergency response.

By Wayne Tindle

Why is it so difficult for an organization to stay on course to becoming a high performing organization?

After years working in manufacturing and with organizations in the public sector, healthcare and education, I have come to the conclusion that the answer to this question is the same for all. The reason for all of the roadblocks, delays and course changing is the result of human nature.

Let’s explore what I mean by human nature as it relates to high organizational performance. A high performing organization would be a Baldrige National Quality Award recipient that has sustained the use of the Baldrige business model for years, using annual assessments to focus on continuous improvement and using performance measures such as defect rate, cycle time, productivity, time to market, financials, customer satisfaction, product or service quality. This high performance company is run by fallible humans.

It is human nature for people to revert back to the old ways whenever difficult times occur. The old ways may be putting out fires instead of preventing fires from happening. Then, over time the unaddressed future problems become the present problems, causing organizations to always work on the “immediate or urgent” items. There just doesn’t seem to be time for long-term planning and improvement. The belief that long-term work cannot exist with short-term work creates lack of preparedness for what the future issues will be.
Lesson: Set short-term and long-term priorities and don’t lose the long-term focus.

It is human nature for people to think they can take a break from continuous improvement while addressing some “immediate” items. They don’t realize that once you stop, it can require twice the break time to return to where you were. What makes it worse is the longer your break, the more likely you will not return at all. An organization where I worked stopped the continuous improvement teams for six months because of a part shortage, and it required over a year to return to the original performance level.
Lesson: Don’t stop improving and don’t stop assessing how you are performing compared to other organizations.

It is normal for leaders of an organization not to understand the magnitude of their influence on the entire organization. Employees pick up on even the smallest hesitation to not putting high performance, customer-focus, planning, and continuous improvement into every communication and decision of their leaders. Absence or mixed messages indicate low priority, less importance, or moving in a different direction. For example, a common problem in manufacturing is monthly shipments. It contradicts the message to employees about how important quality is, when management ships product with lower quality to make billing at the end of the month.
Lesson: Be consistent between what is said and what is done.

It is normal to underestimate the importance of making a cultural change through training, coaching, and opportunities to work together as teams. What is culture change? In high performance organizations, some examples of culture change are:

1. accepting responsibility for mistakes;
2. being able to provide constructive criticism without fear of retribution;
3. encouraging input and suggestions from everyone in the organization and acting on them.

In a company where I worked it required an intentional culture change to decide that the organization of teams, training, and alignment of work were as important as the training of an individual to operate a piece of equipment. The result was an empowered and motivated workforce that produced results such as reduction of defect rate from 2200ppm to 200ppm and cycle time from 30 days to 5 days.
Lesson: Culture change is crucial to the achievement of high performance and draws on the benefit of the organization’s workforce knowledge.

Finally, what is ironic is that organizations send people to conferences and workshops to hear “lessons learned” from high performing organizations, and then continue to cultivate the same issues because they consider themselves different and the lessons do not apply.

Wayne Tindle trains companies in the Baldrige Criteria for Performance Excellence and coaches organizations using the North Carolina Awards for Excellence process.

November 2008

By Charles Parrish

What is this ISO 14001 stuff? What about being Green? Well – the answers are a mixed bag of ideas and terminology, often not necessarily related to one another.

ISO 14001 is the Management System model for building an Environmental Management System. It’s a Plan-Do-Check-Act approach of “continual improvement “in regards to environmental performance. Three areas are managed with a 14001 system:

• Significant Environmental Aspects: These are the most important environmental issues at your facility based on a number of customized decision criteria that a facility evaluates.
• Legal and Other Environmental Requirements: These are environmental laws and regulations covering air emissions, wastewater discharges, hazardous waste, and others.
• Potential Emergency Situations: These are anything that could possibly cause environmental damage, such as chemical spills, oil leaks, emergency wastewater discharges, etc.

An ISO 14001 system manages the above three items in connection with the facilities activities and services (on-site operations). ISO 14001 also requires companies to manage the environmental impacts of their products as well – but truth be told – most facilities do not include materials and products in the scope of their 14001 EMS.

This is where the Green comes in. When a company states they are Green it typically means they meet a standard covering their materials and products. However, this too has a large amount of wiggle room depending on which Green standard is used.

For example, carpet manufacturers may choose to meet the “Green Label Plus” textile standard to indicate they are Green. Put out by the Carpet and Rug Institute, this standard requires that carpets do not emit more than specified amounts of 13 chemicals in an effort to maintain optimum indoor air quality. It is a good standard, but doesn’t include recycling, which is a critical component in certifying a product as Green.

On the other hand, the McDonough Braungart Design Chemistry (MBDC) Green standard awards certifications by demonstrating adequate performance in a full array of sustainability areas including:

• Material Health - Full identification of materials, prohibited toxics, emissions, etc.
• Material Reutilization – Recyclability, recovery plans, etc.
• Energy – Use of renewable energy for manufacture, etc.
• Water – Use of water stewardship guidelines, water audits, etc.
• Social Responsibility – Corporate ethics, fair labor practices, etc

Organizations can be certified to the MBDC at either the Basic, Silver, Gold or Platinum levels.

The choice of which “Green” standard to pursue is critical and will define if your company is trulyGreen – or is just “Greenwashing” the target audience. In addition, ISO 14001 certification is often a requirement for meeting the higher level performance areas in many of the Green standards. We can assist companies in both the process of developing Green programs and products as well as achieving ISO 14001 certification. Check it out and go Green.

Charles Parrish is an ISO 14001 and ISO 9001 Lead Auditor and a Plexus Trainer/Coach, and has assisted more than 40 companies in developing their Environmental Management System (EMS) to qualify for ISO 14001 certification. He has also taught Environmental Compliance Auditing, Introduction to Environmental Regulations, NC Environmental Permits, Introduction to Air Quality, P.E. Exam Review for Air Quality, Stack Testing 101, and other environmental courses. He can be reached at Charles_parrish@ncsu.edu or call 919-515-4266.

By Dhirendra Kumar

RLCB, formerly known as Raleigh Lions Clinic for the Blind, is one of the many clients IES has had the opportunity to partner with for Enterprise Excellence. The manufacturing and distribution center wanted to improve the management of their material processes, thru-put and cash flow within their facility. They wanted to improve their inventory turns and base their production on customer demand, while building upon the strengths of their workforce.

They wanted to diversify their business. They wanted transformation.

They turned to IES for help in strategic planning, including a method for growth, and met with great results.

Enterprise Excellence has helped RLCB increase volume by 30 percent by creating a process flow and layout that was conducive to more efficient production.

Engineering students from NC State University support the Enterprise Excellence programs, and a couple worked at RLCB. This approach creates a win-win situation for both the businesses and the students. Businesses get the opportunity to grow in revenue and profitability while implementing an Enterprise Excellence program. Students get an opportunity to practice what they’ve learned in their classes in real-world applications.

Eric Warnhoff, vice president of operations at RLCB, sees positive progression in every day that passes. “Dr. Kumar is a resource to our organization and he is instrumental in helping us become the world-class operation we aim to be,” he said.

RLCB, Inc. currently employs more than 280 people. They have many partnerships, with one of their most valuable being with the North Carolina Services for the Blind. RLCB, Inc. is awarded federal government contracts through National Industries for the Blind (NIB) in conjunction with the AbilityOne program, but they also have many private industry customers. A state of the art research and development department allows them to meet the needs of both the federal and commercial customer.

What is Enterprise Excellence?

Each organization is focused on producing products or services using a variety of processes to meet customer demand, while simultaneously increasing profitability or margin. These processes occur in functional areas such as sales and marketing, finance, operations and services.

Every business leader in enterprises both large and small strategizes in the hope of meeting customer demand while retaining and attracting new customers. The expected result: an increase in revenue and profitability, and ultimately, growth.

So, the key question - “Is it happening in every enterprise?” I am sure the answer is no. So, we need to understand why it is not happening.

First, we need to explain Enterprise Excellence. The Enterprise Excellence (EE) philosophy is a holistic model for leading an enterprise to total excellence by focusing on the needs of the customer. The model stresses organizational excellence, product and operational excellence, service excellence, and people excellence. See Figure 1.

To achieve Enterprise Excellence in a global economy, all aspects must work collaboratively. A visionary plan should incorporate people, product, processes, resources and technology. Customers are very demanding – expecting on-time delivery of quality products and services at low prices.

Enterprise Excellence is achieved by developing and executing a sustainable growth strategy to:

• Support market and product growth
• Acquire new or diversify business
• Improve margin
• Increase revenue and profitability
• Reduce business cycle time

Unfortunately, the current world economy is in recession and this level of recession has not been seen since the 1930s. It will take some time to come out of it, but we will come out of it even stronger than before the recession. In the meantime, business leaders have to think about sustainability first and growth, second.

In a simple word sustainability means “more with less,” and this is a challenge not only for business leaders, but also for everybody in the world. Every day each of us should challenge ourselves to be better. At times that may include redefining what is possible and do more with less through increased efficiency and effectiveness. To accomplish this, we must rely on the fundamentals that have consistently delivered results, such as, productivity improvement, cost reduction, creativity, innovation, and maintaining a global presence for market leadership.

Business leaders and associates have to partner in order to focus on the needs of the customer and optimize the existing activities in the process. These processes include safety, quality, productivity, resource development, cost, etc. Businesses must find a balance between passion, people, and patience by studying the facts so as to fully grasp the situation. It is very important for businesses to understand their place as either within a state of sustainability or growth. It requires mutual trust and respect between business leaders, their associates, and most importantly, their customers. Understanding the status of an enterprise is key for success.

Enterprise Growth

Eventually, businesses will come out from sustainability mode and grow, but growth needs planning. So, what constitutes Enterprise growth?

Enterprise growth is an integrated approach affecting every employee and every functional area and strategy within the organization. It relies on transformational change management. It is very different from implementing the firm’s business strategies or executing process changes in isolation.

Enterprise growth calls for more than superficial change. These changes can be in response to marketplace events or to address underperformance, but enterprise growth is quite different from a company’s turnaround in financial difficulties. It will inevitably be the biggest single internal program that any enterprise undertakes. It is expected to disrupt the existing business model.

IES resolves the challenges experienced by organizations through partnerships. IES develops and implements business processes with the client to deliver a set of defined outcomes that represent substantial gains. The client has immediate access to IES expertise, resources and technology. IES offers continuous improvement and innovation to its clients’ business processes. This initiates growth and the ability to sustain gains over time while facing competition.

If you have questions regarding the Enterprise Excellence program, contact Dr. Dhirendra Kumar at Dhirendra_Kumar@ncsu.edu or call 919-515-8489.

Dr. Dhirenda Kumar has more than 35 years of technical, management, teaching, and research experience with major U.S. corporations and universities. He is the author of the book Six Sigma Best Practices: A Guide to Business Process Excellence for Diverse Industries and the manual "Lean Enterprise Solution in Global Competition." His extensive experience includes managerial positions with John Deere, Pratt and Whitney, and Pitney Bowes, Inc.

By Mike Joyce

That is a good question to ask in today’s global economy. On July 18, President Bush established a Cabinet-level panel to “recommend how to guarantee the safety of imported food and other products brought into the country and how to better police them,” reported the Associated Press.

With melamine in pet and animal feeds, diethylene glycol in toothpaste, salmonella in spices, mercury in seafood, and illegal pesticides on produce (this is not a common problem), one should stop and think, “Can I trust this food? Do I know where it came from? Is it safe to eat?”

There are three potential sources of risks to the food we eat: 1) the risks associated with handling, processing and preparing food; 2) the use of illegal substances when producing food (pesticides are not a common problem); and 3) the intentional contamination of food by an individual or individuals. All three are addressed by the U.S. Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA).

Food Science

NC State University’s Department of Food Science, Nutrition, and Bioprocessing is widely known for its efforts in food safety. Dr. John Rushing leads the Food Science Extension efforts at NCSU. Each year his department conducts training programs for processors, including Hazard Analysis and Critical Control Points (HACCP).

Additionally, NC State’s Cooperative Extension prepares retail food handlers to be certified food protection managers, using programs such as ServSafe. The Cooperative Extension works closely with local health departments to train retail food handlers on how to safely handle and prepare food.

Dr. Angela Fraser leads this effort. “Food-borne illness is nearly 100 percent preventable if food handlers apply safe food handling practices from the time they receive food to the time they serve it to their customers,” she said “Training is one way to make this happen.”

Imported Foods

The problem associated with imported foods is critical as well. The FDA does not have the resources to inspect all food imports, presently inspecting about 1 percent of the food coming into the U.S. We must therefore rely on foreign governments to develop and implement programs that ensure the safety of imported food products.

This is not an easy objective to accomplish, however, as exemplified by the problems in China. The head of China’s Food and Drug department was recently executed because of the graft and kickbacks he received while in office that allowed illegal activities to occur. These activities resulted in the loss of pet, animal and human lives around the world.

John Yarboro, North Carolina Emergency Management Homeland Security Branch Chief, identified the problem as developing adequate capabilities to prevent, protect, respond, and recover against pathogens, chemical, biological and radiological contaminants, and other hazards that affect the safety of food and agricultural products.

“This involves many aspects,” he said, “such as the timely eradication of outbreaks of crop diseases and pests, assessments of the integrity of the food producing industry, the removal and disposal of potentially compromised materials from the food supply, and decontamination of affected food manufacturing facilities or retail points of purchase or service.

“The potential consequences to our state’s economy and the general well-being of our citizens are enormous. We [Homeland Security] work closely with the state’s Department of Agriculture and Consumer Services and the Division of Public Health to help prevent, mitigate and eradicate threats to food and agriculture safety. You’ve got a lot of people out there who want to harm us, even at the expense of their own lives.”

Increased Awareness

Along this line, we are working with the FDA as part of a grant to the Nebraska Manufacturers Extension Partnership to increase awareness of these potential hazards. As the IES food industry specialist, I am working collaboratively with the various extension groups to implement the ALERT and CARVER programs that have been designed by the FDA to increase the awareness of the threat of bio-terrorism. (ALERT is a simple awareness program, so there is no regulatory follow-up to ensure that safeguards are in place. This is all voluntary.)

There are more than 27,000 retail food operators in North Carolina, and more than 70 percent are independently owned and operated. Most will never implement a plan to protect their food unless the law requires them to do so and there is follow-up enforcement.

The food industry is an important component of North Carolina’s economy that we must protect.

For more information on these efforts, contact IES food industry specialist Mike Joyce at (919) 250-1113, or go to our website at www.ies.ncsu.edu.

By Anna Mangum

Take a minute and think about how different life was in the 1960s and 70s. It was a different time with different priorities and in some ways, a whole different world. One major difference between today and 40 years ago is how we work and interact with our environment. 1970 marked the year that this interaction changed. It was the year that started the two regulatory agencies that protect the American workforce and the environment, OSHA and the EPA.

Now more than ever, companies and the American people have proven that they value both safety and the environment. Therefore, the need for environmental, health and safety professionals is growing every year.

As the number of environmental, health and safety professionals grows in North Carolina, there is one professional development program that stands above the rest, the Manager of Environmental Safety and Health (MESH) certificate program.

Starting in 1996, North Carolina State University partnered with the North Carolina Department of Labor and the Safety and Health Council of North Carolina to create a certificate program for environmental, health and safety professionals around the state. The program consists of 100 hours of training on issues ranging from ergonomics, to indoor air quality, environmental chemistry, emergency management, and accident investigation. The program has been a tremendous success with over 1,000 MESH graduates in 12 years. There was even a demand for an advanced program along with a construction program, which were both added in recent years.

In November of 2008, I represented North Carolina State University and the Industrial Extension Service at the Safety and Health Council Congress in Charlotte, North Carolina. Being new to IES and fairly new to the MESH program, I was surprised at what I found over the 2 day congress. This was a gathering of seasoned safety professionals throughout North Carolina. My booth was visited by over 100 graduates of the MESH, Advanced MESH and Construction MESH programs from all different industries and backgrounds. Each graduate demonstrated such pride in their accomplishments and made me feel so honored to be the new MESH coordinator for NC State. This certificate program is truly valued and recognized among the environmental, health and safety community.

North Carolina’s Commissioner of Labor Cherie Berry said, "The certificate reflects a commitment to workplace safety and health, an objective that we consider essential in making sure that workers in this state go home safe at the end of the workday."

For the environmental, health and safety professionals in North Carolina that are not a part of the MESH program, I highly encourage you to learn more. The best way to find out is to visit the MESH website at http://www.ies.ncsu.edu/mesh/meshcertificate.cfm. As the MESH coordinator, I would also be happy to answer any questions you may have about the program. You can contact me via e-mail or phone. MESH even has a Facebook page. To become a fan, search NC State University MESH. I am always eager to talk and interact with our MESH students and prospective students.

Anna Mangum is an NC State graduate in environmental technology with a minor in toxicology. Prior to accepting the position as NC State’s MESH coordinator and environmental, health and safety specialist, Anna conducted research at the National Institute of Environmental Health Sciences. There, she focused her research on familial pulmonary fibrosis and molecular genetics. She also completed an internship with the NC State IES, environmental, health and safety group focusing on HazWOPER and landscaping safety.

By Phil Mintz 

I recall a great business leader once saying, "We have seen the customer and he is us." Well, maybe I can’t really recall that specific statement. However, let’s consider this: The management system of any business is set up for the purpose of carrying out the necessary activities that lead to customer satisfaction and financial gain. We generally agree that it is difficult to achieve the latter without the former. 

So our clients often ask us to assist with the improvement of their management system through the implementation of internationally recognized quality management standards such as ISO 9001 (basic quality), ISO 13485 (medical devices), or ISO/TS 16949 (automotive).

It is amazing how once we successfully move our clients away from agonizing over the perceived documentation requirements of compliance or certification, our discussions quickly get connected to the customer needs and expectations. It is also interesting how businesses can settle into acceptance of internal philosophies that consistently put customer satisfaction into jeopardy. 

Insight

There is often great insight when we connect a quality management system practice to our personal or business expectations as a customer. Recently, I was discussing the customer on-time product delivery record with a client. It was revealed that there was not really an effective practice in place of reviewing the customers’ delivery needs against company capabilities when orders were placed. 

There was a great reluctance to acknowledge a delivery date other than what was requested by the customer. Consequently, many orders were accepted that resulted in late delivery. So I simply asked about the company’s expectations when they place orders with their vendors. I was told they actually had one vendor that never accepted the delivery date on their purchase orders. However, this vendor’s shipments were always received by the alternate date acknowledged. When I asked how they felt about that, their response was “We love them!” 

In this case, we recognize that the ultimate customer always wants to know the true capabilities of a supplier. We can typically live with planned delays in personal or business transactions, whereas surprises not compatible with our expectations are much more painful. 

Real Customer

Ultimately, we are always the eventual customer of any product or service produced by our businesses. We often recklessly separate the importance of our organization’s widget from the needs of the complex assembly completed by our customer with our widget and sold to us, our friend, or family member. 

The fundamental requirements of ISO management system standards continue to promote the discipline needed as a foundation to good business practices and better solutions for our customers. It humbles many business leaders to believe that it takes a quality management system certification commitment to drive their business focus toward effective customer satisfaction and continual improvement. However, as William Cowper wrote, "Knowledge is proud that he has learned so much; Wisdom is humble that he knows no more." 

Phil Mintz manages the IES continuous improvement services and the ISO 9000 products. He develops and facilitates training, implementation, and auditing activities for the development and maintenance of business quality systems across the state of North Carolina. He holds related certifications as a RABQSA Quality Management Systems Lead Auditor (QMS-LA) and PLEXUS™ Quality Systems Trainer for ISO 9001:2000 and ISO/TS 16949:2002. You can reach him at phil_mintz@ncsu.edu.

By Mike Joyce

In November 2007, the US Food and Drug Administration combined its Food Defense program with its Food Safety program under a single umbrella called the Food Protection Plan. This plan focuses on identifying potential hazards to food sources and supplies, using the latest science and modern technology.

The FDA will integrate the plan with its Import Safety Plan to ensure comprehensive coverage of the approximately 80 percent of the food supply chain under its purview. The US Department of Agriculture covers the other 20 percent, specifically meat, poultry, and processed egg products, so between the FDA and USDA all of our nation's food should be protected.

Strategies

The Food Protection Plan uses three integrated strategies:

1. Preventing food-borne contamination
2. Intervening at critical points in the food supply chain
3. Responding quickly to minimize harm

The Food Protection Plan builds in safeguards from production to consumption. Prevention emphasizes corporate responsibility so food problems do not occur in the first place. Intervention focuses on inspections, sampling, and surveillance at high risk points in the supply chain. Response will react to threats to the food supply with increased speed and efficiency, and will emphasize better communications between producers and federal, state and local agencies. The food industry needs to be aware of how each of these components will affect their operations.

The Food Protection Plan approach is similar to that being used for emergency response planning and environmental management systems. First, by identifying potential hazards, companies develop reactive policies and practices in anticipation of food supply disruptions. These practices include instructions for responding to an incident and the contacts that need to be made. Once established, companies should exercise their emergency response plans using simulations.

The Food Protection Plan gives the FDA immense authority to protect the food supply. The agency will define the level of controls necessary to prevent damage by terrorists, and require food producers to register every two years. The agency will also qualify third party inspectors under this initiative and require electronic import certificates for high-risk shipments. Finally, the program allows for mandatory recalls of food products when voluntary recalls are not effective.

ISO 22000

ISO 22000, the international food safety management systems standard, can be used by manufacturers and suppliers in the food supply system as a comprehensive template to manage emergency response and food protection. Heavily focused on Hazard Analysis and Critical Control Points, ISO 22000 encourages companies to include Food Defense components in a comprehensive food safety system that ensures the food they produce will be safe at the time of human consumption.

Several units of NC State University are collaborating to help North Carolina’s food businesses learn more about the FDA's Food Protection Plan. The Industrial Extension Service joined with the College of Agriculture and Life Sciences’ Cooperative Extension Service, and the Department of Food Science, Nutrition, and Bioprocessing’s Extension Service, to spread the word to the state’s food industry.

In particular, IES offers workshops to increase awareness of the need for Food Defense programs within the food industry. Partially funded by a grant from the FDA, the IES effort provides overview training on the FDA's "ALERT" awareness program and the targeting prioritization software tool "CARVER + Shock," used to assess a facility’s vulnerability to attack and intentional contamination. Combined with the ISO 22000 standard, these enable food producers to meet or exceed the requirements of the Food Protection Plan.

For more information on these efforts, contact IES food industry specialist Mike Joyce at 919.250.1113, or go to our website.