Quality Management: Balancing Compliance and Kaizen

Companies working in heavily regulated sectors might have been historically slow to change and optimise their quality processes, but a sea-change in the focus of regulatory bodies is signalling new opportunities for businesses to innovate and optimise the ‘way they do things’.  

In a recent article for Quality Magazine, the consultant Rony Kubat explains succinctly how organisations can become inert through the focus on compliance:

“the cost of noncompliance is often higher than the opportunity cost of incremental improvements to processes. In the course of certifying and maintaining a QMS, processes can easily become rigid, and many manufacturers leave money on the table for fear of triggering an audit or violating regulations.”

In other words, she says, compliance culture can stifle a more proactive culture of kaizen, the ideal state of continual improvement that a Lean methodology aspires to.  

Rigidity vs flow

A ‘culture of compliance’ can be rigid and unyielding.  But a culture of Kaizen is necessarily characterised by flow and change as a business continually seeks out new opportunities for efficiency in everything they do. As Masaaki Imai Founder of the Kaizen Institute puts it:

“Kaizen is improvement by everybody, everyday, everywhere.”

As suggested above this kind of ongoing identification and refinement of processes to maximise efficiencies is a function of a proactive culture.  It focuses on creating self-organising teams always seeking to learn and change in the pursuit of better product outcomes.  

But as Kubat points out, this might be fundamentally incompatible with a compliance culture that can be intransigent and monolithic in the way it functions:

“under the surface, compliance and continuous improvement evince fundamentally different values: change vs. consistency. Progress vs. stasis. Risk ready vs. risk averse”

If bodies which regulate compliance are only interested in prescriptive measures of enforcement, ensuring that certain ‘boxes are ticked’ and procedures followed in particular and unchangeable ways, then, of course, there is little possibility of cultures of Kaizen developing in the sectors they oversee.

Regulators face a new reality

But that is increasingly not the case.  In fact, faced with a more Agile, disrupted and hyper-competitive commercial world, there’s been a greater need for regulated businesses to embrace more innovation, to rapidly adapt the way they work according to the evolving needs of the market.   

Given this context, those who regulate these industries have acknowledged that the way to improve outcomes for the industry is to embed a self-sustaining, customer-focused culture of quality throughout an organisation.  In this way, they aim to avoid companies merely paying lipservice to ‘compliance’ and instead, embed ‘quality thinking’ into an organisation’s DNA.

Quality focus shifts to better outcomes for customers

Quality is, therefore, recast as a holistic pursuit - driven internally by the suggestions and engagement of people in every part of a business. The focus is on producing better quality end products that more exactly meet customer needs.  By pursuing those ends, optimising processes to eliminate waste and reducing the risk of product failure, they make better value products for their end users with better functioning and ever more innovative feature sets.  

And as a natural by-product of this focus on improvement, businesses see more custom, higher production yields, the need for less regulatory interference, more efficient auditing and less wasted resource from scrapped projects.

Standards reflect a move to proactive Quality Management

We see this shift written into the standards themselves.  It’s in evidence, for example, in clause 6.1 of ISO 9001:2016 which states that when planning your quality management system you should:

Determine the risks and opportunities that need to be addressed to:

a) give assurance that the Quality Management System can achieve its intended result(s);

b) prevent, or reduce, undesired effects;

c) achieve continual improvement.

Risk-based thinking leads the way

In the same way, ISO 13485’s emphasis on Risk-Based-Thinking (RBT) encourages medical device manufacturers to move beyond simply ‘ticking quality boxes’ to obtain ISO and their CE marking, by embracing the proactive, quality thinking that leads to longer-term, sustained improvement in the quality of all their outputs.

Risk-based thinking is about building a Quality Management System (QMS) that constantly monitors and evaluates risks to quality, mitigating against them through the continuous optimisation of process and procedure. 

This movement is also being echoed by the FDA which has recently reiterated its commitment to moving from an ‘inspect and control’ paradigm of regulation to one which seeks to ensure a proactive quality culture is established and maintained in those companies it regulates.

Realising a culture of Kaizen

Moving from a rigid, inflexible culture of compliance to a culture of Kaizen can be challenging, but the benefits are manifold.  And as this study from McKinsey has shown, in every case where a highly regulated company has empowered their employees to continually optimise their processes, they see immediate improvements in quality and commercial outcomes:

How is your quality management: Ad hoc, analytical or chaotic?

“Where processes became subject to continual review and optimisation, where a culture of quality is embedded into an organisation, where every function of a business took responsibility for reducing risk and driving innovation, the company made fewer mistakes, reported less wastage and greater productivity overall.  And these benefits were shown to increase the more a company invested in its quality system, but always delivering greater returns than it cost to implement.”

Choose the right tools

But companies who wish to evolve their quality processes in this way, need access to the right digital tools to do so.  And many businesses find that adopting a flexible, digital Quality Management System underpinned by a Lean DMS can be the answer.

In the first place they offer the digitals tools to document, store and make accessible to an   entire business (via an intranet) the regulatory requirements they need to adhere to. This will ideally include the documentation of processes through interactive business process maps.  

The right QMS can then begin to act as a central repository of quality and process information for an entire organisation.

These digital tools are a way of establishing and propagating best practice - while seeking out input and feedback within a business to evolve them for maximise effectiveness. 

The best QMS tools help managers regularly review existing processes and procedures, gather and share feedback across teams, then seek approval from key stakeholders for suggested changes to working practices, before they are ‘published’ and implemented.  

And as McKinsey observes - once this process starts to happen in a continual and cumulative cycle of collective improvement, compliance becomes a natural feature of everyday business thinking, while companies continue to find new ways to innovate.