Quality - Foro Internacional de la Calidad

Benefits of Quality IMS
based on ISO
Management Standards
Dr. Isaac Sheps
Baltika – President
Carlsberg Group – Senior Vice President Eastern Europe
ICONTEC, Cartagena, August 2014
This is Carlsberg Group today
No.1
in Northern & Eastern Europe and
fourth largest brewer in the world
150
markets around the world
500
different beer brands
40 000
employees on three continents
36 000 000 000
bottles of beer sold in 2013
Our three regions at a glance
Western
Europe
Eastern
Europe
41
35
(2009: 43%)
(2009: 44%)
47
36
(2009: 41%)
(2009: 52%)
Asia
Group
2013
% of total
beer
volume
24
(2009: 13%)
2013
% of EBIT
17
(2009: 7%)
3
Eastern Europe – Ensure Profitable Growth
BELARUS
RUSSIA
Olivaria
• No. 1
• Market share: 29%
• Breweries: 1
Baltika
• No. 1
• Market share: 39%
• Breweries: 10
KAZAKHSTAN
UKRAINE
Carlsberg Ukraine
• No. 2
• Market share: 27%
• Breweries: 3
UZBEKISTAN
Carlsberg Uzbekistan
• Breweries: 1
Carlsberg Kazakhstan
• No. 2
• Market share: 32%
• Breweries: 1
AZERBAIJAN
Baltika-Baku
• No. 1
• Market share: 73%
• Breweries: 1
4
Carlsberg Group owns 4 of the top-10 beer brands in Europe
Top 10 Beer Brands
in Europe 2013 (million hl)
1
Baltika
13.3
2
Heineken
12.7
3
Carlsberg
8.6
4
Efes
8.3
5
Amstel
6.9
6
Tuborg
6.7
7
Obolon
6.5
8
Kronenbourg
6.3
9
Foster’s
6.3
Chernigivske
6.1
10
Source: Canadean Wisdom, 5 March 2014
5
Baltika Breweries Overview
6
Baltika is as big as Russia
10 breweries, 3 malt houses, and sales offices in 115 cities
Total production capacity — 51 mln dal/month
YAROSLAVL‟
12.0
6.5
ST
PETERSBURG
4.5
6.5
TULA
2.0
VORONEZH
CHELYABINCK
4.5
NOVOSIBIRSK
2.0
KRASNOYARSK
2.0
ROSTOV-ON-DON
4.5
Breweries
KHABAROVSK
Malt houses
7
Baltika’s market share is over 2 times bigger than
the nearest competitor’s
Others 15.2%
MPK 2.5%
Ochakovo 2.8%
Baltika 38.6%
Heineken 13.7%
Efes 13.3%
AB Inbev 13.9%
Source: AC Nielsen, Urban + Rural, 2013
8
Baltika has irresistible beer portfolio
Super-premium
№1
Premium
№1
Mainstream
№1
Lower
mainstream
№1
Discount
№1
Non-beer
№4
kvass
№1
energy drink
9
A Management System Implementation
Process
Advanced Management
Systems
10
Development of Competitive Factors
„60
„70
„80
„90
„00
SOCIAL
FLEXIBILITY
ENVIRONMENT
ENVIRONMENT
AGILE
AGILE
QUALITY
QUALITY
QUALITY
QUALITY
EFFICIENCY
EFFICIENCY
EFFICIENCY
EFFICIENCY
EFFICIENCY
INNOVATION
INNOVATION
INNOVATION
INNOVATION
INNOVATION
11
The Queen’s Croquet-Ground
Alice: “You can’t play like that.
The Queen: “That’s the way we play here”.
12
Stop Demotivating Your Employees
David Sirrota, Louis Mischkind,and Michael Irwin Meltzer,
Harward Management Update, volume11,Number 1,Jan.2006
“Most companies have it all wrong. They don’t
have to motivate their employees. They have
to stop demotivating them”.
In about 85% of companies employee’s
morale sharply declines after their first six
months and continues to deteriorate for
years afterward.
Source: survey of about 1.2 M employees at 52 Fortune 1000 companies
from 2001 through 2004, Sirota Survey Intelligence
13
Strategy Workshop
The Business-Quality-Marketing Triangle
Business
Marketing
Quality
14
Quality and Productivity
Productivity
Quality
Product Quality
Organization Quality
Garvin‟s 8
Quality Dimensions
The Interested
Parties Model
Perception
The System Concept of
Quality Management
Identifying Product
Attributes
The new Quality
“Attractive Quality”
Total and Partial
Productivity
Partial Productivity
In the Beer Industry
Quality
The relation between
Quality and Productivity
Marketing
Business
The relation between
Quality, Productivity and
Financial Outcomes
15
Quality is as old as humanity
“HAMURABI LAWS” (1700 b.c.)
No. 229: If a constractor built up a house which prooved not
to be strong and falled apart and killed the owner, the
contractor should be killed.
No. 234: If a boat constructor build up a boat and if it breaks
apart in the very same year, the constructor should repare the
boat on his account”
16
Egyptian Quality Control – 1450 b.c.
From an Egyptian tomb painting, Thebes, C. 1450 B.C. The
workman
at the left is dressing the stone block while the inspector at
the right
checks the quality of the work with a piece of string
Source: Norman de G. Davies
“The Tomb of Rekh-mi-rē at the Thebes,” Vol.2, Pl.LXII
New York, Metropolitan Museum of Art, 1943
17
The “Quality” Evolution
1910-1930
Quality = Conformance to instructions
1930-1950
Quality = Conformance to standards
1950-1960
Quality = Conformance to use
1960-1970
Quality = Conformance to demands
1970-1980
Quality = Conformance to needs
1980-1990
Quality = Conformance to expectations
1990-2000
Quality = Conformance to views of life
2000
Quality = Conformance to social values
18
3 levels of Quality
Organization Quality
Product Quality
Production Quality
19
Advantages of ISO standards application
September 2013
Production Quality
 No Variance
 Every Drop of Beer in Every Bottle
in Every Production Batch,
until Expire Date, Always the same.
20
GENICHI
TAGUCHI
Genichi
Taguchi
The Quality of a Product is the Minimum Loss
Imparted by the Product, to Society from the
Time the Product is Shipped
Lower specification
bound
Upper specification
bound
L
$- Loss
Notes:
L = $ loss
c = cost coefficient
(constant)
x = quality characteristic
under consideration
T = target value
L=c(x-T)2
T–S
Target
T+S
X Quality Characteristic
21
“Drink me” “Eat me”
22
Right First Time
“Would you tell me please” said Alice a little timidly “why
are you painting these roses?…
Two began in a law voice, “Why, the fact is, you see, Miss,
this here ought to have been a red rose tree, and we put a
white one in by mistake….. .”
23
Page 23
Culture Change
There‟s never
time to do it
right but
there‟s
always time
to correct it.
24
Product Quality
Quality = Meeting Customers Needs and Expectations
Understanding your customers (inside & outside) needs and
expectations, is a prerequisite to their fulfillment.
It is imperative to understand those expectations and to
include them in the specifications of products, services,
processes.
The definition of quality as “Meeting Customer Expectations”
will fulfill customers expectations only when there is full
correlation between the customers expectations, needs and
demands.
25
Sergio Zyman, Marketing Chief Officer CocaCola Co.
•RESEARCH
RESEARCH
•RESEARCH
26
Kano’s 3 Types of Quality
 Must be Quality – a quality attribute that if not existing in a product
or if not well performing it will cause to a non satisfied customer, but
when that attribute exists it won’t add to the customers’ satisfaction.
For example if a car has bad brakes the customer will be for sure
unsatisfied, but when they exist it doesn’t add to his satisfaction as
this is the way it should be in any car.
 One dimensional Quality - a quality attribute which by each increase
of it the customer’s satisfaction increases too. As example, with each
improvement in the fuel consumption of our car our satisfaction will
increase.
 Attractive/Charming Quality - a quality attribute which doesn’t
cause dissatisfaction when not existing but when it exists it surprises
the customer and ads to his satisfaction. The customer is delighted,
charmed or, in other words, attracted to that product. As example, a
car’s air condition system that spreads pleasant odors in the car.
27
Relationship between various factors and
customer satisfaction – ISO/CD.3 10004
28
Attractive / Charming Quality of Prof. Kano
Charmed
Customer
“Charming”
Quality
Satisfied
Client
Regular Quality
NonSatisfied
Customer
Insufficient
Quality
Sufficient
Quality
“Charming”
Quality
29
3 Ways to Create New Products with Inherent
Attractive Quality
 Technology – developing a new technology and adding
it to the existing product/service.
 Inspiration and Genuity – depending on genius who
will come up with original ideas.
 Marketing research – learning by marketing research
methods about the product/service environment, the
ways it is used and the values of it to the customers.
30
Quality Perception Model of Baltika
Brand Attributes
•
•
•
•
•
•
•
•
Brand Name
Brand Positioning
Reputation
Past Experience
Package
Advertising Level
Quality Cues
?????
Company Attributes
•
•
•
•
•
Company name
Country of Production
Plant Reputation
Size of Company
?????
Suppliers stream
Equipment
Ingredient supply
Recipe
Customers stream
Corporate Stream
Brand Factor
Corporate Factor
Liquid
Product Quality attributes
Category myths
•
•
•
•
•
•
•
Word of Mouth
Price
Natural and quality goods
Pure, tasty water
Good recipe
Following GOST and standards
Modern equipment
Packaging quality
?????
Perceived quality
Employees Stream
31
Advantages of ISO standards application
September 2013
Quality of an Organization
Quality = to meet the needs
and expectation of customers
Customers of an organization =
all interested parties
Organization Quality = to meet the needs and expectations of
all interested parties in a balanced way
Organization Quality is the driver for sustainable
success!
32
Advantages of ISO standards application
September 2013
Quality at Organization level
INTERESTED
PARTIES
PARTNERS/
SUPPLIERS
Sustainable
Partnership
SOCIETY
ENVIRONMENT
EMPLOYEES
Quality of Work Life
PROTECTION
&
SOCIAL
RESPONSIBILITY
ISO 14000
Family of
Standards
Control or autonomy.
Recognition.
Belonging.
Progress and Development
External rewards.
Decent working conditions
Dignity.
OHSAS
18000
Family of
standards
ISO 26000
SHAREHOLDERS
CUSTOMERS
Sustainable
Growth
&
Profitability
QUALITY OF PRODUCT
AND SERVICE
ISO 9000
Family of
standards,
ISO 22000
Our understanding is that sustainable success is a result of an organization’s
ability to achieve its objectives in the long term with balanced consideration
of the needs and expectations of all its interested parties (customers,
investors/shareholders, employees, suppliers, partners, and society).
33
Advantages of ISO standards application
September 2013
Quality of Work Life (QWL)
Control or autonomy
Recognition
Belonging
Progress and development
External rewards
Decent working conditions
Dignity
34
A Good Wife Can Bring Balance in Life
35
Integrated Management System
•
Baltika focuses on the needs and
expectations of all interested
parties: shareholders, employees,
society, suppliers and partners. At the
same time our customers remain the
highest priority for the company.
•
Our customers and consumers are
at the heart of every decision we
make. We put ourselves in the shoes
of our consumers and customers and
have a detailed in-sight into their
needs and preferences.
•
We base our strategies and plans on
this insight and continuously
evaluate the ways we work to
improve their experience of our
brands, our services and our people.
•
A shift from functional to process
approach
36
IMS policy in large, part 1
37
IMS policy in large, part 2
38
Transition to Integrated MS (IMS)
 New
organizational
structure
for
dealing
with
management systems was implemented by Baltika
during the last year
 Specialists in the areas of Work Safety, Ecology, Food
Safety and Customer Complaints became a part of
integrated service reporting to Quality Management
Director
 Quality management departments were established at
the breweries engaging the experts in management
systems headed by functional champions appointed in
HQ
39
Advantages of ISO standards application
September 2013
Quality Management Department
Management
Systems
Quality Management
Director
Quality
Management
Technology
Quality Control
Department
(ISO 9001)
Health & Safety
Management
Environmental
Management
(OHSAS 18001)
Technology
Control
(ISO 14001)
Customer
Satisfaction
Food Safety
Management
(ISO 22000)
(ISO 10002)
Research
Center
Planned ISO 50001
(Energy management)
40
Advantages of ISO standards application
40
Why IMS ?
 Common methodology
 Competitive factors
 Efficiency and Effectiveness
41
Risk Management is the Ultimate Goal of
Management Systems
All management systems/standards are aimed
to minimize business risks in the different
areas they cover. In all management
systems/standards generic steps of risk
management can be recognized. Those steps
are:
 identification of critical aspects and risks;
 assessment and prioritization of risks;
 determination of requirements;
 implementation of monitoring and control systems.
42
Risk Management
Risk Assessment
Prevention
Human
Technical
Awareness
Training
Hazard Detection
Alarm
Remedy Action
43
Brand Equity - Building Blocks
Meet the needs and expectations of
Customers and Consumers
(Product, Market, Mind)
Product Quality
Brand
Equity
Production Quality
(No Variance)
Organization Quality
Meet the Needs and
Expectations of all
Interested Parties
44
Page 44
How will shoppers judge food companies?
1. Cost
2. Packaging
3. Healthy eating
4. Product information
5. Customer service
6. Environment
7. Where food is from
8. Animal welfare
9. Support for poorer nations
10. Treatment of staff
11. Profit
12. Local community
13. Contribution to economy
14. Job creation
15. Amount to charities
16. Executive pay
Source: IGD
45
KLM – Menu on the flight
46
47
Baltika Breweries – Economic
benefits of standards – Case Study
Developed jointly by the International Organization for
Standardization (ISO) and Baltika Breweries
June-September 2013
48
ISO Study: Benefits of Standards Application
 In May 2013 ISO initiated a project together with
GOST R and Baltika to assess the benefits of
standards application in the Company
 The study considered use of national, regional,
international and other consensus-based
management standards developed by accredited
organizations
•
Agreed scope included 5 business functions of Baltika value chain
which are mostly impacted by standards application: procurement,
inbound logistics, production, distribution and after-sales service
•
An ISO project team visited Baltika in June 2013 for interviews with
staff in key management functions. The project was completed by
September 2013, main conclusions and highlights are presented on
the next slides
49
Advantages of ISO standards application
September 2013
ISO study: Main results and conclusions
 Based on the performed calculations
it became evident that the
application of various standards
gave Baltika Breweries savings
amounted to 3.4% of the annual
average revenues for the last five
years (2008-2012)
 Apart from the benefits of standards
that could be quantified on the basis
of available data and estimations,
there are other benefits resulting
from the use of standards for the
Company – mainly qualitative and
process-based
50
Advantages of ISO standards application
September 2013
ISO study: Other benefits (Organization)
 Optimized information exchange using
less employee time as a consequence,
inter alia, of the implementation of the
ISO 9001 management system, leading
to higher transparency and sharing of
responsibility between managers and
better work discipline
 Integration of the management systems
which reduced the number of corporate
documents; creation of one-page
abridged versions of normative
documents limited to key information
needed specifically at particular worksites
51
Advantages of ISO standards application
September 2013
ISO study: Other benefits (Production)
 Research and development of new types
of beer and packaging based on GOST
standards played an important role in
developing and introducing new products
adjusted to consumer tastes and needs,
thus conserving Baltika’s market share
under difficult market conditions
 The implementation of ISO 22000
standard and their prerequisite programs
have led to enhanced control of the
production process resulting in stable
and high quality and food safety, as well
as customer and consumer satisfaction
52
Advantages of ISO standards application
September 2013
ISO study: Other benefits (Distribution)
 Company standards based on GOST and
other standards allowed flexible
redistribution of production and sale of
products to different regions using a
computerized optimization tool for the
allocation of production and sales where
it is most profitable for the Company
 Use of EAN-standard permitted easier
tracing of products sold on the market
thanks to barcodes and the traceability
system, resulting in prompt corrective
and preventive actions. Additionally, the
use of EAN-based barcodes and
traceability system led to more efficient
warehousing with fewer employees
53
Advantages of ISO standards application
September 2013
ISO study: Other benefits (Environment)
 Due to increased awareness of its
environmental impacts and
implementation of ISO 14001, Baltika
was able to reduce environmental risk.
Lesser environmental damage resulted
in fewer penalty sanctions and better
Company reputation
 Reduction of CO2 emissions: This is an
environmental benefit that is currently
not regulated in Russia so that the
reduction has therefore no direct
financial benefit for the Company, but
helped Baltika to fulfill Carlsberg
Group policies on CO2 emission
reduction
 Using returnable bottles as much as
possible is also a way to reduce
environmental impact
54
Advantages of ISO standards application
September 2013
Conclusions
55
The “Change” Formula
CHANGE =
SHARED
DISSATISFACTION
WHY?
VISION
WHAT?
FIRST
PRACTICAL
STEPS
GUTS
HOW?
56
RUSSIA 2015-17
57
Elements of our strategy
SCOPE
• Focus on beer as core
• Selectively pursue market opportunities
in support of our beer business
OBJECTIVES
 Market Share
 EBIT
 TWC
COMPETITIVE ADVANTAGE
Strategy Wheel
58
The Ingredients of Leadership
Unity of Purpose
Clarity of Direction
Challenging
Target
Consistency
of Message
Tolerance
of Mistakes
Focus on what can be done not why it can‟t
59
“Plans are nothing, planning is everything”
D. Eisenhower, American President
60
Challenging And Ambitious Targets
“The greatest danger for
most of us is not that our
aim is too high and we
miss it, but that it is too
low and we reach it!”
Michelangelo
Strategy Workshop
61
The 3 “C” of Management
Competence – be GOOD in what you are doing
Confidence – express your views with NO FEAR
Caring – show you CARE for 3 „C‟



Strategy Workshop
Customers
Company
Colleagues
62
“Quality is the difference between
things”
(Aristo, 300 B.C.)
63
Why international standards?
They said, "Come, let us build for ourselves a
city, and a tower whose top will reach into
heaven, and let us make for ourselves a name,
otherwise we will be scattered abroad over the
face of the whole earth."
The LORD said, "Behold, they are one people,
and they all have the same language. And this
is what they began to do, and now nothing
which they purpose to do will be impossible
for them.
Therefore its name was called Babel, because
there the LORD confused the language of the
whole earth; and from there the LORD scattered
them abroad over the face of the whole earth.
Genesis, Chapter 11
64
Advantages of ISO standards application
September 2013
Indira Gandhi, former prime minister of India
My grandfather once told me that there are two kinds of
people:
Those who do the work
and those who take the credit
He told me try to be in the first group; there was
less competition there.
65
Thank you!
66

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