ISO 9001 made easy (if you want to make a curry!)

The mere mention of the words ISO 9001 often sends shivers down the proverbial spines of most business owners and employees, accompanied by the old adage that “the auditor is the man that went into the battlefield to shoot the wounded”. The reason the above interpretations of ISO 9001 exist is quite simply that many organisations gain certification for the wrong reason (i.e. a certificate on the wall), and are led to believe that the standard is more complicated than it actually is.

This leads to processes being applied to already established processes, creating bureaucracy on top of bureaucracy. The purpose of this article is to expel some of the myths and enable the reader to understand the simplicity involved in ISO 9001:2008.

ISO 9001:2008 is designed to be an international quality standard that sets out the basic requirements of running a successful business that meets client’s expectation. Unfortunately it is very common for a system to be made over-complicated and applied on top of existing business processes.

The standard quite simply lists the major ingredients, and then asks for you to produce objective evidence that demonstrates the ingredients are there. The ingredients can be defined as follows:

  • Document Control
  • Record Control
  • Management Responsibility
  • Resource Management
  • Product Realisation
  • Measurement, Analysis & Improvement

If the standard is used as it should be (i.e. as a basic framework identifying requirements not solutions), then it should be possible to apply it to any business model. To test this out, let’s think of our business activity as ‘cooking a good curry’. Alas, a justification for the title ! The Table below identifies the key processes applicable to ISO 9001:2008.

Requirement Description
1. Document Control   You have 5 curry recipes strewn over the table, all printed out from the internet and surreptitiously placed back in your cookbook. You know you have tried them all, but you cannot recollect which ones impressed your guests and which one’s sent them running for their bottle of Tiger beer to quench the flames. Luckily you have scribbled “steer clear unless serving to in-laws” on the back of one and “hhhmmmm tasty!” on the back of the other. To put it simply, you are controlling the documents so that you know which one should be used.
2. Record Control   After identifying the correct recipe you realise that some of the qualities have been changed, i.e. “half a teaspoon of curry powder as opposed to one full teaspoon”. Quite simply, a record has been made.
3. Management Responsibility   Cooking the curry is only a small part of the “event”; if you are inviting guests, you may have other commitments that require management, time allocations and costs. You have to be committed to making the meal a success, perhaps managing your partner to get the wine, or set the table. In a business environment, management commitment is demonstrated by ensuring that resources, infrastructure and support exist to produce the other 5 ingredients.
4. Resource Management   It doesn’t matter how good the recipe is, unless you have the correct ingredients, tools, and knowledge, the chances are the curry may not turn out how you would hope. Resource management ensures that you are suitably equipped and trained / experienced to carry out the tasks in hand.
5. Product Realisation   In order to cook enough curry you need to determine why you are cooking it. It could be for a family meal or a Friday night in with friends. The sheer fact that you have decided to cook a curry is part of product realisation, the other factors that need to be determined are quite simply, is a curry required, or has everyone already eaten, do you have the resources, and do you have the skills. We have all been in a situation where we have invited friends round for a meal, only to realise upon their arrival that one of them is vegetarian and probably won’t be too eager to eat the huge slab of roast beef in the middle of the table!
6. Measurement, Analysis & Improvement   The curry has been eaten, everyone was impressed, however you felt things could be improved; more poppadums, less curry powder and the cooking time needed to be reduced slightly. That said, the only major issue was that at 10pm you ran out of beer or wine! It is important to ensure that processes exist to enable improvement in a structured form (such as objectives, recording of problems etc.), otherwise it would be simple for them to be missed or forgotten for the next time.

The areas that usually require attention are those over and above what is needed for the company to function on a basic level, and these tend to be focused around management processes such as seeking opportunities to improve. For example, people will continue with an inefficient task due to the fact that they feel they do not have time to make it efficient. The standard encourages this time to be taken in the form of reviews, audits and the recording of problems to identify possible root causes or trends.

The New American (Gas) Revolution Gathers Pace

“The shale gas revolution, which has already transformed the United States and Louisiana into manufacturing powers, will vastly alter the world’s energy landscape by 2035, a BP executive said Tuesday.

Shale production will help make the United States a net exporter of natural gas in 2018, with exports growing to 10.6 billion cubic feet per day by 2035, said Mark Finley, general manager, global energy markets and U.S. economics, for BP.

Increases in U.S. oil production the past two years were among the largest in history. ‘The numbers here are staggering,’ Finley said.

Last year’s increase was the fourth-largest ever worldwide. Only Saudi Arabia has ever increased production by more.” – theadvocate.com

Over 63,000 shale gas and shale oil (tight oil) wells in the U.S. were analyzed in the effort to produce the map below. Mouse over any well to find production data on both the well and the play as a whole, or type in a location to see what wells are nearby. View full screen map here.

America’s dramatic progress with shale has inevitably captured the attention of Canada, Europe, Australia and Asia, who will all follow suit in some way. Some already have. Geopolitically, recent troubles suggest the possibility that shale could be a key resource to counter Russia’s control of Europe’s energy supply. All big news.

We think: the shale boom could provide the world with energy for many years to come, while creating jobs and opportunities, but perhaps at a cost. By exploiting shale on a massive scale, America is knowingly exchanging a known short-term risk to energy security for an unknown long-term risk to water security. Is it a good bet? It’s impossible to say: no one really knows the odds yet. As the vernacular poet Don Rumsfeld once said, there are known unknowns. But it’s a necessary bet. America has no choice but to exploit shale and make a play for energy independence.

Clive Palmer – renewable energy’s unlikely savior?

I remember a time when life was simple. You either believed in global warming, and knew that only a mad dash for renewables could save the planet, or you thought it was the greatest con ever, and that solar and wind were just another way for governments to increase the tax take.

Then (lo and behold) look who jumps out of the woods. In a move that has caused understandable surprise across the renewable energy sector, the Palmer United Party’s top Western Australia senate candidate, Dio Wang, has issued a press release headlined “Renewable Energy Target should remain as is: Dio Wang”. In it Wang states: “I believe the RET scheme should remain as it. It worries me when the government says everything is on the table in reviewing the RET.” He continues: “Considering that the last review of the RET was completed in December 2012, just 14 months ago, I think the new review is a waste of taxpayers’ money.”

The press release then goes on to say: “Mr Wang said that Australia’s renewable energy sector was a major source of jobs with the solar industry alone employing more people than the oil and gas extraction, gas supply and coal product manufacturing combined in 2012.”

Now the Sydney Morning Herald has reported that PUP leader Clive Palmer has endorsed Wang’s statement, adding that he is a ”supporter of renewable energy” and that this has “nothing to do with the carbon tax”.

Confused? Well we certainly are. So the next time you see a heat haze, or a polluted skyline, take a second look. It might just be the political lines getting increasingly blurred.

Bulls in a China Shop (or, Alibaba and the Forty Investment Bankers)

“Macquarie estimates Alibaba could be worth as much as $200 billion, which would make it the world’s second largest internet company behind the Sun King of Silicon Valley — Google. Goldman Sachs believes the company could be valued at $150 billion.

Why is Alibaba’s listing so enticing to investors? The company is the largest e-commerce company in the world. It sold more goods than Amazon and eBay combined in 2012. The company provides services to more than six million merchants and 300 million retailer customers worldwide.

It has a five per cent share of China’s retail market, which is soon expected to become the largest in the world. The company is also tipped to become the world’s first e-commerce company to handle more than $1 trillion a year in transactions.” – www.businessspectator.com

Alibaba plans to go public in March. This is expected to be the biggest IPO since Facebook, so the world is expecting to see plenty of interest.

It sure looks as if China is helping set the stage for a new global economy. Alibaba is the largest e-commerce company in the world, and has huge potential not just for itself, but for China as well.

Russia’s biggest billionaire (Alisher Usmanov) has already sold shares in Facebook and Apple and invested in Alibaba. As relations sour towards the west over sanctions, we could see more of this behaviour, perhaps causing big changes in the global financial landscape.

There are new giants on the horizon. Let the e-commerce games begin.

Crimean Punishment

“Ukraine’s law enforcement forces have taken full control of the country’s natural gas pipelines that carry most of Russian gas to markets in Europe, the Interior Ministry said on Sunday.

Prime Minister Arseniy Yatseniuk ordered the protective measures a day after Russian soldiers sought to take control over a gas pumping station at a regional pipeline on the border between Ukraine’s Kherson region and the breakaway region of Crimea.

The move also comes amid calls by a Ukrainian right-wing group to punish Russia for its invasion of Crimea by cutting off its gas supplies crossing Ukrainian territory.

‘If Russian soldiers’ boots trample our land, we will do everything to make the occupier pay dearly for it,’ said Dmytro Yarosh, the leader of the far-right Right Sector organization which played a significant role in the 2014 Ukrainian revolution. ‘We know that Russia is making money by supplying oil and gas to the West through our pipelines. So we will destroy the pipeline, depriving the enemy of this source of revenue.'” – platts.com

The situation in Ukraine certainly isn’t slowing down. Both sides are positioning themselves to gain leverage over the other in a series of escalating manoeuvres. It seems unlikely either will back down. In response to the situation, Yarosh is threatening to destroy the Trans-Siberian pipeline. Amazing. The US and EU have announced sanctions and are targeting key players. Like we said before: interesting times.

New Paradigm For Success

“A 2013 study produced in partnership with management consultants McKinsey calculated that by adopting the principles of the circular economy, the consumer goods sector could save up to $700bn annually. As one example, the report claimed that turning discarded household food waste into bio-gas and nutrients for agricultural soils could net local authorities and investors in the UK alone $1.5bn.”

“The opportunity for businesses is to decouple profitability from resource price volatility and at the same time provide a better product or service,” he (Jamie Butterworth) says. “For the economy, it reconciles the outlook for growth and economic   participation with that of environmental prudence and equity. For businesses, it provides the opportunity to deliver superior value.” – The Guardian

A circular economy is a model whereby resources are reused instead of wasted. This provides greater profitability and long term sustainability for businesses. We think: the circular economy model is relevant, rational and potentially extremely profitable. We can look at all sectors of business through this lens to improve processes. What is the price of ignoring it?

California electric grid sets solar generation record

“California set back-to-back solar power records last week, the state grid operator said on Monday.

The amount of electricity produced from carbon-free solar facilities connected to the grid reached 4,093 megawatts on Saturday, surpassing the day-earlier record of 3,926 MW, the California Independent System Operator (ISO) said in a statement.

With 5,231 MW, California leads the nation in installed solar generation, including thermal and photovoltaic facilities, according to the Solar Energy Industries Association.

Power generated from solar has more than doubled from June 2012 when the ISO recorded 2,071 MW of peak production, the ISO said.

The record solar generation accounted for about 18 percent of the state’s 22,700-MW demand on Saturday, the ISO said, with the ability to supply about 3 million homes.” – Reuters

The rise and rise of big, grid-connected solar is complex information for the Australian energy business. Who doesn’t want cheap energy? The producers of less cheap energy, of course. Can big solar really achieve low enough prices to trouble coal and gas in an open market? If you believe the United States government, it can: the DoE predicts 5c / kWh within the next few years, and some plants are already shipping electricity at that price. How will local entrepreneurs react when this becomes a deployable commercial fact? There is certainly money to be made. Interesting times.

Europe Under the Paw

“Poland’s prime minister said on Monday he would ask Chancellor Angela Merkel to work to reduce German and European dependence on Russian gas to avert ‘potential aggressive steps by Russia in the future’.

Merkel will visit Poland on Wednesday to discuss the crisis in Ukraine, where Russia has effectively taken control of the southern Crimean peninsula. Events there have highlighted European reliance on Russian oil and gas.

Ukraine is a major gas transit nation for supplies from Russia to the European Union (EU), which relies on Russia for over a quarter of its gas.” – Reuters

We think: as conflict brews, Europe is increasingly restless. 30% of Europe’s oil & gas is imported from Russia. If the current situation escalates, then Russia has the power to make things very difficult for Europe.  Of course this hasn’t come about by accident. Despite his former Communist résumé, Putin perfectly understands the nature of markets.

“We will not be able to efficiently fend off potential aggressive steps by Russia in the future, if so many European countries are dependent on Russian gas deliveries or wade into such dependence.” – Donald Tusk

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