Meeting the Quality Challenge

Scrap processors who’ve achieved ISO 9000 registration say it’s helped them reach new levels. Their advice can help your firm top this quality peak too.

By Lynn R. Novelli
Lynn R. Novelli is a writer based in Russell, Ohio.

Times were that the majority of scrap recyclers had no idea what ISO 9000—the set of international quality assurance standards—was all about.

Today, not only do most know about it, but more and more are considering or actively pursuing registration. Since 1987, in fact, when the International Organization for Standardization (Geneva) first published the standards, around 15 to 20 scrap companies have achieved registration, while another 50 to 100 are in the process, according to ReMA estimates.

Registration is a hard-won prize, requiring total commitment from management, usually more than a year of work, and a considerable financial investment, but recyclers who have achieved it say the results are worth the effort.

Here, a few ISO 9000-registered recyclers talk about the challenges and rewards of seeking registration, offering tips on how other recyclers can make the grade as well.

Why Do It?

For the most part, scrap recyclers are pursuing ISO 9000 registration in response to real or potential pressure from consumers to increase their quality assurance activities. This has been especially true for processors who supply consumers serving the automotive industry. The Big Three automakers, in fact, require their Tier I suppliers to meet the requirements of their QS 9000 quality assurance standard. Tier I suppliers, then, have the option of inspecting their suppliers—including scrap recyclers—or requiring them to be ISO 9000- or QS 9000-registered. Given that it’s easier and cheaper for Tier I suppliers to require registration to either standard, it’s no surprise that many scrap companies have felt pressure to become registered.

One scrap processor that has already faced the challenge is Isaac Corp. (Maumee, Ohio), which registered its Brook Park, Ohio, operation in 1995 and its Defiance and Bryan, Ohio, facilities in 1996. “We supply the auto industry, so it’s important to be able to tell our customers that our product comes from an ISO 9000-certified facility,” says Bill Smith, director of manufacturing.

Other recyclers, such as Prolerized Schiabo-Neu Co. (Jersey City, N.J.), have pursued ISO 9000 registration for reasons other than customer pressure. As Bob Papp, purchasing manager, explains, “We’re always scanning the environment to see what’s coming and adjust.” In 1995, the firm recognized the growing emphasis on ISO registration and started the process, successfully completing it in November 1996.

Atlas Recycling Inc. (Warren, Ohio) recently came to the same conclusion and decided to pursue registration as a way to meet its business goals. “Being ISO-registered will confer an immediate competitive advantage,” says Scott Wilhelm, secretary-treasurer and the management representative on the firm’s ISO 9000 team. “We’re going to spend a ton of money, but we believe ISO-registered suppliers have a leg up with the auto companies. Registration will give us credibility so we can go to Ford as a supplier without having to spend a year introducing ourselves.”

To many scrap processors seeking registration, ISO 9000 means customers, confirms Clarence Watts, quality manager for Ferrous Processing & Trading Co. (Detroit). “ISO registration has attracted a lot of inquiries from customers,” he states. “Now that we’re registered, people are more inclined to want to do business with us.” And to strengthen its competitive advantage even more, he adds, the company has outlined quality standards for its suppliers according to ISO 9000 and QS 9000.

Cohen Brothers Inc. (Middletown, Ohio) can also vouch for the market advantages ISO registration brings, with Marc Prigozen, engineer, noting that the firm has been approached by several QS 9000 melters who want to do business only with ISO-registered companies. “We can cover two-thirds of the preliminary meetings we used to have with new customers by saying we’re ISO-registered,” he says. “Registration gives us immediate credibility.”

And scrap companies that have been ISO-registered for several years confirm that the benefits are long-lasting. Zalev Brothers Ltd. (Windsor, Ontario), which supplies Ford Motor Co. (Dearborn, Mich.), achieved Q1—Ford’s quality standard—in 1989 followed by ISO 9000 and QS 9000 in 1995. “It costs a lot to get and maintain these quality awards,” says Max Zalev, president, “but there’s no doubt that they’ve been a factor in getting the lion’s share of the business we have today.”

In addition to the business advantages of ISO 9000 registration, the standards can bring significant internal benefits as well. After all, the registration process forces a company to scrutinize its total operation, maximize efficiencies, and standardize processes—all activities that otherwise can get pushed aside in the course of day-to-day business. “It’s like putting all of your work processes under a high-powered microscope,” says Gene Klesta, director of technology for Cozzi Iron & Metal Inc. (Chicago), whose headquarters plant achieved registration in 1996.

The registration process prompted Cozzi to ask questions about its operations, such as “How do we do this? What people are involved ? What paperwork is generated and where does it go?” Klesta says, noting, “When you ask all of those questions, you see the inefficiencies that have evolved over the years. The first work-flow diagram you do will look like a jigsaw puzzle. Then you get in there and start to reduce unnecessary steps, simplify things, change the paperwork.”

At Atlas Recycling, which began its ISO efforts in June, Wilhelm also has high hopes for improving the firm’s operating efficiencies through the process. “By getting everyone on the same page, we should find more than $30,000 in savings,” he estimates.

Scaling Mount ISO 9000

To reap the benefits of ISO 9000, of course, processors have to embark on the climb to registration. Any scrap company can start the registration process. All it takes is a copy of the standards, selection of an auditor and a registrar, and setting up an internal ISO committee.

That’s the easy part. The hard part is meeting all of the standards’ requirements. Following are tips from the experts to help prepare your firm for the endeavor.

Quality Takes Time. The first fact recyclers should know, say ISO-registered processors, is that the effort will be a long—and often arduous—one, and it’s important to not underestimate the time required. While a few scrap companies have achieved registration in less than a year, they’re the exceptions rather than the rule, says Scott Horne, ISRI’s director of state and local programs, who notes that “a 12-month plan is pretty aggressive.” Typically, it takes 18 months to two years to go from ground zero through the final registration audit.

Companies that have some existing documentation of their operating procedures have a head start—since ISO 9000 is heavily based on documentation—as do those with a total quality management program already in place. Firms such as Zalev Brothers that first meet automotive industry standards can often achieve ISO 9000 registration in a relatively short time. Whatever your company’s situation, “to avoid frustration, be realistic in your expectations about how long the process will take,” advises Papp.

It’s an Employee Thing. Employee buy-in is essential to the success of any ISO 9000 program, say registered recyclers. “Recognize going into it that ISO registration is a lot of work and very demanding, and that you need to have everyone onboard or you won’t succeed,” says Papp.

Before they can buy into the process, employees must first gain a basic understanding of what ISO 9000 is all about and see that the company’s management is firmly committed to the registration goal. “The biggest challenge we faced was in spreading the word about ISO to our employees,” Klesta says. To help its employees become acquainted with ISO 9000 and its impact on them, Cozzi Iron & Metal set up a steering committee responsible for employee communication and training.

Expect employee reactions to range from suspicion to enthusiasm, says Papp. Prolerized Schiabo-Neu has tried to involve employees in the program through training to communicate the message that producing a quality product is everyone’s job. “All of our employees now are familiar with the basic elements of the ISO 9000 program,” he says. “Anyone on the floor can explain at least the basics of our quality program and the ISO 9000 standards.”

Conveying the message that ISO registration is lasting and continuous has been challenging, he adds, noting that it has taken “almost a year after registration for some employees to understand that this is an ongoing commitment.”

Once everyone gets onboard, it’s important to keep them there. The way to do that is by maintaining a quality training program, Zalev says, noting that “ongoing training and education are necessary to keep employees interested and motivated.”

Consult the Experts. Consultants get a thumbs up from nearly every processor that has gone through the registration process. Some ISO 9000 project leaders, in fact, swear they wouldn’t have passed the registration audit without their consultant’s help. Smith goes so far as to say, “Anyone who undertakes ISO registration without a consultant is making a grave mistake.” That doesn’t mean you should hand off the entire project to a consultant. The consultant’s role is not to write the program. As Zalev notes, “The more work you do in-house, the more your people are involved and the greater their ownership will be.” But consultants can be invaluable in helping navigate your company through the hoops, facilitate the process, and keep your firm focused on where to apply its efforts.

Show Me the Money. Exactly how much does ISO registration cost? Plenty, say processors who’ve been there. The cost of registration—which includes filing, auditing, and the final registration—ranges from $10,000 to $20,000, depending on your company’s size. As a rule of thumb, the cost of the entire registration process—including hard and soft costs such as consulting fees, employee training, and more—will generally be “three to five times the registration fee,” Horne offers.

Consulting fees can easily be the largest single hard cost in the process. One scrap company, for example, worked with a consultant for seven months at an average monthly fee of $2,500. It’s possible, however, for companies to have much lower consulting costs if they do more of the work in-house and, hence, use consultants on a more limited basis.

Soft costs such as expenses related to employee meetings, training, and overtime are more elusive to document. In fact, few processors can put a precise figure on what they spent overall for ISO registration. “The ISO registration process is change management, and that’s difficult to quantify,” Klesta explains.

Write It Right. “Say what you do. Do what you say.” That adage is often used to summarize the ISO registration process. The standard requires companies to say what they do by documenting every stage of their processes and operations. To be sure, documentation is at the heart of ISO 9000 registration—and the single most frequent cause of companies failing to achieve it.

For many scrap companies, this documentation poses a significant challenge. “It was quite a culture shock for us,” says Papp. “We had procedures, but little was documented. Yet we knew the key to ISO is documentation.”

Many other recyclers are in the same position, but that isn’t cause for panic. “Documentation is important, but the worst thing a company can do is go crazy with it,” Horne says. “We’ve made scrap recycling into a high-tech industry, but what we do is still basically simple, and it doesn’t take a lot to capture it on paper.”

In fact, keeping documentation as brief as possible is the way to go, Horne recommends. For example, ISO 9002—the ISO standard most appropriate to scrap processing facilities—has 19 elements that must be addressed in a company’s quality manual. Though this might seem like a lot, each element can be adequately covered in one or two pages, says Horne.

The typical scrap processing company will also need to write around 20 to 25 standard operating procedures to meet the requirements of the standard. Again, these procedures can be addressed in short order, usually one to five pages each, Horne notes.

Calling Bill Gates. Most recyclers advocate some degree of computerization to get through the documentation requirements. “To do it, you have to go electronic,” says Prigozen. “I had to get acquainted with a computer to write the standards book and manage the documentation.”

Electronic document control simplifies document creation, distribution, and updating, but computerization need not be complicated and difficult. It can be as simple as a word processing document. At the minimum, keeping a master copy of documents on the computer eliminates the need for retyping as items change, Prigozen says. He estimates that 60 pages out of Cohen Brothers’ 100-page operations manual have changed in the past year. “Multiply that by nine ISO manuals throughout the plant and you can appreciate the time savings,” he says.

To serve the needs of scrap companies that want a completely electronic, sophisticated document control system, several companies have sprung up that advertise software designed specifically for ISO 9000 documentation. Atlas Recycling has purchased such a package—at its consultant’s recommendation—with the guarantee that the package will help it achieve ISO 9002 standards in just six months.

A Way of Life. Recyclers who have had the best experience with ISO registration have made the standard a way of life and integrated it into a total quality management program. “Once a company embraces the notion of ISO, it should become so integrated into the company that it’s indistinguishable in the day-to-day operations,” Papp says.

Properly executed, ISO 9000 permeates every employee’s job, Zalev adds, stating, “Quality has to be reflected in every aspect of an operation, from answering the phone to invoicing. Preventive maintenance, health, and safety are all part of it. In a quality manufacturing company, all of these elements are interconnected. To be a quality-based company, you have to live it, starting at the top.”

Importantly, ISO 9000 shouldn’t be considered an end in itself, cautions Klesta. “We have a commitment to continuous quality improvement, to do better and make more money. ISO 9000 is a vehicle for us to get there, not the goal.”

ISO 9000 can, however, become a tool for a company to achieve its own quality management goals. By identifying areas that need improvement and establishing a goal, ISO becomes a yardstick for measuring company performance.

Maintaining Registration, Staying Competitive

As a final point, ISO 9000 wannabes should know that registration isn’t granted forever, just for three years. During that time, registrants must maintain and improve their quality system. Firms generally contract with a registrar for surveillance audits every six months, and after three years a complete reassessment is required.

Recyclers embrace ISO’s ongoing character as an advantage, despite the work involved. “What makes ISO so good is that it stays alive. It challenges you to continue to improve,” says Prigozen.

But maintaining registration isn’t easy. Surveillance audits can be tougher than the original registration audit, say recyclers who have experienced them.

“Don’t be lulled into a false sense of security,” advises Papp. “The auditors are looking for documentation of continual improvement, so surveillance audits get harder, not easier. Once you’ve become ISO-registered, realize that it’s a living thing that’s constantly changing.”

Watts of Ferrous Processing & Trading concurs, stating, “Expect your surveillance audits to be just as rigorous as the registration audit.” Recyclers who want to increase their comfort level regarding surveillance audits should implement a diligent internal auditing system, he suggests. (The ISO 9004 standard provides guidance on how to establish an internal auditing program.)

For all of their challenges, surveillance audits do have their advantages. Zalev, for instance, views the audits as training opportunities for his firm’s employees. “Backsliding can be all too easy, so it’s great to have someone come in and improve operating procedures,” he says. “Our employees enjoy the challenge of having someone looking closely at their work. They enjoy getting involved and discussing improvements. It gives the whole process a positive tone.”

Scrap processors who’ve achieved ISO 9000 registration say it’s helped them reach new levels. Their advice can help your firm top this quality peak too.