NJ Governor’s Award for Performance Excellence to be Presented at QNJ Annual Conference

By Tom Ligas, Executive Director QNJ

The Governor’s Award for Performance Excellence will be presented to three organizations at Quality New Jersey’s 17th Annual Conference on May 16, 2006 by either Governor Jon Corzine or Gary Rose, Head of the Governor’s Office of Economic Growth and Chair of the Governor’s Economic Council. This award, which uses the Malcolm Baldrige National Quality Award criteria, recognizes organizations that have demonstrated successful results through the deployment of a comprehensive integrated quality framework.

The recipients of the 2005 Governor’s Award for Performance Excellence are Reimbursement Services Inc., Jersey Shore University Medical Center and Virtua Health. All three will receive the Bronze Level Governor’s Award.

Reimbursement Services Inc. is an employee benefits brokerage and consulting firm headquartered in Mt. Laurel with 73 employees and serving small and mid-size companies throughout New Jersey, Eastern Pennsylvania, Northern Delaware and Manhattan, New York.

Jersey Shore University Medical Center in Neptune is a division of Meridian Hospitals Corporation, within Meridian Health. It is a university affiliate of The University of Medicine and Dentistry of New Jersey’s (UMDNJ) Robert Wood Johnson Medical School. JSUMC has about 2,900 employees and provides inpatient care, outpatient care, emergency care and community care.

Virtua Health is a non-profit healthcare delivery system, headquartered in Marlton. It is the result of a 1998 merger between Memorial Health Alliance and West jersey Health System, which have been serving South jersey for more than a century. Virtua Health has hospitals, ambulatory surgical centers, out-patient services, long-term care and sub-acute rehabilitation facilities, and a medically-based fitness center.

Quality New Jersey will also recognize two organizations for taking another step along their Quality journey via Baldrige-based assessments – Raritan Valley Community College and Cablevision NJ Field Operations.

At the conference, the First Annual Best Practices in Business Award will be presented to RCI Vacation Network Group for their “Topgrading: Building Capabilities for Execution” initiative addressing employee talent management. This award was selected from the First Annual Best Practices in Business Conference held February 2, 2006. NJBIZ publisher Chad Beatty welcomed sixty people from a variety of organizations and functions to hear ten presentations designed to share best practices from the business community. The Second Annual Best Practices in Business Conference will be held in February 2007.

A re-presentation of the Second Annual Innovation in State Government Award will also occur at QNJ’s Annual Conference. On May 1, 2006 QNJ and the NJ State Department of Personnel will co-presented this Award to the Department of Transportation for their “Best Management Practices in Transportation Security – Partnership Between the Public and Private Sectors” initiative. Special Merit Innovation Awards will also be presented to the NJ Housing & Mortgage Finance Agency for their “NJ Housing Resource Center” initiative and to the NJ Lottery for their “Harnessing The Power Of Cultural Differences For Successful Multi-Cultural Collaboration” initiative.

These awards were selected from the Fourth Annual Best Practices in State Government Workshop held October 19, 2005. State Treasurer John McCormac welcomed 90 attendees from various state government departments. The conference, designed to share best practices among state agencies, to recognize the good work being done in government and to allow for networking opportunities, featured 14 presentations selected from a record 37 submissions. Attendees gave the workshop high marks. “I was happy to say I worked for the State of New Jersey after this conference” said a DOT employee. A Labor & Workforce Development employee remarked “I can say this was the best conference I ever attended”.

In October 2006, the Fifth Annual Best Practices in Government Workshop will be open to all government organizations in NJ, including local and federal.

QNJ, a private not-for profit organization, administers the Governor’s Award for Performance Excellence and advises organizations of all sizes and in all segments, including business, education, healthcare, government and non-profit, on improving their performance. By participating in QNJ, organizations can share best practices, benchmark other organizations, and receive Baldrige training and discounted consulting services. In addition to identifying improvement opportunities, the Governor’s Award process and two other Baldrige-based assessments provide valuable consulting advice for a fraction of what it would cost to obtain it elsewhere. For more information on QNJ, please visit www.qnj.org.

Sarbanes-Oxley and Quality Control

Photo: W. J. Latzko, Ph.D.
W. J. Latzko, Ph.D.

The purpose of the act

There is a great deal of interest by the quality community in the Sarbanes-Oxley act of 2002 (H. R. 3763). Senator Paul S. Sarbanes and Congressman Michael G. Oxley, created this act to set rules for CEO’s, CFO’s, their attorneys, and their auditors for the creation of financial reports used by investors (e.g. Annual Reports). What prompted this act was the disclosure of major wrong doings in large corporations and major auditing firms. The purpose of the act is to give investors the truth, the whole truth and nothing but the truth.

The alphabet soup

The act spawned a whole set of acronyms which refer to its implementation and interpretation. One hears of SOX, PCAOB, COSO, COBIT and similar acronyms. We will try to clarify some of these terms and show how they fit in.

The act’s requirements and the PCAOB

SOX refers to the Sarbanes-Oxley act itself. One can find the 66 pages of the act at http://www.law.uc.edu/CCL/SOact/soact.pdf. It is worth reading but be warned that it is not light reading.

Title I, the first real chapter of the act, sets up a non-profit corporation called the Public Company Accounting Oversight Board (PCAOB). It is the function of the PCAOB “to oversee the audit of public …, in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports for companies the securities of which are sold to, and held by and for, public investors.”

The act requires the PCAOB to set standards and register public accounting firms. Your editor was told that over 1200 firms have applied and that, to-date, over 800 are registered. You see can full details at the PCAOB’s web site http://www.pcaobus.org/index.aspx under “Registration”.

The act uses the words “quality control” 15 times with four additional mentions of the word “quality”. In all cases, this refers to the auditing firm. The use of the word “quality” relates solely to the financial integrity of the audit report issued by the external auditors.

Sections 302 and 404 require that management establish and maintain internal controls. In both cases, these controls are for assuring that the financial reports are accurate and true. Welytok (2006, p. 156) distinguishes the way the term “internal Control” is used in the two sections. She indicates that in Section 302, the act refers to “disclosure controls and procedures. In Section 404 the act refers to “internal control over financial reporting”. Nowhere does the act require quality control of the audited company.

COBIT

Since companies collect most financial data these days on computers, the IT Governing Institute (ITGI) established a standard for information technology (IT). This set of standards they call, “Control Objectives for Information and Related Technology”. This standard results in the acronym COBIT. You can access the standard at http://www.isaca.org/ . The organization developed a subset that specifically addresses the financial aspects required by Sarbanes-Oxley. The organization places the subset standard on its web site at http://www.isaca.org/Content/ContentGroups/Research1/Deliverables/IT_Control_Objectives_for_Sarbanes-Oxley_7july04.pdf

COSO

COSO stands for the Committee of Sponsoring Organizations of the Treadway Commission. “The SEC specifically refers to [COSO] as an acceptable framework for management’s internal control assessment.” (Welytok, 2006, p. 159) Again, the issue is financial reporting not quality control in the sense in which we apply it.

Sarbanes-Oxley and Quality

The Sarbanes-Oxley act has some similarities with ISO 9000. Both are inspection or audit oriented. Both are procedure driven. Both maintain the status quo as far as quality is concerned. In this writer’s opinion, the Sarbanes-Oxley act is valuable for the financial and investing sector. It does not advance quality in its present state. The only group required to look at quality control is the public auditing profession of 800 to 1200 firms. One can read their quality control methods at http://registrationapplications.pcaobus.org/ by going to the bottom of the page and entering the name of an Audit Firm. The PCAOB has set some interim standards for the control of quality of the auditors. One can view these standards at http://www.pcaobus.org/Standards/Interim_Standards/Quality_Control_Standards/index.aspx.

Reference List

Welytok, J. G. (2006). Sarbanes-Oxley for Dummies.

Certification Results

Congratulations to the ASQ members recently certified:

Certified Quality Auditor

Choi, Jiyoung
Kuhn, Timothy J
Munshi, Kinjal A
Ramlal, Suresh
Redington, Jacqueline
Schnaars, Michael D.
Tihal, Ron M

Certified Quality Engineer

Calton, James O.

Certified Quality Improvement Associate

Malloy, Michele

Certified Software Quality Engineer

Nangia, Geetika

Certified Six Sigma Black Belt

Lu, Yuan

Certified Quality Manager

McCool, Steven J.

Program:The Role of Quality in America’s Global Competitiveness

ASQ NY/NJ Metropolitan Section & Rutgers Business School-Newark will present an informative and important program for effective business management
The Role of Quality in America’s Global Competitiveness
Speaker: Dr. Carol Sager, ASQ National Vice President and President, Sager Educational Enterprises

Date: Wednesday, March 22, 2006, 5:30 to 8:00 PM

Location: Rutgers Newark Campus, Robeson Campus Center
350 Dr. Martin Luther King Blvd
(use Parking Deck I)

Register: Mr. Bill Martin, Customized Management Services, Ltd. (718) 631-2375, Email: ASQ-CMS@att.net
or register online

Fee: ASQ Members: $20, Non-members: $25, Students: free in advance or $10 at the door

Chair’s Message

Happy Holidays to all:

As the year 2005 draws to a close I am pleased to see that the 2005 Deming Conference and the 2005 Section’s Annual Conference were so well received. It would appear that these conferences are the lifeblood of the sections events. This years events were exceptional and if you missed them, you missed some great programs.

In keeping with our objectives, the Deming Conference (December Atlantic City) is already set for 2006. Although the actual program details are not complete the Conference is set for the week of December 4 through December 8, 2006 and is returning to the Tropicana Hotel in Atlantic City. Those of you that attended in 2005 I am sure will agree this is a first class location and one of the most educational Conferences offered anywhere.

Check the Web site for the slate of officers for the 2006 – 2007 year. It’s hard to believe that we are scheduled to hold elections already, but we are.

Please remember, if you are interested in any of our committees we are always open to new executive board members and need your support.

We are already working on the 2006 58th Annual Metropolitan (OTT) Section Conference and are planned on returning to the Rutgers Campus in Newark New Jersey, if all goes as anticipated. We are looking for volunteers to work on mailing lists, publicity, registration, and arrangements. If you would like to work on the committee please let me know. You can reach me at Chair@Metro-asq.org. Anyone wishing to present or exhibit at the 2006 Annual Metropolitan Section should also let me know.

As I stated in my previous messages, it is a privileged to serve as chair of the Metro section. Without your support or input we may not be addressing your concerns or needs as members. So feel free to contact any board member, or me, we need your input.

Merry Christmas and Happy New Year to ALL

Joe Borden P.E.; CQA
Chair 2005-2006

Chair’s message – November 2005

Hello from the Chair:

This is the first update to the 2005 2006 chair messages to the section.

Summer is over and the sections annual conference is complete, so what’s up for the coming year? Two important events are pending, the Deming Conference (December Atlantic City) and a daytime section meeting. Please click the links for information on these important events. The general section meeting is two presentations, each about 45 minutes, with time for questions. A buffet dinner will be served based on advanced registration. Keeping with last year’s theme, there will be no charge if you pre-register.

Turnout is one measure by which we plan future events so the daytime meeting is important if the members support it. We have only had a few daytime meetings in the last few years, so let us know if you want them.

We are already working on the 2006 Annual OTT Section Conference and have planned on returning to Rutgers, if all goes as anticipated. We are looking for volunteers to work on mailing lists, publicity, registration, and arrangements. If you would like to work on the committee please let me know. You can reach me at Chair@Metro-asq.org

Anyone wishing to present or exhibit at the 2006 conference should also let me know.

So what else is up!! We are planning to have a survey to see what type of meetings the members are most interested in, I ask, that when you receive the survey, please respond. However you don’t need to wait for the survey, if you want or have, a request for the section let me know what it is. Remember you are also welcome to attend a board meeting, check the schedule and register with:

Mr. William I. Martin
Registrar
Customized Management Systems, Ltd.
18-65 211 St Suite 2F
Bayside, NY 11360-1814
By Phone/Fax: (718) 631-2375

For the first time in the history of ASQ, headquarters is reaching out to the leaders of the sections and divisions and held the first “Member Value Leadership Summit” in Milwaukee on October 17th and 18th 2005. I would say that a majority of the sections and division where represented and many ideas for the future direction of ASQ where presented. It will be interesting to see what direction and progress Headquarters makes based on the results of the summit. I will provide further details as ASQ Headquarters moves forward with the initiatives. They are planning a formal update at the next World Quality Conference scheduled for May 2006 in Milwaukee.

As I stated in my first message, it is a privileged to serve as chair of the Metro section. Without your support or input we may not be addressing your concerns or needs as members. So feel free to contact any board member, or me, we need your input.

Sincerely

Joe Borden P.E.; CQA
Chair 2005 – 2006

Is the Quality Profession Evolving or Disappearing?

Photo: W. J. Latzko, Ph.D.
W. J. Latzko, Ph.D.

In 1980 a revolution started. Quality became a management issue and corporations were vying with one another to stress the importance of quality in their organization. Today these voices are few and far between. What happened?

Background
On June 24th, 1980, NBC aired an 90 minute white paper called, “If Japan Can … Why Can’t We?”(Crawford-Mason, Frank, Lockhart, & Dobyns, 1980). C. S. Kilian a biography of W. Edwards Deming stated that Claire Crawford-Mason wrote “In the 1970s, Americans had found two easy targets to blame for their economic woes: inflation and high energy costs. . . . Other people interviewed pointed to the adversarial relationship between government and industry”. Mrs. Crawford-Mason went on to describe that while 14 million households viewed the program (a reasonable number for a documentary, according to her), the show became the most requested program of all time. She stated, “One reason this program has generated so much continued interest is because of the powerful, relevant message of one man who was featured in the documentary: Dr. W. Edwards Deming”(Kilian, 1992).

For one and a half decades the interest grew in intensity, leveled off, and may be in a decline at this time. In a way this is reflected in the membership levels of ASQ and the section. One can speculate on the reason for this decline and we propose to do so below. However, the importance of the change is in how it impacts us, the quality professionals.

Quality is King
While quality was being emphasized, quality professionals became as recognized in the organization as other contributors such as finance, marketing, etc. Job titles tended to reflect this increased importance with many more vice presidents for quality appearing in organizations than existed before. Some departments grew rapidly. Salaries were in line with what other significant corporate contributors were earning. The increase in staff levels may have even led to shortages which in turn would help increase starting salaries.

The period of emphasis on quality coincided with (and probably contributed to) economic prosperity. At the turn of this century, increasing economic prosperity stopped. The impact was that executives started to look at areas that they considered to be non-contributors to the organization with a view of making these areas contribute or get rid of them. For a number of reasons, this resulted in a de-emphasis of many aspects that contributed to quality in the past. It translates into fewer quality professionals.

What happened? In my opinion it is the conflict with two methods to check quality: inspection and process control.

Inspection versus Process Control
Inspection dates from ancient times. For example, the code of Hammurabi (c. 1730 BC) specified commercial transactions and had rules for checking (inspection) and enforcing these codes. Dr. Juran often pointed to the Egyptian inspectors. The Byzantines had an officer of the court called a Logothete whose task it was to inspect workplaces to see that they conformed to standards. The method of assuring conformance was inspection. We still do it today. Inspection probably worked well as long as one talks about crafts where the whole product is made by one person. However, with the advance of technology and newer production methods, the age of the single craftsman is receding and inspection no longer as effective in both cost and output.

In the 1920’s Dr. Walter Shewhart formulated a method that met the needs of modern production. It is process control. The emphasis in process control is not on the product but on the process that produces the product. By making the process fail safe, only good output is created. This saves the cost of scrapping or reworking bad output and leads to greater customer satisfaction which in turn often leads to more sales and profits.

Until the 1980’s the bulk of quality operations in the USA used the inspection method. Key in this process was MIL-STD-105, Sampling Procedure and Tables for Inspection by Attributes, now called ANSI/ASQ Z1.4-2003: Sampling Procedures and Tables for Inspection by Attributes. The emphasis was the acceptances of a lot of output with a small risk of rejection of good items on the part of the producer and a larger risk of accepting bad items on the part of the customer. Relatively few process control systems existed.

The Japanese, on the other hand, specialized in process control which Deming taught them in 1950. As a result, they were capturing markets with better products at lower cost. Once American Management recognized this, they too wanted process control. The NBC White Paper of 1980 gave them this information and process control became a standard method.

Top Management’s Role
Deming, Juran, and others kept emphasizing the need for top management’s active involvement in achieving quality. The key was that top management needed to make their policies support quality not hinder it. The concept of single source suppliers saved many companies a fortune as well as creating better, more uniform output.

The problem was that the rapid growth of the quality profession led to a number of untrained or partially trained individuals who needed a quick fix. The European Union supported a method called ISO 9000. While this method permitted process control, it did not emphasize it, in fact it was an option. The emphasis of this process was and is on inspection, now renamed auditing.

Entropy: Sliding Back
Apparently, we moved from emphasis inspection before 1980 to process control until the latter part of 1990’s then back to the emphasis on inspection. Can this be a reason for what I see as the decline in the number of quality professionals, the change in management attitudes, and the return to the status quo of pre 1980? Is there the equivalent of Gresham’s Law in quality: old methods replace the modern? Does the death of Deming and Crosby followed by the retirement of Juran leave us with no one to whom top management listens? Can we recapture the spirit of quality as a sound business policy? Your editor invites your comments.

Reference List
Crawford-Mason, C., Frank, R., Lockhart, R., & Dobyns, L. (1980). If Japan can. . .why can’t we? Dobyns, Lloyd. New York, NBC. Ref Type: Video Recording

Kilian, C. S. (1992). The world of W. Edwards Deming. (2nd. ed.) Knoxville, TN: SPC Press.

Certification Results 2005

Certification is a valuable way to further your career in quality, by affirming your commitment to quality and obtaining recognition for your knowledge.  Through certification, members enhance their knowledge, their career and their self-esteem by advancing themselves within their organization and realizing their salary goals.  Get the recognition you deserve for what you know and can contribute!

You can learn more about the various certification programs offered by ASQ at the website http://www.asq.org/certification/.   Registration is convenient and simple online. Exams can be taken at any of multiple locations for your further convenience.  If you are interested in learning more about preparation for these exams, contact Russ Ferretti via email at ferretti@mnr.org or by phone at 212-672-1222.

Congratulations:

Congratulations are in order to the latest Metropolitan Section members who have passed certification exams, as follows:

CQA: Certified Quality Auditor

December 2004
Ruddie D. MacDonald
Roxanne I. Lewis
Manojkumar Oza
David Lloyd Fuller

June 2005
Glenda Ann Coulter
Irene Wei Sun
Sabine D. Joseph
Kelly D. Jones
Thefania M. Lynardakis
James Thomas Mackenzie

CQE: Certified Quality Engineer

December 2004
Man King Fong
June 2005
James Robert Richardson Jr.
Martin R. Riehm

CQIA: Certified Quality Improvement Associate

December 2004
Padmanabaiah Srirama
Denesha J. Kelly
Thomas J. Pritchard
Andrew A. Wilson
Yon Ha Kim
Steve Ramirez

CQM: Certified Quality Manager

March 2005
George E. Dimopoulos

CSSBB: Certified Six Sigma Black Belt

October 2004
Tony Pattanayak
Richard K. Meyer
Rushabh J. Shah
Matthias Groh
March 2005
Donia M. Piersaint
Martin Vonderheiden

CSQE: Certified Software Quality Engineer

June 2005
Bennett Weber


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