Implementing ISO 901:2015-based Quality Management System in SME Tyre Retreading of the clients and the auditors TO BE OR NOT TO BE: The dilemma

By PP Perera

It is a well known and widely accepted fact that tyre retreading offers substantial economic, environmental and social benefits that enhances the “triple bottom line” improvement towards sustainability. During the conversations I have with tyre retreaters, a matter for concern is how well this is understood in its correct perspective by the tyre retreaters. This is particularly common in case of the small and medium scale (SMEs) entrepreneurs in Sri Lanka, although I presume that this is a common feature globally. Yet we have to admire the courage of entrepreneurship shown by the SMEs who operate under several technical and economical constrains.

Non availability of technology at affordable prices, inadequate product and processing knowledge, high mobility of labour, and debt burden are some of the key constrains despite which some retreaters are performing a commendable and admirable job. While ISO 9001 based Quality Management Systems are implemented voluntarily by the companies or as a requirement stipulated by the customers, it has become a pre requisite for qualifying to be registered as suppliers of retreaded tyres to the state owned organisations. Very often the SMEs face the dilemma of how to satisfy the certifying organisation in order to demonstrate the conformity status to the requirements. Ironically this situation is exploited intentionally or unaware to the clients by some certification bodies and Consultants whose professionalism leaves much to be desired.  I intend to brie4fly highlight the constraints and limitations faced by the SMEs during the successful implementation of the ISO 9001:2015 requirements in their tyre retreading units.

The key principles of the ISO 9001:2015 standard encompasses  identifying the external and internal issues related to the interests  of the stake holders, the  Process Approach,  the application of the PDCA ( Plan –Do; Check –Action ), and Risk based approach to take preventive action on “what can go wrong” .

Requirement No: 4  Context of the organisation

This implies aligning the business strategy in line with the external and internal issues and keeping tack of the changes in the above by periodic reviews. It is noted that most SMEs are single owner or family businesses which has direct exposure to the markets and the prospective clients. Very often business decisions are taken by the owner, based on his knowledge on the issues concerned related to the interests of the stake holders. They are guided more by their tacit knowledge which is rather difficult to be demonstrated to a third party Auditor.

Requirement No:  5  Leadership

The SME entrepreneur is closer to the customers and very often personal contacts and communications are informal yet effective. They do not have their vision, mission, values or the Quality Policy documented and displayed, while it is a fact that even in some very large organisations, these have become items of decoration of the walls. On the other hand I have s witnessed one or two medium scale companies, who conduct a daily morning pledge to the Quality Policy. With respect to the allocation of roles and responsibilities, the SMEs have a limited number of personnel and most of them are multi tasked and some multi skilled.

Requirement No: 6 Planning

Identification of the risks and opportunities as an input to the quality management and taking preventive action to minimize or mitigate the risks is stipulated in this requirement. Considering the “modus operandi” of the SMEs, mere looking for documentary evidence of risk assessment could  be futile, and a more practical means would be to assess the success or failure of the business and the evidence of any improvements in the infrastructure and work methods. With respective to setting up Quality Objectives and monitoring the same documents may not be available. However, it will be good practice to have some simple goals and objectives such as reducing the scrap and reworks.

Requirement 7:  Support activities

This section covers important resource requirements with respect to competent manpower, satisfactory work environment and infrastructure to realize a quality product, control of monitoring and measuring equipment and managing organizational knowledge and communications.  Tyre  retreading, which is traditionally considered as a “dirty, difficult and dangerous “ industry, attracts few employees as there are  more lucrative opportunities in other spheres. Hence attracting and retention of and maintaining a knowledgeable and competent workforce is a major issue. Labour turnover is high and trained operators are in the habit of joining larger companies which offer better employment terms. With respect to the work environment and the infrastructure only a limited number of companies have gone for improved work places and new layouts and most are continuing in the traditional ways.

Most SMEs do not have their in-house compound and mixing facilities and depend on external suppliers for their tread rubber and other component requirements. In companies who have their own compounding and mixing machinery and equipment, different levels of managing knowledge and its application are practiced. Very often knowledge is retained in the head of the single owner, and the prospects of the second generation entering the family tradition is receding. Hence auditors may have to do floor level evaluation to establish that sufficient knowledge to manage the operations is available, instead of looking for documentary evidence. Instrument calibration is another area that is new or known but neglected.  With respect to internal and external communications it is noted that the SMEs depend more on informal but hands –on communications

Requirement No: 8 Operational aspects

This is the core aspect of the tyre retreading activities,. Product requirements of the customers can be more easily acquired through direct personal contacts and very often the Owner/ Manager is in charge of the marketing function.  The requirement of product design and development is not directly applicable because the tread patterns, compound and component specifications are already available and no original design work is undertaken

Purchasing of raw materials (rubber and compounding  ingredients) is another area of constrain. Very often raw materials are purchased in small lots  from the open market , due to  constrains on the working capital, which imposes risks and issues of uniformity and consistency of quality of the material inputs. Verification of purchased materials are often confined to visual checking on the qualities and perhaps packaging. In many cases where the mixing of compounds is outsourced , verification  controls  and supplier quality assurance reports  (Test Certificates) are not  used. This however is an area that can be established and improved.

Production and process controls, inspection testing and verification and control of non conforming outputs, are practiced to different levels and the auditor has to make an onsite easement of the effectiveness of the adopted methods. Some companies obtain the services of independent testing laboratories to carry out random tests on compounds and finished tread or bonding gum.

Requirement No: 9 Performance evaluations

In most cases, customer feedback and customer satisfaction documentation are not formally maintained. Product performance is usually gauged by the tyre mileage. In companies which are already certified for ISO 9001, internal audits are carried out by external auditors. However this is a random activity, performed as a requisite to satisfy the Certification Bodies. Same applies to Management Review Meetings as stipulated by the ISO 9001: 2015 Standard. Performance reviews are normally carried as a daily practice, and  corrective action is taken on a case by case manner in case of non conformities and some companies have records of non conformities and actions taken. This again is a practice that can be adopted by all SMEs

Requirement No: 10   Improvements

It is noted that maintaining records of continual improvements on processes, products and activities is the exception rather than the rule even in some large companies and unearthing objective evidence in this area is a real challenge to the auditors