Moving Up the Ranks

 

Asset Recovery Business (ARB) of Dell is a model for this approach of process innovation to make the utmost use of the ISO 9000:1994 QMS.

 

In this modern world, initiatives specifying the steps for controlling quality or inspection are inadequate for organisations to remain competitive. Business Success largely depends on the entrepreneurs who have the ability and vision to implement and enhance their processes.

This case study highlights the method of using the ISO 9000:1994 quality management system, as a tool for developing a culture for constant improvement.

 

Dell Computers: 
�Dell� is the world number-1 PC manufacturer and seller. It is known for its direct selling and build-to-order business model. Dell�s understanding of its customers and the strategies it tailors for them are the key factors for its success. Dell is an example of how effective leadership can bring about changes in an organisation.

 

Dell has a unique business culture that helps it to be the No 1 in the computer industry. Special features of Dell�s business culture:

 

  • A strong vision of the future.
  • A new marketing strategy.
  • Constant innovation.
  • Product development driven by constant improvement.

 

Employee performance assessment is conducted in Dell only if it reflects in the enhancement of the business performance. Training is deemed as a day- to day activity but not as one that interrupts work. Risk is encouraged at every stage of the process because of the shared vision of the organisation. Roadblocks are viewed as opportunities and coped with bold and systematic effort.

 

With all such existing initiatives, in 1995 Dell accomplished ISO 9002 certification. However, the �ISO process� was not looked as a performance enhancement tool. Most of its business units viewed it as a structure to evaluate and enhance their existing processes and ensuring conformance to international standards.

 

Case under study:
The Asset Recovery Business (ARB) of Dell computers at AUSTIN, USA is an internal division of Dell computers and sells renovated computers at a nominal price.

 

Background:
Dell computers has a unique system in place under which any Dell product can be returned for repayment or substitution within a month. Earlier these returned products were used to inspect faults, renovated and sold to retail customers at the Factory Outlet Store.

 

Although the errors were minimised to the maximum possible extent, due to consistent growth in sales the number of units returned each month seemed enough to keep 450 people busy everyday. Thus they developed an e-commerce site for selling the renovated computers.

 

However, the organisation�s main focus was not just gaining by selling these renovated products but on making this particular unit also a recognised profit centre.

 

Asset Recovery Business (ARB) is a model for this approach of process innovation to make the utmost use of the ISO 9000:1994 QMS.

 

ARB does not have defined production lines nor does it demand specialisation in its cycle. Almost every employee is made responsible for all the products that the group has to deal with. Even the issues they deal with are quite different from the issues in the typical Dell manufacturing units. They have to find out what the customer returned and why did he do so. Then the best solution for each unit is determined.

 

Planning used to be done in real time instead of estimates since ARB has no defined practice to predict the number of units that will be received. Even ARB�s customers were very distinct from the customers of the other Dell manufacturing units. They were more price-sensitive and precisely consistent hunters for broader technical requirements.

 

ARB employees work on the challenges thrown at them to improve throughput, curtail cost and essentially make this recovery unit a profit centre. When all other plants of the organisation were trying to sustain their reputation, ARB was working towards becoming the standard of productivity, novelty and business process enhancement for all of Dell. 

Despite meeting such diversified requirements, instead of being recognised as the most talented and innovative division, they were perceived as the operators at the bottom line of the chain.

 

Blessing in disguise:
As a part of the certification process of the Dell manufacturing units, ARB was scheduled to go through an inspection by their registrar (NSAI) That was a time when they had the obsolete documentation of their earlier business unit. ARB does not have the required documentation to prove their continuous enhancement process. Thus with two months to go before the audit they choose to implement ISO9000: 1994 not only for preparing the essential documentation but also for using it as a tool for enhancing their business of selling renovated computers.

 

A �Business Management System (BMS)� was developed on a six-week basis to help in the documentation of existing processes and assisting for transition to continuous business process enhancement.

 

The steps taken to ensure this include:

  • Identifying the crucial areas of the plant totalled to 49 that need to be summarised and documented.
  • Identifying the experts in each of these functional areas and assigning the responsibility of drafting a procedure encompassing activities like the method of conducting each process.
  • Developing a Business Management Systems Manual (BMSM) after interviewing each of the experts by the BMSM representative and outlining an agenda for ARB to perform its daily activities.
  • Inspection and review of the drafts prepared for approval by the respective managers.
  • Preparing a �Roles and Responsibilities� Manual.
  • Placing the manual, roles and responsibilities and 49 identified procedures on website named BMIS (Business Management Information System).

 

Audit:

External auditors (NSAI) were astonished to see the ARB�s drive for continuous enhancement. Very few areas were noticed for possible improvement contrasting the expectation of large number of non-conformities. Thus the audit resulted in a series of reforms and revisions instead of disciplinary remedial actions focussed at individual performance as expected. Contradicting to the view of ARB as the bottom line of the business chain, the unit was cited as the �Most improved� business unit.

 

Conclusion:
There were no supernatural activities involved in the two-month reformation process of the business. The success is attributed to the visionary leaders in the plant always seeking internal and external channels to build solutions for different business issues.   Using the concept of continuous process improvement and implementing ISO 9000:1994 as a value adding activity rather than as a non-conformance inspection tool, helped the plant in acquiring certification.

BMS (Business Management System) developed in ARB was thus included in every sector of the organisation as in finance, sales and marketing, and the organisation�s operations. Dell ARB has moved from being under the eye of suspicion to the spotlight of success. It proved that ISO 9000:1994 can in fact be a system of business enhancement and not just a tool for traditional quality management.
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