by Nicolette Dalpino and Carey Wilson  |  07/31/2008

by Nicolette Dalpino and Carey Wilson’s default image

News Digest

Short on News

NIST has developed the first detailed chemical analysis revealing what processing is needed to transform crude oil made from pig manure into fuel for vehicles and heating.


The average refrigerator sold today consumes less energy than a 60-watt light bulb left on 24 hours a day.


The USDA has not accredited any certifier doing organic foods inspections in China, yet millions of dollars of organic trade is taking place in China via handshake deals and reciprocity with other international certifiers.


ROWE, for “results-only work environment,” seeks to demolish decades-old business dogma that equates physical presence with productivity.


The next generation of data security will be based on quantum cryptography. The technology works with individual photons, which are generated and coded by an optical array.


We would welcome more state and federal judiciaries to follow the lead of these courts,” says John Engler, NAM president and CEO, in response to a Rhode Island Supreme Court decision to overturn a verdict against lead paint manufacturers.


Understanding Financial Risk

In most financial institutions, governance, risk, and compliance activities are spread across several overlapping and related functions. Each function (e.g., audit, compliance, finance, and legal) operates independently, leading to inconsistent and inefficient processes. According to a new report, “Governance, Risk and Compliance in Financial Services: Learning From the Present to Prosper in the Future,” published by the London-based Economist Intelligence Unit and sponsored by Oracle, the bigger problem is that each division reports separately to senior management, which hinders a comprehensive understanding of risk.

Proponents of an integrated governance, risk, and compliance strategy say that these elements should be linked to produce a more transparent view of risk across an organization. A key area where integration could help is in improving the ability of organizations to assess the effectiveness of their overarching governance and risk policies.

One outcome of the recent bout of asset-price volatility is that it has exposed weaknesses in the risk governance of financial institutions, increasing the incentives for reform in this area. Firms are increasingly striving for a more effective governance policy which defines the organization’s risk profile, lays out a process for evaluating and prioritizing risks, and makes sure that the process is followed.

Other findings of the report include:

Financial services executives see the main benefits of integrating governance, risk, and compliance functions as gaining better control over business processes and in reducing the risk of noncompliance.

The main obstacle to implementing an integrated program in governance, risk, and compliance is not apathy at the board level, technology shortfalls, or even organizational silos. The main hindrance is internal politics--not least the uncooperative response of executives who perceive the integration of governance, risk, and compliance as an encroachment on their turf.

Firms that pay little attention to the integration of risk and governance functions seem to also be the firms that tend to ignore the big picture of risk management.

For further information, visit


DOD Saves Billions with Lean Six Sigma

Since the U.S. Army deployed lean Six Sigma (LSS) in 2005, nearly 2,000 personnel have been trained, more than 1,000 projects have been completed, and more than 1,600 remain active. The Army credits these projects with nearly $2 billion in savings so far.

The Department of the Navy has trained more than 5,000 sailors and Marines as Six Sigma Green or Black Belts since 2006. The Navy estimates savings from its projects for 2006 and 2007 to be $450 million, a 4-to-1 return on investment.

The U.S. Air Force has trained more than 500 belts, and its Air Logistics Centers received two Shingo Prizes for quality improvement last year. The Air Force has committed to a 40,000- manpower reduction without impairing its operational capabilities.

These savings could grow even faster as the Department of Defense takes steps to expand these initiatives throughout the armed services. For example, the Defense Department recently selected Minitab Inc., for a General Services Administration blanket purchase agreement.

The agreement makes Minitab’s solutions for quality improvement, data analysis, lean, and Six Sigma more easily accessible as all branches of the military implement LSS initiatives.

The software implementation will:

Provide online instruction in analyzing data for quality improvement as interactive lessons walk users through real-world problems and make advanced statistical concepts easy to grasp and retain

Enable team members to centralize and share project data, get guidance from coaches, map processes and assign variables, standardize project deliverables, and more

For more information, visit


Do the Math

Last month’s “Do the Math” was based on confusing “median” with “average.” A press release issued by the Agency for Healthcare Research and Quality (AHRQ), stated that, “The quality of health care improved by an average 2.3 percent a year between 1994 and 2005,” and referenced the statistic’s source as AHRQ’s “ 2007 National Healthcare Quality Report” and “2007 National Healthcare Disparities Report.” A chart on that report states that “The annual median [emphasis added] rate of change for all core measures, which span the years 1994 to 2005, is 2.3%”

In the scheme of things, this isn’t the end of world; certainly we make mistakes in this magazine. What is more important is how these types of errors propagate throughout the internet. Press releases often simply get reprinted in various media with no one fact-checking the data. Because the error is then reprinted hundreds of times in various media outlets, the error then becomes “fact.” The lesson is to try to find the source of the data and read it for ourselves.

This month’s “Do the Math” winner is Patrick Biggins. Patrick wins a glorious prize from (Perhaps “glorious” is a bit of an overstatement.)

Next month’s puzzle
OK. It had to happen eventually. A math error (gasp!) within our own pages. Hard to believe it, but there you go. Read H. James Harrington’s column in the June 2008 issue of Quality Digest ( ) . There is a rather obvious mistake that the editors missed (I’m one of them).

Find the error and send it to us using the contact form at We will randomly choose a correct entry for a fabulous door prize (a doorstop, perhaps).

Be sure to send us any math mistake you spot in the media. If we use it, you win a prize, too.


ASQ Banking Survey

Most Americans rank the customer service at their financial institution as above average with room for improvement, according to a recent survey conducted by Harris Interactive on behalf of Milwaukee-based American Society for Quality (ASQ). The online survey was conducted between March 27 and March 30, 2008, among 1,001 adults aged 18 and older.

The survey finds:

96 percent of adults rate the customer service at their financial institution as above average or average.

85 percent are very satisfied or satisfied with the products and services available.

89 percent of adults feel that it is easy to open a new account.

27 percent of adults have experienced a problem with their account in the past year.

About two-thirds (68%) of adults who experienced a problem are satisfied with the process to get the problem resolved.


“Quality practices such as Six Sigma or business process management enable banks to standardize the way they work and achieve improved consistency, faster cycle times, and fewer errors,” says Mike Nichols, ASQ president and co-author (with Rowland Hayler) of Six Sigma for Financial Services (McGraw-Hill, 2006) .

Nichols also points out the fairly high defect rate of 27 percent of adults who have experienced a problem with their accounts during in the past year. “This is a significant area for opportunity,” he says. “With the help of quality tools, banks can improve operational processes, identify problems quickly and systematically, and have fewer errors.”

For more information, visit .


Grayson Medals Awarded

APQC, a nonprofit benchmarking and best practices organization headquartered in Houston, presented the inaugural C. Jackson Grayson Distinguished Quality Pioneer Medals in Houston this May at the ASQ 2008 World Conference on Quality and Improvement. The award recognizes the contributions of individuals who have demonstrated outstanding leadership in the application of quality philosophy, methods, and tools in education, health care, public service, and not-for-profit organizations.

“This year’s winners… have used quality principles to find solutions to serious societal problems, raise[d] the alarm when others haven’t, and worked persistently against high odds and great resistance,” says Grayson, who founded APQC in 1977.

The 2008 Grayson Medal winners are:

Dr. Donald M. Berwick, president and CEO, Institute for Healthcare Improvement (IHI), for his pioneering work in health care quality.

A. Blanton Godfrey, Ph.D., dean and professor at North Carolina State University, for his leadership in blending quality and innovation in product development, strategy, and higher education.

Al Gore, former U.S. vice president and Nobel Prize winner, for his inspiring leadership of the Reinventing Government Initiative and his work on climate change.

Jerry Weast, Ph.D., superintendent, Montgomery County Schools, for launching quality applications in K-12 education programs and inspiring others to build world-class educational systems.


For more information, visit .


QD Launches Video-Enhanced Web Site

The Quality Digest web site now offers streaming video, featuring interviews with key players in the quality industry, commentary from experts in quality management, reports from quality events, “how-to” segments illustrating quality implementations, product demonstrations from top solution providers, and, most innovative of all, the Quality Digest News Desk --the first online news program devoted to stories about the quality industry.

The web site will also continue to offer the most up-to-date, in-depth written coverage of all things quality.

To experience the new site for yourself, visit


Energy-Conserving LED Lighting Standards

Scientists at the National Institute of Standards and Technology (NIST), in cooperation with national standards organizations, have taken the lead in developing the first two standards for solid-state lighting in the United States. Working in conjunction with the U.S. Department of Energy (DOE), NIST is seeking to support its goal of developing and introducing solid-state lighting to reduce energy consumption for lighting by 50 percent by the year 2025.

The DOE is launching the Energy Star program for solid-state lighting products this fall. NIST scientists assisted DOE by providing research, technical details, and comments for the Energy Star specifications. The Energy Star certification assures consumers that products save energy and are high quality, and also serves as an incentive for manufacturers to provide energy-saving products for consumers.

“More standards are needed, and this will be the foundation for all solid-state lighting standards,” says Yoshi Ohno, a NIST scientist who chaired the task groups that developed these new standards.

Through the use of light-emitting diodes (LEDs), instead of incandescent filaments or fluorescent tubes, this new lighting technology cuts energy consumption significantly, and is expected to reduce the amount of energy needed for general lighting, including residential, commercial, and street lighting.

“Lighting uses 22 percent of the electricity and 8 percent of the total energy spent in the country, so the energy savings in lighting will have a huge impact,” says Ohno.

Twice as energy efficient as fluorescent lamps, solid-state lighting is expected to be 10 times more efficient than incandescent lamps, although the current products are still at their early stages. In addition to saving energy, the new lighting, if designed appropriately, can produce better color rendering--how colors of objects look under the illumination--than fluorescent lamps or even incandescent lamps.

The Illuminating Engineering Society of North America (IESNA) published documentary standard LM-79, which describes the methods for testing solid-state lighting products for their light output (lumens), energy efficiency (lumens per watt), and chromaticity (color quality). Details include the environmental conditions for the tests, how to operate and stabilize the LED sources for testing, and measurement methods and types of instruments to be used. The standard is available from the IESNA (

For further information, visit


Designing IEC 61508-Compliant Products

TÜV Rheinland, an independent testing and certification service, will host a four-day seminar titled “Hardware/Software Design According to IEC 61508,” from September 22 to 25, at the Courtyard Boston, in Natick, Massachusetts. The seminar will support engineers and others in the functional safety discipline as they expand their technical knowledge of IEC 61508--“Functional safety of electrical/electronics/programmable electronic safety-related systems (E/E/PES)” and other international standards. The final day will offer the option for an exam to receive the TÜV Rheinland Functional Safety Engineer certificate.

The Hardware/Software Design seminar will offer guidance by Heinz Gall, manager of automation, software and information technology at TÜV Rheinland Industrie Service GmbH in Cologne, Germany; and Matthias Haynl, business field manager of functional safety at TÜV Rheinland’s North American division in Boxborough, Massachusetts.

The seminar will include an overview of safety engineering, IEC 61508 requirements, functional safety management, E/E/PES requirements, case studies, practical examples for IEC 61508, and configuration requirements for tools.

For more information, visit


Bioscience Trends

The United States’ bioscience industry continues to grow as states vie to attract high-wage jobs, according to a study released by Battelle of Columbus, Ohio, and the Washington, D.C.-based Biotechnology Industry Organization (BIO).

The study, “Technology, Talent and Capital: State Bioscience Initiatives 2008,” presents data on nationwide bioscience-employment and -growth trends from 2001 to 2006. The study also examines key performance metrics and describes policies and programs designed to accelerate the growth of the biosciences.

“The bioscience sector is coming of age with discoveries finding their way into new applications and products leading to new medical treatments, new sources of energy, and new products made out of bio-based materials,” says Jim Greenwood, president and CEO of BIO. “This has led to the growth of clusters of bioscience firms focused on specialized niches throughout the 50 states and Puerto Rico.”

“Recognizing that the biosciences are a key driver of economic progress, states and regions across the county are building business climates that support the needs of bioscience companies,” says Walter H. Plosila, senior advisor to the Battelle Technology Partnership Practice. “These efforts focus on technology, talent, and capital, the key ingredients needed to grow a bioscience-based economy.”

For more information, visit


About The Author

by Nicolette Dalpino and Carey Wilson’s default image

by Nicolette Dalpino and Carey Wilson

Nicolette Dalpino and Carey Wilson are news editors for Quality Digest.