A worldwide leader in automotive lighting, OSRAM has probably made the lamps in your car. If you drive to the movies, chances are that OSRAM made the projection lamps. From stage lamps, the light in copy machines, the lights in your house, to perhaps even the light for backlighting your cell phone; the lighting products could all come from this company.
“Innovation is one key success factor of OSRAM. In fact, 40% of our turnover comes from products that are less than five years old. Today, classic light bulbs account for only about 3% of worldwide sales. And the stylised light bulb in our logo is a symbol not only for light, but also for good ideas – and our passion for intelligent light,” says Detlev Plath, Head of Organisational Support, Internal Audit and Quality Management.
One particular area of innovation and growth now is LED, or light-emitting diodes. Step by step, they will substitute more of the conventional lighting over time, and already that has started with interior lighting in cars.
Inspiration
OSRAM is an original equipment supplier to the important car manufacturers in the world. As the automotive industry is perhaps second only to the aerospace industry in demanding mandatory certification and quality assurance schemes, being a first-tier supplier entails some work.
“We saw that the certification process improved the way we worked, as well as our internal processes in the automotive division, and were inspired. We are continuously getting all the different aspects of certification into an overall concept,” says Plath.
Sarbanes-Oxley Act
What OSRAM is hoping to achieve is a process where they can use the requirements and work done for the certification schemes to also satisfy other needs and requirements put forth by internal quality assessments and audits, as well as the Sarbanes-Oxley Act (SOX).
The Sarbanes-Oxley Act came as a result of the Enron and WorldCom scandals in the US, and was signed into law by President Bush in July 2002. It introduced stringent new rules with the stated objective, according to President Bush, to “deter and punish corporate and accounting fraud and corruption, ensure justice for wrongdoers, and protect the interests of workers and shareholders.”
Great deal of overlap
“The Sarbanes-Oxley Act requires the companies listed on the NYSE, where OSRAM’s shareholder Siemens is listed, to fulfil a certain degree of description of their processes and a certain degree of internal controls. The same is true for the certification/ISO requirements. They both require documentation of the process steps, an ownership of the processes, and they do require a certain interval for internal controls. There is a great deal of overlap here, and therefore I think there are great synergies between the ISO concept and the Sarbanes-Oxley requirements,” says Plath.
He believes that this will become more and more important the more companies are forced to have an internal control system with a complete coverage. “And if you have a well-working ISO process management, then there is not so much more you have to do to comply for instance with SOX as well,” he explains.
A difference between the two is that the SOX requirements focus on processes that have an impact on the profit and loss, or balance sheet. The certification schemes to ISO standards require descriptions of all processes, except those that are purely financial.
Internal revisions and audits
OSRAM also sees great benefit in using the certification process as a tool to improve their internal audits and quality management processes. In the audit process, they use an integrated questionnaire assessed through qualified DNV EFQM and Automotive Auditors.
“We have combined the quality management and the internal audits in one department because we experienced that quality management and internal audits conducted similar audits and assessments on similar subjects. In order to make the organisation more effective, we combined those assessments and now we only ask the questions we need answers to once,” says Plath.
Minimizing cost
“I appreciated very much that DNV has a comprehensive approach to certification and is open-minded to new ideas. This has enabled us to establish an intelligent combination of the different requirements, and we are now able to limit the number of audits and the people that are involved in the organisation. With this system in place we can balance out the costs for the entire certification process, while still getting the same or perhaps even better results out of the audits,” says Plath.
OSRAM has consistently expanded its global presence through acquisitions and joint ventures since the late 80s. It truly changed from a regional player to a worldwide market leader in 1993 with the acquisition of Sylvania North American Lighting. Proving that they have their lights set on the future, in 2004 OSRAM acquired Russian SVET, a fluorescent production facility. It was the first investment in Russia with a production site by one of the big three international lighting manufacturers.
