by Rich Culbertson
Most of us have heard the latest news on Volkswagen and the scandal surrounding their intention deception of the EPA on their clean diesel engines.
I believe it is important to understand what happened with Volkswagen, and their apparent success since 2009 of being able fool so many for so long on the pollution of their diesel products.
So far this practice as caused shareholder value to decrease $26 Billion. Internally, the company has reserved ~$7.3 Billion to pay for the issue.
The reports of how this happened have not yet been fully investigated. From what I have read so far, VW was an early adopter of ISO 9000 and was a participant of other quality initiatives. What we know is that the ISO 9000 / quality infrastructure failed, apparently multiple places — multiple times. Or was the ISO 9000 standard not designed to identify this type of deception?
But what about ISO 55000 – would this have identified the scheme sooner? Maybe yes or maybe no. If ISO 55000 implementation is limited to infrastructure type assets – the answer is probably no.
If ISO 55000 is implemented to recognize increased (and decreased) value and income comes from assets (as defined in ISO 55000) – and therefore include in a ISO 55000 system those intangible assets that can have an impact on corporate value, such as the quality system, corporate values, culture of compliance, ethics, whistle blower system, and property accountability system. When these are proactively measured and managed as assets, there is a greater chance to avoid what Volkswagen is experiencing.
Along with certain vital intangible business systems being in an ISO 55000 asset management system, another Standard should be adopted ASTM E2452 Equipment Management Process Maturity (EMPM). This model was developed for equipment (Jim Dieter, Executive Director of the ALN, led the writing of this standard – I was part of the team) but can apply to intangible assets. These type of assessments of intangible assets guide corporate management to improve competence and reliability of these business systems and functional groups.
As we keep track of the situation with Volkswagen we will find multiple lessons learned that will help ISO 55000 implementations.