Golden mark for leaders
The national contest Altyn Sapa choosing the top performers in the field of management quality and efficiency will celebrate its 10th anniversary this year. Our magazine interviewed the last year’s Altyn Sapa winners and asked them about the secrets of their success.
Kazakhstan’s membership in the WTO and the EEU, shrinking markets and increased competition amid the challenging economic environment is what makes Kazakhstani businesses focus on improving competitiveness and product quality and adopt new technology. The great help here is the introduction of management systems based on experience and knowledge of successful international companies. For example, the quality management system based on international ISO series 9000 standards guarantees high product quality for the benefit of consumers. The OHSAS 18000 international occupational safety management system ensures compliance with occupational health and safety regulations. While the ISO 14000 environmental management system helps companies implement consistent and focused initiatives aimed at reducing the environmental impact.
According to the Committee for Technical Regulation and Metrology, as of June 1, 2015, 8,527 companies in Kazakhstan have implemented and obtained certification for management systems meeting international and national standards, which in an increase of 1,381 companies compared with the previous year.
To date, 281 Kazakhstani companies have ISO 9001 certification, while 13,269 companies are ISO 14001 certified, 1,221 companies are OHSAS 18001 certified, 111 companies are ISO 22000 certified and 18 companies have SA 800016 certification. The largest number of companies with international certification is in Almaty, making up 27% of the total. Then come Karaganda Region (15%), Astana (13%), Aktobe Region (10.6%), South-Kazakhstan Region (10.3%), Zhambyl Region (9.8%) and Almaty Region (9.3%). The smallest number of companies which have implemented management systems is in North-Kazakhstan Region (1.7%), Kostanay Region (2.9%) and Akmola Region (3.3%).
Award for Quality and Management
Altyn Sapa competition for the prize of the President of Kazakhstan plays a special role in promoting the philosophy of quality. The history of this Kazakhstani version of the Deming Prize goes back to October 9, 2006, when the President signed a decree starting this annual competition. In 2009, it was put in conformity with with the European quality award model. At the moment, Altyn Sapa is also consistent with the CIS award for achievements in the field of quality of products and services with greater importance of indicators describing management leadership, the company’s policy and strategy in the field of quality, customer satisfaction with the quality of products and services.
The Prize can be claimed by private entrepreneurs and legal entities producing goods and providing services in the territory of the Republic of Kazakhstan. Exceptions include manufacturers of military equipment, companies that are more than 50% owned by the government, as well as companies undergoing rehabilitation and bankruptcy procedures.
The Prize of the President of the Republic of Kazakhstan is awarded in three nominations: “Best Manufacturing Company,” “Best Manufacturer of Consumer Goods” and “Best Company Providing Services.” There are three prizes in each nomination: small enterprise, medium-sized enterprise and large enterprise. Their performance is evaluated based on the company’s achievements in the field of quality and the goals it pursues. The total number of points has to be more than one thousand. The existence of a management system is a prerequisite for participation, and business activities have to be audited for a period of 3 years.
It should be noted that victory in Altyn Sapa is a powerful incentive for further business development. Having interviewed last year’s winners, we found that the award first and foremost strengthened the company’s image both domestically and internationally. For example, after it won the prize, Globalink was named “The Best Forwarder” in Kazakhstan and its office in Georgia was named the country’s “Industry Leader.” According to Siddique Khan, President and CEO of Globalink Logistics Group, this victory raised the team’s corporate spirit to a new level.
Serik Kubeisinov, First Deputy Chairman of Ak Bidai-Terminal, believes that winning the award is the confirmation that the company is on the right track, and its operating principles are effective and successful.
Marat Bakkulov, Chairman of the Board of Directors of AVZ, noted his company gained new partners after winning the competition. Arystanbek Dzhumagulov, Director of MedAspapOptika (subsidiary of Medremzavod group of companies) said that the contest turned out to be a good opportunity to draw attention to local manufacturers in the healthcare sector. Moreover, the preparation for the contest alone promoted the revision of quality and management systems. For example, the focus on the “Management as a leader” category strengthened the company’s potential: “As a manager, I need to be savvy in various aspects of business, from product manufacturing to the launch and marketing.” “Impact on the society” category makes manufacturers keep up with global trends. As for “Policy and strategy in the field of quality,” Mr. Dzhumagulov believes that systematic and regular activities are needed.
Still, the majority of the winners interviewed believe that, regardless of the level of awards and the grades, participation in the contest and its criteria are a good tool for analyzing the ongoing changes and finding new ways for development.
Old contest reinvented
This year, organization of Altyn Sapa is the responsibility of Atameken National Chamber of Entrepreneurs. The contest consists of four stages. At the first stage, the company independently assesses its compliance with the established model. This encourages it to improve its operations and allows to identify those areas where efficiency needs to be improved. To explain the rules and procedures, as well as the methodology of self-evaluation, to the contestants, the Chamber held a number of workshops. At the second stage, the contestants are screened by the commissions on-site. At the third stage, a special commission reviews and prepares training materials. And only then the list of potential winners is submitted to the President of the Republic of Kazakhstan.
With the new organizer, the commission has changed radically. It used to be consisted mainly of representatives of government authorities, and now it includes heads of sector-specific organizations and associations. The expert panel includes only two departments: the Ministry of Investment and Development and the Ministry of National Economy. The review board of Altyn Sapa has three groups in the three nominations, each headed by one of the vice-chairpersons of the National Board: Nurzhan Altaev, Yulia Akupbaeva or Gulnar Kurbanbaeva. The experts selecting the best companies have extensive experience in different areas of business. For example, this year the experts include Umirserik Erzhanov, Secretary of the Committee of Mechanical Engineering and Metalworking of the National Chamber of Entrepreneurs, Tolegen Mukhanov, First Deputy CEO of the Republican Association of Mining and Metallurgical Companies, Daulet Sutengenov, independent expert of the Kazakhstani Association of Compliance Assessment Bodies, Evgeny Gan, Head of the Union of Kazakhstani Grain Processors, Zhanna Ospanova, Secretary of the NCE’s Committee of the Pharmaceutical Industry and Medical Services, Yerbol Eseneyev, Secretary of the NCE’s Food Industry Committee, Zhibek Azhibaev, Secretary of the NCE’s Trade Committee, etc.
Unsurprisingly, this year a new category was introduced for the contest’s participants: called “Contribution to the development of the industry,” it is evaluated by companies within a particular sector. “Participation in the contest promotes domestic goods, and certainly it indirectly affects the development of the industry,” said Lyubov Khudova, President of the Association of Consumer Goods Manufacturers. However, she believes that the system of evaluation for the participants of Altyn Sapa needs further improvement. For example, the proportion of goods sold on the domestic market and the amount of exports have to become the focus of attention.
Kanat Almagambetov, CEO of KAZLOGISTICS union of Kazakhstani transport workers, believes that the participants should also be evaluated based on their participation in forums and exhibitions. He also says that innovation, environmental friendliness and introduction of advanced technologies could become additional parameters for evaluation.
In fact, the rules of the contest and its criteria continue to be reviewed. The NCE is currently working to make it easier to prepare documents and submit reports in a digital format to replace hard copies. The are other reforms on the agenda. Nonetheless, even despite the existing forthcomings, entrepreneurs remain extremely interested in the contest.
Best of the best
The exhibition “Best Product of Kazakhstan” is the official partner of Altyn Sapa. The main objective of this event is to promote the products under the brand “Made in Kazakhstan” and to encourage domestic manufacturers to embrace international standards. The exhibition-contest has three nominations: “Best manufacturing goods,” “Best consumer goods” and “Best food products.” The selection consists of two stages. First, there are regional exhibitions, and their 9 winners from each region come to Astana for the final. Here, the winners of the “Best product of Kazakhstan” national exhibition-contest are chosen and awarded diplomas of I, II and III degrees for each of the nominations. Currently, the NCE is developing a new concept for the contest, so that winners could be chosen by consumers themselves starting from next year.
Since the moment the exhibition-competition was first held, 106 entrepreneurs have been named best domestic manufacturers. Below are the names of the winners in 2014. In the nomination “Best manufacturing goods,” the winners were Almaty Plant of Heavy Machinery (Almaty), Pavlodar Mechanical Engineering Plant (Pavlodar Region), Zhambyl Cement Manufacturing Company (Zhambyl Region). In the nomination “Best consumer goods,” the winners were Levin V.D. sole proprietor (North-Kazakhstan Region), Bal Textile (South-Kazakhstan Region) and BLACK (Akmola Region). In the nomination “Best food products,” the winners were Zerde-Fito (South-Kazakhstan Region), KEMMI GROUP (Pavlodar Region) and Diyevskaya Agrofirm (Kostanay Region).
Region-wise, the winners mostly came from South-Kazakhstan Region and Almaty (nine and ten awards respectively), Pavlodar Region (seven awards), as well as Astana, Almaty Region, Karaganda Region and Zhambyl Region (five awards each). Companies from North-Kazakhstan Region won the award four times, while companies from Atyrau, Akmola and Kostanay Regions became the winners three times. The last but not least are West-Kazakhstan, Mangistau and Kyzylorda Regions, each having two awards.
In 2014, there were 293 participants in Altyn Sapa competition. AZMK (Almaty), AVZ (Almaty Region) and ALKON+ (Astana) were named “Best manufacturing company.” RZA (Kyzylorda Region), MedAspapOptika (Almaty) and Bio Tau Zher (Almaty Region) were named the “Best manufacturer of consumer goods.” Globalink Logistics and Transportation and Logistics Wordwide (Almaty), Ak Bidai-Terminal (Mangistau Region) and Dostyk trade and production cooperative (Karaganda Region) were named the “Best company providing services.”
Special Altyn Sapa awards were given to Aktobe Rail and Structural Steel Plant (Aktobe) in the nomination “Best industrial project of 2014” and to POSUK Titanium (East-Kazakhstan Region) in the nomination “Best innovations in the manufacturing in 2014.”
It should be noted that 62 domestic companies received the Golden Quality over the history of the contest. Region-wise, Almaty is a leader by a wide margin (14), followed by Astana (9) and Almaty Region (7). The winners also include companies from Kyzylorda, Mangistau, Karaganda, Aktobe, East-Kazakhstan and West-Kazakhstan Regions. Only companies from North-Kazakhstan Region have yet to win something.
Controversial criterion
This year, only 153 companies vs. 293 companies last year applied for participation in Altyn Sapa. The number of participants in the “Best product of Kazakhstan” regional contests totaled 669 companies, with 144 winners reaching the national level.
It should be noted that this year’s competition is taking place at a time when the country is in a difficult economic situation. According to the rules of Altyn Sapa, a company gets 1 point for increasing its output by 10%. Obviously, there are few businesses lucky enough to increase production amid a crisis. Therefore, this criterion is controversial, and some of the winners of 2014 believe a non-standard approach is needed for the current situation.
According to Mr. Siddique Khan, today almost all industries are facing declining sales and their major challenge is to remain stable and keep their market share. On the other hand, there are some industries that benefit from the crisis. And this fact must be taken into account, because it creates unequal opportunities for the participants. Arystanbek Zhumagulov and Marat Bakkulov agree with this.
Yet, Serik Kubeisinov believes that there is no need to adjust the terms of the contest to the current economic situation in the country. “Any one of the criteria is fairly arbitrary, and of course, the impact of the current economic situation varies. For example, it is good for the exporters and bad for the importers. Once the situation changes – and it will changes – then it will be the imports’ turn to benefit from this ‘relative advantage.’ Therefore we think that there is no need to change the rules and eliminate certain categories.”
According to Mr. Kubeisinov, those companies which are going to participate in Altyn Sapa for the first time should focus their attention on one thing: if your company feels it deserves it. And Mr. Dzhumagulov warned entrepreneurs that preparations for participation in the competition would require some spending. Still, he said that this would be your investment making consumers more aware about your company and its products, improving your reputation among your partners and suppliers, and also enhancing the trust of Kazakhstani consumers.
We hope that both organizers and participants of the contest will find the insights shared the Altyn Sapa 2014 winners valuable. For our part, we wish all applicants good luck and may the best man win!
Rimma Ivakhnikova
