Tuesday, 2 April 2013

ISO 9001





ISO 9001 is much more than a standard. It should be part of a company’s strategic plan rather than something to get certified to because customers require it. The guidelines and quality principles in ISO 9001 are just good business practices.

Several management teams think of the standard as something the quality department should focus on; in many cases it’s an afterthought rather than a strategic part of their business plans. Sometimes it’s only thought about when a customer asks if a company is ISO 9001-certified, or when it appears on a bid questionnaire for a project.

Here is an explanation from the ISO 9001 standard’s introduction: The adoption of a quality management system should be a strategic decision of an organization. The design and implementation of an organization’s quality management system is influenced by:
  • Its organizational environment, changes in that environment, and the risks associated with that environment
  • Its varying needs
  • Its particular objectives
  • The products it provides
  • The processes it employs
  • Its size and organizational structure


Does ISO 9001 really add value?

The value of ISO 9001 certification has been debated for as long as I can remember. Organizations that continue to debate rather than take action are resigned to the prospect of poor business growth and being incapable of competing with organizations that have moved beyond debating the topic.

One of the most powerful benefits of the standard is the principle of employing the process approach to management. David Levine and Michael Toffel of the Harvard Business School published “Quality Management and Job Quality,” a paper summarizing an empirical study on the benefits realized by 916 companies that adapted the ISO 9001 standard compared to 17,849 non-adapters. Some benefits noted in the study include higher rates of survival, higher sales, higher employment growth, and increased wages. In addition to these benefits, others included: reduction in waste generation, enhanced productivity, improved attention to detail, and improvement in health and safety performance. ISO 9001 should be thought of as a business management tool for your organization to drive real value and results.


A business management tool

A business model describes the rationale of how an organization creates, delivers, and captures value for anyone or anything that is affected by the organization. The business model should outline the organization’s mission, strategies, infrastructure, organizational structure, and the operational procedures that will be used to execute the business model. An organization must deliver value to its customers and convince customers to pay for that value. Once they pay, the organization must operate in a manner that will result in profitability.


Process approach

If ISO 9001 is meant to be used as a business management tool, every employee in the organization should have a basic understanding of how the organization generates revenues, the order and flow of organizational processes, and their roles in companywide processes. Without understanding organizational processes, it’s difficult to diagnose problems, get to the real cause(s), and implement preventive or corrective actions. The process approach is based on four principles:
  1. Understanding and meeting requirements.
  2. Considering processes in terms of added value.
  3. Obtaining results of process performance and effectiveness.
  4. Continual improvement of processes based on objective measurement.

Understanding and meeting requirements 

Most problems in organizations are associated with not understanding and meeting ISO 9001 requirements. Employees often underperform because they don’t have a clear understanding of their job requirements. Customers are often dissatisfied because their requirements are not being understood and met. Understanding requirements is the responsibility of both parties involved. For employees to be successful, it’s important for the organization to identify all job requirements for every position and clearly explain them to each employee.




It’s also important to educate the customer on requirements. The customer may understand what he wants, but may not understand the requirements involved in delivering what he wants. Once requirements are understood, the chances of those requirements being satisfactorily achieved are greatly increased, and the process can add value to the organization.


Consider processes in terms of added value

Your organizational processes should add value internally and externally all along the way, from capturing customer requirements to final delivery. This is when your ISO 9001 quality management system really becomes a business management tool and not a marketing tool to attract customers. Processes transform inputs (i.e., understanding requirements) into desired outputs (meeting requirements). Without controlling inputs, the organization will fail to add value when the output of the process is delivered.

What is added value? Value is based on the perspective of the process recipient. Value internally may mean that an employee is meeting requirements of a job description. Externally it may mean that the customer’s requirements are being met, on time and on budget.

There is nothing worse for an organization than having processes that do not add value or that are ineffective. This is so frustrating to employees and customers. A perfect example is when you call customer service, and the representative asks you a list of questions to verify your identity. Once she figures out she can’t help you, she transfers you to another representative, who asks you the same list of questions. Now they’ve spent 15 minutes verifying your identity and haven’t spent any time addressing your real problem. Having to repeat information adds no value to the customer or the organization. Value is determined at the “output point” of each process, which will be very difficult to achieve if the “inputs” to the process are not understood. It’s the principle of garbage in, garbage out.


Obtaining results of process performance and effectiveness

Once an organization understands its processes, it’s important to monitor performance to assess effectiveness. A quality management system should be a strategic part of the overall business plan, so it’s imperative to determine if the processes are assisting the organization in meeting the overall objectives of why the process was initially created. For example, the purpose of a final inspection process is to ensure that nonconforming product is not delivered to customers. To achieve the final inspection, criteria (i.e., inputs) must be defined so that the inspector can determine if the product meets requirements (output).




Every process has variation, so even an effective process won’t prevent nonconforming product 100 percent of the time. The organization may establish an objective to have a 2-percent nonconforming product rate. To monitor this on an ongoing basis, the organization would have to record each time a product is returned to be able to measure the performance and effectiveness of the final inspection process. If the process is not monitored and the nonconforming product rate goes beyond 2 percent, the organization would have to analyze the cause(s) and implement corrective action to improve the final inspection process and get the rate back in tolerance.


Driving continual improvement based on objective measurement

The reason why many organizations do not reach their full potential or remain stagnant is that they don’t have a mechanism to drive continual improvement. They simply run around putting out fires, tackling surface issues, and responding to the “problems of the day” rather than addressing process performance issues based on objective measures. This is one of the reasons that small and medium-sized companies remain small, and why big companies don't achieve maximum profitability. ISO 9001 provides objective measures to continually drive improvement.


Conclusion

ISO 9001 is much more than a quality management system standard and should be used as a business management tool. Focusing on implementing a process approach will lead to a systematic method of identifying and controlling processes to ensure requirements are understood and met in an effort to add real value. Once the processes are monitored through objective measurements, an organization can focus on the actual cause(s) of process performance issues. This is the ISO 9001 standard being used as the business management tool it is intended to be.

Sources: Oscar Combs, ISO 9001 Group, Quality Digest.


HF


1 comment:

Barton Wilson said...

Quality management is important for a company's progress. Without certain standards and definite goal to meet, it is most likely to become stagnant. Conforming and aiming for ISO certification can help motivate a company be at its 100% best.

-Barton Wilson @ IsaRegistrar