BUSINESS STANDARDS
is the quarterly magazine of BSI Group, highlighting the vital role that standards play in today's business environment. Regular features include interviews with leading business figures, as well as news on the latest developments in management systems and standards.
Survive and prosper
28 Jan 2008
Topics: Quality management, ISO 9001
ERRATUM: The version of this article that appeared in the January 2008 edition of Business Standards included factually inaccurate information. This is the corrected version. We apologise for any confusion or embarrassment this may have caused.
Despite being 20 years old, ISO 9001 is as relevant to today's businesses - from telecoms to services - as it was to businesses back in 1987.
""Sustainable success' is how you grow from a start-up business and survive to become a 10, 20, 100-year business," says Charles Corrie, secretary of the ISO TC 176 Sub Committee 2, which is responsible for writing the forthcoming update to ISO 9001.
He points out that the evolution of the ISO 9000 series has always moved along this path. In 1987, the standard focused on delivering the right product. After the revisions in 2000, the emphasis shifted more explicitly onto all the interactions an organization has with its customers or clients.
In 2008, the revisions to 9001 will be minimal (see box), but in 2009 ISO is set to publish ISO 9004:2009, a wholesale revision of 9001's companion standard, which changes from: "Guidance on performance improvement" to the currently proposed "Managing for sustainable success. A quality management approach." Corrie describes this as "a very new direction for this document". This begs the question, how much of a standard for sustainable success is ISO 9001 itself? In Corrie's mind, there is no doubt that surviving and prospering have always been at the root of what ISO 9001 is about.
"We would always have said ISO 9001 contributes to sustainability because an effective quality management system is trying to be effective and efficient in the use of resources, and really that's what sustainability is all about," he says.
"Also knowing what your market needs, what the customers' requirements are, meeting them explicitly and looking for ways to continually improve are all parts of 9001. So, yes, we would say that ISO 9001 supports sustainability and ISO 9004 goes a lot further."
Setting the standard
That said, what is the experience of organizations that are actually implementing the standard? Certainly, there is no argument that ISO 9001 delivers processes and process control, which make a direct contribution to success. Dave Rogers is head of quality for Telefónica O2 Europe, a leading provider of mobile phone services to consumers and businesses in Europe, with 38,000 staff serving 40 million customers.
"The key thing for us about the standard is it drives continual improvement," Rogers points out. "It identifies processes which are the key to the delivery of customer requirements, customer satisfaction and efficiency in financial performance.
"It also helps us to control the development of products and services, and it enables us to be number one in our industry in network management performance."
Speaking of performance, Dalepak Ltd, a Northampton-based storage, distribution and contract packing operation has packed 21 million parts for the Ford Motor Company without a single error - an achievement which is simply unheard of.
Mick White, Dalepak's MD, believes that a good part of this extraordinary success is down to the processes that the standard underpins. "The thing is, you've got the system. You know what you are working to." He adds, "ISO 9001 has brought us a lot of stability and new customers. I think it's a lot about sustaining what you've got, giving continuity and uniformity to what is required by our customers."
Moreover, it's the experience of both O2 and Dalepak that having processes in place leads to a deftness and adaptability which are very valuable. For instance, when O2 was acquired by Telefónica, the transition was relatively painless and quick, because O2 had good visibility of all its operations.
"We have a very flexible fast moving management system which enables us to be fast on our feet to deliver the services that we need to," Rogers adds.
For Dalepak, clear processes also deliver flexibility. Says its operations director, Michael Finn: "If people on the shop floor come through with good ideas, the first thing that the manager of the department has to do is rewrite the process and get it approved because he has a procedure to follow. Effectively, it's a procedure for innovation which means we can adopt good ideas quickly."
Stakeholder engagement
Both organizations are clear that ISO 9001 also brings them closer to their customers and suppliers. Having the certification breeds confidence, and implementing the standard brings a special attitude to interactions. For instance, Dalepak strives to be transparent to its customers, who can dial in and look at their stock levels at any time.
The company handles all the retail distribution in the UK for Molton Brown, as well as its worldwide hotel distribution, internet business, outlets, and production. The pre-Christmas period is a very busy time for Molton Brown and subsequently makes for a very intense period of activity at Dalepak, making essential a clear understanding of what Molton Brown is trying to achieve. Says White: "We're always looking to improve our customers' perception of what is going to happen and make sure that customers have confidence in us and trust us, because ultimately we always strive for more control of their business. That way they have fewer issues to deal with and they can concentrate on what they're good at." As a result Molton Brown can now access a number of reports from Dalepak that are of great use in helping the retailer manage its business.
O2 meanwhile has the highest customer satisfaction index in its industry. According to Rogers, having ISO 9001 certification is a key element in O2's contract negotiations with corporate customers: "It gives them confidence and guarantees a level of service, which is extremely important."
But he goes on to stress: "For us it's not about having a certificate on the wall. It's about using the principles of ISO 9000 to drive the improvement. We have implemented a programme called Value Streams to look at the key things we need to improve from the customers' perspective, walking right the way through our organization and identifying any gaps to ensure we have the best customer experience going.
"We've designed our systems around key risks to delivering customer satisfaction," Rogers adds. Similarly, supplier relationships are based on a partnership approach, as Rogers points out: "It is absolutely vital that suppliers are aligned with our strategy and plans and we also make sure that they have line-of-sight of our customers, and that there is quite a lot of transparency."
Moreover, the culture of transparency flows into the employee relationship as well. For Dalepak, 9001 is a way of focusing and sharpening not only the senior managers, but the people at the grass roots too. Says Finn "We get people to buy in to what they are doing no matter how small a part they play. Our only product is the quality of our service and 9001 gives us the ability to give awareness of where things are required, as well as information about the things that don't change, and the things that do."
In O2, the standard is used to manage people performance, as well as to identify roles and responsibilities in the organization and ensure it has the right skills in the right place at the right time.
Regulation, risk and continuity
Regulatory requirements and the speed at which they change can trip up any business and O2 operates in a particularly highly regulated sector. Says Rogers: "We have to comply with thousands of ETSI standards in Europe so we've got a process in place and when things change, we know what impact that will have on the business."
Additionally the standard gives them a structured approach as well as an independent verification of compliance to legal and regulatory requirements like Sarbanes Oxley, Ofcom and Radio Quality Council regulations. Under the risk and continuity headings the standard enables O2 to forecast and plan a response. For example, it moved on the requirements of the WEEE Directive two years ago, so that when the Directive came into force they were ready for it.
For Dalepak the standard means the company is always looking forward. Says Mick White: "Our strength is in knowing our business, because ISO 9001 encourages us to do that." He adds, ?In 2001 Dalepak's turnover was around £2m. We implemented ISO 9001 that year and now have around 200 people on the payroll working across four sites with a projected turnover figure in 2007 of £6.4m and that is down mainly to the disciplines of ISO 9001."
Based on this kind of evidence, ISO 9001 certainly does seem to be a standard for sustainable success.
>CASE STUDY: Small changes
ISO standards are reviewed every five years to make sure they are still working well and ISO 9001 is no different. However, ISO's feedback surveys on 9001 indicated that there were several revisions required, which are due to be published in mid to late 2008. The proposed revisions fall under three headings. First, ambiguities were identified, especially when translating the standard, eg "accountability" has no direct translation in Spanish, which is the primary language in 23 countries. Second, the drafting committee wanted to clarify the standard to reduce the need for interpretations. Finally, the 2008 revisions will improve the compatibility of ISO 9001 with ISO 14001 for organizations wanting to integrate their management systems.
For more information, visit:www.bsigroup.com/jan08iso9001
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