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Size doesn't matter: ISO 9001 Quality management
16 Nov 2010
Topics: ISO 9001, Quality management, SMEs
Some business standards are developed for particular industries, or with specific regulatory developments in mind, but many are relevant no matter what your line of business.
Similarly, many standards can prove helpful to organizations of any size - they are not just for big businesses with multiple management tiers. While some management issues become more complicated the larger a business becomes, the fundamentals, such as sound financial management, confident compliance and excellent customer service, are crucial for any enterprise. Robust risk management is another example - vital for a smaller or recently formed company, which usually has fewer resources to deploy if a serious problem arises.
The well-established quality management standard ISO 9001 is a case in point. Quality matters to all organizations, whether it is the quality of service, quality of products, quality of people, or all three. Quality translates into a better reputation, which should lead to a virtuous circle of improved sales and increased revenues - to reinvest for further growth and to ensure the future sustainability of the organization.
One for all
In fact, ISO 9001 is one of a series of three quality management standards, which are complementary, and should be used together to build a robust management system for quality. The other two are ISO 9000 (an introduction to the ISO 9000 series that deals with the fundamentals and terminology behind the standard) and ISO 9004:2009 Managing for the sustained success of an organization - A quality management approach.[1]
All three standards in the series are based around eight longstanding quality-management principles. They include strong leadership; the active involvement of staff at all levels; a focused, system approach to management; an appreciation of customer needs and requirements (not just now, but also in the future); and the basing of any changes on a quantitative analysis of relevant data.
For those organizations that want validation of their quality management system, they can obtain independent certification to the standard. This will be based on evidence of a "plan, do, check, act" (PDCA) approach to these management issues. Organizations will need to produce a "quality policy" (based on both ISO 9001 requirements and their own quality objectives); to document and communicate that policy; to evaluate existing procedures and processes to ensure they are suitable; and to conduct internal audits to demonstrate compliance. BSI can then conduct an external assessment and award a certificate if all the requirements are being met,
"It grew up in the manufacturing sector, but these days there are clients in most sectors," says BSI's group product manager John Hele. "Professional services manufacturing, construction and transport are the big ones, but we have also seen implementations in banks, accountancies and solicitors, and even a GP practice."
"I'd say it is one of the most successful and long lasting management tools of modern times," adds director of group operations and compliance, Neil Hannah. "The latest ISO survey has just revealed that there are now over a million organizations around the world, and has proved itself to be of almost universal applicability."[2]
Sizing up or down
Indeed, BSI has certified some 60,000 organizations to the standard worldwide itself, with approximately 85 per cent going to companies with under 250 members of staff - the typical definition of a "small to medium-sized enterprise" (SME) in the UK.
"Around half of our new business for ISO 9001 comes from organizations with under 50 employees - very small companies indeed," continues Hannah. "We've also seen interest increase in recent years from these businesses. Most of the large companies that are interested have now got it and we see the market growth very much in smaller companies. At least one of our clients has just four employees."
Hele suggests that the issue of assigning the necessary "resource" to undertake an implementation may be partly responsible for the perception that such standards are for organizations that have reached a certain size.
"A related misconception is that it's all about form filling and box ticking - a burdensome thing imposed on business," Hannah adds. "That might have been true 20 or so years ago, but since 2000 the focus has been very different. Now the vast majority of people recognize that it isn't about that at all. Instead it's about whether the organization understands what its customers want, and has the processes in place to deliver it."
"There's lots of research showing that all those introducing it have seen financial benefits in some form or another," Hele adds.
For example, independent academic research carried out in the US and Spain on the impact of certification in US companies has found that the standard can lead to "significant abnormal improvements in financial performance".[3]
This research concludes: "Anecdotal evidence abounds that some firms implement the standard in a more rigorous and comprehensive way than others, and hence are likely to obtain more benefits.
"Overall, the evidence presented does support the view that careful design and implementation of consistent and documented quality management systems can contribute significantly to superior financial performance."
Even without certification, the process of investigating how "quality" translates for your organization can "pay dividends", Hele says.
"ISO 9000 asks you to map the processes that supply your clients with the results you've agreed to supply them. Even that exercise can lead to streamlining some processes."
Drawing on the academic research, Hannah adds that BSI has now created a tool that can calculate the approximate return potential customers can expect from implementation. "We use customers' numbers and estimate what the likely benefits would be if they were to perform in line with the average in the academic research," he says. This can be very useful when creating an internal business case for the investment.
Service security
Small southeast England security specialist Sight & Sound Security certainly found that working with BSI towards certification in 2009 had an impact on its bottom line. Quite simply, the business says that an improved corporate image has led to many more customer wins.[4]
Moreover, in addition to establishing an ISO 9001 quality management system, the business turned again to BSI to help it achieve accreditation under the UK's Security Industry Authority Approved Contractor Scheme (SIA ACS).
"This is the pinnacle of British security recognition to which all security companies aspire," explains managing director Paul Purchase.
"Despite the financial implications being substantial for a company of our size, we realized that being an SIA Approved Contractor would bring benefits to us and our customers. We have won a number of new contracts from non-ACS companies. We were operating to most of the ACS requirements already thanks to the management framework we put in place for ISO 9001."
Sight & Sound has seen additional benefits too. The business had already invested in a rigorous training programme to keep key personnel up to date, but now it also has access to the ACS Workbook, workshops and other forums to improve industry knowledge further. It is investing in the quality of its employees to improve the quality of the end product.
"We have been able to introduce new procedures as a result of our Approved Contractor status and so, in essence, thanks to our partnership with BSI, our company has now significantly improved," Purchase concludes.
For Shades of Comfort Limited, which launched in 2005, certification to ISO 9001 was even part of its first ever business plan, enabling it to target new, larger clients from government councils through to blue-chip companies. The company supplies outdoor customer entertainment infrastructure such as awnings, umbrellas and heating facilities. It sources some of its parts from Germany and Italy, and is able to modify any element according to customer requirements, so the reliability of those varying products is of paramount importance.
"Our business growth has been largely due to recommendation," says sales and marketing director Tony Peters.
In order to drive this, however, Peters knew it was crucial to be sure the company "had systems, processes and procedures fully documented" and "an ethos of continual improvement and customer satisfaction".[5]
"I believe we are now in a position to survive the economic downturn and are in good stead to be able to grow when the financial situation improves," he explains. "We have already had encouragement from large organizations and secured business that we could not have obtained prior to certification."
Air quality
The Mileage Company, a very recent BSI certification, has also benefited from improved training. It was certified to ISO 9001 in February 2010, following an implementation of just ten months to cover its Airmiles travel loyalty scheme for airline passengers
"We learnt we had a lot of inconsistencies and areas for improvement," admits project manager, Emma Wood. "For example, we found our training department only covered about two thirds of our customer contact centre, so we implemented new training programmes to be sure people were trained on a consistent basis."
"There is also a lot more consistency in general management thanks to fixed documentation such as appraisals and reports."
Addressing Airmiles' quality is therefore clearly tied to improving the overall service experienced by customers, and Wood explains that internal efficiency has been a further benefit.
"We have seen a shift in culture in terms of sharing and learning from different departmental challenges and experiences, whilst working together to simplify areas of the business," she says.
Continual improvement between BSI's audits is another area that has been addressed. Two of the company's employees took part in BSI's "Internal Auditor: ISO 9001:2008 Quality Management Training" course to enable them to drive the new approach to improve from within.
Global goals
As the Mileage Company also illustrates, however, ISO 9001 is relevant not only to any size of company, but also to any office or site in any country.
Spain is the world's third largest market for ISO 9001 certification and local computing and telecommunicatons specialist PLEXUS has recently been certified to ISO 9001:2008 by BSI. The company has a multidisciplinary team of 195 consultants, who can advise on diverse areas including office design, information system design and web development.
"In order to meet the expectations of our customers, PLEXUS applies quality plans and continuous improvement in all processes, as demonstrated by its certificates issued by BSI," the company says.[6] It is also certified to OHSAS 18001:2007 for occupational health and safety, and ISO/IEC 27001:2005 for information security.
The company explains it "promotes a continuous risk assessment approach to its different business processes, designing systematic plans of action to improve working conditions and to control unsafe acts".
Trading standard
In the US, meanwhile, ISO 9001 has been widely used to boost the performance of the manufacturing sector, which is so vital to the wider economy's robust recovery. U.S. Department of Commerce statistics show that manufacturing made up some 11.5 per cent of total US GDP in 2008, representing around two-thirds of the country's total research and development spend and accounting for over 80 per cent of all exports.
However, the US sector must also ensure it stays competitive in the face of rapidly increasing productivity elsewhere in the world. "Manufacturers must rapidly adopt new technologies and develop innovative products," says the National Institute of Standards and Technology (NIST). Working towards ISO 9001 can help these businesses improve their performance, increasing customer satisfaction and stimulating demand.
Meanwhile, one country providing this growing global competition is the exporting giant China, where financial security firm Cinda Securities has also recently implemented ISO 9001. Compliance director, Wu Liguang, says that its processes have become "more refined" as a result, offering "real change".
"External file identification is improved to ensure compliance of business development, business processes are effectively controlled through tight control of business operational requirements, and there is strengthening of rights management and system security measures," he says.
Finally, rubber component manufacturer Metflex also feels a key advantage of its recent certification to ISO 9001 is that it can inspire confidence internationally.
"Metflex chooses to work with BSI because of its global reputation," explains Steve Parry, the company's director of development and quality. "As a global business it is important to us that our BSI certification is respected by our worldwide clients."[7]
Parry points out that ISO 9001 also offers important flexibility. The ethos of continuous improvement enables more effective change management as business conditions shift.
"When the world changes so rapidly and business needs change, the ISO 9001 standard helps us better manage that change in a structured way," he explains.
For further information on the ISO 9001 standard.
For further information on ISO 9001 certification.
For further information on ISO 9001 training.
[1] http://www.iso.org/iso/pressrelease.htm?refid=Ref1263
[2] http://www.iso.org/iso/the_iso_survey
[3] "The Financial Impact of ISO 9000 Certification in the United States: An Empirical Analysis", CORBETT, C.J., University of California, MONTES-SANCHO, M.J., Universidad Carlos III de Madrid, and KIRSCH, D.A., University of Maryland
[4] http://www.bsigroup.co.uk/en/Assessment-and-Certification-services/Management-systems/Standards-and-Schemes/ISO-9001/ISO-9001-Quality-Management-Case-Studies/
[5] http://www.bsigroup.co.uk/en/Assessment-and-Certification-services/Management-systems/Standards-and-Schemes/ISO-9001/ISO-9001-Quality-Management-Case-Studies/
[6] http://www.tecnologiasplexus.com/index.php?idMenu=5&idIdioma=1
[7] http://www.bsigroup.co.uk/en/Assessment-and-Certification-services/Management-systems/Standards-and-Schemes/ISO-9001/ISO-9001-Quality-Management-Case-Studies/
Business Standards © 2010. Editorial produced by Caspian Publishing in association with The British Standards Institution. Editorial opinions expressed on are not necessarily those of BSI Group or Caspian Publishing. Neither Caspian Publishing nor BSI Group accept responsibility for advertising or editorial content, nor for that appearing on linked third-party websites. Reproduction in whole or in part is forbidden without written permission from BSI Group or Caspian Publishing.
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