To remain competitive, businesses must excel in their operations by being efficient and precise (Metcalfe 1). ISO 9000 encompasses various aspects of quality management, including management responsibility, involvement of producers in the Quality Management System, contract review, design control, document and data control, purchasing, process control, inspection and testing, control of non-conforming product, corrective action, handling, storage, packaging and delivery, internal quality audits, training, servicing, and statistical techniques (Prasanna 1).
Quality control and quality assurance are crucial aspects that require time and financial investment but ultimately offer benefits. Types of specifications hold great significance, and their proper documentation is even more essential. Both manufacturers and purchasers bear significant responsibility for achieving success. The importance of product quality cannot be overstated, particularly for the customer.
A company’s commitment to quality management is demonstrated through the documentation of its quality management system. This includes a plan that outlines quality procedures and work instructions, which companies can use to create their own system. Once the quality procedures are completed, companies undergo an audit to determine if they are eligible for ISO 9000 certification. ISO, the International Organization of Standards, was established in Geneva Switzerland in 1947. Its mission is to develop international standards and facilitate global trade of goods and services.
The American National Standards Institute, known as ISO, is a global organization consisting of over 90 countries. The name ISO derived from the Greek word “isos,” meaning equal. It was established by business individuals who understood the requirements for increasing competitiveness and enhancing customer satisfaction in businesses. Despite not being government regulated, ISO operates through bodies such as the US Registrar Accreditation Board.
Organizations that issue ISO certificates, known as registrars, are authorized by various governing bodies (Barrier 2). In Europe, government-regulated organizations fulfill this function, while in the United States, the ISO is operated by the American National Standards Institute and authorized by the US Registrar Accreditation Board (Barrier 2). The primary role of the ISO is to establish standards that ensure efficient and high-quality production for companies worldwide. This ultimately benefits customers who receive exports by providing them with precise information about the products and ensuring their satisfaction.
ISO members set standards at assembly meetings, which are held three times a year. The ISO Council, similar to a business board of directors, develops proposals. These standards are created by technical committees, with participation from 30,000 experts who provide comments, feedback, and vote electronically in 15 daily meetings. Experts are chosen by an ISO member of their respective country. The ISO 9000 series was published in 1987.
ISO is a standardization system developed by the International Organization for Standardization (ISO) and obtained by 130 countries. Its main office is located in Geneva, Switzerland, where it coordinates and publishes the finished standards (iso online). The ISO standards are a set of rules and guidelines that guarantee the safety, reliability, and efficiency of products produced by manufacturing businesses (iso online). These standards ensure that businesses fulfill their commitments.
The ISO 9000 certificate is awarded to businesses that adhere to the quality management requirements set by ISO (Henkoff 1). ISO 9000 aids businesses in obtaining certification by outlining the necessary criteria and the means to achieve them. It offers a structure for companies, establishing global standards and facilitating international trade.
However, for a company to thrive, it must have good strong leaders. The success of a business in implementing ISO 9000 largely depends on its organization. Planning, training, setting and achieving goals are all crucial for improving or achieving success in a business (Henkoff 5). ISO 9000 ensures that a company is doing what it claims to be doing and assists them in doing so.
According to USAToday 1, ISO 9000 does not control or dictate the operations of a company, but rather provides guidance on manufacturing techniques while helping to establish customer appeal through certification. Nonetheless, having ISO 9000 certification does not guarantee the quality of a company’s products. As Richard Buerow, director of corporate quality at Motorola, explains, even with ISO 9000, a company can still have faulty processes and products. In fact, Buerow gives an example of certifying a manufacturer that produces life jackets made of concrete, as long as the production follows documented procedures and the company provides instructions for customers to report defects.
According to Henkoff, the idea of ISO 9000 being beneficial for manufacturers is absurd (3). ISO 9000 consists of three quality systems that are equally ranked and cater to different business processes. A company can choose the quality system that best fits its needs. ISO 9001 is suitable for businesses involved in design, development, production, installation, and servicing. On the other hand, ISO 9002 is for businesses that do not engage in design and development but cover other processes mentioned in ISO 9001. Lastly, ISO 9003 is for businesses that do not include design control, process control, purchasing, or servicing, but rely on inspection and testing to ensure adherence to requirements. One crucial aspect of ISO 9000 is management responsibility outlined in Element 4.1. Executive level management has the responsibility of implementing the company’s quality system and ensuring understanding of the quality policy throughout the organization.
Management is responsible for gathering resources and training employees to perform the required work. The Quality System is overseen by management representatives who provide reports to management. It is necessary to utilize a Quality System to ensure that the product meets all specifications. This system should be thoroughly documented and comply with ISO 9000 standards. The documentation should include the structure, processes, and procedures that guarantee product quality. A quality manual containing a table of contents and company history should be included. Additionally, the manual should incorporate the customer’s specifications and requirements (Stimson 165, 168).
The system should align with the business’s mission and policy, demonstrating how it will meet the company’s requirements. It is important to have written plans that outline how customer standards will be fulfilled. According to Stimson, there should be a documented system in place to review and amend contracts to ensure agreement with customer expectations (317). This contract review process ensures that all requirements are stated, documented, and ultimately met. If any changes need to be made, they should be applied to appropriate parts of the system. Stimson also states that a system is necessary to control, verify, and validate product and process designs in order to adhere to specifications (215). In the Design Control phase, there are three key cycles: requirements, specifications, prototypes, and acceptable design (217). Element 4.5 of the quality management system includes verification, validation, and participation from both external and internal customers. “Document and Data Control” requires controlling the distribution of all quality-related documents and data and associating procedures with control mechanisms (Stimson). To ensure proper control, authorization, changes, and removals should be managed in a controlled manner (iso online).
“The purchasing system must ensure that the purchased product meets the specifications and that subcontractors maintain quality criteria (Stimson 127). Information on purchasing should be accurate and complete, and vendors should adhere to Element 4.7: Control of Customer-Supplied Product, which requires a process control for any product provided by the customer in the company’s supply systems (Stimson 249). During receipt inspection delivery, the condition, quantity, and fitness of the product should be checked and evaluated (Stimson 256). Element 4.8: Product Identification and Traceability demands a system to identify and trace purchased products at all stages of production. This traceability includes identifying the product within a batch or lot (Stimson 259). Inventory and production processes are crucial for the use of identification, and policies will identify those parts from receipt to delivery (Stimson 263). The planning and implementation of production, installation, and service processes have an impact on quantity.”
Furthermore, it is necessary for these processes to be operated under controlled conditions (Stimson 265). The process control system consists of flexibility and customer overview. Changes establish a quality baseline (Stimson 2). Process control relies on the company’s definition, as well as the choice of materials to purchase. Element 4.10: Inspection and Testing – “Inspection and testing activities are carried out to verify adherence to specifications. Records will be maintained of the results of these activities (Stimson 279).” The inspection and testing process involves policies, procedures, documentation, including status and employee methodologies (Stimson 289). Element 4.11: Control of Inspection, Measuring, and Test Equipment – “The control, calibration, and maintenance of equipment, hardware, and software used for inspecting, measuring, and testing product conformance to specifications is necessary (Stimson 227).” Measurements taken and the equipment used are recorded as quality records.
Methods are set for trained personnel (iso online). Element 4.12: Inspection and Test Status “The status of a product is identified relative to conformance, to inspection and test criteria. The identification process defined inappropriate procedures, will be maintained throughout the production and post production process to ensure that only an acceptable product is delivered (Stimson 291).” The test will determine if the product passes or fails inspection. Element 4.13: Control of Nonconforming Product “A system that will control product that fails to meet specifications, preclude unintended use, and define product disposition (Stimson 296).” Element 4.14: Corrective and Preventive Action “Systems are needed to correct and prevent non conformance’s.
According to Stimson (37), appropriate actions should be taken to address risks, whether they are corrective or preventive in nature. It is important to establish a formal process to correct or prevent problems. Stimson (305) states that a documented system should be in place to control activities after production, starting from acceptance by testing to the delivery of the product. This system should focus on achieving customer satisfaction, with delivery being the key factor (Stimson 313). Another element, 4.16, pertains to the control of quality records, which requires documented procedures for identifying and managing these records.
Quality records are necessary to show compliance with specifications and effectiveness of the quality system (Element 4.17: Internal Quality Audits). According to Stimson (202), regular and periodic internal quality audits are required to assess the effectiveness of the quality system. These audits, known as IQA or internal quality audits, serve as self-evaluation and improvement for the customer. Audits will be conducted based on documentation that impacts quality (Stimson). Additionally, a training program must be implemented to identify training needs, allocate resources, create a schedule, and keep records for all individuals whose work affects quality. Personnel should be assigned tasks that are appropriate for their level of training and experience. Management should clearly specify the required training for each position, provide the necessary training, and assign tasks accordingly. Furthermore, all employee training should be documented (Stimson 152). The contract specifies the performance expectations for service activities. Procedures will be implemented to ensure that the service meets the defined specifications (Stimson 326). It is crucial to control equipment and personnel, and execute procedures and methods accurately for the product (iso online).
According to Stimson (235), the company is required to identify and use statistical techniques to verify adherence to product specifications and system capability. This involves identifying the characteristics that need to be measured and selecting the appropriate metrics. The results of data collection must be charted using procedures and techniques (Stimson 239).
In order to become registered, a business must demonstrate good management qualities and organizational skills. Typically, businesses book for a registrar six months in advance, and the length of the audit process can vary from several months to up to two years, depending on the size of the business (Henkoff 2). Smaller businesses usually require more time for registration and audit due to the limited number of personnel available for assistance (Metcalfe 1). However, because there are fewer employees, educating and training them would take less time (Barrier 5).
A good quality management will simplify the certification process as the business adheres to the ISO 9000 steps and diligently documents all procedures (Henkoff 3). Subsequently, an independent auditor will assess the company’s ability to conduct its own inspections, update engineering drawings, maintain machinery and equipment, train employees, and handle customer complaints (Henkoff 3). It is not necessary for the company to demonstrate increased production speed or customer satisfaction. The audit primarily evaluates the documentation (Barrier 4) of collected data and involves interviewing managers and factory workers (Henkoff 3).
The auditor’s main responsibility is to verify whether the company is fulfilling its promises and working towards its goals. If the company meets the criteria, a certificate is issued (USAToday 1). To ensure continued compliance, the auditor conducts visits every six months; failure to meet standards will result in the company losing its ISO 9000 certificate (Metcalfe 1). Performing internal audits is highly recommended for companies to ensure regulatory compliance. Furthermore, the certificate must be renewed on an annual basis (Barrier 6) following an audit process. Obtaining an ISO certification demands substantial financial investment from business owners (Metcalfe 3) and can reach costs as high as $200,000 (Henkoff 2).
The cost of certification has posed a challenge for small businesses and created a barrier to gaining a competitive advantage. Nevertheless, small businesses now have the opportunity to negotiate prices due to the increased popularity of ISO 9000 (Barrier 2). Moreover, there is positive news that the IRS permits companies to deduct the expenses associated with ISO 9000 certification (Bloomberg 1). Additionally, states are providing grants to manufacturing companies to assist with the cost of certification, such as the state’s economic development agency awarding $400,000 to six Long Island manufacturers (Martorana 1).
In the future, the cost of ISO 9000 certification will likely decrease, making it more accessible for businesses. Additionally, the cost of certification will be tax deductible. This will allow more businesses to obtain ISO 9000 certification and create a more competitive business environment. Nowadays, customers have numerous options, so companies are almost compelled to become ISO 9000 certified in order to stay competitive. The certification helps businesses compete, plan, audit, and receive awards, which means companies that do not have it should strive to obtain it. Without ISO 9000 certification, a company’s operating system may be disorganized and its quality system may be lacking in quality.
Foreign consumers now demand ISO 9000 because they will know what they are going to get when purchasing with that company (Metcalfe 2). ISO 9000 certification is crucial for manufacturers as it helps save money by reducing the need for external quality audits and inspections of incoming products (Barrier 1). Similarly, being ISO 9000 certified holds great significance for customers as it assures them of the business’s quality management procedures and ensures consistent standards worldwide. Obtaining ISO 9000 opens up new global opportunities for companies that would otherwise not be accessible. While ISO 9000 is now more widely recognized than its initial release, it remains limited to certain customers and companies.
According to Henkoff (2), a majority of executives at midsize manufacturing companies are unaware of ISO 9000 and mistakenly believe that it is a legal requirement for conducting business. However, those companies that do possess ISO 9000 certification are often preferred by customers. In the year 2000, having ISO 9000 certification will become crucial for competing in the market as it will gain widespread recognition and popularity. ISO has developed and established standard systems for various products and processes, ranging from screw threads to credit and telephone cards to packaging instructions like the “this way up” sign on boxes and the ISBN number found in every book (iso online). Many companies worldwide are already certified under ISO 9000. Presented below are real-life examples of certified businesses and how they have successfully utilized ISO 9000 as a competitive advantage.
Caterpillar Engines in Mosville, Illinois received customer complaints regarding engine performance issues. Adopting ISO 9000 provided the manufacturers with a structured approach to implement design modifications, ensuring the use of updated documents and enhancing engine production efficiency. Consequently, production time decreased while customer satisfaction increased (Henkoff 3). Similarly, Rockwell International’s Allen-Bradley facility in Twinsburg, Ohio specializes in manufacturing circuit boards and other electronic components.
Their problem was a lack of organization, resulting in documents and memos being posted on a memo board and not reaching workers until months later. Due to poor management quality, they obtained ISO 9000 certification. Within a year of becoming certified, their productivity increased by 21%, time decreased by 18%, Excalibur USA achieved ISO 9000 certification, and over $10 million in operating expenses were saved.
ESPITI, a European software industry, sought to enhance competitiveness by obtaining ISO 9000 certification. This certification played a crucial role for them as it guaranteed quality and productivity. Additionally, it proved to be beneficial for textile companies in Africa, particularly those in Uganda, who were struggling due to low-quality fabric imports. After becoming ISO 9000 certified, ESPITI experienced a significant boost in business with a 30% increase in both production and customer satisfaction. Moreover, their costs were reduced while maintaining high standards for imported fabric.
According to Africa 1, Uganda is extremely pleased with the improvement that has been made, as it will result in reduced production costs and increased sales. As a result, fifty more companies in Uganda will receive certification by the end of the year. Similarly, in Batam, Indonesia, twelve companies have obtained ISO 9000 certification. These companies were selected because they desired a competitive advantage in the vast global market and wanted to establish an effective quality management system. Moreover, Cloister Spring Water Company in Lancaster, PA expanded its operations by launching three additional plants.
However, the fear of water being bottled and delivered differently at each plant was resolved by ISO 9000 certification. As a result, sales exceeded expectations, increasing by 250% in just three years (USAToday 1). ISO 9000 is now recognized as a competitive weapon across the globe and its popularity continues to grow. A survey conducted in October 1998 by “Quality Progress” reported that among 1240 US companies, the following perceptions existed regarding ISO 9000 certification: 90% considered it a value-added quality system, 87% believed it was necessary for maintaining competitiveness, 78% were convinced that it significantly improved quality within their organizations, 73% anticipated long-term cost savings, and 99% acknowledged that implementation required management commitment.
More than 20,000 companies in the US are currently certified, demonstrating their faith in an effective quality system, management quality, improvement, profit, and competitiveness. These crucial aspects of business are discussed in Bibliography Stimson, William A. Beyond ISO 9000: How to Sustain Quality in a Dynamic World. New York: Amacom, 1998.
The articles “Quality Standards the World Agrees on: Small Businesses Can Meet ISO 9000 Standard” by Barrier, Micheal and Amy Zuckerman, “Newsbreak: 6 LI Manufacturers Granted Funds” by Martorana, Jamie, and “An Insight into ISO 9000 for Small Businesses” by Raman, Prasanna discuss various aspects of ISO 9000 standards and their relevance to small businesses.
The following articles discuss the benefits of ISO 9000 certification for businesses:
– Metcalfe, Coll. “Ventura County Business; The Business Beat: Firms Find ISO 9000 Certification Means Business.” Los Angeles Times 02 March 1999: B1.
– Henkoff, Ronald. “Managing: The Hot New Seal of Quality.” Fortune 28 June 1993: 116.
– “Surveyor Indonesia to Grant 12 ISO 9000/14000 Certificates.” Asia Pulse 03 February 1998.
– “ISO 9000 Helps Firms Achieve Consistency.” USA Today 27 May 1998: 02B.
The European Report published on 01 May 1996 states that ISO 9000 is crucial in enhancing Europe’s software performance. The Africa News Service reported on 05 January 2000 that ISO gives manufacturers hope. On 06 January 2000, Bloomberg L.P. revealed that the IRS allows manufacturers to deduct quality certification expenses.
“ISO 9000” is a computer desktop encyclopedia entry that was accessed from the International Organization for Standardization homepage on January 1, 1998. The source of this information was last accessed on February 27, 2000.
