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Importance of ISO 9000

Importance of ISO 9000.

INTRODUCTION

In this term paper we discussed about ISO 9000 and its importance. `ISO 9000' is usually used to refer to a set of intimately related standards. One standard is a roadmap for the others. These standards cover quality design, quality management, and quality assurance for different kinds of companies depending on the extent to which they design as well as manufacture products. ISO 9000 is important in the first instance because it gives organizations some guidance on how to manage for quality. Secondly, mechanisms exist by which an organization can be certified for conforming to ISO 9000 specifications. With this certification in hand, an organization can better sell its product or service to its customer. It can say that the product or service is the result of a process that continually tested for quality. The government of the European Union has mandated that some products will not be imported into Europe unless the exporting organization can demonstrate compliance to ISO 9000.

What Is ISO 9000?

ISO 9000 began in 1979 when the British Standards Institute Technical Committee 176 began the creation of a standard for generic quality principles for manufacturing. This led to the ISO 9000 standard that was finally issued in 1987. ISO 9000 is the most widely known, most widely adopted, and best selling standard of any that ISO has published. The language and apparent assumptions of ISO 9000 are targeted to the manufacturer. Nevertheless, ISO 9000 is being applied to quality systems of many organizations, whether they be manufacturing or not (Voehl et al, 1994). One theme of this column is that further ISO standards ought to be developed to support quality management.

The term `ISO 9000' is usually used to refer to a set of intimately related standards. One standard is a roadmap for the others. These standards cover quality design, quality management, and quality assurance for different kinds of companies depending on the extent to which they design as well as manufacture products. Another one of the standards covers risks, costs and benefits, management responsibility, quality system principles, and other building blocks that help users customize quality standards to conform to real-life situations. In the rest of this column the term ISO 9000 will be used to refer to this set of quality-related standards.

One way to model the coverage of ISO 9000 is to think of the organization's operating process, its quality records, and its quality control. The operating process creates the final product or service (see Figure 1). The quality records are maintained relative to this process, and the control system corrects for divergences from quality. Quality control is supported by a procedure manual that provides guidance for the implementation of the quality system on a day-to-day basis. The control system must include a means for identifying, collecting, indexing, storing, retrieving, and maintaining quality records. The quality system must help people work to quality. This requires both that the documentation is relevant to the standard and that the behavior of people is relevant to the standard (Huyink and Westover, 1994).

The rectangle in the middle shows the basic process of the company. The quality records that are indicated in the right must reflect each step of the basic process. The quality control is indicated on the left and applies to the quality records relative to the ongoing company process.

What are the ISO 9000 Principles?

1. A Customer Focus

As stated before, the customer is the primary focus of a business. By understanding and responding to the needs of customers, an organization can correctly targeting key demographics and therefore increase revenue by delivering the products and services that the customer is looking for. With knowledge of customer needs, resources can be allocated appropriately and efficiently. Most importantly, a business's dedication will be recognized by the customer, creating customer loyalty. And customer loyalty is return business.

2. Good Leadership

A team of good leaders will establish unity and direction quickly in a business environment. Their goal is to motivate everyone working on the project, and successful leaders will minimize miscommunication within and between departments. Their role is intimately intertwined with the next ISO 9000 principle.

3. Involvement of people

The inclusion of everyone on a business team is critical to its success. Involvement of substance will lead to a personal investment in a project and in turn create motivated, committed workers. These people will tend towards innovation and creativity, and utilize their full abilities to complete a project. If people have a vested interest in performance, they will be eager to participate in the continual improvement that ISO 900 facilitates.

4. Process approach to quality management

The best results are achieved when activities and resources are managed together. This process approach to quality management can lower costs through the effective use of resources, personnel, and time. If a process is controlled as a whole, management can focus on goals that are important to the big picture, and prioritize objectives to maximize effectiveness.

5. Management system approach

Combining management groups may seem like a dangerous clash of titans, but if done correctly can result in an efficient and effective management system. If leaders are dedicated to the goals of an organization, they will aid each other to achieve improved productivity. Some results include integration and alignment of key processes. Additionally, interested parties will recognize the consistency, effectiveness, and efficiency that come with a management system. Both suppliers and customers will gain confidence in a business's abilities.

6. Continual Improvement

The importance of this principle is paramount, and should a permanent objective of every organization. Through increased performance, a company can increase profits and gain an advantage over competitors. If a whole business is dedicated to continual improvement, improvement activities will be aligned, leading to faster and more efficient development.Ready for improvement and change, businesses will have the flexibility to react quickly to new opportunities.

7. Factual approach to decision making

Effective decisions are based on the analysis and interpretation of information and data. By making informed decisions, an organization will be more likely to make the right decision. As companies make this a habit, they will be able to demonstrate the effectiveness of past decisions. This will put confidence in current and future decisions.

8. Supplier relationships

It is important to establish a mutually beneficial supplier relationship; such a relationship creates value for both parties. A supplier that recognizes a mutually beneficial relationship will be quick to react when a business needs to respond to customer needs or market changes. Through close contact and interaction with a supplier, both organizations will be able to optimize resources and costs.

Why is ISO 9000 Important?

ISO 9000 is important in the first instance because it gives organizations some guidance on how to manage for quality. Secondly, mechanisms exist by which an organization can be certified for conforming to ISO 9000 specifications. With this certification in hand, an organization can better sell its product or service to its customer. It can say that the product or service is the result of a process that continually tested for quality.

The government of the European Union has mandated that some products will not be imported into Europe unless the exporting organization can demonstrate compliance to ISO 9000. Organizations, such as the military, which have traditionally implemented costly reviews of quality in their suppliers can instead require that their suppliers demonstrate conformance to ISO 9000.

The International Organization of Standardization (ISO) does not itself test for conformance to ISO 9000. Conformance to ISO 9000 may, in general, be checked by

* the organization which claims to follow the standard and wants certification (1st party certification),

* the organization which is buying product or service from the company that claims ISO 9000 compliance (2nd party certification), or

* an organization which specializes in such certification and is neither the 1st or 2nd party (3rd party certification).

Rules exist for how such certification should be done, and organizations exist which certify other organizations as performing reliable ISO 9000 certifications. In the United Kingdom and Australia 3rd party audits of ISO 9000 compliance involves a system audit every three years and five mini-audits within each three year span. To receive certification a company must show that its documentation follows the quality standard and that its people follow the documentation.

How does ISO 9000 work?

ISO 9000 is set up as a collection of guidelines that help a company establish, maintain, and improve a quality management system. It is important to stress that ISO 9000 is not a rigid set of requirements, and that organizations have flexibility in how they implement their quality management system. This freedom allows the ISO 9000 standard to be used in a wide range of organizations, and in businesses large and small.

One important aspect of ISO 9000 is its process-oriented approach. Instead of looking at a company's departments and individual processes, ISO 9000 requires that a company look at "the big picture." How do processes interact? Can they be integrated with one another? What are the important aspects of products and services?

Once this process-oriented approach is implemented, various audits can be done as a check of the effectiveness of your quality management system. There are three main types of audits - 1st, 2nd, and 3rd party audits. An internal audit is a 1st party audit. ISO 9000 encourages (and requires) this type of audit so that an organization can get feedback quickly from those who know the company best. However, this audit process cannot be viewed as impartial. Therefore, 2nd party audits allow for a consumer to evaluate the performance on an organization. As an alternative to a 2nd party audit, many companies choose to become certified with ISO 9000 through a 3rd party audit. In this case, an independent certification body comes into an organization and evaluates it in terms of the ISO 9000 guidelines. If an organization meets the requirements of the standard, it becomes certified in ISO 9000 and carries a seal of quality recognized throughout the world.

Developing Standards:-A standard is a specification that is recognized within an organization. A product or process can be measured against a specification to establish whether it meets the standard. The organization could be a group of 10 people, a small company of 100 people, an industry of 1 million, a country of millions, or a world of billions. The most important standards for any organization are those which it develops to coordinate itself.ISO 9000 provides a meta-standard. Each organization that wants to be recognized for the quality of its processes and products creates and maintains that standard internally. The way in which the international meta-standard was developed is similar in principle to the way that instances of it are developed within an organization.

Universities typically work to the quality of standards created by groups of professors and certified by groups of professors. Universities have not been striving to be explicitly ISO 9000 compliant. However, their intent is at times comparable to that of organizations that demonstrate ISO 9000 compliance. How does the university develop internal standards? The university may create a task force with extensive representation of influential people. This task force proposes standards. After the task force completes its work, the normal apparatus of the university is invoked to ratify or amend the recommendations of the task force. Subsequent implementation of the ratified recommendations requires the support of existing and perhaps new groups within the organization.

The development of the quality standard within the university parallels the development of ISO 9000 itself. A group of business and government people in England were concerned about quality management. They organized a group within the British Standards Institute (BSI) to develop a specification. Other groups within BSI then discussed and ultimately ratified the proposed specification. The BSI result already reflected the direction for a large country. The successful effort to persuade the world through ISO of the importance of this standard represented another level of the same kind of process that had already occurred through BSI. The implementation of the standard has been supported by numerous other organizations, such as the earlier described American Society for Quality Control.

The trend in higher education can be used to illustrate ramifications of ISO 9000. New private organizations are entering into the higher education marketplace. These private organizations feel that they can compete where state-funded universities have typically held control because these new private organizations exploit to the maximum the information superhighway and quality management. One barrier to the success of these new universities is the traditional certification processes that are biased in favor of the existing universities. A university degree is certified by associations of professors from like-universities. If a new, private company wants to offer a radically new kind of curriculum, then will it get certification from its traditional competitors? Might these new universities instead seek ISO 9000 certification?

In the health care industry standards have become increasingly important. The explosive growth of health care costs is being contained by setting standards for quality care that are monitored across extensive information networks. One part of this approach has been to define categories of illness and to fix reimbursements for managing patients in certain illness categories. The Committee for European Normalization has a very active health care information technology standardization groups within it. They are developing many standards for health care information including some which provide models for the quality management of the entire health care industry information infrastructure.

Environmental protection has been a major political theme of the current quarter-century. The Rio Conference on the Environment held in 1992 helped stimulate the development of new standards that extend ISO 9000 into a particular concern for the environment. These new developments are leading towards the ISO 14000 standards which are expected to be issued in 1996 and which will prescribe requirements for environmental quality management. The ISO 14000 standards will include specifications for the implementation of environmental quality management systems, environmental audits, and environmental performance evaluations. ISO 14000 principles will be in many ways similar to ISO 9000 principles but with a different application.

While ISO 9000 itself is being updated, new standards are also appearing that are closely related to ISO 9000. This column has argued that such standards are important and that we should lend support to the further development of such standards in important application areas.

Importance of ISO 9000

There has been so much written about the benefits of having ISO-9000 registration, there isn't enough space on this website to repeat it all. We will attempt to list some of the basic benefits here.

1. ISO-9000 forces an organization to focus on "how they do business". Each procedure and work instruction must be documented and thus, becomes the springboard for Continuous Improvement.

2. Documented processes are the basis for repetition and help eliminate variation within the process. As variation is eliminated, efficiency improves. As efficiency improves, the cost of quality is reduced.

3. With the development of solid Corrective and Preventative measures, permanent, company-wide solutions to quality problems are found.

4. Employee morale is increased as they are asked to take control of their processes and document their work processes.

5. Customer satisfaction, and more importantly customer loyalty, grows. As a company transforms from a reactive organization to a pro-active, preventative organization, it becomes a company people want to do business with.

6. Reduced problems resulting from increased employee participation, involvement, awareness and systematic employee training.

7. Better products and services result from Continuous Improvement processes.

8. Fosters the understanding that quality, in and of itself, is not limited to a quality department but is everyone's responsibility.

9. Improved profit levels result as productivity improves and rework costs are reduced.

10. Improved communications both internally and externally which improves quality, efficiency, on time delivery and customer/supplier relations.

Gauging the importance of ISO 9000

The International Standards Organization's (ISO) quality management standard, ISO 9000, is rapidly becoming the standard of choice for businesses throughout the world, and worldwide registration totals almost 100,000 companies. In the US, NASA and the Dept of Defense, as well as the three major automakers, have adopted it and in the UK, registration of companies using the standard has been quickly increasing. Meanwhile, US computer industry leaders are trying to implement a system of self-certification, arguing that many business benefits are to be obtained from so doing.

Why is root cause analysis and systemic corrective action so important in management system standards, such as ISO 9001?

When problem solving, it is important to find the cause of problem in order to develop a solution. Sometimes, the most obvious cause is not the right one. This is why ISO 9000 stresses the importance of finding the root cause(s) of a problem. There may be multiple, subtle reasons why a process isn't working correctly, and finding the actual causes will lead a company one step closer to a solution and implementation of corrective actions.

The goal of finding root causes is to improve the way problems are managed. Becoming adept in recognizing the root causes of a problem will lead to a reduced impact, a containment of error, and the prevention of recurrence. Identifying and correcting root causes will also lead to the reduction of unnecessary efforts which in turn will lower the cost of maintaining quality. As more and more corrective actions are taken, processes will become more stable, and continual improvement will face less interruptions.

How does ISO 9000 interact with other standards?

ISO 9000 is the standard for a quality management system that closely resembles many other management systems. These other systems, based on health, safety, the environment, and business continuity, can be integrated into an overarching business management system. Benefits of this system include aligned interests, reduced costs, and improved efficiency. With one of these systems in place, it is easier to implement any of the others; many documents required for a different standard are already prepared, and personnel are already accustomed to the audit process. Using multiple standards will not only increase the efficiency of an organization, but increase the integrity of its operations.

What does ISO 9000 mean to me and my company?

ISO 9000 is a standard created to make the attainment of quality, consistent products easier by providing specific steps for development of an organization's quality management system. This quality management system is meant to monitor the progress of a product or service as it goes through each stage of production, from development to testing to assembly to customer feedback.

One cornerstone of ISO 9000 is continual improvement. No company should ever be satisfied with the conditions of a process at the given moment; they should always be looking for ways to make these processes more efficient and effective. ISO 9000 was written with the business world's insatiable desire for excellence in mind. This is why continual improvement is a requirement of the standard - to inspire progress and the pursuit of perfection.

ISO 9000 is an internationally recognized standard, and that may seem daunting for some smaller businesses. How are they going to implement the same standard adopted by multi-national corporations? Quite easily, actually. ISO 9000 is a flexible standard that lays down requirements for an organization to follow, but allows the organization to fulfill these requirements any way they choose. This increases ISO 9000's scope of effectiveness, allowing a wide range of companies to create quality management systems that match their needs.

ISO 9000 is seen in every sector of the business world, and its success is a testament to its worth. With a focus on customer satisfaction, products and services improve and flourish under ISO 9000's quality management system. With a combination of continual improvement and corrective actions - tenets of ISO 9000 - a business will create processes that run smoothly and efficiently.

CONCLUSION

Finally the conclusion is that, ISO 9000 are not confined to the business sector alone, but benefit society as a whole, including customers, governments, trade officials, developing countries, consumers, and the environment. Standardization allows businesses the opportunity to compete in markets around the world. This enables more competition, which results in more choices for customers. Standards also help developing countries compete in international markets without investing scarce resources on research and development. Consumers benefit from products or services consistently manufactured to agreed-upon levels of safety and quality.