IN THIS ISSUE
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March 2007 CEO Perspective By Sue Chapman  Looking back, to learn something new. “The King is dead…long lives the King”. And so it was when the 1994 editions of the ISO 9001 Quality Standards gave way to the year 2000 versions. Almost everyone could see the benefits of moving to a new, more business focussed quality model, and set about upgrading with barely a look behind. However in a recently released study paper from Monash University titled ‘The Implementation of ISO 9000 in Australian Organisations: A Comparison Between the 1994 and the 2000 Versions*’ the authors have researched users to determine if the assumed drivers, benefits and impacts have been realised. This report, written by Dr Prajogo and Professor Sohal and released through JAS-ANZ, collected data from a large sample of Australian companies to consider the motives for, and approaches to certification, the benefits of implementation, and the difficulties experienced. ISO 9001:2000 is based on 8 quality management principles, which are thought to reflect best practice management systems. These include customer focus, leadership, people involvement, process and systems approaches to management, continuous improvement, factual approaches to decision making and mutually beneficial supplier relationships. The intent of the standard has changed from the earlier version and now primarily focuses on customer satisfaction rather than quality assurance; on defined objectives rather than procedures; and continuous improvement rather than the correction of errors. The sample used in the study covered 326 companies ranging from SMEs to very large organisations. 87% of the sample comprised SMEs and of those around 50% employ less than 50 people. 11% of the sample employed more than 500 workers. The industry sectors covered by the sample were varied, ranging from food, beverage and tobacco, construction, wood and paper products and mineral products to health care, professional services and education and training. The findings covered a range of topics including reasons for implementing ISO 9001, approaches to implementation, impact of ISO 9001 and organisational performance. The following is a sample of the findings: Reasons for implementing ISO 9001 The 3 top reasons for implementation are externally-oriented: enhance company image, meet customer demands and gain preferred supplier status. These are closely followed by internally oriented reasons: build a foundation for systematic improvement, have better control of the operations of the business and provide a basis for continuous improvement. The responses indicate that quality systems continue to have external value and customers still demand that firms are certified to ISO 9001. Approaches to ISO 9001 implementation Human factors received the highest attention in the implementation process e.g. training of staff on the concepts of quality and quality systems. However, the survey indicated that senior management does not perceive a need to get involved in the process. Further, the findings indicate that ISO9001 is still seen as a stand alone element rather than an integral part of the daily operating system. This is a disappointing finding and does not encourage integration with other systems such as other management systems standards (e.g. ISO 14001) or business systems. Potential benefits of effective integration can result in cost reduction as a result of improvement in data management and metrics, training, and a decrease in the amount of system related paperwork which can then be more easily used by staff. Impact of ISO 9001 The researchers considered how implementation of ISO9001 impacted on 8 key company areas: people management, process management, customer relations, supplier management, purchasing and logistics, product management, information and knowledge management, and organisational strategy and culture. The data indicates that implementation has been most useful in providing a foundation for employee training and education and for enhancing employees’ job-related skills, competencies, confidence and effectiveness. ISO 9001 was also of benefit in customer relations – through improving partnerships with customers in product design/innovation, helping companies to better understand customers’ needs, and increasing useful feedback from customers. Implementation of ISO 9001 appeared to have less impact on supplier management, purchasing and logistics and product management but does have a positive impact on information and knowledge management. Knowledge dissemination and availability of necessary information needed for staff to complete tasks are aspects particularly enhanced by the quality system. Organisational performance Considerable impact was made in a large majority of the 9 key elements of organisational performance: market share, profitability, sales, on-time delivery, price competitiveness, cost effectiveness, product innovation, brand image and product performance. The most significant positive impacts related to on-time delivery, brand image and product performance. Overall, implementation of ISO 9001:2000 appears to be much less difficult than the implementation of the 1994 Standard with cost, volume of paper work, effort and the documentation of procedures all much lower than for the previous version. The key findings summarised above should be of keen interest to companies considering ISO 9001 certification. The report should also interest quality managers in organisations with certified ISO 9001 systems who often need to demonstrate or restate the value of such systems to their managers, colleagues and team members. The researchers concluded that it appears that many companies have not gone beyond the minimalist approach to ISO 9001 implementation, which may well be preventing Australian companies from reaping the optimal benefits of ISO9001. It may be useful for NCSI clients to consider how they can raise the level of benefit they are obtaining from their quality system. NCSI staff can help you identify areas for improvement; just ask the next time you are talking to your client manager. *Copies of the full report are available from JAS-ANZ. |