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ISO 9000 and the Small Company
The ISO 9000 is a "generic management system standard," which is primarily concerned with quality management:
The ISO 9000 family of standards represents an international consensus on good management practices with the aim of ensuring that the organization can time and time again deliver the product or services that meet the client's quality requirements. These good practices have been distilled into a set of standardized requirements for a quality management system, regardless of what your organization does, its size, or whether it's in the private, or public sector." (ISO Web site)
Benefits: Any business across sectors, whether big or small in size, gains significantly by acquiring ISO certification. Since many countries have adopted the ISO 9000 series as a national standard, an ISO 9000 certified company improves its access to world markets. ISO 9000 certification also facilitates ease of trade since ISO standards serve as a quality assurance. On a local level, ISO 9000 certification reassures prospective customers about the quality of product manufactured and gives the ISO 9000 registered firm a competitive advantage. Implementing ISO 9000 standards leads to the firm enjoying several internal benefits as well, such as improvements in facility performance; product; employee productivity; reduced costs arising out of inefficiency; and scope for continuous improvement in quality (Standards Council of Canada Web site).
ISO has published a handbook for small businesses to dispel the myth that ISO 9000 is for big companies only. The handbook does not set change the requirements of the standards, and is intended only as an informative and comprehensive guide. In addition to basic explanations, it suggests first steps towards a quality system, whether to go it alone or use consultants, offers guidance in matters such as training and auditing, and gives a brief outline of the certification process. (ISO Web Site).
Management Role: Quality of product leading to customer satisfaction and success in business is the primary concern of top management. As such, the benefits from the ISO 9000 standards will accrue only if the top management is totally committed to its purpose, which means money, time and involvement. Small firms, with sales of less than $11 million, that have implemented ISO 9000 standards, report costs of $75,000 and an implementation time of 18 months (CIRAS Web site).
To start with, top management must play a pivotal role in defining the company's quality policy, which must meet ISO regulations, besides being relevant to the company's own field of business. Once the quality policy is in place, management has a continued role to play in conducting regular internal audits to ensure that standards are being met through adherence to defined processes and in order to evaluate policy impact with actual results (management effectiveness); results of statistical score-keeping tools; noted problems or defects (results of internal audits); customer complaints and resolutions; and the effectiveness of previous solutions in handling of non-conforming products (CIRAS Web site).
Development of Documentation: ISO 9001 requires a company to conform to 20 elements of the quality standard in design control, contract review and process control. Compliance is determined by an audit of the company's quality system against the standard by an independent auditing firm called a registrar. To achieve certification, a company must develop a documented quality system through a quality manual, procedures and work instructions that outline the way the company complies to the standard (CIRAS Web site).
A small manufacturing company would need to follow the ISO 9001 quality assurance model, since it outlines the requirements for business processes ranging from design and development, to production, installation and servicing. Of course, with the publishing of the new ISO 9001:2000, the standards as set out by the revised version will need to be taken into account.
The new version lays far more emphasis on continuous improvement, customer satisfaction, the importance of standards and processes being viewed as a business (not manufacturing) system and the need to harmonize ISO 14000 (environmental management) with ISO 9000. The new standard takes the process management approach of Plan-Do-Check-Act, which is widely followed in the business world. (Alamo Learning Systems Web site).
There are several key steps that must be taken prior to commencing work on the documentation required such as the creation of a core task force; communication of the importance of adhering to ISO 9000 standards across the company; assessment of current…[continue]
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09 30.42 Foreign Sales (a) 63 2.69 2.98 0.00 8.43 Size (b) 63 5.50 1.81 0 97 10.03 Table 3 Non-ISO Companies Variable N Mean SD Min Performance 63 2.15 2.52 -8.84 10.59 Profit 63 1.40 10.37 -29.81 15.22 Foreign Sales (a) 63 2.01 3.04 0.00 9.90 Size (b) 63 3.92 1.42 0.94 6.85 Note: * p < .001 ** p < .0001 a = square root of foreign sales as a percentage of total sales. b Natural logarithm of total assets ($ millions). A direct comparison of the performance indicators for the ISO-companies vs. The non-ISO companies is provided in Figure 1 below. Figure 1. Comparison of ISO 9000 registered companies and non-ISO 9000 registered companies Source: Based on data in Simmons and
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