Competitive and Global Market, it Is Essential

¶ … competitive and global market, it is essential that companies have a means of continually making improvements to their products and services. This is called the total improvement process or quality management system (QMS). A QMS can take a variety of forms in order to consistently meet customer requirements. A QMS offers a number of benefits to an organization: enhanced customer satisfaction and confidence and improved market reputation and market share (Harrington, 1995, p.173).

In order to produce a product or service, a company relies on the materials and supplies from a number of vendors. The vendors must meet the same stringent criteria as the company as a whole to meet the customer requirements. It is very difficult for vendors to have different criteria for each company to which they sell. As a result, a group of professionals in the quality field realized that it would be much better if the same criteria could be applied by all companies for consistency and efficiency. In 1946, "delegates from 25 countries met in London and decided to create a new international organization, of which the object would be 'to facilitate the international coordination and unification of industrial standards'. The new organization, ISO, officially began operations on 23 February 1947" (Overview of the ISO system).

The ISO published the first version of the ISO 9000 series standards in the mid-1980s specifically for management systems, or "what the company does to fulfill the customer's quality requirements, and applicable regulatory requirements, while aiming to - enhance customer satisfaction, and achieve continual improvement of its performance in pursuit of these objectives" (Overview of the ISO system). These standards are not written as product or service specific, but rather generic for all industries. Along with the ISO came a certification that ensured compliance with the standards by an objective third party audit system.

The ISO 9000 requirements framework has three basic parts -- The core system is the most fundamental section of the management system. It consists of the elements of the standard that are applied to all parts of the organization, such as documentation control, training, records and corrective action; The operating system refers to the different parts of the value chain that are within the scope of the standards. These include contract review, design and purchasing; The management support and control system refers to management responsibility and internal quality audits (Harrington, 1995, p.177).

To develop a QMS, a company first asks what does the customer require? Then it asks what does our organization require? The firm must constantly review production to make sure that both requirements are met.

The benefits of the ISO 9000 are varied. They include: Increase access to international markets; Maintain consistently dependable processes; Guarantee less wasted time, materials, and efforts and, more specifically, speed up return on investment, reduce inventory, reduce product cost, decrease lost work days, increase on-time deliveries, reduce credit memos, increase market share, increase overall margin (Harrington, 1995, p.178).

One of the first U.S. companies to apply the ISO 9000 standards was the Foxboro Company, which develops, manufactures, engineers and integrates control systems, analytical instruments and sensing and control devices for process industries. Its products measure and automate processes in industries such as pulp and paper, oil refining, utilities, pharmaceuticals, food products, mining and steel production. It was founded in 1908 and purchased by Siebe of the United Kingdom in 1990 (Rabbitt and Bergh, 1993, p. 45).

The ISO 9000 completely turned around Foxboro's quality efforts. In the 1960s and 1970s, Foxboro was a dominant player in the process control industry with relatively decent margins. However, the company became complacent and began to suffer against domestic and foreign competitors. The business environment started to deteriorate and employment fell from 12,000 in 1985 to 4,000 (Rabbitt and Bergh, 1993, p. 45).

Companies such as Ford, which used Foxboro as a supplier, said that they had to implement a Total Quality Management program or lose their business. Foxboro put in place a series of strategic manufacturing endeavors and went for the ISO 9000 standard. One of the direct benefits was the discovery of a "Work Breakdown Structure" methodology for doing business within project engineering operations. All the engineering groups stated using the same standards. The company was able to turn around and have on-time projects, satisfied customers, cost control, reusable engineering and savings of more than $1 million per year from waste reduction (Rabbitt and Bergh, 1993, p. 46).

Another example, as seen on the company's website, is the Plastics Group of America. In December 1996 this organization became one of the few medium-size compounders in the U.S. To comply with the international quality standard. For instance, The Plastics Group's customers are an ensured product quality of its Polifil resins, which are directly based on customer requirements and specifications. This information is used to develop a specific customer profile for each Polifil product ordered.

When a customer places an order, the Polifil customer profile is cross-referenced to guarantee product integrity and lot-to-lot consistency. This allows The Plastics Group to regularly supply the customer with the products that meet all of their specifications. It essentially offers customers an insurance policy that the resin being purchased from The Plastics Group is quality tested and approved (The Plastics Group).