ISO 9002 certification and quality improvement at Neural Manufacturing SDN Bhd

ISO

The international Organization for standardization plays an important role in ensuring that businesses throughout the world are practicing the proper standards. The ISO is currently the largest developer and publisher of international standards in the entire world. There are several dimensions associated with the system. There are general requirements, management requirements, realization requirements and resource requirements and remedial requirements. The purpose of this discussion was to investigate the certification of Neural Manufacturing SDN Bhd (NMSB). The research found that the certification was instrumental in improving the quality of the products and services provided by the company. The research focused on the manner in which the attainment of this certification assisted the company in changing the complexion of the firm. The research indicates that the certification allowed for greater emphasis to be placed on training and development of employees.

Introduction

Standardization in the manufacturing industry is of the utmost importance. This is that cases for several reasons including the increased number of companies that operate globally. As the world become more interconnected as a result of advancements in technology, it is important that products become more standardized to ensure quality control. To this end the International Organization of Standardization (ISO) works with companies around the world to ensure that they can become certified member of the organization. These certifications differ in terms of both size and scope.

The purpose of this discussion is to investigate the certification of Neural Manufacturing SDN Bhd (NMSB). The research will focus on the manner in which the attainment of this certification assisted the company in changing the complexion of the firm. The research will investigate various aspects of certification the effect NMSB as it pertains to employees and the products that the company offers.

History

Biometrics is an extremely important type of technology that has transformed the nature of keeping individuals and businesses secure. This technology is utilized throughout the world. One of the companies at the forefront of this technology is Neural Manufacturing SDN Bhd (NMSB). Neural Manufacturing Sdn Bhd was created for the purpose of providing security awareness for corporate security system. The company has an aggressive task team that has been formed to accomplish the aforementioned objective.

The company also has the desire to ensure that the needs and expectations of customers are met. In an effort to maintain high quality products and good customer relations the company is determined to provide its full support as it pertains to the products and services that it provides.

NMSB is also a full service company providing solutions in the areas of fire fighting and security systems. The company is also responsible for trading and maintenance. In an effort to further develop the security system department, the company has begun to manufacture and market the SIRIM invention which is one aspect of the Security System called "e-Jari." This technology will have the NMSB signature 'NEURAL'.

There are several objectives associated with the goals that the company has a desire to realize. These objectives are as follows:

Expand it into a national product, with over RM43 million sales by end of 2008.

Establish sales and service centre in South East Asia by end of 2006.

Prove business model generates 2700 in unit sales in the first year and 20% on cash return.

NSSB will offer quality service by implementing a highly trained technical staff and advanced information technology. This will be complemented by an unpretentiously feature and premium quality product that are made on premises. E-Jari will be available to small and large orders. This product will be priced RM 6744.00 per unit product at the high end for security technology however the value of the product will be priced in a manner that is comparable to security alternatives.

The fingerprint system industry generates RM144.2 million per year. Within this market, NMSB targets large organizations that have a significant number of employees. Target customers are government and semi-government firms are also targeted as potential customers. These entities seek security measures that are user friendly and efficient. A security firm such as NMSB is uniquely suited to meet these needs.

The business model emphasizes three elements: (1) multiple revenue streams (2) high margins (3) Geographic Expansion. The projected sales revenue is 11 million in 2003. SIRIM royalty was based on RM 20.00 per unit amounting from RM 55,000 to RM 102,000 for year 2005. Once a beachhead unit is established in a given market, the business model is further enhanced by increase economies of scale and capacity utility in the initial unit. NMSB is passionate about the security industry and are in the process of building a management team with unparallel security industry experience. The resulting combination of professional management and security savvy creates a team well positioned to pursue this endeavor.

History of the ISO

The international Organization for standardization plays an important role in ensuring that businesses throughout the world are practicing the proper standards. The ISO is currently the largest developer and publisher of international standards in the entire world. The organization consists of a network of the national standards of 161 nations around the world ("About ISO"). Each country has one member and there is a Central Secretariat located in Geneva Switzerland ("About ISO"). This Secretariat is responsible for managing the entire network society ("About ISO").

The organization is non-governmental that serves as a conduit that links the private and public spheres ("About ISO"). That is some of the member countries are an extension of a governmental structure. However other member countries have their foundation in the private sector because they were established by national partnerships of industry associations ("About ISO"). As such the "ISO enables a consensus to be reached on solutions that meet both the requirements of business and the broader needs of society ("About ISO")."

As it applies specifically to the ISO 9001:2008 which replaced the ISO9002: 1994, the ISO 9001 concerns itself with quality management. In fact it is a quality management system that establishes various requirements ("ISO 9001:2008"). In order to gain certification the organization must:

1. Demonstrate its capacity to consistently offer product that meets customer and applicable statutory and regulatory requirements ("ISO 9001:2008").

2. Plan to improve customer satisfaction through the effective application of the system ("ISO 9001:2008"). This plan will include procedures that enforce continual improvement of the system and the pledge of conformity to customer and proper statutory and regulatory requirements ("ISO 9001:2008").

It is also the case that all the provisions established by the ISO 9001:2008 are universal and intended to be pertinent to all organizations, despite their nature, size or product manufactured ("ISO 9001:2008"). Additionally

"Where any requirement(s) of ISO 9001:2008 cannot be applied due to the nature of an organization and its product, this can be considered for exclusion. Where exclusions are made, claims of conformity to ISO 9001:2008 are not acceptable unless these exclusions are limited to requirements within Clause 7, and such exclusions do not affect the organization's ability, or responsibility, to provide product that meets customer and applicable statutory and regulatory requirements ("ISO 9001:2008")."

In addition to the aforementioned aspects of ISO 9001:2008 there are several other dimensions associated with the system. There are general requirements, management requirements, realization requirements and resource requirements and remedial requirements.

The general requirements are inclusive of developing the quality management system (QMS) including

1. Establishing the organization's QMS.

2. Documenting the organization's QMS.

3. Implementing the organization's QMS.

4. Maintaining organization's QMS.

5. Improving the organization's QMS ("ISO 9001-2008 Quality Management Requirements")

All of these requirements are designed to not only establish the quality system but maintain it and improve it. The end result of this is to improve the overall quality of the products and the manner in which these products are delivered to consumers.

In addition to the general requirements there are also some management requirements that also exist. Theses requirements include

1. Showing Commitment to quality

2. Focus on customers

3. support quality policies

4. Carryout QMS Planning

5. Allocate QMS responsibility and authority

6. Perform QMS management reviews ("ISO 9001-2008 Quality Management Requirements")

The management requirements are present to ensure that those in positions of authority work in compliance with the standards established by the certification. Managers play a critical role in ensuring that employees know how to comply with the regulations established by the certification. If managers fail to carry out their duties the entire organization will suffer.

In addition to general and management requirements certified organizations must also adhere to realization requirements. These requirements include:

1. Properly manage product realization planning

2. Manage customer related processes

3. Manage product design and development

4. Manage purchasing and purchased products

5. Manage production and serve provision ("ISO 9001-2008 Quality Management Requirements")

These requirements are very much related to meeting the needs of customers and the proper handling of products. Proper handling of products is inclusive of all aspects of the product including development and distribution of produces.

Resource requirements are also an important aspect of the ISO 9001:2008 certification. These requirements are as follows:

1. Supply required QMS resources

2. Supply capable QMS Personnel

3. Supply needed infrastructure

4. Supply a work environment that is efficient ("ISO 9001-2008 Quality Management Requirements")

Resource requirements are vitally important because it focuses on ensuring that the company has the resources necessary to ensure that employees can carryout their jobs effectively. These requirements draw attention to the stability of the work environment and the infrastructure available.

Finally there are remedial requirements associated with the certification. These requirements are as follows:

1. Establish Monitoring and Measurement Processes

2. perform monitoring and Measurement Activities

3. recognize and manage nonconforming products

4. Collect and analyze Quality Management Data

5. Make improvements and take remedial actions ("ISO 9001-2008 Quality Management Requirements")

According to Sampioa et al. (2009), the implementation of a quality management system, and its subsequent certification, is a voluntary process, supported by the organisation's own motivations, goals and policies. The authors further explain that "The diffusion of ISO 9001 certifications started mostly in Europe. Then, European companies pressured their suppliers around the world to become also ISO 9001 certified, and such suppliers sought certification as a protection mechanism against the perceived threat of having ISO 9001 certification to become an international trade barrier (Sampioa et al. 2009; Corbett et al., 2003)."

According to Levine & Toffel (2008) today "Nearly 900,000 organizations in 170 countries have adopted the ISO 9001 Quality Management System standard, a remarkable figure given the lack of rigorous evidence regarding how the standard actually affects organizational practices and performance (Levine & Toffel, 2008) ." The authors report that although the impact of the certification is difficult to measure many companies have sought and achieved certification (Levine & Toffel, 2008; O'Connor, 2005).

SIRIM

SIRIM came about as a result of an inquiry designed to establish some national industry standards ("Background"). This inquiry came in 1964 as the request of the Government of Malaysia directed the Minister of Commerce and Industry ("Background"). The request came because there was an urgent need to adopt the principles of standardization in the wake of Malaysia's growing industrial development ("Background").

This inquiry led to the establishment of the Standards Institution of Malaysia (SIM). In the beginning, the SIM was created as a Government department under the Ministry of Commerce and Industry in 1966 ("Background"). By October of 1966, "the Standards Act No: 76, 1966 was passed in Parliament making SIM the national standards body. SIM was governed by the Standards Council ("Background")." The purpose of the act is to supply the Standards Council with sovereign authority as it relates to the declaration of standards and the proving of certification mark licenses ("Background"). In addition,

"In 1974, the National Action Council decided that SIM be merged with the National Institute for Scientific and Industrial Research (NISIR) to form the Standards and Industrial Research Institute of Malaysia (SIRIM). As a result of this decision, SIRIM was established as a statutory body under the Ministry of Science, Technology and the Environment by the SIRIM (Incorporation) Act, 1975 which came into effect on 15 September 1975 ("Background")."

As a result of the aforementioned merger, SIRIM is better prepared to enlarge its reach as it pertains to the manner in which the entity functions ("Background"). This improvement is essential because of the rapid growth of industrialization in Malaysia ("Background"). Additionally as a result of rapidly shifting market requirements that occurred because of the accelerating national industrialization and globalization of markets, the SIRIM (Incorporation) Act 1975 had to be amended. These amendments were designed to provide required flexibility for SIRIM to counter to these changes ("Background").

There have also been some other amendments of the SIRIM since its inception. These amendments came into effect in July of 1993("Background"). The Amendments to the SIRIM (Incorporation) Act, were approved by Parliament ("Background"). Among the amendments is the ability to permit SIRIM to embark on profitable partnerships through the development of joint-venture or wholly-owned subsidiaries ("Background"). In addition the amendment abolished the 24-member SIRIM Council and replaced it with a 13-member SIRIM ("Background"). Seven of the members were from the private sector and six were from the public sector ("Background"). This redesigned Council allows an increased amount of accountability and competence. It also serves to fortify the connection between SIRIM and the industry ("Background").

There were also additional changes that occurred with SIRIM. For instance

"On 1 September 1996, SIRIM was corporatised to be known as SIRIM Berhad. SIRIM Berhad incorporated under the Companies Act was vested with all the rights, privileges and obligations of SIRIM; and 1 September 2006, marked the 10th anniversary of corporatisation of SIRIM Berhad ("Background")."

Methodology

This thesis utilizes a qualitative methodology. A qualitative methodology does not rely on figures and statistics. Instead the qualitative method utilizes interviews and other methods of gaining information. In addition, the "Qualitative methodology includes a variety and diversity of methods, procedures, and research designs. All kinds of qualitative methods have in common that their main research aim is a deeper understanding of the research object. Therefore, they are nonstandardized tools that can be adapted flexibly to every kind of research object, which can better be called research subjects because qualitative methods do not measure them objectively but interact with them, insofar as method is not a neutral tool in order to gain knowledge about researched subjects but is part of the social reality investigated ("Qualitative Methodology")."

This method was chosen because it will provide the most accurate information concerning the ISO 9001: 2008 and its impact upon NMSB.

Findings and Analysis

The research indicates that NMSB has utilized the ISO 9001 certification to improve the quality of the products that it manufactures. The research indicates that the certification has played an instrumental role in guaranteeing and improving the quality of the product and the manner in which the company is managed.

As it pertains to answering the objectives/questions previously posed in this the discussion. The research has exposed the following answers:

1. Does ISO 9001:2008 certification improve the quality of product?

It certainly appears that the very purpose of receiving the certification is to manage the quality of the products that NMSB produces. The certificate provides a system through which the company is able to achieve quality in a standardized and proven manner. The company admits that the certification has improved the manner in which the company operates as it relates to the keeping of roper records. These changes came about as a direct result of certification because auditors are used to ensure that the company is properly handling business affairs. Employees have learned the importance of paperwork as it pertains to the business and managing the quality of products. This increased sense of organization has led to an increase in the overall quality of the products that NMSB manufacture.

2. Do employees believe that ISO is beneficial for the company?

Employees indicate that the ISO benefits the company for several reasons. Firstly such a certification establishes the commitment of the company to ensure that employees have a work environment that is conducive to the manufacture and distribution of high quality products. That is the certification requires that employees have all of the resources needed for total quality management.

In addition there is a great deal of training that employees are exposed to as it pertains to ensuring that the requirements of the certification are met. Even prior to certification training occurs that teaches employees how to handle paper work. This increases the amount of organization within the company which leads to greater efficiency. This greater efficiency leads to greater TQM.

In addition the company also conducts appraisals to ensure that employees are operating in a manner that is efficient. This oversight allow the company to receive feedback as it relates to what the company is doing right and what it is doing wrong. The company can then have a greater understanding of what it needs to continue to do and the things that need to be changed or improved upon.

3. Does the company accept the decision to have ISO certification?

The company does accept the decision to get the certification. The company recognized the need for the certification as a tool to produce a product of greater quality. The company also recognized that if it has the desire to expand it must have a certification that will aid it in meeting this goal. The certification aids in this endeavor because it allows the company to operate in a more organized manner. Also there are outside forces such as auditors that assess the ability of the company to conform to the standards of the certifications. Overall this is of great benefit of the company and the managers and employees alike understand and accept the need for the Certification. The company also understands that the purpose of the certification is to make the company better and promote quality control.

4. Did ISO increase profit?

Increases in profitability are apparent. Although these increases are present it has only been three years since the company has been certified. With this understood the full impact of the certification on the profitability of the company is not fully known.

Conclusion

The purpose of this discussion was to investigate the certification of Neural Manufacturing SDN Bhd (NMSB). The research focused on the manner in which the attainment of this certification assisted the company in changing the complexion of the firm. The research found that the certification was instrumental in improving the quality of the products and services provided by the company. The research also investigated various aspects of certification and the effect NMSB as it pertains to employees and the products that the company offers. The research indicates that the certification allowed for greater emphasis to be placed on training and development of employees. In addition, the certification provided an opportunity for the company to receive the feedback necessary to make the appropriate improvements.