Benefits of an ISO-Based Management System

There are many reasons to implement an ISO based management system. Often the market is the driving factor. Once an ISO management system is in place, companies realize that the internal benefits which are as important as the external ones. An ISO based management system, if correctly implemented, will drive improvements in processes, products and your bottom line.

Dun and Bradstreet findings:

    • 85% of registered firms report external benefits including higher perceived quality and greater customer demand.
    • 95% report internal benefits including greater employee awareness, increased operational efficiency and reduced scrap expense.

CIRAS News (Center for Industrial Research and Service,IowaState University) says:

    • Cutting quality cost in half can increase profit more than a 10% increase in sales could.
    • ISO 9001 is the most promising method forcutting the cost of quality.

Irwin Professional Publishing survey results show:

    • 83% of registered companies have products with a higher perceived quality in the marketplace.
    • 30% of registered companies experience increased customer demand.
    • 69% of registered companies have a competitive advantage in their market.
    • 69% of registered companies have a competitive advantage in their market.

Benefits during implementation:

  • Process Improvements
    As you implement the system, you have the opportunity to improve your processes. You will outline the current process, and the requirements of the standard, and then optimize the process with input from the process users.
  • Increased Management System Awareness
    As the system is implemented, process and product awareness will increase because all staff must be trained on ISO standard and the processes as they are implemented. Staff will have “ownership” of processes they are involved in developing and improving.

Benefits after implementation:

  • Market Advantages

Surveys of registered companies show that 41% were asked by a client to obtain registration. Using a registered supplier can reduce the number of vendor audits a company must perform.

When a client requests a vendor to seek ISO registration, it can take up to 18 months or more to comply. Therefore, the vendor who is already registered has an advantage. This can be used as a strong marketing tool.

ISO is becoming a requirement to do business in many markets. Registered companies currently have an advantage over their competition. As registration becomes more common, this will shift and the unregistered companies will be at a disadvantage.

  • Internal Advantages

Improved Preformance: Once registered, companies often find the greatest payoffs are internal, as processes experience continual improvement.

A survey of 100 registered firms reported the average improvement in their operating margin was at 5% of sales. Firms also report improvements in order turnaround time, scrap and overtime.

Key Indicators: The management system has built-in systems to report on key indicators: Corrective and Preventive Action, Internal Audits and Management Review. Management is required to take action based on this information.

These built-in systems also contribute to continual improvement by significantly reducing the reoccurrence of problems. Corrective actions issued must be addressed, the root cause determined, and action taken to prevent reoccurrence. Follow-up will make sure the action was effective.

Internal audits will evaluate the effectiveness of the system, and identify opportunities for improvements. Nonconformities must be addressed. Internal auditors are also able to make observations and suggestions.

Management review is a chance for management to evaluate the performance of the management system. Information is provided from corrective actions, internal audits, purchasing information and client complaints.

The operation will run more smoothly, with fewer crises and “fires”. The management system promotes consistency in how work is done and recorded. It helps employees learn more easily and quickly what should be done. It reduces misunderstandings with customers.

Corrective Action: When a problem occurs, it is corrected at the root cause. It does not have to be “fixed” again next week by someone else, and next month by another person.

Improvement:There is a strong improvement culture. Internal audits, corrective action and training result in “top of mind” awareness of the system. Increased confidence in workmanship results in a more confident staff. Systems in place allow staff to address problems. Staff recognizes problems as systems or process issues. Problems are solved, not blamed on anyone.

How long will it take?