Tools for Smart Growth

Not all companies are required to become ISO 9001:2000 certified. So why are so many Wisconsin manufacturers making the effort to become ISO compliant or certified anyway Simply stated, ISO compliance equals serious benefits for business owners. More and more companies are learning that ISO 9001:2000 is far more than an updated list of standards. Rather, it is a foundation effort that gives them a more focused and efficient business operation, with distinct market advantages.

Realizing the benefits

The benefits of becoming ISO certified go beyond improved quality. Manufacturers report benefits of $300,000 to $10 million as a result of certification in the form of sales increases, improved on-time delivery, reduced defects and fewer product returns. The 2000 standard is superior to previous standards because it's a business system that addresses quality - not just a quality system.

The list of improvements a company can gain from ISO is impressive. A few of the key benefits include:

Increased market share and revenue
Improved customer loyalty
Increased employee motivation
Better understanding of organizational goals
Improved reaction to customer demands
A quality management system

ISO 9001:2000 requires a business to develop a management system for improving all of its business processes. This is a sweeping change from the 1994 standard, which only required the documentation of quality procedures in a business's manufacturing process.

The 2000 standard is designed to be flexible and to apply to a wide range of company sizes and types, not just large manufacturing companies.

Besides putting much greater emphasis on customer satisfaction, the revised standard also emphasizes the involvement of top management, along with requiring continual improvement of the management system, and data analysis to aid improvement.

ISO is now a ‘foundation' effort as opposed to a tool. This is something that will help to align and organize your business, as opposed to solving a particular problem.

The foundation is built

ISO 9001:2000 touches all areas of your business. While working towards compliance, an organization improves its overall performance by learning to:

focus on exceeding customer expectations
manage the system rather than the problems
strengthen the leadership
actively involve people
look at the overall process for improvements
strengthen supplier relationships

Therefore, many forward-thinking companies realize that the ISO model is simply a better way to run a business.

"People start to understand that this can be a vehicle for building their business," says Bill Eisentraut, a WMEP manufacturing specialist. Even if a company doesn't want or need actual certification, they can still use the new standard as a model for reorganizing and managing their business. One very small company that manufacturing specialist Jim Schneberger worked with couldn't afford the cost of certification; instead, that company created a system that was compliant with the standard. "They couldn't say, ‘We're ISO certified,' but they could say, ‘We have an ISO-compliant system,'" Schneberger says. "That effort allowed them to get in the door of a very large manufacturer," he adds.

A new business management model

Most importantly, the system you create for your ISO certification will in reality be a "business management system." You will establish quality-based policies and procedures that are unique to your company, along with a system for continual improvement of all your business processes. Your employees will understand what your customers need and will try to meet those needs. And all of your internal processes will be integrated and working to support those efforts.

"If you do a good job of implementing this," Schneberger says, "if you dedicate yourself to really improving your company, you're going to be the ‘best in class.'" And in today's competitive environment, that may be just what you need to solidify your place in the market.

© Copyright 2003 by WMEP.org

WMEP provides technical expertise and hands-on implementation assistance to small and midsize manufacturing firms on advanced manufacturing technologies and business practices includinglean manufacturing, ISO, value chain management, and strategic repositioning services for manufacturers and manufacturing facilities located in Wisconsin.