2010

Implementation & Impact of Quality Standards among Small Industry

Vaibhav Borkar. Tanuj Jindal
Indo-German Training Centre, Bangalore
4/23/2010

TABLE OF CONTENT

No 1

Contains About ISO   ISO's origins ISO's name

Page no 2

2

The ISO brand   Democratic Voluntary

3

3

Information        How ISO decides to develop a standard Who develops ISO standards How ISO standards are developed Why standards matter Why standards matter What standards do How the ISO system is financed

4

4

ISO 9000  Element of ISO 9000  Steps in ISO 9000 registration  Steps in ISO 9000 registration  Quality documentation Advantages of ISO 9000 Benefits of ISO Conclusion Bibliography

7

5 6 7 8

10 12 13 14

Indo-German Training Centre, Bangalore | No 1

1. About ISO
ISO (International Organization for Standardization) is the world's largest developer and publisher of International Standards. ISO is a network of the national standards institutes of 159 countries, one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system. ISO is a non-governmental organization that forms a bridge between the public and private sectors. On the one hand, many of its member institutes are part of the governmental structure of their countries, or are mandated by their government. On the other hand, other members have their roots uniquely in the private sector, having been set up by national partnerships of industry associations. Therefore, ISO enables a consensus to be reached on solutions that meet both the requirements of business and the broader needs of society ISO's origins 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, in Geneva, Switzerland. ISO's name Because "International Organization for Standardization" would have different acronyms in different languages ("IOS" in English, "OIN" in French for Organisation internationale de normalisation), its founders decided to give it also a short, all-purpose name. They chose "ISO", derived from the Greek isos, meaning "equal". Whatever the country, whatever the language, the short form of the organization's name is always ISO. What "international standardization" means When the large majority of products or services in a particular business or industry sector conform to International Standards, a state of industry-wide standardization exists. The economic stakeholders concerned agree on specifications and criteria to be applied consistently in the classification of materials, in the manufacture and supply of products, in testing and analysis, in terminology and in the provision of services. In this way, International Standards provide a reference framework, or a common technological language, between suppliers and their customers. This facilitates trade and the transfer of technology.

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2. The ISO brand

Democratic Every full member of ISO has the right to take part in the development of any standard which it judges to be important to its country's economy. No matter what the size or strength of that economy, each participating member in ISO has one vote. Each country is on an equal footing to influence the direction of ISO's work at the strategic level, as well as the technical content of its individual standards.

Voluntary ISO standards are voluntary. As a non-governmental organization, ISO has no legal authority to enforce the implementation of its standards. ISO does not regulate or legislate. However, countries may decide to adopt ISO standards - mainly those concerned with health, safety or the environment - as regulations or refer to them in legislation, for which they provide the technical basis. In addition, although ISO standards are voluntary, they may become a market requirement, as has happened in the case of ISO 9001 quality management systems, or of dimensions of freight containers and bank cards. ISO itself does not regulate or legislate.

Market-driven ISO only develops standards for which there is a market requirement. The work is mainly carried out by experts from the industrial, technical and business sectors which have asked for the standards, and which subsequently put them to use.

Consensus ISO standards are based on international consensus among the experts in the field. Consensus, like technology, evolves and ISO takes account both of evolving technology and of evolving interests by requiring a periodic review of its standards at least every five years to decide whether they should be maintained, updated or withdrawn. In this way, ISO standards retain their position as the state of the art.

Globally relevant ISO standards are technical agreements which provide the framework for compatible technology worldwide. They are designed to be globally relevant - useful everywhere in the world. ISO standards are useful everywhere in the world. Indo-German Training Centre, Bangalore | 3

3.Information
How ISO decides to develop a standard ISO launches the development of new standards in response to the sectors that express a clearly established need for them. An industry or business sector communicates its requirement for a standard to one of ISO's national members. The latter then proposes the new work item to ISO as a whole. If accepted, the work item is assigned to an existing technical committee. Proposals may also be made to set up technical committees to cover new scopes of activity. At the end of 2006, there were 3 041 technical bodies in the ISO system, including 193 ISO technical committees. The focus of the technical committees is specialized and specific. In addition, ISO has three general policy development committees that provide strategic guidance for the standards' development work on cross-sector aspects. These committees ensure that the specific technical work is aligned with broader market and stakeholder group Who develops ISO standards ISO standards are developed by technical committees comprising experts from the industrial, technical and business sectors which have asked for the standards, and which subsequently put them to use. These experts may be joined by representatives of government agencies, testing laboratories, consumer associations, non-governmental organizations and academic circles. The experts participate as national delegations, chosen by the ISO national member institute for the country concerned. These delegations are required to represent not just the views of the organizations in which their participating experts work, but of other stakeholders too. According to ISO rules, the member institute is expected to take account of the views of the range of parties interested in the standard under development. This enables them to present a consolidated, national consensus position to the technical committee. How ISO standards are developed The national delegations of experts of a technical committee meet to discuss, debate and argue until they reach consensus on a draft agreement. This is circulated as a Draft International Standard (DIS) to ISO's membership as a whole for comment and balloting. Many members have public review procedures for making draft standards known and available to interested parties and to the general public. The ISO members then take account of any feedback they receive in formulating their position on the draft standard. Indo-German Training Centre, Bangalore | 2. The ISO brand 4

If the voting is in favour, the document, with eventual modifications, is circulated to the ISO members as a Final Draft International Standard (FDIS). If that vote is positive, the document is then published as an International Standard. Every working day of the year, an average of eight ISO meetings is taking place somewhere in the world. In between meetings, the experts continue the standards' development work by correspondence. Increasingly, their contacts are made by electronic means, some ISO technical bodies have already gone over entirely to working electronically, which speeds up the development of standards, and cuts travel costs. Why standards matter Standards make an enormous and positive contribution to most aspects of our lives. Standards ensure desirable characteristics of products and services such as quality, environmental friendliness, safety, reliability, efficiency and interchangeability - and at an economical cost. When products and services meet our expectations, we tend to take this for granted and be unaware of the role of standards. However, when standards are absent, we soon notice. We soon care when products turn out to be of poor quality, do not fit, are incompatible with equipment that we already have, are unreliable or dangerous. When products, systems, machinery, and devices work well and safely, it is often because they meet standards. And the organization responsible for many thousands of the standards which benefit the world is ISO. When standards are absent, we soon notice. What standards do
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make the development, manufacturing and supply of products and services more efficient, safer and cleaner facilitate trade between countries and make it fairer provide governments with a technical base for health, safety and environmental legislation, and conformity assessment share technological advances and good management practice disseminate innovation safeguard consumers, and users in general, of products and services make life simpler by providing solutions to common problems How the ISO system is financed ISO's national members pay subscriptions that meet the operational cost of ISO's Central Secretariat. The subscription paid by each member is in proportion to the country's Gross National Income and trade figures. Another source of revenue is the sale of standards. Indo-German Training Centre, Bangalore | 2. The ISO brand 5

However, the operations of ISO Central Secretariat represent only about one fifth of the cost of the system's operation. The main costs are borne by the member bodies that manage the specific standards development projects and the business organizations that provide experts to participate in the technical work. These organizations are, in effect, subsidizing the technical work by paying the travel costs of the experts and allowing them time to work on their ISO assignments. Standards benefit ISO standards provide technological, economic and societal benefits. For businesses, the widespread adoption of International Standards means that suppliers can develop and offer products and services meeting specifications that have wide international acceptance in their sectors. Therefore, businesses using International Standards can compete on many more markets around the world. For customers, the worldwide compatibility of technology which is achieved when products and services are based on International Standards gives them a broad choice of offers. They also benefit from the effects of competition among suppliers. For governments, International Standards provide the technological and scientific bases underpinning health, safety and environmental legislation. For trade officials, International Standards create "a level playing field" for all competitors on those markets. The existence of divergent national or regional standards can create technical barriers to trade. International Standards are the technical means by which political trade agreements can be put into practice. For developing countries, International Standards that represent an international consensus on the state of the art are an important source of technological know-how. By defining the characteristics that products and services will be expected to meet on export markets, International Standards give developing countries a basis for making the right decisions when investing their scarce resources and thus avoid squandering them. For consumers, conformity of products and services to International Standards provides assurance about their quality, safety and reliability. For everyone, International Standards contribute to the quality of life in general by ensuring that the transport, machinery and tools we use are safe. For the planet we inhabit, International Standards on air, water and soil quality, on emissions of gases and radiation and environmental aspects of products can contribute to efforts to preserve the environment.

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4. ISO 9000
In 1987, the international Standard Organization (ISO) published its first standard on ‘Quality system’ ISO 9001, ISO 9002 and ISO 9002. At the same, time the European version of quality standard EN 2900i, EN 29002. Moreover, EN 29003 were published and British standard BS 5750(part 1, 2, 3) were updated and aligned with their equivalent foreign counterpart. All three standards are identical. They were essentially manufacturing standard are soon came to be applied to services as well as possible misinterpretations of products, but the 1994 standard has resolved some of those difficulties by redefining the products. The structure of the ISO 9000 standard : The family of ISO 9000 standards has been developed by ISO and it is made up of four core standards: a) ISO 9000:2000 – Fundamentals and Vocabulary b) ISO 9001:2000 – Quality Management Systems – Requirements c) ISO 9004:2000 – Quality Management Systems – Guidelines for performance improvements d) ISO 9011: 2002 – Guidelines for quality and/or environmental management systems auditing The ISO 9000 series of Standard consist of two broad categories of standards and supplementary guidance standards Core standard: are standard in meant for internal use by organization and provides guidance in designing and implementing a quality system so that they can meet their market needs and achieve overall success. Supplementary standards:

Element of ISO 9000 1. Management Responsibility. Management sets the company quality policy and implements it by providing resources, personnel and training. 2. Quality System. A Quality System comprised of a Quality Manual and supporting procedures is created and maintained. 3. Contract Review. Contracts reflect the customers' needs and expectations. Products and services provided must comply with those requirements. 4. Design Control. Engineering drawings and design changes are carefully documented to ensure that changes have been fully coordinated and approved internally, and when appropriate, by the customer. Indo-German Training Centre, Bangalore | 2. The ISO brand 7

5. Document Control. The creation and modification of documents supporting the Quality System is strictly controlled by ISO 9001 procedures. 6. Purchasing. Purchasing procedures describe supplier requirements and the system for ensuring compliance to these standards. 7. Handling of Purchaser Supplied Product. Procedures detail methods of handling and safekeeping of product supplied by the customer. 8. Product Identification and Traceability. Methods of tracking date and lot codes of product and raw materials from start to finish guarantee traceability. 9. Process Control. Work instructions, quality plans and workmanship standards verify that each job is being done correctly. 10. Inspection and Testing. Inspection and testing at receiving, in-process and final inspection areas ensures quality. Test and inspection records are preserved as part of the quality system. 11. Inspection, Measuring and Test Equipment. Instruments and measuring tools are calibrated regularly and records maintained. 12. Inspection and Test Status. Only inspected materials may be used or processed further. Inspected product is always identified. 13. Control of Nonconforming Product. Materials or products that fail to meet specifications are rejected and separated from normal production. Only the proper authorities may decide if rejected material will be used as is, reworked or returned to the supplier. 14. Corrective Action. The corrective action system focuses on identifying the root cause of quality concerns and any corrective action required. 15. Handling, Storage, Packaging and Delivery. Procedures outline practices that protect products from damage during manufacturing and shipping. 16. Quality Records. Quality records provide an audit trail for internal and external auditors. 17. Internal Quality Audits. Specially trained teams verify that the Quality System is working by evaluating the same 20 elements required by the external auditors, on an on-going basis. 18. Training. Training records are maintained for every employee showing their levels of expertise. 19. Servicing. Where servicing is specified in the contract, procedures are established to verify that servicing meets the indicated requirements. 20. Statistical Techniques. Control charts, graphs and other methods of analysis determine how well a process is working and facilitate continuous improvement. Steps in ISO 9000 registration 1. select the appropriate standard from ISO 90001, 9002, 9003 using guidelines in 9000 2. prepare quality manual to cover all element of selected model 3. Develop proper procedure and shop floor instruction which may be necessary for the implementation of the quality system. 4. conduct self audit to check compliance of selected model 5. select the register and apply for certification and registration

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Quality documentation

First tier: quality manual Manual may be organized according to ISO standard it is general in nature and moderate in length which summarizes the whole quality system in one document. it is written in policy level and acts as an overview in quality system. It defines the policies, objectives, organization structures and general quality practices of the company. Second tier: procedure Each procedure consists of the objective of the objective and description of the activity. the procedure describes what is to be done and by whom. And how, when, why and where the activity is to be carried out. At the procedure level step by step instruction for performing activities are not included. Third tier: instruction It consists of step by step instruction that must be followed in order to get the particular job done. These direct the worker in a single activity and subordinate document to procedure. Such instruction may be needed for specific tasks processes, operation, Tests and inspection etc. Forth tier: forms and records It includes files, specification, code of practices, checklists, technical and legal document and other form to recode data. All documentation of record which demonstrates compliance of quality system requirement comes under this tier. Quality assurance models of ISO 9000 1. ISO 9001 model for quality assurance in design, development, production, installation and servicing. When conformance to specified requirement is to be assured by supplier during the various stages. It consist of 20 elements 2. ISO 9002 model for quality and assurance in production, installation and servicing. It is used when conformance to specified requirement is to be assured by supplier during the production and installation it consist of 18 elements. 3. ISO 9003 model for quality assurance in final inspection and test. . It is used when conformance to specified requirement is to be assured by supplier solely at final inspection and test it consist of 12 elements.

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5. Advantages of ISO 9000
1. Increased Efficiency Companies that go through the ISO 9001:2000 Quality Management Standards certification process have given a lot of thought to their processes and how to maximize quality and efficiency. Once certified for QMS, the processes are established and guidelines in place for anyone to follow easily, making training, transitions, and trouble-shooting easier. 2. Increased Revenue Studies have shown that ISO QMS certified companies experience increased productivity and improved financial performance, compared to uncertified companies. 3. Employee Morale Defined roles and responsibilities, accountability of management, established training systems and a clear picture of how their roles affect quality and the overall success of the company, all contribute to more satisfied and motivated staff. 4. International Recognition The International Organization for Standardization (ISO) is recognized worldwide as the authority on quality management. 5. Factual Approach to Decision Making The ISO 9001:2000 QMS standard sets out clear instructions for audits and process reviews that facilitate information gathering and decision making based on the data. 6. Supplier Relationships Mutually beneficial supplier relationships are one of the key attractions to ISO certification. Following the processes for documentation and testing ensure quality raw materials go into your production system. The process also requires thorough evaluation of new suppliers before a change is made and/or consistency with respect to how and where orders are placed. 7. Documentation

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The ISO QMS standard requires documentation of all processes and any changes, errors and discrepancies. This ensures consistency throughout production and accountability of all staff. This also guarantees traceable records are available in case of non-compliant products or raw materials. 8. Consistency One of the foundations of ISO; All processes from research and development, to production, to shipping, are defined, outlined and documented, minimizing room for error. Even the process of making changes to a process is documented, ensuring that changes are well planned and implemented in the best possible way to maximize efficiency. Recommendations in the biotech industry to use XML authoring or similar software formatting for data collection, reports, and product labelling, minimizes the risk of obsolete documents/labels being mistakenly used. 9. Customer Satifaction Client confidence is gained because of the universal acceptance of the ISO standards. Customer satisfaction is ensured because of the benefits of ISO 9001:2000 QMS to company efficiency, consistency and dedication to quality service. 10. Improvement Processes The ISO 9001:2000 QMS outlines audit processes, management review and improvement processes based on collected data. Improvements are carefully planned and implemented based on facts, using a system of documentation and analysis, to ensure the best decisions are made for your company.

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6. Benefits of ISO 9000
ISO 9000 should be much more than a certificate hanging on the wall of your business. It should be a comprehensive living system that provides measurable bottom line improvements to the health of your company by assisting you to:        Increase access to international markets Maintain consistently dependable processes Guarantee less wasted time, materials, and efforts Some documented case histories of ISO 9000 benefits include: A wholesale distributor 10% percent sales increase directly attributable to ISO 2% reduction in costs yielding $300K per year

Manufacturing assembly shop  Return on investment achieved in less than two years Service and repair shop  Savings of $250K in the first year following registration Hardware manufacturer  18% reduction in customer returns  25% increase in production backlog Process control systems and instrumentation manufacturer       Inventory reduction of 50% Product cost reduction of 5% Decrease in lost work days of 80% Increase in on-time deliveries of 12% Reduction in credit memos of 70% Increase in market share of 15%

Keypad manufacturer  2% increase in overall margin Indo-German Training Centre, Bangalore | 2. The ISO brand 12

7. Conclusion:
Continual improvement is a process of increasing the effectiveness of your organization to fulfill to quality policy and your quality objectives that you have established which are updated periodically. Many organizations expand their management systems by extending the ISO 9001 structure to include the requirements of other management systems standards. Organizations are recognizing that an effective Quality Management System leads to reduced costs and greater operating margins.

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8. Bibliography:
 Impact of ISO 9000 certi cation on quality management practices: A comparative study by Hesan A. Quazi, Chang Wing Hong & Chan Tuck Meng  ISO 9001: 2000  http://www.iso.org/iso/iso_catalogue/management_standards/iso_900 0_iso_14000/iso_9000_selection_and_use/maintaining_the_benefits_a nd_continual_improvement.htm  http://www.isocenter.com/9000/benefits.html  http://www.google.com/

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