TWELFTHEDITION

O P E R AT I O N S
MANAGEMENT
Sustainability and Supply Chain Management

HEIZER
JAY

RENDER
BARRY
Jesse H. Jones Professor of Business Administration
Texas Lutheran University
Charles Harwood Professor of Operations Management
Graduate School of Business
Rollins College
Boston Columbus Indianapolis New York San Francisco
Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto
Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

ISO 9000 International Quality Standards

The move toward global supply chains has placed so much emphasis on quality that the
world has united around a single quality standard, ISO 9000 . ISO 9000 is the quality standard
with international recognition. Its focus is to enhance success through eight quality management
principles: (1) top management leadership, (2) customer satisfaction, (3) continual
improvement, (4) involvement of people, (5) process analysis, (6) use of data-driven decision
making, (7) a systems approach to management, and (8) mutually beneficial supplier
relationships.
The ISO standard encourages establishment of quality management procedures, detailed
documentation, work instructions, and recordkeeping. Like the Baldrige Awards, the assessment
includes self-appraisal and problem identification. Unlike the Baldrige, ISO certified
organizations must be reaudited every three years.
The latest modification of the standard, ISO 9001: 2015, follows a structure that makes it
more compatible with other management systems. This version gives greater emphasis to riskbased
thinking, attempting to prevent undesirable outcomes.
Over one million certifications have been awarded to firms in 206 countries, including
about 30,000 in the U.S. To do business globally, it is critical for a firm to be certified and listed
in the ISO directory.

Just-in-Time (JIT)
The philosophy behind just-in-time (JIT) is one of continuing improvement and enforced
problem solving. JIT systems are designed to produce or deliver goods just as they are needed.
JIT is related to quality in three ways:
◆ JIT cuts the cost of quality: This occurs because scrap, rework, inventory investment, and
damage costs are directly related to inventory on hand. Because there is less inventory on
hand with JIT, costs are lower. In addition, inventory hides bad quality, whereas JIT immediately
exposes bad quality.
◆ JIT improves quality: As JIT shrinks lead time, it keeps evidence of errors fresh and limits
the number of potential sources of error. JIT creates, in effect, an early warning system for
quality problems, both within the firm and with vendors.
◆ Better quality means less inventory and a better, easier-to-employ JIT system: Often the
purpose of keeping inventory is to protect against poor production performance resulting
from unreliable quality. If consistent quality exists, JIT allows firms to reduce all the costs
associated with inventory.