The ISO 9000 approach

The ISO 9000 series is a set of worldwide standards that establishes requirements for companies’ quality
management systems. ISO 9000 is being used worldwide to provide a framework for quality assurance.
Registration requires a third-party assessment of a company’s
quality standards and procedures and regular audits are made to ensure that the systems do
Chapter 17 Quality management 513
Figure 17.8 Increasing the effort spent on preventing errors occurring in the first place
brings a more than equivalent reduction in other cost categories
Getting it right first time
ISO 9000
not deteriorate. Its purpose when it was first framed was to provide an assurance to the purchasers of products or
services that they have been produced in such a way that they meet their requirements. The best way to do this,
it was argued, was to define the procedures, standards and characteristics of the management control system
which governs the operation.

Such a system would help to ensure that quality was ‘built into’ the operation’s transformation processes. In
2000 ISO 9000 was substantially revised. Rather than using different standards for different functions within a
business it took a ‘process’ approach that focused on outputs from any operation’s process rather than the
detailed procedures that had dominated the previous version of ISO 9000. This process orientation requires
operations to define and record core processes and sub-processes (in a manner very similar to the ‘hierarchy of
processes’ principle that was outlined in Chapter 1). In addition, processes are documented using the process
mapping approach that was described in Chapter 4. Also, ISO 9000 (2000) stresses four other principles.

●Quality management should be customer-focused. Customer satisfaction should be measured through surveys
and focus groups and improvement against customer standards should be documented.

● Quality performance should be measured. In particular, measures should relate both to processes that create
products and services and customer satisfaction with those products and services. Furthermore, measured data
should be analysed in order to understand processes.

● Quality management should be improvement-driven. Improvement must be demonstrated in both process

performance and customer satisfaction.

● Top management must demonstrate their commitment to maintaining and continually improving management
systems. This commitment should include communicating the importance of meeting customer and other
requirements, establishing a quality policy and quality objectives, conducting management reviews to ensure the
adherence to quality policies, and ensuring the availability of the necessary resources to maintain quality
systems.

ISO 9000 is seen as providing benefits both to the organizations adopting it (because it gives them detailed
guidance on how to design their control procedures) and especially to customers (who have the assurance of
knowing that the products and services they purchase are produced by an operation working to a defined
standard).

It may also provide a useful discipline to stick to ‘sensible’ process-oriented procedures which lead to error
reduction, reduced customer complaints and reduced costs of quality, and may even identify existing
procedures which are not necessary and can be eliminated. Moreover, gaining the certificate demonstrates that
the company takes quality seriously; it therefore has a marketing benefit.

(Nigel and Slack, 6th ed. Pg: 513)

ISO 9000 Standards
Increases in international trade during the 1980s created a need for the development
of universal standards of quality. Universal standards were seen as necessary in order
for companies to be able to objectively document their quality practices around the
world. Then in 1987 the International Organization for Standardization (ISO) published its first set of
standards for quality management called ISO 9000. The International Organization for
Standardization (ISO) is an international organization whose
purpose is to establish agreement on international quality standards. It currently has
members from 91 countries, including the United States. To develop and promote international quality
standards, ISO 9000 has been created. ISO 9000 consists of a set of
standards and a certification process for companies. By receiving ISO 9000 certification, companies
demonstrate that they have met the standards specified by the ISO.
The standards are applicable to all types of companies and have gained global
Deming Prize
A Japanese award given to
companies to recognize
efforts in quality
improvement.
ISO 9000
A set of international quality
standards and a certification
demonstrating that
companies have met all the
standards specified.
Human Resources,
Management
QUALITY AWARDS AND STANDARDS • 161
acceptance. In many industries ISO certification has become a requirement for doing
business. Also, ISO 9000 standards have been adopted by the European Community as
a standard for companies doing business in Europe.
In December 2000 the first major changes to ISO 9000 were made, introducing the
following three new standards:
• ISO 9000:2000 – Quality Management Systems – Fundamentals and Standards:
Provides the terminology and definitions used in the standards. It is the starting
point for understanding the system of standards.
• ISO 9001:2000 – Quality Management Systems – Requirements: This is the standard used for the
certification of a firm’s quality management system. It is used
to demonstrate the conformity of quality management systems to meet customer requirements.
• ISO 9004:2000– Quality Management Systems – Guidelines for Performance: Provides guidelines
for establishing a quality management system. It focuses not
only on meeting customer requirements but also on improving performance.
These three standards are the most widely used and apply to the majority of companies. However, ten
more published standards and guidelines exist as part of the ISO
9000 family of standards.
To receive ISO certification, a company must provide extensive documentation of
its quality processes. This includes methods used to monitor quality, methods and frequency of
worker training, job descriptions, inspection programs, and statistical
process-control tools used. High-quality documentation of all processes is critical.
The company is then audited by an ISO 9000 registrar who visits the facility to make
sure the company has a well-documented quality management system and that the
process meets the standards. If the registrar finds that all is in order, certification is received. Once a
company is certified, it is registered in an ISO directory that lists certified companies. The entire
process can take 18 to 24 months and can cost anywhere
from $10,000 to $30,000. Companies have to be recertified by ISO every three years.
One of the shortcomings of ISO certification is that it focuses only on the process used
and conformance to specifications. In contrast to the Baldrige criteria, ISO certification
does not address questions about the product itself and whether it meets customer and
market requirements. Today there are over 40,000 companies that are ISO certified. In
fact, certification has become a requirement for conducting business in many industries.

(TQM Cahpter 5 pdf)

3.3.2. ISO 9000 registration

ISO 9000 can be considered to be a subset of TQM. ISO 9000 mainly deals with quality
management systems for the design, development, purchasing, production, installation, and
servicing of products and services.
However, the eight TQM practices added to the 2000 version of ISO 9000 brought ISO 9000
and TQM closer together than ever before (Goetsch and Davis, 2003).
Overall, the literature suggests that many ISO-registered companies view the registration
process as a prerequisite to TQM implementation (Escanciano et al., 2001). Yusof and
Aspinwall (2000) argued that ISO registration contributed to a company’s achievement of the
‘‘total system’’ associated with TQM. Thus, ISO-registered companies would be expected to
have more effective TQM practices in place than non-ISO-registered companies as a result of
their ISO 9000 efforts.
The literature is not in unanimous agreement with the effects of ISO 9000 registration on
organizational performance. Some of the previous studies (e.g., Terziovski et al., 1997;
Simmons and White, 1999; Lima et al., 2000) found that ISO registration did not
necessarily improve companies’ performance. On the other hand, according to the
International Organization for Standardization, ISO 9000 can increase customer satisfaction,
provide cost and risk-management benefits, and result in improved competitiveness (Goetsch
and Davis, 2003). In fact, Rao et al. (1997a) found that ISO-registered companies had better
quality management practices and quality results than those companies that were neither ISO-
registered nor interested in obtaining registration. Ismail and Hashmi (1999) also reported
better performance for ISO-registered companies compared to non-ISO-registered
companies. A study by McAdam and McKeown (1999) found that 37% of the surveyed
companies reported improvements, such as increases in productivity and sales and reductions
in costs and customer complaints. Overall, 77% of the companies reported being pleased or
very pleased with ISO. Lee and Palmer (1999) also reported improvements in performance as
a result of ISO
registration. Thus we have the following proposition.