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Chapter Three

ISO 9000:2000
Quality Management System
Introduction
Quality Systems – Approach recognizes continuous Improvement in Quality
can be best achieved through planning and preventing problems form arising
at source with the introduction of Quality Control Tools and Techniques. This
helped to move emphasis from detection to prevention.
Quality Assurance – Approach recognizes the inherent inefficiency
of waiting for the mistakes to happen. Analysis of Nonconformance
and happen Cause in a systematic manner. Design Quality into the
process and practices so that things will not go wrong

Quality Control – A process that is used to ensure certain level


of quality in a product/service. It might include whatever
actions a business deems necessary to provide for the control
and verification of certain characteristics of a product or
service.

Quality Inspection – Simple Approach that relies on


identifying defects in the Product or service before
they reach the customer by introducing “Inspection
Stage or stages. Against the specification
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.
• And the organization responsible for many thousands of the
standards which benefit the world is ISO.
International Organization for
Standardization (ISO)
• Central Secretariat in Geneva, Switzerland, that
coordinates the system.
• ISO, officially began operations on 23rd
February 1947.
• ISO standards are developed by “Technical
Committees” comprising experts from the
industrial, technical and business sectors which
have asked for the standards, and usage.
History of ISO 9000 Series
• In the year 1985 the Quality Management systems Concept
came into the Existence by ISO
• In the year 1987 First Guidelines as requirements of Quality
Management Systems has been published for the Purpose of
Certification.
• In the year 1994 First revision took place to make it more
practical for the Implementation and Simple to understand. Four
Standards published ISO 9001, ISO 9002, ISO 9003, ISO
9004.
• In year 2000 Second revision took place to make it generic for
the application in any type of Industry and simplified form the
Audit Point of View.
• 15th November 2008 Third revision published to give more
clarity for implementation and use.
ISO: International Organization for Standardization

The name derived from the Greek word “isos”


meaning "equal".

From "equal" to "standards" that lead to the choice


of "ISO" as the name of the organization.

ISO is a non-governmental organization with its


members drawn from 120 countries, currently is
made up of 130 national standards institutes or
organizations.
ISO: International Organization for Standardization

• To date, ISO's work has resulted in over 19 000


International Standards, representing some
750 000 pages in English and French (terminology
is often provided in other languages as well).
ISO 9000 and ISO 14000 in brief

• ISO 9000 and ISO 14000 are among ISO's most


well known standards ever.
• They are implemented by more than a million
organizations in some 175 countries.
• ISO 9000 helps organizations to implement quality
management system.
• ISO 14000 helps organizations to implement
environmental management system.
Management System

• Management system means


– What the organization does to manage its
processes, or activities in order that its
products or services meet the organization’s
objectives, such as satisfying the customer's
quality requirements, complying to regulations,
or meeting environmental objectives
Management System
• To be really efficient and effective, the
organization can manage its way of doing things
by systemizing it, i.e.:
– Nothing important is left out.

– Everyone is clear about who is responsible for


doing what, when, how, why and where.

• ISO Management system standards provide


organizations with an international, state-of-the-
art model to follow.
Management System

• Large organizations, or ones with complicated


processes, could not function well without proper
and effective management systems.
• Companies in fields such as aerospace, automobiles,
defense, or health care devices have been
operating management systems for years.
• The ISO 9000 and ISO 14000 management system
standards now make these successful practices
available for all organizations.
Quality management
ISO 9000 is for quality management.
• Quality refers to all those features of a product (or
service) which are required by the customer.
• Quality management means what the organization
does to:
– Ensure that its products or services satisfy the
customer's quality requirements and
– Comply with any regulations applicable to those
products or services.
Quality management

• Quality management also means what the


organization does to
– Enhance customer satisfaction and exceed
their expectations, and
– Achieve continual improvement of its
performance.
Principles of Management Systems

• Customer focus
• Leadership
• Involvement of people
• Process approach
• System approach to management
• Continual improvement
• Factual approach to decision making
• Mutually beneficial supplier relationships
Generic Standards

ISO 9000 and ISO 14000 are generic standards.


Generic means that the same standards can be
applied:
– To any organization, large or small, whatever its
product or service,
– In any sector of activity, and
– Whether it is a business enterprise, a public
administration, or a government department.
Generic Standards
Generic also signifies that

• No matter what the organization's scope of


activity is, if it wants to establish a quality
management system, ISO 9000 gives the
essential features

• Or if it wants to establish an environmental


management system, ISO 14000 gives the
essential features.
Processes, not Product
• Both ISO 9000 and ISO 14000 concern the way
an organization goes about its work.
– They are not product or service standards, they are
process standards.
– They can be used by both product manufacturer and
service providers

• Processes affect final products or services.


• ISO 9000 gives the requirements for what the
organization must do to manage its processes
affecting quality of its products and services.
Schematic Representation of Process
ISO: International Organization for Standardization
The ISO 9000 family of standards represents an
international consensus on good management practice.

Its primary aim is to give organizations guidelines on


what constitutes an effective quality management
system, which in turn can serve as a framework for
continuous improvement.

The ISO 9000 family of International Standards for


quality management has 12,900 standards published
since it began operations in 1947.
The ISO Survey
ISO: International Organization for Standardization
i) ISO 9001:
Is one of the standards and it is a model for
quality assurance in design, development,
production, installation and servicing.

ii) ISO 9002:


Is a model for quality assurance in production,
installation and servicing for an already
established design.
ISO: International Organization for Standardization

iii) ISO 9003:


This is a model for quality assurance in final
inspection and testing.
iv) ISO 9004:
This is quality management and quality
systems elements: guidelines. This provides
the users in the process of developing in-
house quality systems.
ISO: International Organization for Standardization

ISO 9000 is not a product quality label or


guarantee. Compliance with the standards verifies
product repeatability: products produced under a
specified standard will have similar dimensions of
quality
In conclusion, ISO 9000 should be seen as a first
step in continuing improvement while the
customer requirement may be more than the
general application of the standard
ISO: International Organization for Standardization

A quality management system is the way organization


directs and controls those businesses activities, which
are associated with quality.

Broadly, it consists of organizational structure together


with the planning, processes, resources and
documentation that you use to achieve your quality
objectives, to provide improvement of your products
and services and to meet your customer’s requirements.
ISO: International Organization for Standardization

 Quality Management system standards should


not be confused with product standards

 The use of product standards, quality


management system standards and quality
improvement approaches are all means of
improving your customers’ satisfaction and the
competitiveness of your business and they are
not exclusive of each other
ISO: International Organization for Standardization
 ISO 9000:2000 promotes the adoption of a process
approach

 Process approach refers to the application of system of


processes within an organization, together with the
identification and interactions of these processes, and
there management

 An advantage of the process approach is the ongoing


control that it provides over the linkage between the
individual processes within the system of processes, as
well as their combination and interaction
Process approach emphasizes the importance of:
1. Understanding and meeting requirements

2. The need to consider processes in term of added


value

3. Obtaining results of process performance and


effectiveness, and

4. Continual improvement of processes based on


objectives measurement
Conceptual model of ISO 9000: 2000 Quality
Management Systems
Deming Prizes (1951)

30
Malcolm Baldrige National Quality
Award (1987)
Australian Quality Award (1988)
European Quality Award (1991)
The Ethiopian Quality Award (EQA)
Assessment Model (2007)
EQA 1. Leadership
 Commitment to excellence and continuous improvement
 Development and deployment of policies & strategies
 Allocation of appropriate resources
 Motivation and recognition of employee’s effort
 Customer relationship management
 Leader’s involvement in achieving organizational
objectives
 Public responsibility
EQA 2. Policy and strategy

 Relevant policy and procedures


 Sound & focused strategy
 Deployment of policies and strategies
EQA 3. Resource management
 Targeted human resource development &
management
 Optimized material resource management system
 Effective financial resource management
 Efficient facilities management
 Knowledge based information resource
management
EQA 4. Processes
 Optimized product/ service process
 Synergized service processes
 Proper planning & control
 Integrated business process
 Review and improvement of process

EQA 5. Customer satisfaction/focus


 Exceeding external customers’ expectation
 Meeting internal customers’ satisfaction
 Review and evaluation of customers’ satisfaction
 Level of product/ service quality
EQA 6. Business Performance

 Degree of financial performance


 High market share
 Increased productivity

EQA 7. Impact on society

 Significant socio-economic impact


 Enhanced environmental impact
System Requirements
Quality Management Resource Product Measurement
Management Responsibility Management Realization Analysis &
System improvement

Management
Commitment Provision of Planning
General General
resources
requirements
Customer focus Customer
Human related Monitoring &
resources processes measurement
Quality policy
Documentation
Requirements Design &
Infrastruct development Control
Planning
ures

Responsibility, Work Purchasing Analysis of


authority & environment data
communication
Production &
service Improvements
Management provision
Reviews
Benefits of implementing quality
management system
Internal benefits
 Improved management confidence
 Improved awareness of company objectives
 Improved communications
 Responsibilities and authorities are
adequately defined
 Improved traceability to root cause of
quality problems
 Improved utilization of resources
 Fewer rejects, therefore, less repeated
work and warranty costs
 Errors rectified at the earliest stage, and
not repeated
 Continuous improvement
 Increased productivity
 Increased profits and company growth
External benefits
 Easy access to international market through
demonstration of competence and improving
competitiveness
 Improved customer satisfaction
 Consistency in quality of products and
services
 Customer confidence (reduces the amount of
inspection)
 Improved company image
Role of employees in quality
management
Accept ownership and responsibility to solve
problems
Actively seek opportunities to make
improvements
Actively seek opportunities to enhance their
competencies, knowledge and experience
Freely share knowledge and experience in
teams and groups
 Being innovative and creative in furthering
the organization’s objectives
 Better representing the organization to
customers, local communities and society at
large
 Deriving satisfaction from their work
 Be enthusiastic and proud to be part of the
organization
 Focusing on the creation of value for
customers
Market Impact Of ISO 9000

 The customer is the focal point for all


businesses to survive in any market – locally,
nationally, and globally
 Customer’s needs and requirements are
important
 ISO 9000 establishes a set of rules and
regulations to avoid poor-quality products
and services for a variety of customers
Importance to Marketing and Sales

 The degree of positive impact depends on


the degree of involvement in the
certification process
 Customers can be confident in a company
that knows the importance of quality
assurance
 A stepping stone to improve quality products
and true customer focus
Reasons for Companies to Comply
 A study conducted by Rayner and Porter:

10% - Other reasons

35% - Pressured by
10% - Improve quality
customers

15% - Access new


markets

15% - Gain 15% - Need to


competitive anticipate
advantage registration

 80% of the firms considered marketing as the main reason to


be certified by ISO 9000
Other reasons:

 Comply with public projects


 Government requirements
 Overseas trade and market
 Pressure from larger businesses
 Reduce time failure
 Reduce costs of customers’ claims
 Improve customer service and customer loyalty
 To get things done right the first time
Benefits from Certification
A study conducted by McAdam and McKeown
Northern Ireland/Europe
 37% - Increased productivity
 23% - Internal benefits (i.e. reduced
cost)
 14% - Greater control
 37% - of the businesses received benefits
within the first year of ISO 9000
Certification
Other benefits:

 Quality improvement
 Enhance competitiveness of company
 Cost reduction
 Sales increase
 More systematic record keeping
 Improved internal communication and
performance
 Continual improvement of operation
Here are two examples

Example 1
 A metal parts fabricating company used ISO 9000:2000 to
develop a plan to implement their quality management system.
 They prepared a quality manual and quality system procedures,
excluding the requirements covering product design and
development because their products are designed by their
customers.
 Later, in order to bid on the supply of parts to a major
automotive company, they adapted their quality system to meet
the sector of specific requirements
Example 2

 A welfare agency decided to establish a quality


improvement strategy.
 It adopted ISO 9004:2000 as the basis for planning
and implementing its system.
 The agency found that ISO 9000:2000 provided
very useful additional guidance and plans to seek
certification to ISO 9001:2000 to gain more
credibility.
In Summary
Benefits Of ISO 9001:2000 Certification
 Quality Audit:
 Internal Quality Audit
 Assessment done by independent out side Auditors
 Done as per International Standards.
 Helps in identification, Traceability of records.
 Evaluation of over all working of different Offices/
Maintenance Centers.
 MIS Reports:
 Enables to monitor the rectification of Faults and
 Completion of Works as per the Quality Objectives.
 Cases not complying with the Quality Objectives are
Identified, discussed for the Corrective Action.
Importance to Marketing and Sales

 The degree of positive impact depends on


the degree of involvement in the
certification process
 Customers can be confident in a company
that knows the importance of quality
assurance
 A stepping stone to improve quality products
and true customer focus
Real World Examples

“FedEx’s worldwide ISO 9001


certification gives us a competitive
advantage in the global market-
place, especially as more countries
adopt ISO standards”

-FedEx Chairman and CEO Frederick W. Smith


Real World Examples
“At IBM, the ISO 9000 standards have
proven to be a template for the creation of a
sound quality system, regardless of whether
the target market is located in the United
States or overseas. By embarking on the ISO
9000 journey, it is reasonable to expect lower
costs, improved customer satisfaction,
greater brand loyalty, and stronger market
performance associated with this quality
effort. The ISO 9000 quality process can be
an important step on the road to total quality
management.”

IBM Director of ISO 9000 , Dr. Jack E. Small


How to implement ISO 9000

1. Decide whether to do it or not


There are many success stories of companies
using ISO 9000
But this does not mean its guaranteed to boost
profits
An assessment of whether ISO will benefit a
company is required before proceeding
If a company decides to do it they need to commit
to it
How to implement ISO 9000

2. Select a quality manager


Find someone to be in charge of quality
control
He/she should have an unbiased view of
quality and the ability to communicate
problems to the chief executive
How to implement ISO 9000

3. Set up the ISO 9000 group


Traditionally a committee of all the
managers from every department of the
company grouped together to analyze
processes and come up with better
solutions and then document them
How to implement ISO 9000

4. Foster employee confidence


Very important to the success of ISO
9000
Staff needs to be motivated to accept
ISO otherwise it won’t work
Executives should set example by being
excited about it
How to implement ISO 9000

5. Write a Quality Policy


A mission statement stating the company’s
commitment to the ISO standard and
signed by the chief executive
How to implement ISO 9000

6. Define employee responsibilities


Responsibilities must be clearly defined
and stated for each employee
Employees that know exactly what they
should be doing reduces confusion and
inefficiency
How to implement ISO 9000

7. Create a manual
 A manual needs to be compiled of all the
company’s processes and contain the best
practices
How to implement ISO 9000

8. Get audited
A company’s procedures are checked and
allows for refinement and correction of
errors
Competent auditing firm is required so all
problems can be worked out
How to implement ISO 9000

9. Get certified
Find an internationally well-known and
credible group to certify the company
Allowed to announce certification to
clients after this step
How to implement ISO 9000

10. Maintain certification


ISO is not a one shot deal, it is a continuous
improvement program
Maintain quality systems and gauge client
satisfaction
Pursue continuous improvement and have an ISO
9000 maintenance team
Anticipate biyearly surveillance audits, there is
the possibility of losing certification