TABLE OF CONTENTS Page
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Historical Antecedent of ISO ………………………………… ……………………….… ……………………….… A Quest for Capability ……………………………………………… ………….………..
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Quality …………………………… ………………………………………………………… …………………………………..……...………….... ……..……...…………....
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Stakeholders …………………………… ……………………………………………………… ……………………………….………..……….. …….………..……….. Quality Management Organizations and Awards ………………….………….…………. ………………….………….………….
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Verification and Validation ………………………………………………….…………… ………………………………………………….……………
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ISO 9000 ………………………………………………………….………….…………….
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Certification ………………………… …………………………………………………… ……………………………………..……………... …………..……………...
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Auditing ……………………………… …………………………………………..………………… …………..………………………….……………. ……….…………….
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Advantages …………………………… ………………………………………………………… …………………………………………………… ………………………
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Disadvantages …………………………… …………………………………………..……………… ……………..………………..……………… ..………………..
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Sources …………………………… ………………………………………………………… ……………………………………………………… …………………………..
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Topic of the Report:
Historical Antecedent of ISO A Quest of Capability
Reported by:
Ma. Therese Y. Villamayor
HISTORICAL ANTECEDENT OF ISO
Trade is one way of doing businesses in the Philippines by our forefathers even before the arrival of the Spaniards. As our forefathers’ communities grow, they become more dependent on others providing goods and services they are unable to provide from our own resources. Trade continue up to this day on the strength of the customer-supplier relationship. In this relationship, it is important to have trust and confidence. Customer satisfaction, profitability and market leadership are driven in large part by delivering quality products and services to customers. Today, more than ever, there is a worldwide trend towards increasingly stringent customer expectations regarding quality. Accompanying this trend has been a growing realization that continuous quality improvements are often necessary to achieving and sustaining excellent economic performance. One roadblock to providing quality products and services was the definition what ―quality‖ meant to different customers. Different countries, industries and government all had varying quality systems that suppliers had to adopt in order to deliver goods around the world. A single worldwide standard was needed to simplify international standard which resulted to the development of ISO 9000.
THE INTERNATIONAL ORGANIZATIONAL FOR STANDARDIZATION (ISO)
It is a worldwide federation of national standards bodies such as e.g. the US standardization body ANSI. ISO prepares international standards, which are publicized after voting among ISO members. Located in Switzerland, ISO is the specialized international agency for standardization and the source of ISO 9000. Established in 1947, it is comprised of the
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national standards bodies of 140 countries, working together to produce more than 13,000 International Standards for business, government and society. ISO 9000 family of standards relate to quality management systems and are designed to help organizations ensure they meet the needs of customers and other stakeholders (Poksinska et [1] al, 2002 ). The standards are published by ISO, the International Organization for Standardization and available through National standards bodies. ISO 9000 deals with the fundamentals of quality management systems (Tsim et al, 2002), including the eight management principles (Beattie and Sohal, 1999; Tsim et al, 2002 ) on which the family of standards is based. ISO 9001 deals with the requirements that organizations wishing to meet the standard have to fulfill.
THE FAMILY OF ISO 9000 STANDARDS
There are four core Standards and a series of supporting Standards:
The term 'ISO 9000' is often incorrectly used. Properly used, it is the individual Standard, ISO 9000:2000 - Quality Management Systems Fundamentals and Vocabulary.
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When an organization is ISO 9001 registered (also known as certified) it means that an auditor has checked and confirmed that it meets the requirements laid out in ISO 9001:2000. This is the only standard in the family for which a third party can issue registration. The logo opposite is the one displayed by the organizations that have gained registration through BSI.
EVOLUTION OF ISO 9000
ISO 9000 was first published in 1987. It was based on the BS 5750 series of standards from BSI[23] that were proposed to ISO in 1979. Its history can however be traced back some twenty years before that when the Department of Defense published its MIL-Q-9858 standard in 1959. MIL-Q-9858 was revised into the NATO AQAP series of standards in 1969, which in turn were revised into the BS 5179 series of guidance standards published in 1974, and finally revised into being the BS 5750 series of requirements standards in 1979, before being submitted to ISO.
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BSI has been certifying organizations for their quality management systems since 1978. Its first certification. (FM 00001) is still extant and held by the Tarmac company, a successor to the original company which held this certificate. Today BSI claims to certify organizations at nearly 70,000 sites globally. The development of the ISO 9000 series is shown in the diagram to the right.
A QUEST FOR CAPABILITY
Trading organizations need to create and retain satisfied customers to survive. Many business organizations develop their own ways to working and strive to satisfy their customers in the best way they know how. The obejective of ISO 9000 is to promote the development of standardization and related world activities with a views to facilitating international exchange of goods and services and to developing cooperation in the sphere of intellectual, scientific, technological, and economic activity Being able to identify customer needs and expectations as well as supplying the products and services that meet customers requirements, customer confidence can be built up by reputation, customer assessment or third party assessment. The global adoption of ISO 9001 may be attributable to a number of factors. A number of major purchasers require their suppliers to hold ISO 9001 certification. In addition to several stakeholders’ benefits, a number of studies have identified significant financial benefits for organizations certified to ISO 9001, with a 2011 survey from the British Assessment Bureau showing 44% of their certified clients had won new business. Corbett et al (2005) showed that certified organizations achieved superior return on assets compared to otherwise similar
organizations without certification. Heras et al (2002) found similarly superior performance and demonstrated that this was statistically significant and not a function of organization size. Naveh and Marcus (2007) showed that implementing ISO 9001 led to superior operational performance. Sharma (2005) [12] identified similar improvements in operating performance and linked this to superior financial performance. Chow-Chua et al (2002) showed better overall financial performance was achieved for companies in Denmark. Rajan and Tamimi (2003) showed that ISO 9001 certification resulted in superior stock market performance and suggested that shareholders were richly rewarded for the investment in an ISO 9001 system 4
Topic of the Report:
Quality Stakeholder
Reporter:
Mariel Anne B. Arambulo
QUALITY
In manufacturing, a measure of excellence or a state of being free from defects, deficiencies, and significant variations, brought about by the strict and consistent adherence to measurable and verifiable standards to achieve uniformity of output that satisfies customer or user requirements.ISO 8402-1986 standard defines quality as "the totality of features and characteristics of a product or service that bears its ability to satisfy stated or implied needs." In supplying products or services there are three fundamental parameters that determines their saleability. They are the price, quality and delivery. Customers require products and services of a given quality to be delivered by or be available by a given time and to be of a price that reflects value for money. Quality is determined by the extent to which a product or a service successfully serves the purposes of the user during usage. The word quality has many meanings. 1. A degree of excellence 2. Conformance with requirements 3. The totality of characteristics of entity that bear on its ability to satisfy stated or implied needs 4. Fitness for use 5. Fitness for purpose 6. Freedom from defects imperfections or contamination 7. Delighting customers In the context of ISO 9000 quality is concerned with the totality of the characteristics that satisfy needs. Quality is the degree to which a set of inherent characteristics fulfil the requirements. 5
STAKEHOLDERS
A person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization's actions, objectives, and policies. Stakeholders in a business organization include creditors, customers, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources. Although stakeholding is usually self-legitimizing (those who judge themselves to be stakeholders are stakeholder), all stakeholders are not equal and different stakeholders are entitled to different considerations. For example, a company’s customers are entitled to fair trading practices but they are not entitled to the same consideration as the company's employees. Organizations depend on the customers because without them there is no business, but in order to satisfy these customers, organizations also depend on a number of other parties that provide it with resources and sanction its operations. There are parties other than he customer that have an interest or stake in the organization and in what it does but may not receive a product.
Criteria used by interested parties to judge business organization effectiveness or success: Interested party Owner Employees
Success criteria Financial return Job satisfaction, pay and conditions and quality of leadership Quality of products and services Contribution to the – jobs, support for other traders in the community – care for the local environment Satisfactory mutual trading Value of shares Compliance with legislation
Customers Community
Suppliers Investors Government
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Topic of the Report:
Quality Management Organizations and Awards Verification and Validation
Reporter:
Kristel Mae F. Villanueva
QUALITY MANAGEMENT ORGANIZATIONS AND AWARDS
The international organization for standardization’s ISO 9001:2008 series describes standards for a QMS addressing the principles and processes surrounding the design, development and delivery of a general product or service. Organizations can participate in a continuing certification process to ISO9001:2000 to demonstrate their compliance with the standard, which includes a requirement for continual (i. e. planned) improvement of the ISO.
The Malcolm Baldrige national quality award is a competition to identify and recognize top quality U.S. companies. This model addresses a broadly – based range of quality criteria, including commercial success and corporate leadership. Once an organization has won the award it has to wait several years before being eligible to apply again. The European Foundation for Quality Management’s EFQM Excellence Model supports an award scheme similar to the Baldrige Award for European companies.
The Alliance for Performance Excellence is a network of state, local, and international organizations that use the Malcolm Baldrige National Quality Award and model at the grassroots level to improve the performance of local organizations and economies. Network for Alliance.org is the Alliance website; browsers can find Alliance members in their state and get the latest news and events from the Baldrige community.
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VERIFICATION AND VALIDATION
Verification and validation is the process of checking that a product, service, or a system meets specification and that it fulfills its intended purpose. These are critical components of a quality management system such as ISO 9000. Sometimes this is preceded with ―independent‖ (or IV& V) to ensure that the validation is performed by disinterested third party. Verification is a quality control process that is used to evaluate whether or not a product, service or a system complies with regulations, specifications, or conditions imposed at the start of a development phase. Validation is a quality assurance process of establishing evidence that provides a high degree of assurance that a product, service or a system accomplishes its intended requirements. This often involves acceptance fitness for purpose with end users and other product stakeholders. ISO 9000 The product ISO 9000 provides a tried and tested framework for taking processes so that they consistently turn out products that satisfy customers’ expectations. Some of the requirements in ISO 9001 (which is one of the standards of the ISO 9000 family) include:
A set of procedures that cover all key processes in the business; Monitoring processes to make sure that they are effective; Keeping adequate records; Checking outputs for defects, with appropriate and corrective action where necessary; Regularly reviewing individual processes and the quality system itself for effectiveness; and Facilitating continual improvement
It is not necessary that a company should obtain an ISO Certification. It is only the supplier’s customers who for the certification in order to remain on the approved supplier’s list. Even without the ISO Certification, most of the companies interested in retaining their customers and theirs businesses usually already make some type of commitment to quality management and are performing just well.
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Topic of the Report:
ISO 9000 Certification
Reporter:
Joanna Ruth L. Brazal
ISO 9000
To keep customer’s satisfied, the organization needs to meet their requirements. One of the products design to meet this objective is the ISO 9000 standard. The product ISO 9000 provides a tried and tested framework for taking systematic approach to managing organization’s processes so that they consistently turn out products that satisfy customer’s satisfaction. It contains technical specifications or other precise criteria to be used consistently as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes and services are fit for their purpose.
Some of the requirements on ISO 9001 (which is one of the standards in the ISO 9000 family) include:
a set of procedures that cover all key processes in the business; monitoring processes to ensure they are effective; keeping adequate records; checking output for defects, with appropriate or effective action where necessary; regularly reviewing individual processes and the quality system itself for effectiveness; and facilitating continual improvement
A company or organization that has been independently audited and certified to be in conformance with ISO 9001 may publicly state that it is ―ISO 9001 certified‖ or ―ISO 9001 registered‖ Certification to an ISO 9001 standa rd does not guarantee any quality of end products and services; rather, it certifies that formalized business processes are being applied. It is not necessary that a Company should obtain an ISO Certification. It is only the supplier’s customers who demand for the certification in order to remain on the approved suppliers or 9
retain eligibility for receiving invitations to tender. Even without an ISO certification, most companies interested in retaining their customers and their businesses usually already make some type of commitment to quality management and are performing just as well.
CERTIFICATION
ISO does not itself certify organizations. Many countries have formed accreditation
bodies to authorize certification bodies, which audit organizations applying for ISO 9001 compliance certification. Although commonly referred to as ISO 900: 200 certifications, the actual standard to which an organization’s quality management can be certified is ISO 9001:2000. The applying organization is assessed based on an extensive sample of its sites, functions, products, services and processes. An ISO certificate is not an ounce is not a once-and-for-all award, but must be renewed at regular intervals recommended by the certification body, usually around three years.
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Topic of the Report:
Auditing Advantages
Reporter:
Aileen G. Bechayda
AUDITING
Two types of auditing are required to become registered to the standard: auditing by an external certification body (external audit) and audits by internal staff trained for this process (internal audits). The aim is a continual process of review of assessment, to verify that the system is working as it’s supposed to, find out where it can improve and to correct or prevent problems identified.
ADVANTAGES OF ISO 9000 The advantages associated with ISO 9000 certification are numerous, as both business analysts and business owners will attest. These benefits, which can impact nearly all corners of a company, range from increased stature to bottom-line operational savings. They include:
Increased marketability — Nearly all observers agree that ISO 9000 registration provides businesses with markedly heightened credibility with current and prospective clients alike. Basically, it proves that the company is dedicated to providing quality to its customers, which is no small advantage whether the company is negotiating with a longtime customer or endeavouring to pry a potentially lucrative customer away from a competitor. This benefit manifests itself not only in increased customer retention, but also in increased customer acquisition and heightened ability to enter into new markets;
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indeed, ISO 9000 registration has been cited as being of particular value for small and mid-sized businesses hoping to establish a presence in international markets.
A reduced operational expense — Sometimes lost in the many discussions of ISO 9000's public relations cache is the fact that the rigorous registration process often exposes significant shortcomings in various operational areas. When these problems are brought to light, the company can take the appropriate steps to improve its processes. These improved efficiencies can help companies garner savings in both time and money. "The cost of scrap, rework, returns, and the employee time spent analyzing and troubleshooting various products are all considerably reduced by initiating the discipline of ISO 9000, " confirmed Richard B. Wright in Industrial Distribution.
Better management control — The ISO 9000 registration process requires so much documentation and self-assessment that many businesses that undergo its rigors cite increased understanding of the company's overall direction and processes as a significant benefit.
Increased customer satisfaction — Since the ISO 9000 certification process almost inevitably uncovers areas in which final product quality can be improved, such efforts often bring about higher levels of customer satisfaction. In addition, by seeking and securing ISO 9000 certification, companies can provide their clients with the opportunity to tout their suppliers' dedication to quality in their own business dealings.
Improved internal communication — The ISO 9000 certification process's emphasis on self-analysis and operations management issues encourages various internal areas or departments of companies to interact with one another in hopes of gaining a more complete understanding of the needs and desires of their internal customers.
Improved customer service — The process of securing ISO 9000 registration often serves to refocus company priorities on pleasing their customers in all respects, including customer service areas. It also helps heighten awareness of quality issues among employees.
Reduction of product-liability risks — Many business experts contend that companies that achieve ISO 9000 certification are less likely to be hit with product liability lawsuits, etc., because of the quality of their processes.
Attractiveness to investors — Business consultants and small business owners alike agree that ISO-9000 certification can be a potent tool in securing funding from venture capital firms. 12
DISADVANTAGES OF ISO 9000 Despite the many advantages associated with ISO 9000, however, business owners and consultants caution companies to research the rigorous certification process before committing resources to it. Following is a list of potential hurdles for entrepreneurs to study before committing to an initiative to gain ISO 9000 certification:
Owners and managers do not have an adequate understanding of the ISO 9000 certification process or of the quality standards themselves — Some business owners have been known to direct their company's resources toward ISO 9000 registration, only to find that their incomplete understanding of the process and its requirements results in wasted time and effort.
Funding for establishing the quality system is inadequate — Critics of ISO 9000 contend that achieving certification can be a very costly process, especially for smaller firms. Indeed, according to a 1996 Quality Systems Update survey, the average cost of ISO certification for small firms (those registering less than $11 million in annual sales) was $71, 000.
Heavy emphasis on documentation — The ISO 9000 certification process relies heavily on documentation of internal operating procedures in many areas, and as Meyer stated, "many say ISO's exacting documentation requirements gobble up time. Indeed, there are horror stories about companies losing substantial business because a documentation obsession redirected their priorities." According to Nation's Business, small business owners need to find an appropriate balance between ISO documentation requirements, which are admittedly "one is ISO 9000's hallmarks, " and attending to the fundamental business of running a company: "Strike a balance among obsessively writing down every employee's task, offering training for the work, and letting common sense dictate how a task is to be performed."
Length of the process — Business executives and owners familiar with the ISO 9000 registration process warn that it is a process that takes many months to complete. The 1996 Quality Systems Update survey indicated that it took businesses an average of 15 months to move from the early stages of the process to passage of the final audit, and that processes of 18-20 months or even longer were not that uncommon.
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8 Quality Management Principles Principle 1: Customer focus Principle 2: Leadership Principle 3: Involvement of people Principle 4: Process approach Principle 5: System approach to management Principle 6: Continual improvement Principle 7: Factual approach to decision making Principle 8: Mutually beneficial supplier relationships
Principle 1: Customer focus Organizations rely on customers. Therefore:
Organizations should understand customer needs. Organizations should meet customer requirements. Organizations should exceed customer expectations.
Principle 2: Leadership Organizations rely on leaders. Therefore:
Leaders should establish a unity of purpose and set the direction the organization should take.
Leaders should create an environment that encourages people to achieve the organization's objectives.
Principle 3: Involvement of people Organizations rely on people. Therefore:
Organizations should encourage the involvement of people at all levels. Organizations should help people to develop and use their abilities.
Principle 4: Process approach Organizations are more efficient and effective when they use a process approach. Therefore: Principle Organizations should use a process approach to manage activities and related resources.
Principle 5: System approach to management Organizations are more efficient and effective when they use a systems approach. Therefore: 14
Organizations should identify interrelated processes and treat them as a system.
Organizations should use a systems approach to manage their interrelated processes.
Principle 6: Continual improvement Organizations are more efficient and effective when they continually try to improve. Therefore:
Organizations should make a permanent commitment to continually improve their overall performance.
Principle 7: Factual approach to decision making Organizations perform better when their decisions are based on facts. Therefore:
Organizations should base decisions on the analysis of factual information and data.
Principle 8: Mutually beneficial supplier relationships Organizations depend on their suppliers to help them create value. Therefore:
Organizations should maintain a mutual relationship between each other beneficial relationship with their suppliers
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SOURCES:
http://www.referenceforbusiness.com/small/Inc-Mail/ISO-9000.html http://www.praxiom.com/princ http://www.iso.org/iso/iso_catalogue/management_standards/iso_9000_iso_14000/qmp.htmiples .htm Total Quality Management: Concepts and Practices by: Samuel Mejia Salvador, Gloria J. Tolentino-Baysa, Francisco C. Cullar and Ellinor C. Fua-Geronimo BSI Group presentation Poksinska, B.; Dahlgaard, J.J.; Antoni, M. (2002), "The state of ISO 9000 certification: A study of Swedish organisations", The TQM Magazine 14 (5), retrieved 2010-11-22 Tsim, Y.C.; Yeung, V. W. S.; Leung, E. T. C. (2002),"An adaptation to ISO 9001: 2000 for certified organisations", Managerial Auditing Journal 17 (5), retrieved 2010-11-22 ISO Press Release, 25 October 2010. www.wikipedia.com http://www.bizmanualz.com/iso-9000-qms/ISO_background.html Salvador, S. M: Tolentino-Baysa, G. J; Cullar, F. C; Fua-Geronimo, E. C (2009) ―Total Quality Management: Concepts and Practices‖, 230-231 Corbett, C.J.; Montes-sancho, M.J.; Kirsch, D.A. (2005), "The financial impact of ISO 9000 certification in the United States: An empirical analysis", Management Science 51 (7): 1046 – 1059, retrieved 2010-11-22
Heras, I.; Dick, G.P. M.; Casadesus, M. (2002), "ISO 9000 registration's impact on sales and profitability A longitudinal analysis of performance before and after accreditation", International Journal of Quality and Reliability Management 19 (6): 774 – 791, retrieved 2010-11-22
Hendreicks, K.B.; Singhal, V.R. (2001), "The long-run stock price performance of firms with effective TQM programs", Management Science 47 (3): 359 – 368, retrieved 2010-11-22 16
