Some companies just seem to have an edge over others. Some thrive through rough times where others struggle or fail. Is there a special formula to help companies stay on top of change and still grow? What special assurance can a customer have that they are doing business with a solid company that puts them first? Could there be a business model, for instance, to follow that gives your company that special something? Yes! Success stories and positive bottom-line results trend more and more in favor of the companies that have an ISO 9001 certification.
Companies continue to seek ways to improve the quality of their products and services and to consistently meet or exceed customer expectations. As economies began to depend on global markets, it became even more important to have a resource to provide assurance that purchasing items or building relationships abroad would contribute to success, not be an obstacle. So the International Organization for Standardization issued its first set of requirements in 1987. Companies that met these requirements could apply for a certificate of conformance from several different certification bodies.
Today, more than one million certificates have been issued to businesses across 191 nations. And after several revisions, the current standard (revised in 2015) makes the process of improving even more simple and meaningful. The latest revision added components for service providers so the requirements can apply for any type of company, whether it’s a large manufacturing site, a hospital, a small machine shop, or a beauty shop.
What is ISO 9001:2015 Certification
Certification is a process where a third-party certification body assesses an organization to determine whether or not it sufficiently demonstrates conformance to the requirements of the standard.
ISO 9001:2015 is a worldwide standard that sets requirements for a strong Quality Management System. It details specific processes, procedures and activities that organizations must create, implement, maintain and improve in order to successfully manage making products or delivering services. A third party issues a certificate to help customers have more confidence that the organization has a system in place to meet their requirements. And when an occasional slip-up occurs, the system can help the organization quickly respond to the customer and put measures in place to make sure the issue doesn’t happen again.
To gain a certificate, organizations must implement and maintain all 131 of the “shalls” in the standard. The organization has flexibility on “how” it will meet them. When there is enough evidence that these requirements are sufficiently met, the certification body will visit with the company and can decide to issue a certificate that lasts up to 3 years. They normally check on progress annually to make sure companies are still meeting the requirements.
How Does it Help Your Company?
Certification to the standard can allow your company to expand into other markets, into other countries and certain industries. But fulfilling the requirements has an even bigger payoff:
According to the 9001 Council, recent studies show a comparison of certified and noncertified companies from studies conducted by Lloyd’s Register of Quality Assurance. Companies certified to the 9001 standard saw a strong correlation with increased profit margins and sales, up to TWICE the industry average within their niche. “In terms of return on assets (ROA), our findings showed that certified companies typically outperformed their non-certified counterparts by an average of slightly over 20 percent,” according to the study summary.
The authors also warn that simply adopting the requirements isn’t enough. “It must then become a major component of the company’s culture and daily practices” to bring about a competitive advantage.
Some specific outcomes:
- At a European company, water potability increased from 91% to 99.1% after implementing ISO 9001.
- ISO 9001 compliance facilitated better control of processes and a consequent 19% reduction in managerial staff. Cost savings over the following five years averaged roughly 4% per annum.
- Staff costs traditionally represented 70% of expenditure. Through consistent application of ISO 9001, improvements in productivity led to an almost 10% reduction in staff.
- Clark County School District, the largest school district in America, accommodated a rapidly expanding student population while achieving $174 million in cost avoidance and cost savings over 10 years after implementing ISO 9001.
- A manufacturing site improved quality by 12/5% in their first-pass yield and increased throughput by 166% after implementing ISO 9001.
- In another facility, two workers were redeployed for a new product line, facilitating a sales increase of 68%.
And the list goes on!
Every 6-8 years, the ISO reviews the standard to ensure it reflects the needs of organizations around the world. Representatives from more than 190 nations participate in reviewing the standard, raising concerns, and representing the “Voice of the Customer” in the requirements.
The 2015 standard has several notable changes from previous versions.
- There is no longer a requirement for a quality manual.
- The ownership of the quality management system belongs to top leadership. There may be a person assigned to facilitate the system, but the ownership of fulfilling requirements and ensuring a successful system cannot be delegated downward.
- Documentation requirements have been severely reduced. There are only three required “documents” required as directives. The organization can choose as many, or as few, as it needs, in order to ensure consistency of services and products.
- Risk and change management are important requirements, defined in several sections of the standard. The companies that adopted these concepts early tended to do especially well during the pandemic.
This version of the standard has been considered the most simple to implement, with the best results.
The History of ISO
ISO stands for International Organization for Standardization. The letter rearrangement is due to ISO deriving from the Greek word Isos, which means equal.
ISO became a company in 1947 in Geneva, Switzerland. A congregation of twenty-five countries created it. They brought together their concerns after issues in World War II, attempting to purchase parts and components for equipment outside their own borders. They met in the Institute of Civil Engineers in London. During this meeting, the group created a set of international standards. These mirrored the Military Specifications issued by the U.S. government.
These standards were to be followed by each country’s industrial manufacturing industry. A worldwide standard of manufacturing made each country work to the same level. After finding success in this new regime in 1951, ISO created standards for more areas, including the incredibly popular ISO 9001 standard for quality management systems. The organization creates additional standards for multiple industries including food safety, occupational health, risk management, laboratory, environmental, and many more.
Since its origins, ISO has published over 22,000 standards. They have grown from that small group of people to having 161 different standards bodies around the globe. Within these bodies are over 700 committees and subcommittees, represented by almost all nations on the globe.
Now you understand the ISO 9001-2015 certification a little better. We are proud to say that the Quality Management System of Custom Truck One Source (Kansas City location) is ISO 9001-2015 certified. If your customer or potential customer requires it, then you will need a certificate. It may not make sense to be certified if you are a very small company with few resources. It absolutely makes sense to get the standard and apply it. It’s truly becoming a model for successful businesses, and you don’t want your organization left behind.
To take the next step, inquire with a company that supplies ISO 9001 implementation support. Then, with that support, you can check to see which ISO certification body is best for your company, once you’re ready for a certificate.
Either way, strengthening your quality management system is a giant step forward in making sure your company is on the path to a thriving and growing future. Happy growing!