June 29, 2015 / best practices, customer satisfaction metrics, industry news, LIT, quality, ROI, strategic planning, value-added services
As competition in the industrial metal-cutting sector rises, companies are now forced to compete on both speed and quality. In fact, the struggle to balance speed with quality is one of the top operational challenges facing industrial companies today, according to a white paper produced by the LENOX Institute of Technology. One way metal-cutting companies are addressing this challenge is through ISO 9001 certification. According to BSI, there are currently 1.2 million certified organizations; however, if your company helps comprise this number, it will soon be time to go through the process again.
Preparing for Change
Currently, the International Standard Organization (ISO) is in the process of updating ISO 9001. The new version will be finalized in September 2015, and companies will have three years to become recertified. The 2015 version will look and feel very similar to ISO 9001:2008, with a few minor changes and a new focus on risk management.
The simplest of changes comes in the form of new vocabulary. As listed in this Quality Digest article, there are a couple minor shifts in wording:
- “Product” will become “goods and services”
- “Document” and “records” will be replaced by “documented information”
- “Continual improvement” will now be referred to as simply “improvement”
Apart from terminology changes, ISO 9001:2015 also includes important updates to its fundamentals, with a new focus on risk-based management. Dr. Nigel Croft, chairman of the ISO revision subcommittee, recently gave an interview clarifying these changes, and according to a recent blog post from California Manufacturing and Technology Consulting (CMTC), these changes can be boiled down into the following three core concepts:
- Risk-Based Thinking. The largest change to ISO 9001 is what Dr. Croft refers to as “aiming at preventing undesirable outcomes.” The CMTC blog post describes a scenario ISO 9001:2015 is designed to protect against. In 2011, Japan suffered an earthquake and tsunami, damaging an auto part supplier in the region. This supplier provided auto parts to multiple manufacturers around the world. In the wake of the natural disaster, Nissan and Toyota were forced to halt production, losing 20% of sales. This new core concept would have helped the manufacturers prepare for the catastrophic event and mitigate its ripple effects.
- Process Approach. The main focus of this concept will remain on providing consistent products and services to meet customer needs and expectations. However, there is an added emphasis on aligning the quality management system with the company strategic direction. To accomplish this alignment, added involvement from top management will be necessary.
- Plan-Do-Check-Act Methodology. According to Dr. Croft, the final pillar will continue to emphasize the fit of individual processes within the overall organization and the success of these processes.
Benefits of ISO 9001:2015 Certification
In light of the recent revisions, companies are now faced with the decision to update their quality systems or forgo their certification. Is becoming recertified worth the cost and hassle?
Typically, companies with ISO certification reap many benefits, predominantly because organizations are required to meet strict quality standards to obtain certification. To meet such high standards, many companies implement a quality management system within their organization, and in turn, this system often leads to better long-term performance. According to research from the Chartered Quality Institute, companies that invest $1 on a quality management system on average increase their revenue $6, reduce costs by $16, and increase profits by $3. Furthermore, companies also benefit from the actual certification itself. The certification serves as a mark of consistent quality, and as stated in a report from ISO, organizations with the certification enjoy access to new markets, increased market share, and boosted sales. If you would like to estimate your ROI of becoming ISO certified, BSI provides an ISO 9001 “Return on Investment Calculator.”
While ISO certification is beneficial for many companies, there are several points to consider before becoming recertified or receiving the certification for the first time. As written in this previous blog post, it is essential for companies to fully understand the purpose of ISO 9001 certification and reach out to other shops before making a decision.
Planning Your Next Steps
If becoming recertified makes financial and strategic sense for your organization, it is time to begin planning. While companies will be granted three years to officially become recertified, it is possible to undergo the process sooner. The International Accreditation Forum created a transition planning document that lays out the following five steps for companies preparing to meet the new ISO requirements:
- Identify organizational gaps which need to be addressed to meet new requirements.
- Develop an implementation plan.
- Provide appropriate training and awareness for all parties that have an impact on the effectiveness of the organization.
- Update the existing quality management system (QMS) to meet the revised requirements and provide verification of effectiveness.
- Where applicable, liaise with their Certification Body for transition arrangements.
While it is tempting to delay recertification, it is essential for industrial metal companies to start preparing now. Three years will come quickly, so companies cannot postpone updating their quality systems or re-evaluating the cost-benefit of obtaining an ISO certification.