Wednesday 16 March 2016

ISO 9001 (Quality Management Systems) Explained

What is ISO?

The ISO was founded in 1946 to develop international quality standards to facilitate worldwide trade and help Western countries regain their competitiveness. ISO 9000 is "a series of international standards dealing with quality systems that can be  used for external quality assurances purposes".

What is ISO: 9001?

ISO 9001 is one of the standards within the range of ISO 9000 standards. This standard specifics requirements for a quality management system, for any firms that needs to demonstrate its ability to consistently provide product that meets customer and applicable regulatory requirements and aims to enhance customer satisfaction. It has been organised in a user-friendly format with terms that are easily recognised by all business sectors.

International experts and authorities of the Construction Industries have already testified that implementing ISO 9001:2008 enables continuous improvement of organization’s quality management systems (QMS) and processes. In turn, this improves the ability of your operations to meet customer requirements and expectations.

ISO 9001 certification is suitable for all sizes and types of organisations and is well established around the world as an invaluable Quality Management System standard. It is suitable for organisations in all industry sectors and will help your organisation to improve management processes to compete locally and/or globally.

The implementation of ISO 9001: 2008, Quality Management System in the construction industry is now an on going trend. More and more, the Small and Medium Enterprise (SMEs) in Myanmar are getting the certification.

Principles of ISO: 9001

ISO 9001:2008 is based on eight quality management principles. These principles can be used by senior management as a framework to guide their organizations towards improved performance. The principles are derived from the collective experience and knowledge of the international experts who participate in ISO Technical Committee ISO/TC 176, Quality management and quality assurance, which is responsible for developing and maintaining the ISO 9000 standards.

Principles of ISO 9001:2008 are:
  1. Customer focus
  2. Leadership
  3. Involvement of people
  4. Process approach
  5. System approach to management
  6. Continual improvement
  7. Fact-based decision making, and
  8. Mutually beneficial supplier relationships

Principle 1: Customer Focus

ISO 9001:2008 defines customer focus as a top management responsibility. Customer focus involves determining customer requirements and meeting the requirements so as to achieve customer satisfaction.

Enhance customer satisfaction by ensuring that customer requirements are identified. The principal message is that management must convey is that the objective of the business is to keep the customer happy.

Organizations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations.

Key benefits:
  • Increased revenue and market share obtained through flexible and fast responses to market opportunities;
  • Increased effectiveness in the use of the organization’s resources to enhance customer satisfaction;
  • Improved customer loyalty leading to repeat business;
Applying the principle of customer focus typically leads to:
  • Researching and understanding customer needs and expectations;
  • Ensuring that the objectives of the organization are linked to customer needs and expectations;
  • Communicating customer needs and expectations throughout the organization;
  • Measuring customer satisfaction and acting on the results;
  • Systematically managing customer relationships;
  • Ensuring a balanced approach between satisfying customers and other interested parties (such as owners, employees, suppliers, financiers, local communities and society as a whole);

Principle 2: Leadership

Leaders provide clear direction to an organisation, pointing the way and being clear about its purpose (or mission/vision/policy). They should encourage and develop a culture and environment in which people do what needs to be done to satisfy customers.  Leadership is not telling or directing people, it is leading them and the culture required is one that goes beyond just 'doing the work' to underpinning how people think and talk and behave: the culture of the organisation.

Leaders establish unity of purpose and direction of the organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization’s objectives.

Key benefits:

  • People will understand and be motivated towards the organization’s goals and objectives;
  • Activities are evaluated, aligned and implemented in a unified way;
  • Miscommunication between levels of an organization will be minimized;

Applying the principle of leadership typically leads to:

  • Considering the needs of all interested parties including customers, owners, employees, suppliers, financiers, local communities and society as a whole;
  • Establishing a clear vision of the organization’s future;
  • Setting challenging goals and targets;
  • Creating and sustaining shared values, fairness and ethical role models at all levels of the organization;
  • Establishing trust and eliminating fear;
  • Providing people with the required resources, training and freedom to act with responsibility and accountability;
  • Inspiring, encouraging and recognizing people’s contributions;

Principle 3: Involvement of People

The most effective way to achieve quality is by involving people across all levels of the organization. Everyone contributes to the success (or otherwise) of an organisation and has a part to play in it, as well as a responsibility for quality.  Whether the word quality appears in their job title is quite immaterial.

People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization’s benefit.

Key benefits:
  • Motivated, committed and involved people within the organization;
  • Innovation and creativity in furthering the organization’s objectives;
  • People being accountable for their own performance;
  • People eager to participate in and contribute to continual improvement;

Applying the principle of involvement of people typically leads to:
  • People understanding the importance of their contribution and role in the organization;
  • People identifying constraints to their performance;
  • People accepting ownership of problems and their responsibility for solving them;
  • People evaluating their performance against their personal goals and objectives;
  • People actively seeking opportunities to enhance their competence, knowledge and experience;
  • People freely sharing knowledge and experience;
  • People openly discussing problems and issues;

Principle 4: Process Approach

Efficiency is better achieved when things are managed as processes, rather than as individual tasks or separate departments.
A process is a sequence of related activities, organised to achieve a particular purpose. 
Example:  creating and serving a meal is a process.  Its activities include buying stuff, preparing it, cooking and then serving it;  the inputs are the raw materials and recipe/s; the output is the meal itself.

To apply a process approach means that you first decide what you plan to do (e.g., provide a particular service/create a particular widget), and then work out what processes you need in order to provide that service/create that widget.  For example, you have to decide what the tasks are, how and where they relate, what resources and inputs you need, and how to do things in order to arrive at the result you want.

A desired result is achieved more efficiently when activities and related resources are managed as a process.

Key benefits
  • Lower costs and shorter cycle times through the effective use of resources;
  • Improved, consistent and predictable results;
  • Focused and prioritized improvement opportunities;

Applying the principle of process approach typically leads to:
  • Systematically defining the activities necessary to obtain the desired result;
  • Establishing clear responsibility and accountability for managing key activities;
  • Analysing and measuring of the capability of key activities;
  • Identifying the interfaces of key activities within and between the functions of the organization;
  • Focusing on the factors – such as resources, methods, and materials – that will improve key activities of the organization;
  • Evaluating risks, consequences and impacts of activities on customers, suppliers and other interested parties;

Principle 5: System Approach To Management

This means understanding what a management system is, its various parts and how you want it to work. It also means having consistent ways to do and manage things, rather than ad hoc 'making it up' and/or just being reactive.

Identifying, understanding and managing interrelated processes as a system contributes to the organization’s effectiveness and efficiency in achieving its objectives.

Key benefits:
  • Integration and alignment of the processes that will best achieve the desired results;
  • Ability to focus effort on the key processes;
  • Providing confidence to interested parties as to the consistency, effectiveness and efficiency of the organization;

Applying the principle of system approach to management typically leads to:
  • Structuring a system to achieve the organization’s objectives in the most effective and efficient way;
  • Understanding the interdependencies between the processes of the system;
  • Structured approaches that harmonize and integrate processes;
  • Providing a better understanding of the roles and responsibilities necessary for achieving common objectives and thereby reducing cross-functional barriers;
  • Understanding organizational capabilities and establishing resource constraints prior to action;
  • Targeting and defining how specific activities within a system should operate;
  • Continually improving the system through measurement and evaluation;

Principle 6: Continual Improvement

Always aim to do better. Make improving what you do or make a permanent objective.

Continual improvement of the organization’s overall performance should be a permanent objective of the organization.
Key benefits:
  • Performance advantage through improved organizational capabilities;
  • Alignment of improvement activities at all levels to an organization’s strategic intent;
  • Flexibility to react quickly to opportunities;

Applying the principle of continual improvement typically leads to:
  • Employing a consistent organization-wide approach to continual improvement of the organization’s performance;
  • Providing people with training in the methods and tools of continual improvement;
  • Making continual improvement of products;
  • processes and systems an objective for every individual in the organization;
  • Establishing goals to guide, and measures to track, continual improvement;
  • Recognizing and acknowledging improvements;

Principle 7: Fact-based Decision Making 

Use suitable information/fact/data when making decisions - as opposed to opinions, feelings, knee jerk responses, snap reactions, 'gut instinct' etc. To do this, you need to decide first what data you will need, collect it, and analyse/review it.

Wrong information will definitely lead to a poor management decision, therefore an efficient access to factual information will increase ability to demonstrate the effectiveness of past decisions through reference to factual records.

Effective decisions are based on the analysis of data and information
Key benefits:

  • Informed decisions;
  • An increased ability to demonstrate the effectiveness of past decisions through reference to factual records;
  • Increased ability to review, challenge and change opinions and decisions;

Applying the principle of factual approach to decision making typically leads to:

  • Ensuring that data and information are sufficiently accurate and reliable;
  • Making data accessible to those who need it;
  • Analysing data and information using valid methods;
  • Making decisions and taking action based on factual analysis, balanced with experience and intuition;

Principle 8: Mutually Beneficial Supplier Relationships

An organisation and its suppliers depend on each other. Work with your suppliers wherever possible, so that you can both benefit.

An organization and its suppliers are interdependent and a mutually beneficial relationship enhances the ability of both to create value.

Key benefits:
Increased ability to create value for both parties;
Flexibility and speed of joint responses to changing market or customer needs and expectations;
Optimization of costs and resources;

Applying the principles of mutually beneficial supplier relationships typically leads to:
Establishing relationships that balance short-term gains with long-term considerations;
Pooling of expertise and resources with partners;
Identifying and selecting key suppliers;
Clear and open communication;
Sharing information and future plans;
Establishing joint development and improvement activities;
Inspiring, encouraging and recognizing improvements and achievements by suppliers;

The Next Step

There are many different ways of applying these quality management principles. The nature of the organization and the specific challenges it faces will determine how to implement them. Many organizations will find it beneficial to set up quality management systems based on these principles.