Essay on ISO 9000

This essay has a total of 1901 words and 10 pages.

ISO 9000

ISO 9000

Nowadays, the quality standards play a very important role in the international business.
The movement towards standardization began changing the whole concept of managing
business. The importance of quality awareness is accepted by a great number of companies
in Europe and in the United States. It is recognized as an essential criteria for the sale
of products and services all over the world.

What should be remembered is that most companies will benefit from becoming registered to
an ISO 9000 standard both in the short and long terms. In the short term, it will give
companies a competitive edge because of the positive impact the quality assurance system
will have on product/service quality, cost savings, access to markets, and overall
efficiency of operations. In the longer term, ISO registration will increasingly become a
requirement to do business in areas such as the European Community, as well as other vital
markets. (www.xanedu.com).

The global market becomes more competitive every day. Companies are looking for ways to
obtain advantages over the competitors. One of the brilliant solutions to this situation
is gaining ISO 9000 certification. ISO 9000 standards are international quality standards.
They are universal in the sense that they can be adopted to any kind of business. The ISO
9000 series is designed to be applicable to any manufacturing or service process. The
series is revised and controlled by Technical Committee (TC) 176. It consists of
international members from many areas of industry and science. (Avery, 1995).

The need to be ISO 9000 certified becomes so attractive that it captures the minds of all
the levels of corporate management. It influences the organization from the top executives
to clerks and process operators. The movement to the quality management transforms
businesses. Why is ISO 9000 so important? At some point, it is a matter of resource
allocation. How does management allocate scarce resource such as time, energy and money?
ISO 9000 becomes a marketing tool which shows customers that the company offers high
quality products. While other companies do not have the certification, it is one step
further to be more competitive at the market. (www.xanedu.com)

We can find out why the standardization is so important, if we look back to the history.
During the 1970s and 1980s, the science of quality control changed from
inspection-dominant to system-oriented organizations. The focus altered from the end
result orientation to the process of production. The background of this theory was that if
the process of production was well organized, then the final product would be of the
appropriate quality. Such approach served as the basis for quality improvement. Later,
when the production process was maintained, and companies saw improvement in production
size and the quality, everybody began realizing the importance of the orientation towards
quality standards.

But another problem appeared. Many of the existed standards could not make the transition
from product orientation to process orientation. Some countries realized the need for
making changes in their own requirements. As the companies entered the global market, the
difference of standard requirements led the producers toward confusion. To eliminate some
of the confusion, the International Organization for Standardization, headquartered in
Geneva, Switzerland, developed an international quality system standard, called ISO 9000.
The first standards were published in 1987. (Greene, 1991).

One of the objectives of ISO 9000 standards are business benefits. Thus the ISO 9000
standards aim at profitable increase of turnover and market share. In this case, such
benefits are gained in the result of cost decreases. ISO 9000 also increases stakeholder
confidence and customers' reliance on the quality of the product. It adds value to the
company which acquire ISO 9000 certification. Most companies have three overall goals to
mix: minimize costs, maximize profits, and maximize customer satisfaction. This way, the
benefits, expected from ISO certification, are both external and internal. The customers
perceive the product as having superior product quality and willingly buy it. Having
adopted ISO 9000, the company gains trust from the customers and suppliers. The company,
using this advantage, increases sales. Since the standards are considered to be
universally accepted quality standards, the company also gets worldwide recognition. And
finally, it increases its stock value. (www.xanedu.com).

Understanding and controlling all fields of the production process leads to reduction of
costs. ISO 9000 gives an opportunity to reduces manufacturing lead times and work in
process. (Harrington, 2002). The documentation aspect of ISO is really very important:
once the company starts documenting, it develops uniformity in different shift operations.
A good documentation can also lead to reductions in training time. With the help of ISO
9000, more effective work instructions are created for employees. The company can reduce
the amount of time required to train them. (Brown, 1997). Another a very important factor
is that the employees discuss their procedures within ISO standards. It leads to clarity
of process documentation.

Consequently, ISO 9000 leads to increase in productivity, meanwhile the inventories are
decreased. It lowers costs, and increase sales. This way, it increases the material flow
efficiency. The production and inventory control becomes more clear and transparent. All
uncertainty is minimized, while discipline increases. (Craft, 1994).

Today, these ISO standards are the most widely recognized and accepted international
standards. Quality is becoming increasingly important, therefore many companies are
seeking registration to demonstrate to their customers that they are in control of their
businesses. There are currently about 40,000 organizations in the world registered under
ISO 9003, 9002, or 9001 standards. By 1992, more than 20,000 companies in the EC had
registered, compared to about 600 in the United States. The Japanese not only have adopted
the standards, but also encourage registration among the companies. Many other countries
are moving rapidly toward ISO 9000 registration. (Avery, 1995).

In some situations, ISO standards become vital for a company to find the customer. It can
be very harmful not to have the standards, since ISO are required for products by European
Community. (Bodinson, 1991).

How does a company adopt ISO 9000? The involvement of top management is the most important
element in preparing for ISO registration. Senior management must drive the process,
managing the time and expense connected with obtaining the registration. It is essential
that every employee have a clear understanding of ISO 9000. Everyone must be aware of his
role in the organization process.

Once a company is sure that ISO implementation will be beneficial, it must select the ISO
9000 quality system standard. The preparation process demands a lot of time, and it
depends how well the organization's current quality system meets the requirements of the
chosen standards. Usually, this process takes from eighteen to twenty four months. The
purchase of ISO 9000 becomes a long strategy decision. Audit is the first thing to do. The
first thing an auditor looks for is documentation. After examining the documentation, the
auditor checks if the company production process follows the documentation. Such approach
not only ensures quality of products, but also ensures confidence in the process of
standardization.

ISO 9001 establishes a management system that provides confidence of the product to the
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