José Ockerman Marco A. Soto ISO 9001:2000 José Ockerman Marco A. Soto EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT What is ISO? International Organization for Standardization (Organisation internationale de normalisation) Founded on February 23, 1947, it promulgates world-wide industrial and commercial standards Headquartered in Geneva, Switzerland Two official languages: English and French ISO is based on the Greek word ἴσος (isos), which means equal Recognized by the world with 157 member nations out of 195 in the world, ensures adherence to operating standards Works in partnership with other technical organizations to coordinate standards. They are: IEC- International Electronics Commission -IEEE- (1906) ITU- International Telecommunications Union –UN- (1865) ANSI- American National Standards Institute (1918) ASTM – American Society for Testing and Materials (1898) EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT ISO Member countries Members Correspondent members Subscriber members other places with an ISO 3166-1 code who aren't members of ISO EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT History of ISO 9001 Pre ISO 9000:During WWII, due to British high-tech industry having many manufacturing problems and accidents the government sets new standard and calls it BS 5750 BS 5750 required factories to document manufacturing procedures, and prove by record-keeping that the procedures were being followed ISO 9000:1987 had the same structure as BS 5750, with three 'models' for quality management systems: ISO 9001:1987 Model for quality assurance in design, development, production, installation, and servicing 9002:1987 Model for quality assurance in production, installation, and servicing ISO 9003:1987 Model for quality assurance in final inspection and test ISO 9000:1994 emphasized quality assurance via preventative actions EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT History of ISO 9001 ISO 9001:2000 combines the three standards 9001, 9002, and 9003 into one, now called 9001. Requirements are: Radical change in thinking by placing the concept of process management front and center Demands involvement by upper executives to integrate quality into the business system and avoid delegation to junior executives and staff Inclusion of process performance metrics Expectations of continual process improvement and tracking customer satisfaction EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT ISO 9001:2000 Certification: ISO doesn’t certify organizations Countries have accreditation bodies to authorize certification bodies which in turn audit organizations applying for ISO 9001 certification Commonly referred to as ISO 9000:2000 certification, the actual standard to which an organization's quality management can be certified is ISO 9001:2000 EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT ISO 9001:2000 Standard Scope Normative reference Terms and definitions Quality management system Management responsibility Resource management Product realization Measurement, analysis and improvement EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT ISO 14001:2004 Standard Standard for Environmental Management, Contains six main clauses: 4.1 General requirements 4.2 Environmental policy 4.3 Planning 4.4 Implementation and operation 4.5 Checking and corrective action 4.6 Management review EIN 5322 ENGINEERING MANAGEMENT FALL 2007

Current state of a Non-ISO Business No consistent quality policy (QMS) Inconsistent procedures and processes Inconsistent focus on quality Inconsistent documentation of processes and procedures Lack of management support for continuous improvement Lack of a monitoring and measurement program Deficient of nonexistent corrective action documentation Poor focus on customer feedback and concerns Inability to compete for contracts with ISO certified businesses EIN 5322 ENGINEERING MANAGEMENT FALL 2007

Why should I get certified? Your customers are demanding it! You want to compete for other business You want to improve productivity You want to establish processes and standards for your company to follow You want to brand your products with ISO You want to improve quality You want to establish continuous improvement You want to sustain your current performance EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT IAAR Survey IAAR (Independent Association of Accredited Registrars) conducted a survey and found the following reasons for getting QMS Certification: 29% Customer Mandate 17% Competitive pressure or advantage 16% Continuous improvement based on customer requirements 14% Improve Quality 10% Implementation of best practices 9% Corporate mandate 1% Reduce costs and legal mandate http://www.qualitydigest.com/may07/articles/02_article.shtml EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT IAAR Survey The IAAR Survey also found that Quality Certification came with external benefits Improved perceived quality 57% Improved customer satisfaction 55% Competitive advantage 38% Reduced customer audits 31% Increased market share 11% Quicker time to market 4% Internal benefits include: Greater quality awareness and better documentation 73% Increased efficiency 37% Positive cultural change 33% Improved financial performance 12% Improved employee morale 9% http://www.qualitydigest.com/may07/articles/02_article.shtml EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT What do you have to do? Dedicate resources and personnel to ISO Develop a quality oriented management team Create a quality team with a quality manager Train them on ISO and Auditing to the standard Hire an outside registrar Develop a QMS Document processes and procedures Do a gap analysis audits and pre assessments Have the registrar pre audit you Then schedule the actual audit for certification Make continuous improvement your mantra Dedicate your activities to your customers needs EIN 5322 ENGINEERING MANAGEMENT FALL 2007

What does it cost? Depends on the complexity of your business (service, manufacturing or retail) Depends on the size of your business Depends on the standard you are pursuing On average it can cost from a high of $4,500 to a low of $1,000 per employee* Average initial registration costs average from $1,500 to $2,500 per employee* Source http://www.ciras.iastate.edu/publications/management/iso.asp EIN 5322 ENGINEERING MANAGEMENT FALL 2007

Real world cost examples Medium sized companies such as Continental Circuits Corp., is spending close to $100,000 ($40,000 in software and $60,000 labor costs associated with implementation and pre-assessments* “The cost of the whole ISO 14001 certification process, beginning with gap analysis and culminating with Certification, could run from $40,000 to more than $100,000, estimates Edward Pinero, director of environmental services at Miller-Rettew Associates.** *Source http://www.qualitydigest.com/jul/iso14k1.html **Source http://www.qualitydigest.com/oct/iso14000.html EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT ISO 9001 2000 Certified Quality Management System Documented policies and procedures Root cause analysis Continuous improvement Management support and responsibility Regular reporting and maintenance Control of facility requirements Focus on the customer Fielding of customer complaints and requirements EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT ISO 9001 2000 Certified Regular calibration of tools and equipment Tracking of performance Periodic auditing and measurement of the overall organizations adherence to their own stated procedures Certification by an outside governing body Trained quality specialists providing guidance and internal auditing Management commitment to quality Documentation of performance and auditing EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT ROI Consistent procedures Commitment to a quality policy Management support Quality infrastructure and consistent focus on Quality performance Continuous performance Branding of certification Additional revenue Product improvement Competitive advantages EIN 5322 ENGINEERING MANAGEMENT FALL 2007

Measured ROA Certification in the chemical industry EIN 5322 ENGINEERING MANAGEMENT FALL 2007

Measured ROA Certification in the machinery and computer industry EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT Measured ROA Certification in the electronic equipment and components industry EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT Conclusion ISO 9001:2000 ISO 14001 Why, what, how much and benefit ROA Depending on the industry, ISO certification brings many advantages both perceived and tangible, but ultimately with empirical data it provides sustained and improved return on assets. Unfortunately, the data also indicates that that return may be small when compared over several years of post certification growth, but if you compare it to non-certified companies it proves to be a worthwhile investment. EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT QUESTIONS? ??? EIN 5322 ENGINEERING MANAGEMENT FALL 2007

EIN 5322 ENGINEERING MANAGEMENT Bibliography http://www.iso.org/iso/iso_catalogue/the_iso_portfolio.htm http://www.iso.org/iso/standards_development/processes_and_procedures/stages_description.htm http://en.wikipedia.org/wiki/International_Organization_for_Standardization http://en.wikipedia.org/wiki/Image:ISO_French_logo.svg http://www.qualitydigest.com/may99/html/body_iso9000.html http://www.qualitydigest.com/may07/articles/02_article.shtml http://www.ciras.iastate.edu/publications/management/iso.asp http://www.qualitydigest.com/jul/iso14k1.html http://www.qualitydigest.com/oct/iso14000.html http://www.aworldofquality.com/content/Downloads/Financial%20Benefits%20of%20ISO%209000%20Certification.pdf EIN 5322 ENGINEERING MANAGEMENT FALL 2007