Implementing ISO 9001 Improves Business Performance
What is Business Performance
Business Performance is defined by the capacity of an organization to achieve its goals and anticipated outcomes. Indicators of business performance include: product quality, waste control, cost reduction, competitiveness improvement, sale volume, and profitability.
How ISO 9001 Improve Business Performance
The ISO 9001 sets requirements designed to improve a business ability to improve business performance by addressing all aspects of business planning and monitoring including the assessment of business risks, setting of goals and objectives, defining business processes and monitoring their effectiveness and monitoring business results.
How ISO 9001 Improve Business Performance Indicators?
Product Quality and achievement of higher customer satisfaction is at the core of the ISO 9001 standard. ISO 9001 defines various controls within its clauses that ensure that an organization provides high-quality output to its clients and meet its customer’s expectation. Some of the ISO 9001 requirements that ensure these are:
- Understanding the requirements of customers and interested parties: ISO 9001 requires that an organization understands the requirements of all its interested parties and internal/external issues that are relevant to the organization while defining the scope of the Quality Management System. This ensures that the requirements of customers are well understood and catered to when defining the Quality Management System. ISO 9001 requires that top management actively involve themselves in defining the strategic direction and ensure that the Quality Management System runs in conjunction with the business scenario and align with companies’ long term and short-term objectives. Understanding the requirements of its customers and setting of objectives ensures that an organization understand the needs of its customer well and processes defined are more customer-centric.
- Risk Management: Risk-based thinking is introduced in the new version of ISO 9001 and is an important tool to understand the risks involved in delivering a quality product /service to the customer and take actions to address these risks.
- Operational Controls: Various controls are built in the standard in various clauses of the standard to ensure all deliveries are reviewed and tested before it reaches the customer. Some of these are requirement/design reviews, quality inspections of both raw materials/final product, monitoring of suppliers, etc.
- Resources and Infrastructure: ISO 9001 touches on all the aspects of a business and support systems required to ensure product quality to the customer. This includes infrastructure, communication, resources, both human resource and equipment/tools that may be required.
- Data-driven approach: ISO 9001 is a standard that is driven by data and have efficient monitoring mechanisms applied. It required that the organization defines its quality objectives and constantly improve on their performances. Organizations with a continuous focus on the quality objectives and with improvement in the goals, achieve their business objectives.
- Process-Approach: ISO 9001 focuses on having a standard set of procedures and having streamlined processes in all departments of an organization. This ensures processes are repeated and produce the same quality of product every time. This approach provides the necessary controls that are required to keep the risks at an acceptable level and deliver a more consistent result.
- Empowered and Engaged Employees: ISO 9001 also stresses on having empowered & engaged employees, suitable work environment, access to organizational knowledge and training. This helps in improving the overall morale of employees and employees put in their best efforts towards customer satisfaction and ensure better product quality.
To achieve higher business performance, waste control is important as it makes your processes leaner and more efficient and you deliver faster. This also ensures that the procedures are optimized and the product quality improves.
- Non-Conforming Product/Process: ISO 9001 requirements has defined a very detailed approach for handling Non-conforming product /processes. It requires that an organization analyse all aspects of the non-conformities and ensure that the non-conformance do not re-occur. This pro-active approach improves processes and reduces waste in the processes.
- Continual Improvement: The new version of ISO 9001 standard has captured various aspects of running a business which is beyond just a Quality Management System. It gives a framework or a tool to improve performance. ISO 9001 focuses on continual improvements which require that organizations explore various ways to improve the current set of processes and develop optimized ways of working.
A set of consistent processes which are continuously improving with time, brings in efficiency and you deliver more with the same set of resources. Waste Control and lesser rework reduce the cost of deliveries.
Efficient Risk management which is embedded in all the processes of the organization ensures that the organization has analysed business needs well. This reduces all risks due to external factors like competition, market, trends, technological advancements, etc. and improves business sustainability in a competitive marketplace. ISO 9001 also improves customers trust in the organization’s processes when an organization is ISO 9001 certified. ISO 9001 focuses on increasing customer satisfaction and working towards improving customer relationship at all levels. This itself improves the competitiveness of an organization as old customers are retained and new customers are introduced.
Sale Volume and profitability
Overall increase in the reputation of the organization in the market due to excellent customer satisfaction and improved product deliveries, brings in new business and increase sales volume. Reduced cost and increase in sales results in increased profitability in business.
ISO 9001 is all about: Improved product quality + process improvements.
Both these factors, when implemented through the various clause of ISO 9001, ensures that there is less waste in the system. This further ensures cost reduction. Reduced cost helps the organization to pass on better value to its customers. As you provide value to the customer within the same cost, the customer is “delighted” and you gain more business. Each delighted customer provides you with new references and your competitiveness improves. A surge in sale volume is what follows which increases your profitability. So, just by applying the ISO 9001 standard, you achieve higher business performance with improvement in all the parameters that define performance.