ISO Standard in a Product-Based Industry

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Table of Contents

Introduction
ISO and the Leadership Team
Benefits of ISO
Justification
Impact on Performance and Productivity
Applicability to Other Firms
Conclusion
References

Introduction

Any business needs to adopt standards to check if it is performing properly. The International Organization for Standardization (ISO) issues standards for companies, and ISO 9000 is a specific category of quality management standards for which a business can be certified. Complete Pool Controls (CPC) is an independent company that employs 30 people and produces “recreational water treatment chemicals and dosing equipment for swimming pool & hot tub users” (“About us,” n.d., para. 1).

Having adopted ISO standards, the firm received appropriate certification. To assess the effects of applying these standards, it is necessary to analyze the leadership’s initial decision to adopt the standards, explore any benefits, provide a justification for the action, examine the effects on performance and productivity, and reflect on the applicability of ISO standards to other businesses.

ISO and the Leadership Team

The leadership of CPC states that “’ISO 9001 has verified and improved [the company’s] processes and more importantly has formalised them in writing” (“ISO 9001,” 2013, p. 1). The technical director at CPC further states that the firm’s main concern had been a number of errors occurring during operation processes, the resolution of which had required a significant amount of time and financial resources.

The standardization of processes proposed by ISO quality management approaches decreased the number of errors occurring. Also, the company’s leadership recognizes that the adopted standards allow not only the meeting of customer needs (expressed in demand) but also by providing customer benefits; i.e. promoting loyalty by ensuring that customers are delivered additional value, even above expectations. For the management, the main reason for using ISO standards is improved efficiency. For the leadership, there is the additional strategic advantage of being able to focus on customer satisfaction as opposed to purely products or operation.

Benefits of ISO

In addition to the reduction of time needed to complete tenders and the focus on customer satisfaction, other benefits include the improved systematization of processes and procedures, as well as reduced costs (“ISO 9001,” 2013). Moreover, it is acknowledged at CPC that staff engagement (i.e. employee commitment to the quality of their work and activeness in terms of providing feedback) is improved through the use of ISO standards. Further, the company stresses that it initially considered certification to address the tender stipulation issue but, upon implementing the new processes, the management revealed additional benefits, such as an improved reputation of a professional firm.

Reputation is an important factor in dealing with both suppliers and customers, and the business community in general. As the company was rather young and actively growing at the time of the IOS adoption, it recognizes today that the standardization allowed it to manage its growth more effectively and avoid any negative scenarios in which the quality of customer service would have been undermined.

Justification

The selected company adopted ISO 9000 standards because it wanted to make its operation faster and smoother. The company’s leadership initially considered only one aspect of operation—the tender process—but ultimately revealed that the certification led to a number of additional benefits described above. CPC stress that, at the beginning, the objectives “identified by the company [were] demanding but through involvement of all staff CPC are close to achieving them all” (“ISO 9001,” 2013, p. 2). Although it had not been planned by the firm, the optimization of procedures that allowed for a more successful growth and the achievement of challenging goals can be regarded as the justification for the adoption of ISO standards.

Impact on Performance and Productivity

The certification affected CPC’s productivity and performance; i.e. the output of the staff’s work and the quality of it measured by the compliance with expected outcomes. The company acknowledges that the adoption of the ISO standards resulted in “overarching quality” (“ISO 9001,” 2013, p. 2) of their products, which is an important outcome because, according to Heizer, Render, and Munson (2016), “[h]igh-quality products and services are the most profitable” (p. 216).

The way the firm evaluates the performance of its workforce is not specifically revealed, but certain performance benefits, including finance-related, are referred to in CPC’s statement on ISO standards. Overall, it can be concluded that both performance and productivity were improved. However, it should not be overlooked that both indicators are based on internal assessments.

It could be argued that external assessment, based on the customers’ perspective, provides a more accurate indication of a company’s success. Heizer et al. (2016) state that quality is the “ability of a product or service to meet customer needs” (p. 217). Therefore, a company should analyze the effectiveness and successfulness of certification based not only on its internal performance indicators but also external feedback and customer satisfaction. In this regard, CPC claim that the adoption of the specific standards allows them to focus on customer needs, and this shows that the company commits to the right values instead of being overly preoccupied with its operation issues or products.

Applicability to Other Firms

It is evident that CPC have enjoyed many benefits from adopting the ISO 9000 standards and are currently satisfied with adhering to them. However, it can be argued that certification is not necessarily the best option for all firms (Tarí, Molina-Azorín, & Heras, 2012). First of all, as mentioned, CPC are rather small; managing 30 employees can be dramatically different from managing 1000. For bigger companies, standardization is more challenging because standards need to be designed for every department, team, and position, and it is much harder to make all those standards compliant with the corporate strategy of a large workforce than it is for a firm that employs only 30 people.

However, the size of a business is not the only issue. There is also the issue of specific characteristics of operation that may resist standardization (Psomas, Pantouvakis, & Kafetzopoulos, 2013). If a company addresses a wide range of customer needs, it needs to develop its own guidelines on how to meet those needs based on this company’s expertise.

External institutions may not be able to impose effective standards on such a company because the company is an expert in a certain field, and it develops its own standards based on the extensive experience of addressing a certain type of demand. For such firms, ISO certification can hinder their development and prevent further innovation. However, the standards issued by the ISO can be modified and improved in the future, based on the experience of those unique firms in case the firms’ operation and approaches prove to be successful.

Conclusion

CPC are satisfied with their decision to adopt ISO standards and recognize such benefits as improved efficiency, employee engagement, and customer satisfaction. Although the company’s justification had been the specific need to improve the tender process, additional positive effects on performance and productivity were later observed. Although ISO standards may not be fully beneficial for all businesses, actively growing companies may choose to adopt them to manage their growth more successfully.

References

About us. (n.d.). Web.

Heizer, J., Render, B. & Munson, C. (2016). Operations management: Sustainability and supply chain management (12th ed.). Boston, MA: Pearson.

ISO 9001 – improving financial performance. (2013). Web.

Psomas, E. L., Pantouvakis, A., & Kafetzopoulos, D. P. (2013). The impact of ISO 9001 effectiveness on the performance of service companies. Managing Service Quality: An International Journal, 23(2), 149-164.

Tarí, J. J., Molina-Azorín, J. F., & Heras, I. (2012). Benefits of the ISO 9001 and ISO 14001 standards: A literature review. Journal of Industrial Engineering and Management, 5(2), 296-322.

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