Bottom Line Benefits of Management Standards

TPMB4

Quite Involved in Discussions
#1
I can see and know how ISO 9001 can save money by reducing defective parts and waste. I was just wondering about some of the other management standards such as OHSAS18001, ISO14001, etc.

If you are a low environmental impact manufacturer who needs no permits to operate (environmental permits) then what is the real benefit of 14k? Surely it is good business practise to reduce heat, light and power costs. So if you are doing this already then what is the actual bottom line cost benefit of a certification of meeting a management standard going to be?

Similarly for the OHSAS standard. You don't want lost man hours or to be sued due to an accident so it is in the business interests to prevent the chances of this. So if it is done anyway does it make the company any better to get the system paperwork done and certified to the standard? Bottom line, will it add to the profitability?

I work in a company in the auti sector so we are 9001, you have to be as a minimum these days. That has helped us become more efficient, competitive and earnt us more business due to the systems being documented, certified, etc. I'd personally like to get stuck into EMS and OHSMS for my own benefit of having learnt those standards. I just can't see our company (SME) ever justifying the expenditure to gain those standards. I just can't see how it will save us enough money to become worthwhile. Now if OEMS decided tier2 or 3 suppliers needed 14k or 18k then we'd have to just like we might have to get TS standard. Just can't see it happening.

Any views?
 
Elsmar Forum Sponsor
#2
Re: Bottom line benefits of management standards?

If it is a business driven decision, then the benefit is the continued business itself.
If it is voluntary, then the bottom line benefit is systematic and continually improved approach to the focus aspect of the management standard. They pay off in the long run.
Your other benefit is being on the better side for a new business, where big names seek to have suppliers certified to these management standards.
 
Last edited:

Wes Bucey

Prophet of Profit
#3
Re: Bottom line benefits of management standards?

I can see and know how ISO 9001 can save money by reducing defective parts and waste. I was just wondering about some of the other management standards such as OHSAS18001, ISO14001, etc. <snip>
I think you've hit the nail on the head - your personal desire has nothing you can offer to provide value to the company to seek these registrations.

Ultimately, paying for ANY registration to an International Standard has to have a business advantage for an organization to justify making the expenditure.

Sometimes the "business benefit" is based in public relations (being a good neighbor proved by registration to environmental Standards may make it easier [translate cheaper in terms of attorney fees, etc.] in getting governmental approval for expansion of facilities. That same good neighbor aura may be a deciding factor for a prospective customer who wants to mitigate risk of opposition to ongoing operations of a supplier or to help burnish its own aura of "good guy" to appeal to its own customer base.

The bottom line:

Smart business owners and managers ALWAYS consider WIIFM and WIIFU [What's In It For Me/Us] as part of their business strategy.
 

TPMB4

Quite Involved in Discussions
#4
Re: Bottom line benefits of Management Standards?

That's exactly what I was thinking Wes. We are low impact environmentally and we have only the usual small cuts and scrapes any manufacturer would have. Our owners are proactive (even down to actually working on the shopfloor or on a forklift). They are trained in all the equipment on site and take pride in being involved. As a result we have a basically well run operation that always looks to improve. They make the big spend improvements on new equipment but in between they are always looking at the details to make smaller, incremental improvements.

Anyway, with all that it is straight down to bottom line. They will always look at the figures before deciding. As such OHSAS and 14k are not even on the agenda. 14k is the only one of these two that would even figure with our customers as a potential benefit and even that is not worth much to the company. Getting TS 16949 would potentially be a benefit but the cost at the moment is limiting I think. Cost /benefit has not been proven but we may well end up getting it if not having it loses customers and business.

Anyway, I guess you really need to be in the right company (usually a bigger one or one with more use of chemicals deleterious to the environment) to get involved with OHSAS and 14k. Shame as it would be another feather to my cap so to speak.

one quick question. Is OHSAS truly an international standard? I know it widely taken up round the world but it is still only adopted by BSI. IIRC it is down to the US and their ANZI Z10 (??) that prevented it becoming adopted by ISO to become a true international standard. correct me if I'm wrong.
 

Stijloor

Leader
Super Moderator
#5
Re: Bottom line benefits of Management Standards?

<snip> One quick question. Is OHSAS truly an international standard? I know it widely taken up round the world but it is still only adopted by BSI. IIRC it is down to the US and their ANZI Z10 (??) that prevented it becoming adopted by ISO to become a true international standard. correct me if I'm wrong.
Our Member "Weak Licks" states it very well in this post.
 

Jen Kirley

Quality and Auditing Expert
Leader
Admin
#6
Re: Bottom line benefits of Management Standards?

In my view the only direct benefit of [registering to] the management standard is customer requirement.

For the rest, the benefit is in the activities. Even with no reportable waste, there are costs associated with waste. I am currently with a client that found someone to buy their waste product as a raw material for other, less controlled goods. So not only is that immense quantity if solid not going into the landfill, the waste generator gets $$$.

These days there is a heightened attention to "going green" with some people actually using environmental stewardship as a part of the buying decision. But that is harder to measure than the above two examples.
 
V

vanputten

#7
Re: Bottom line benefits of Management Standards?

I think the most important general benefit is the word you left out of the title of the thread - system.
 
#8
Re: Bottom line benefits of Management Standards?

I can see and know how ISO 9001 can save money by reducing defective parts and waste. I was just wondering about some of the other management standards such as OHSAS18001, ISO14001, etc?
I tend to look at it in this way:
  • If you have quality related problems, they are likely to affect Environment and H&S.
  • If you have Environmentally related problems they are likely to affect Quality and H&S.
  • If you have H&S related problems they are likely to affect Quality and environment.
Maybe I am oversimplifying things, but they are all interrelated, all of them to a varying degree being part of the reality any company has to deal with.

/Claes
 

harry

Trusted Information Resource
#9
Re: Bottom line benefits of Management Standards?

Much like the Hierarchy of Needs and its application to individuals, beyond 'profit', responsible and forward looking organizations look at social responsibility and 'sustainability'. EH&S standards, ISO 50001 and ISO 26000 are some standards that provide readily available guidelines and framework for these organizations to pursue their goals. The objective is not to enhance bottom line but more to 'sustain' the business.
 

Wes Bucey

Prophet of Profit
#10
Re: Bottom line benefits of Management Standards?

Much like the Hierarchy of Needs and its application to individuals, beyond 'profit', responsible and forward looking organizations look at social responsibility and 'sustainability'. EH&S standards, ISO 50001 and ISO 26000 are some standards that provide readily available guidelines and framework for these organizations to pursue their goals. The objective is not to enhance bottom line but more to 'sustain' the business.
This is so true, Harry, BUT ---
the Standards may be adopted as a guide for the business, but I, for one, have NEVER bought the concept that it is necessary for a disciplined and well-organized management team to expend the extra money to pay a third party for registration UNLESS there was a clear business requirement for registration versus compliance.
 
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