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Does ISO 9001 have nothing to do with profitability?

Helmut Jilling

Auditor / Consultant
#1
Starting two or three years ago, we have here a new fashion of some ISO 9001 registrars considering that quality improvement should enter in the financial field.
In this direction they think that organizations should have financial objectives in their QMS, such as knowing if each work is profitable or not. This not written anywhere in the standard, but some auditors find it very interesting…
:notme:

It is interesting, and probably beneficial, but not required. We frequently discuss things related to profitability for certain processes, because it is related to process improvement. But, there is no requirement to add it to Quality Objectives. Nor is it prohibited. It is how business runs, after all.

NOTE: THIS THREAD HAS BEEN SPLIT FROM ISO 9001 Implementation and Certification - Some advice
 
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Antonio Vieira

Involved - Posts
Trusted Information Resource
#2
Re: ISO 9001 vs. Profitability

It is interesting, and probably beneficial, but not required. We frequently discuss things related to profitability for certain processes, because it is related to process improvement. But, there is no requirement to add it to Quality Objectives. Nor is it prohibited. It is how business runs, after all.
Profitability issues should never be mixed with quality management. Not just because it’s not a 9001 requirement, but because it can lead to the “famous” budget cuts that are not related to improvement.
Sometimes small organizations use financial objectives in their QMS just because they don’t have other management system in the Organization.
 

Helmut Jilling

Auditor / Consultant
#3
Re: ISO 9001 vs. Profitability

Profitability issues should never be mixed with quality management. Not just because it’s not a 9001 requirement, but because it can lead to the “famous” budget cuts that are not related to improvement.
Sometimes small organizations use financial objectives in their QMS just because they don’t have other management system in the Organization.

I would suggest you ask your top management what they think. Profitability and financial issues are a key part of business organizations. Telling top management ISO has no interest in profitability would make support for the program dry up. Quality only for the sake of quality is very passe.
 
J

JaneB

#4
Re: ISO 9001 vs. Profitability

Profitability issues should never be mixed with quality management. Not just because it’s not a 9001 requirement, but because it can lead to the “famous” budget cuts that are not related to improvement.
Why should they 'never be mixed'? To me, this is a silo view: and a rather idealistic and unrealistic one at that (although I may be mistaking your meaning of 'mixing').

Commercial businesses must make profits and manage financials. For 'quality' to ignore or refuse to have anything to do with such issues, and/or insist that there should be 'no mixing' doesn't make any sense. For example, I'd see an objective that aimed to have a process achieve the same level of quality, but at a lower operating cost (say) or a higher profitability level as an eminently acceptable objective!

If budget is being cut unrelated to improvement, it's precisely because one part of the business isn't considering the other part. Silo thinking.
 
J

JaneB

#5
Re: ISO 9001 vs. Profitability

Helmut, I think we posted within minutes of each other.
Telling top management ISO has no interest in profitability would make support for the program dry up.
In a heartbeat!

Quality only for the sake of quality is very passe.
And very rightly so. Myopic and just plain silly thinking. :applause:
And exactly the kind of 'thinking' that makes managers think very rude things about 'quality'.
 

Antonio Vieira

Involved - Posts
Trusted Information Resource
#6
Re: ISO 9001 vs. Profitability

I would suggest you ask your top management what they think. Profitability and financial issues are a key part of business organizations. Telling top management ISO has no interest in profitability would make support for the program dry up. Quality only for the sake of quality is very passe.
If you say your top management that 9001 has anything to do with profitability, you’re not being completely honest to them!
 

Jim Wynne

Staff member
Admin
#7
Re: ISO 9001 vs. Profitability

If you say your top management that 9001 has anything to do with profitability, you’re not being completely honest to them!
What if you say that control of processes is linked to profitability? Would that require prevarication? We continually conflate the container with the thing contained. If ISO 9001 is the method chosen to regulate and control processes, then profitability and financial considerations in general are obviously important. Note that I'm not referring an any way to registration here.
 

Randy

Super Moderator
#8
Re: ISO 9001 vs. Profitability

Everything about 9001 and certification is related to profitability of one type or another (or to those things related to profitability, cost avoidance or whatever)

I have yet to see an organization or organization leadership commit to a QMS approach just to get a warm fuzzy or look good.:nope:
 
B

blueicecube

#9
Re: ISO 9001 vs. Profitability

Thank you for your thoughts & reply.

The concern here is that the manufacturing will be having a industry specific ISO whereas the 'other side' will remain holding the ISO 9001.

Maybe the only person I am trying to convince for this 2 certificate is myself and not you ;-)
 
J

JaneB

#10
Re: ISO 9001 vs. Profitability

:topic:
If you say your top management that 9001 has anything to do with profitability, you’re not being completely honest to them!
Since we're making sweeping statements, mine is that if you are saying to your top management that '9001 / quality has nothing whatsoever to do with financials or profitability' then you're misleading them and advocating a limited and erroneous view of quality.

Please - at least tell them that this is solely your view and that there's a huge body of professionals out here who disagree with you very strongly! Jim, Randy et al have indicated some of the reasons why.

You don't have to think far... just imagine the impact of poorly controlled processes and/or producing crappy product, resulting in product returns/ loss of customers/satisfaction (with consequent inevitable impact on business) ... the quality management model of ISO 9001 - and thinking quality professionals! are utterly focussed on preventing these!
 
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