Evidence: Has 9001 Registration Increased ROI (Return On Investment)?

[noboxwine]

Roi

Please bear with me if I hose this up. Tis my first poll !
(Any of you poll experts, feel free to jump right in and fix it !)

Factor in all the costs.

**Pencil whipping the night before the audit
**Useless busy work
**Doing tasks "for ISO"
**Forests of paper
**Meetings
**Anxiety
**Spent energy
**More meetings
**Doing someone elses work for them
**Time away from family
and
**Payables to the Registrar

How many of you have ever experienced a return that meets or exceeds registration investments ?

 

[Al Dyer]

The only identifiable return might just be the right to do business with the company that requires such.

If you are 80% big 3 you do what it takes, if you are 10% big three you need to talk about the direction the business wants to take.

In my opinion these various "systems" make viable sense for any business even if they are not required to do so. A company may use all or part to fit their goals. It all comes down to what company goals and aspirations entail.

MHO

Al...

 

[Craig H.]

I appreciate the goal here, but how do you add in the savings from the problem that didn't happen because of some corrective or preventive action that would not have been taken or even identified without the QS?

How can we measure the profit from a customer kept because they are delighted? Do we figure how much it will cost to get a new customer to replace the business?

How about our employees? If they are more productive through "elimination of hassles" (see P. Crosby), how much more productive are they?

Maybe Deming said it best - "...unknown and unknowable..."

So, I would love to know the answer, but doubt that, anecdotally, I would accept the numbers.

 

[noboxwine]

Negative Returns

Craig: I appreciate very well your points, but ask you this: Is registration the cause for this favorable outcome ? Is the registration body the stimulus for a successful QS ? I see all reasons for an effective QMS falling completely outside of any registration activity. Here is one of dozens examples: An automotive supplier I recently consulted for passed their last 3 surveillance audits (from a very reputable auditor). How ? They wasted weeks at a time fabricating documentation for compliance purposes, while, simultaneously, their dPPM’s were deplorable, scrap was higher than ever, customer back-charges mounted to over $300,000, etc, etc. The auditor in all three cases commended us for our QS and “allowed” us to retain our certificate.

How can any registrar advertise an effective QS when all your key indicators prove otherwise ? The only body that can measure & improve QS effectiveness is you. So, needless to say, every facet of the get- well plan came from within the walls of the organization itself.

 

[Craig H.]

nobox:

Agreed. If there is no desire to improve, if the cert. is window dressing, then acquiring it IS a cost center, and there will be little to show for it.

However, recently, in another thread, there was a link for an article by Corbett, et. al. that explored the question for a large group of companies ("Does ISO Certification Pay?") that I think you would find very interesting.

As far as getting certified with a lousy or fake system, in my accounting auditing class (several years ago) one of the "secrets" we learned is that it is very difficult to catch fraud, using auditing techniques, if the person(s) engaging in the nefarious activity have access to the records, the people know the system, and there is little or no effective internal oversight and controls. What is caught is usually the result of a mistake or dumb luck.

Upper management commit quality systems fraud? No, never! Say it ain't so.

 

[Marc]

Evidence

I would like to see one or more case study with evidence of a positive (+) ROI over a 5 year (or more) period. I always see the 'immediate' ROI but never Long term ROI. Again, I stress the word Evidence. All my old clients tell me they experienced a short term ROI or no definite immediate or + Long Term ROI from implementation.

I've browsed the web and seen so many testimonials on sites selling services, yet I see no evidence of long term evidence other than on sites which have an direct interest in not addressing 'failures'.

Anyone out there with an unbiased assessment?

 

[Claes Gefvenberg]

Re: Evidence

Originally posted by Marc
---X---
Anyone out there with an unbiased assessment?

I very much doubt if we'll ever find anyone truly unbiased... but still, so would I.

Originally posted by noboxwine
---How many of you have ever experienced a return that meets or exceeds registration investments ?

A good question, and I pondered for a while before responding.

My answer will have to be that when it comes to hard figures, I really don't know... There are simply too many unknown in the equation. The major one among those is imo what is would have cost us not to go for registration.

We will always consider the cost for taking action of some kind, but we'll never see an invoice for what it cost us not to do so, even though it may be even more expensive to do absolutley nothing.

I will try to answer the question anyway, in my own way. I think it's worth it, not only becuse our customers require it. I believe that the improvements, short as well as long term we achieve in order to get and keep the registration exceed the costs. But any hard figures? Sorry, I can't give you any, but I'll say this: It's up to ourseves to make it worth it.

/Claes

 

[LMO]

I to would like to see the long term ROI.

Here is a problem;

A lot, not all companies have opportunities for improvement. The seven wastes, quality issues, poor design, poor equipment, etc.

I currently am fortunate to work for a compnay that from the beginning has reduced improvement opportunities down to all most nothing. I am having a hard time finding one or two a year. My registrar asked for at least one for their audit.

In order to get the ROI, companies have to have the opportunities and a lot of small, medium and large companies have them. But not all.

I am currently an expense to my organization and in order to just recoup the implementation cost which includes my salary. Reuiqres new sales. How great is that.

When I see AIAG and other truit improvement and cost savings of these quality management systems, makes you wonder after to you have seen real life.

Instead of our customers have a quality manual that we need to follow. They require this base system and then add on requirements. To a certain point good, but some of the reuqirements add to cost and some costs are hard to recoup.

I believe that for the most part QS/TS has increased cost!

:thedeal:

 

[Mike S.]

Originally posted by LMO

Here is a problem;

A lot, not all companies have opportunities for improvement. The seven wastes, quality issues, poor design, poor equipment, etc.

I currently am fortunate to work for a compnay that from the beginning has reduced improvement opportunities down to all most nothing. I am having a hard time finding one or two a year. My registrar asked for at least one for their audit.

LMO,

I find this hard to believe. I'm not saying you are lying, just that maybe you aren't looking in the right places. If it is so, you are truly a one in a million company -- maybe one in ten-million. What a great problem to have.

I wonder if your customers and floor-level employees, if they were to speak candidly, would agree that there is "almost nothing" you could do to improve? I'll bet there are some folks here in the Cove who would LOVE to interview your management, employees, and customers!

 

[LMO]

Well, I am not lying!

The company is small two owners, myself the quality manager, 1 full time and 1 part time floor assocaite.

The owners are verify conscious about quality, production and customer satisfaction.

When we set up a new process, we optimism the process at that point, not months after the fact.

May be I am unique because I work for a small company and not a at a large organization any more.

At this time I just do not have the waste in my process to recoup the cost of the quality system. If it was not a customer requirement. I guess I would have a job at this company.

The last comapny I was at, passed their audit and then laid off the quality manager to save money.

They were understaffed and did not have the understanding to do improvement. At that company, they had the waste and I was able to make some significant improvement.

But I am still not seeing it, as claimed by AIAG and others.