ISO 9001 - Gigantic waste or Beneficial? Why does ISO 9001 exist? Got data/facts?

[Craig H.]

It seems to me that most of us are not in situations where our company sells directly to the consumer. Often we also have suppliers we use on a regular basis.

One area where ISO 9000 certification has made a difference to me is when I am buying a personal item; big ticket, and long lasting (a "durable good" like a TV or washer).

I was comparing TV sets a few years ago, with a few in the price range I was interested in. One had "ISO 9001 Registered" on the carton, the others did not. Did I buy the TV from the registered company?

YEP.

 

[Carl Keller]

Craig,

Unfortunately, you have absolutely no way of knowing if the company had a cert on the wall and little else, or actually had a living system that was of benefit. The ISO designation meant nothing.

You may have passed up a set from a company that had a much higher consumer quality rating / lower defect rate.

Not the way that I would choose, but to each their own.

Best of luck with the set in any case!

Carl-

 

[Caster]

Could it be? A Real ISO $ucce$$?

Check this out!

http://www.nsf.org/NSF-ISR/newsroom/Register_Fall03.pdf

Page 2 tells the story of a home builder who implemented ISO. Here are the number$

Sales: 39 percent increase from 1999 through 2001.

​

​

Increased market share: Sales are 36 percent higher in the first six months of 2002 compared to the previous year. Winton’s share of the El Paso market increased by 11 percent.​

​

​

Profit: Profit increased 82 percent from 1999 through 2001. For the first six months of 2002, the company posted a 203 percent increase in net profits compared to the same period in 2001. In fact, profits in the first six months of 2002 exceeded the entire year of 2001.​

​

Even allowing for hype, it looks like someone actually got something good from ISO and can prove it.​

​

Here is the website​

http://wintonhomes.com/mean.htm​

What a nice simple statement of what ISO means to the customer.​

​

The key lesson I take from this is - MANAGEMENT COMMITTMENT - he did it because he saw value, not because he was forced to by a customer. ​

​

I'm jealous - it sounds like it was a ton of fun​

​

 

[AllanJ]

Check this out!

http://www.nsf.org/NSF-ISR/newsroom/Register_Fall03.pdf

Page 2 tells the story of a home builder who implemented ISO. Here are the number$

Sales: 39 percent increase from 1999 through 2001.

​

​

Increased market share: Sales are 36 percent higher in the first six months of 2002 compared to the previous year. Winton’s share of the El Paso market increased by 11 percent.​

​

​

Profit: Profit increased 82 percent from 1999 through 2001. For the first six months of 2002, the company posted a 203 percent increase in net profits compared to the same period in 2001. In fact, profits in the first six months of 2002 exceeded the entire year of 2001.​

​

Even allowing for hype, it looks like someone actually got something good from ISO and can prove it.​

​

Here is the website​

http://wintonhomes.com/mean.htm​

What a nice simple statement of what ISO means to the customer.​

​

The key lesson I take from this is - MANAGEMENT COMMITTMENT - he did it because he saw value, not because he was forced to by a customer. ​

​

I'm jealous - it sounds like it was a ton of fun​

​

I think everyone associated qith "quality management" would like any such story to be conclusive of what an improved QMS could do for a company. Of course the firm deserves congratulations for its improved results but, does ISO 9K etc really deserve the amount of credit all would wish.

The firm admits its sales follow national trends: we all know there has been a housing boom since the late 90s and especially following the stock market crash of 2000-2001. Indeed most economists and Mr Greenspan admit robust house building, with new starts reaching and sustaining all time highs has been responsible for mitigating a major part of the USA recession's worse effects. Indeed, as is well recorded, a lot of people who were disillusioned with the stock market debacle have chosen to invest their money in homes/ new homes/ upgrades/ extensions and the like. Therefore, in determining the effects of ISO 9K on sales, one would have to discount what might have been the effects of the house boom. And, though one would want to think a show house might have a ribbon around it proclaiming it was built under a QMS certified to ISO 9K that is as unlikely as is the possibility that Mr & Mrs Joe Q. America actively sought out ISO 9K builders and their decision to take on a mortgage was in any way influenced by the thought of the builder being ISO 9K "certified".

As many Covers will know, profits depend on fixed and variable costs. What we would need to know is that these were in anyway reduced directly as a result of ISO 9K registration. If a firm has been working at less or around break even, even a small increase in sales will have a significant effect on profit as does the structure of the balance sheet. If the firm is highly leveraged, a small increase in sales will have a considerable effect on the bottom line. And, as Mr Greenspan has so generously reduced interest rates to help America out of its recession, it could easily be the case that the profit increase is in no small way attributable to lowered costs of financing for the builder.

So, though I want to be able to refer people to success stories, on the basis of what the registrar states in its brochure (which is bound to be of a glowing nature, for obvious reasons) there is not enough evidence. And, if you wanted to put that brochures affirmations in front of any CEO to convince her/ him of the case for ISO 9K or any QMS improvement project, you might be looked at " a little bit sideways"!

 

[Craig H.]

Craig,

Unfortunately, you have absolutely no way of knowing if the company had a cert on the wall and little else, or actually had a living system that was of benefit. The ISO designation meant nothing.

You may have passed up a set from a company that had a much higher consumer quality rating / lower defect rate.

Not the way that I would choose, but to each their own.

Best of luck with the set in any case!

Carl-

Carl:

Obviously the best way would have been to go to Consumer Reports and do some research - if it was an expensive big screen I would have. But, for this set, used only once in a while, and a small investment, as far as I knew all other things were fairly equal.

As far as the set goes, it still works....

 

[Craig H.]

As many Covers will know, profits depend on fixed and variable costs. What we would need to know is that these were in anyway reduced directly as a result of ISO 9K registration. If a firm has been working at less or around break even, even a small increase in sales will have a significant effect on profit as does the structure of the balance sheet. If the firm is highly leveraged, a small increase in sales will have a considerable effect on the bottom line. And, as Mr Greenspan has so generously reduced interest rates to help America out of its recession, it could easily be the case that the profit increase is in no small way attributable to lowered costs of financing for the builder.

Allen:

I agree with most of your post, but, respectfully, there is one important piece of data you don't address, IMO. I'll do that here.

This most interesting tidbit is the increase in market share. If the company is seeking to increase market share, it may actually be willing to endure flat, or even slightly declining, profits. If market share was indeed the main goal, then did ISO 9000 help them to achieve it? Hard to tell. I would like to think that a robust QMS had something to do with it, though. Put another way, it would be very hard to believe that the numbers shown were achievable with lousy quality and poor customer service, wouldn't you agree?

 

[Jen Kirley]

Increased market share, $___ more profits through ___% fewer defects and ___% lower employee turnover, a ___% increase in customers' "excellent" rating of work.

These are metrics that have more meaning to me than just ___% higher profits because I have seen various ways to lower costs, thus improving the bottom line. I once saw a manufacturer that piled its receivables high on the floor, only paying the screaming suppliers for them when it was time to insert into product. They even stopped paying for bathroom materials. They almost ran out of toilet paper...their supplier refused to sell to them after that.

Yes, ISO can have value but it's a waste of effort when the activities are just a sing-along. Its premise is good. It is actually little more than a guideline for a good QMS and a seal of approval for stakeholders who can't get a closer look at business operations.

If you have a truly effective and vital QMS without it, then you are indeed singing a tune for the benefit of whomever. But if the registration gets you that business, weigh its costs against the value of that business or just feel like a prostitute.

 

[AllanJ]

Allen:

I agree with most of your post, but, respectfully, there is one important piece of data you don't address, IMO. I'll do that here.

This most interesting tidbit is the increase in market share. If the company is seeking to increase market share, it may actually be willing to endure flat, or even slightly declining, profits. If market share was indeed the main goal, then did ISO 9000 help them to achieve it? Hard to tell. I would like to think that a robust QMS had something to do with it, though. Put another way, it would be very hard to believe that the numbers shown were achievable with lousy quality and poor customer service, wouldn't you agree?

Craig,

Thank you for agreeing in general with my post. But, as I read the NSF brochure, Winton admits (and names) a number of its competitors LEFT that particular market. If so, small wonder it can claim an increase in market share in a market for which, following national trends, which they claim to do, the market would simulataneously be growing. And, if that also meant they had a greater number of units sold - abracadabra!

 

[Craig H.]

Craig,

Thank you for agreeing in general with my post. But, as I read the NSF brochure, Winton admits (and names) a number of its competitors LEFT that particular market. If so, small wonder it can claim an increase in market share in a market for which, following national trends, which they claim to do, the market would simulataneously be growing. And, if that also meant they had a greater number of units sold - abracadabra!

Allen:

Again, here we are with some data that could be interpreted either way - why did all of these competitors go out of that line of business (even as generally the housing market was strong)?

Were there other reasons, or was Winton just that good (because of ISO certification, no less)?

Even if we were there as it happened, still I suspect it would be hard to tell for sure. Also, this is just one instance...

Still, interesting case.

 

[AllanJ]

Allen:

Again, here we are with some data that could be interpreted either way - why did all of these competitors go out of that line of business (even as generally the housing market was strong)?

Were there other reasons, or was Winton just that good (because of ISO certification, no less)?

Even if we were there as it happened, still I suspect it would be hard to tell for sure. Also, this is just one instance...

Still, interesting case.

Yes Craig, I, too, am intrigued. we could muse over that for ages, in the absence of hard data. And for that, I guess it is going to be a case for the Missouri wisdom.