How to Achieve Organizational Excellence with ISO 9001: A Case Study
Business leaders are on a continual quest to maximize profits and customer satisfaction. Unfortunately, many see quality management as an overhead expense. If quality professionals are to be more proactive in organizational success, as suggested in ISO 9001:2015, we need to address Quality Management System (QMS) implementation using a more business-oriented approach. To find out how, read the following ISO 9001 implementation case study.
The paradigm shift – Learn from the industry leaders
The following is a case study of how Dell Computer implemented their ISO 9001:2000 transition. It was first implemented in their Asset Recovery Business (ARB), which had major challenges in meeting its strategic business goals.
The directive was not merely to implement the 2000 revision for compliance, but to examine each element for creating a return on investment. We created a web-based tool called The Business Management Interactive System (BMIS), which was an enterprise-wide operational control system that embedded the requirements of ISO 9001:2000 into the workflow.
The directive from senior management
“ARB will be successful only by focusing on the management system as a whole.
ISO 9000-1994 focuses on operations related to production and delivery of goods and service
ISO 9000-2000 scope will require an enterprise-wide focus
The ARB Business Management System will be designed to address current and future management system requirements by incorporating a continuous process improvement methodology across the enterprise.”
Instead of the quality group conducting training for management, management opened the transition kick-off meeting with the following mandate:
Ever-improving Value to Customers
Marketplace Success and Enhanced Competitiveness
Applicable to Entire Organization
Assessments and Measures of Progress Toward World-Class
The implementation team consisted of cross-functional individuals who each focused on their own areas of responsibility. A web programmer incorporated not only the QMS requirements, but all business functions into BMIS on the corporate web.
Every piece of data that anyone in ARB needs to do their jobs would be no more than three clicks away.
The screen saver is a scrolling real-time set of operational performance metrics that alerts the process owners to variations in effectiveness and timeliness.
And here are the outcomes:
Within a year of implementation, the division reported that they had turned around a significant operating loss to profitability.
They were able to create a 40% business growth.
They increased unit sales by 145%.
They consolidated five manufacturing facilities into two.
They reduced manufacturing costs by 15%.
They reduced out-of-box audit defect rates from 28% to 7.3%.
Their transition certification auditors praised BMIS as “best in class.”
These are the metrics that matter to business leaders. In this case, they are particularly significant because Dell amortized the cost of our consulting fees and the cost of the employees who worked on the transition in less than a year.
Making the transition
The table below is an overview of the transition from quality management to a business excellence model based on ISO 9001:2015.
This table is intended to guide the reader into potential enhancements to your QMS if you are striving for a higher level of excellence and greater return on investment.
Meaning of terms
Within the constraints of the blog post, the following are high-level summaries of the meaning of each term used in the crosswalk. Please use the comments section below if you desire more detailed explanations.
3.0 – Your organization will need to create definitions of “organizational excellence” processes and tools unique to your environment.
4.0 – Beyond the traditional QMS approach to organizational context, identify the contents of the mission and vision you will employ for achieving organizational excellence.
4.1 – 4.4 – Consider renaming your management system to Business Management System. It sends a message that the QMS is part of an enterprise-wide model for excellence.
5.0 – One of the foundational tenets of highly effective organizations is learning how to lead people and manage processes. Leading creates ownership. Managing people is often punitive.
5.1 – 5.3 – In the Dell example, the organization underwent a fundamental cultural renaissance from the top down. This is often not practical in existing organizations, but the traditional quality policy can often be enhanced to create an enterprise-wide mission plan.
6.0 – Planning a Business Management System is more holistic than simply implementing ISO 9001:2015.
6.1 – 6.3 – Consider a risk-avoidance approach to error-proofing your organization. Focus on identifying opportunities to identify foreseeable risk and include them in your planning.
7.0 – Another ambitious undertaking is to consider implementing outcome-based risk and reward metrics for all processes. Encouraging accountability is the basis for defect avoidance.
7.1 – 7.5 – If you do not have one, consider empaneling a standing, cross-functional committee to oversee the entire BMS. Conduct regular meetings with specific agendas of maintenance and improvement.
8.0 – The ISO 9001-based QMS has always been process-driven. Consider creating similar processes and metrics that do not currently exist in the rest of the organization.
8.1 – 8.7 – Within each element of 8, ensure that all process metrics are tied to business key performance indicators.
9.0 – Make the focus of improvement more about business excellence than corrective action or traditional process improvement.
9.1 – 9.3 – Include risk avoidance and business excellence in the activities of 9.
10.0 – Focus on enterprise-level improvement, not just on process improvement.
10.1 – 10.3 – There are new paradigms in implementing defect avoidance as a culture, not just nonconformance controls.
Consider alternative approaches to maximize your business objectives
This blog post is a very high-level introduction to The Evolution of Quality Management to Organizational Excellence. To implement it to the level that Dell ARB did requires fundamental cultural changes, bold risk-taking, and extreme commitment to the mission.
Many of you will find the concept overwhelming. You can, however, implement some of the tenets, like linking quality metrics to business key performance indicators, as a test case. You can become educated on the concepts of leading people and managing processes and gradually facilitate the transition.