In today’s competitive markets, standardizations are a benchmark to help companies to keep up with their competition, and develop the necessary competencies needed to attract and keep quality customers. These standards are considered a validation of a company’s current processes, and are used as a quality assurance for their products and services. Therefore allowing companies down the supply chain to attract reputable customers and better prices for their offering.
These standards are tailored for the industry each company is operating in. And there are many standardizations such as ICTAD, IEC, IEEE, ISO, ITU, SGS and SLS that companies can adhere to, to develop necessary competencies. These standards validate Out of these standards, ISO systems, developed by International Organization for Standardization are continuously securing their position as world's most recognized systems (Perry Johnson Registrars, 2016). In 2014, there were more than 1.6 million ISO certifications issued worldwide, slightly higher than the previous year (International Organization for Standardization, 2016).
Ticking the competency boxes (P2)
Of the standards awarded by the International Organization for Standardization, the 1SO 9001 certificate is a quality management standard that guides organisations, regardless of their size or the industry they operate in, to organise their processes and continuously improve them. It does this by providing a process-oriented approach to reviewing the structure, responsibilities, and procedures of an organization. These standards address many aspects of an organization's operations including its; cleanliness, neatness, punctuality and safety (Hens, 2015). For example many quality factors such as the disposing of expired items (Related to cleanliness), the recording of item locations (Related to neatness), in time project completions (Related to punctuality) and the marking of stocking areas (Related to safety) need to be identified and maintained.
To achieve and maintain such standards requires a continual commitment on the parts of the company, its management, and its employees. The management in particular needs to ensure the right measures are taken to obtain and maintain these standards. Which can include; bringing in experts to help upgrade existing procedures, developing the materials necessary to communicate the new practices required by these standards, and familiarising current employees with these practices. These measures need to be backed by continuously assessing the organisation’s progress via audits and management reviews.
Porter’s Value Chain breaks down an organization's activities to sell a product into primary and secondary operations (P3)
Benefits of Standardization
As mentioned before, ISO 9001 standardization improves many aspects of an organisation including its; cleanliness, neatness, punctuality, safety, and standard operating procedures (SOPs). Linking this with Porter's value chain, shown in the above diagram, ISO 9001 brings several needed competencies to an organisation given that all primary and support activities are adhered to the ISO standard consistently.
Different ISO activities have different benefits; for example labelling physical resources will provide a psychological impression to stakeholders, whereas streamlining operational procedures will provide sustainability to an organisation’s practices. In the short term organizations need to place more weight on activities that will bring sustainability to its operations than on activities that will impact psychological impressions. Though in the long term a mix of both is essential to get all levels of the organisation on board with adhering to these standards.
New standards require businesses to pay closer attention to understanding the contexts in which they are operating in, instead of just ticking the boxes (P4)
The new ISO 9001 standard is updated to keep up with a more dynamic business environment. To this end it places a greater emphasis on;
Leadership Engagement - The ISO 9001:2015 standard expects the top management to be hands-on in an organisation’s quality management system (QMS). To this end the management is required to take on the responsibility for the effective running of the organisation’s quality management system. And be accountable for its effectiveness by ensuring that policies are compatible with the industry context and the strategic direction of the business. (1)
Contextualizing your Business - The new standard also requires organisations to take the specific context in which it operates into consideration when developing their quality management systems. Requiring organisations to take into account the evolving trends of not just its own industry but those of its suppliers, customers, shareholders, legislative bodies and general society, and work with all of them. Which will allow the organization to address changes in needs as and when they arise instead of being blindsided by disruptive technologies and business practices. (2)
Framing risks and opportunities - The new standard also encourages organisations to conduct and maintain a formal risk analysis, through methods such as FAILURE MODE EFFECTS ANALYSIS (FMEA). Which maps out all potential challenges that could arise as a result of current business practices. FEMEA was first implemented by the US military in the 1940s but since has been adopted by manufacturers in several industries. It is step-by-step approach for identifying all possible failures in a design, manufacturing process, and business practice, or service.
“Failure Modes” refer to the ways in which something may fail, even if it is only a potential failure. While “Effects Analysis” refers to understanding the impact such a failure will have. FMEA is used during design to prevent failures and during operation to maintain control, evaluate and alter implemented practices in pursuit of the optimum. (3)
In today’s business world to stand on top means to constantly evolve ahead of the competition (P5)
The new ISO 9001 standard highlights the high resolution through which organizations need to view and make changes to their quality management systems. Considering the rapid growth of disruptive technologies and process innovations in all industries, quality management is no longer about maintaining existing standards but continuously evolving them. As a result the standard provides organisations with a base through which to assess the change occuring around them, identifying a suitable strategy with clear goals to address this change, and a framework with which to assess their progress towards these goals.