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ISO 9000 for Micro, Small and Medium Businesses

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Title: ISO 9000 for Micro, Small and Medium Businesses


1
ISO 9000
for Micro, Small and Medium
Businesses Presentation to the International
Quality Congress for the micro, small and medium
businesses Quality as a Strategy to
compete Mexico City, 2-3 December 1999 by Charles
Corrie Secretary ISO/TC 176/SC 2
2
  • Overview of presentation
  • Items to note on MSMEs
  • What is ISO and TC 176
  • ISO 9000 and MSMEs - the Present
  • ISO 90002000
  • ISO 9000 and MSMEs - the Future

3
Items to Note on MSMEs 1. Importance MSMEs are
vital to employment and form the bulk of
enterprises in an economy (In Europe, during the
1990s MSMEs have absorbed the 2 million jobs that
have been shed by larger organizations while
total employment has been static) They can be
flexible and dynamic, leading to the foundation
of future large, successful, organizations Their
importance cannot be over-emphasized.
4
  • Items to note on MSMEs
  • 2. Categorization
  • Lifestyle, or Income Substitutor organizations
  • Objective for the owner to make a reasonable
    living.
  • Generally reach their ultimate (small) size
    within a short time
  • Growth Businesses, or Builder companies
  • From outset, founder(s) driven by ambition to
    create an organization that will be a significant
    force in the business world
  • From the perspective of developing an economy,
    main focus is usually on the Growth / Builder
    firms

5
Items to Note on MSMEs 3. Leadership
Leadership is everything !!!!!!!! It
determines purpose, style, culture, ambition,
access to finance, technical
ability, flexibility etc. Much research in this
area, specifically on MSMEs
6
Items to Note on MSMEs - 4. Growth patterns
7
ISO 9000 affects all types of MSMEs !
8
  • What makes up ISO ?
  • ISO is made up of its members which are divided
    into 3 categories
  • Member bodies are the national body most
    representative of standardization in their
    countries. Thus, only one body in each country
    may be admitted to the membership of ISO
  • Correspondent members are from countries which do
    not yet have a fully developed national standards
    activities.
  • Subscriber members are from countries with very
    small economies

9
  • Who does the work ?
  • ISO is a hierarchical, but decentralised
    organization.
  • Representatives of industry, research institutes,
    government authorities, consumer organizations,
    and international organizations come together as
    equal partners in some 2850 technical committees,
    sub-committee and working groups.
  • Administration of standards committees is by
    representatives of the national standards bodies
  • ISO Central Secretariat, Geneva, has a supporting
    and monitoring role

10
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11
  • How are ISO standards developed ?
  • Consensus
  • The View of all interests are taken into account
  • Industry-wide
  • Global solutions to satisfy industries and
    customers world-wide
  • Voluntary
  • International standardization is market driven
    and therefore based on voluntary involvement of
    all interests in the market place

12
  • How is ISOs work financed ?
  • Member subscriptions (80)
  • Sales of standards/other publications (20)
  • Note ISO member bodies bear the cost of the
    secretariats for which they are responsible. It
    is estimated that the operating expenditure of
    the ISO Central Secretariat is only 20 of the
    cost of financing ISO administrative operations
  • Also the costs of the volunteer experts has to be
    added to the sums, but this has never been
    calculated.

13
  • ISOs partners
  • International partners
  • International Electrotechnical Commission
  • International Telecommunications Union (part of
    the United Nations Organization)
  • World Trade Organization
  • Regional Partners
  • Regional standardization bodies, e.g CEN in
    Europe
  • International /Regional organizations
  • Liaisons with about 500 international/regional
    organizations

14
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15
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16
ISO 9000 is NOT a single standard A family of 27
published documents on Quality
Management and Quality Assurance
17
The four main groupings of the current ISO 9000
standards
- Quality Assurance standards, e.g. ISO 9001 -
Quality Management standards, e.g. ISO 9004-1 -
Quality Auditing standards, e.g. ISO 10011 -
Other supporting standards, e.g. ISO 8402
18
Sub-groupings of the current ISO 9000 standards
- Guidance on selection and application e.g. ISO
9000-1, ISO 9000-2 - Guidance against the
generic product categories e.g. ISO 9000-3 -
Software ISO 9004-2 - Services
ISO 9004-3 - Processed materials - Guidance
against specific clauses in ISOs 9001/2/3 e.g.
ISO 10005 - Quality plans ISO 10012 - QA
for Measuring equipment ISO 10013 -
Quality manuals - Guidance on Quality
Management e.g. ISO 9004-1, ISO 9004-4
19
Also in the current ISO 9000 family of
documents Handbook ISO 9000 for Small
Businesses- What to do Advice from ISO/TC
176 Published in 1996
20
Handbook - Background ISO/TC 176 recognised that
there were differences between large and small
companies, but considered that this was limited
to the Technical differences in application of
quality technologies e.g. MSMEs unlikely to be
involved in large production runs, therefore
unlikely to use SPC. Research by France (and
other countries) presented to September 1994
meeting of TC 176 showing urgent need for SME
guidance, based not on technical differences, but
on approach to understanding and applying the
ISO 9001/ 9002/ 9003 standards . TC 176 accepted
this recommendation, and establish a Small
Business Task Group (SBTG), with experts from 15
different countries
21
Handbook - Key issues examined during development
General What is a small business ? Do
the requirements need amending ? Commercial
pressures for registration Third party
auditing costs/approach Implementation
Difficulties in understanding or applying
the standards Minimum availability of
resources Costs of setting up and running a
quality system
22
Handbook - Key issues examined during development
What is an SME ? Argued - No. of employees
versus turnover Agreed - A philosophy of the way
a business is run Short, Simple, Direct
communications (x 2n) Individuals do a wide
variety of tasks Decision making confined to
few(one) person
23
Handbook - Key issues examined during
development Requirements SBTG considered there
was NO justifiable reason to ADD to, DILUTE, or
CHANGE ANY of the requirements in ISO 9001, ISO
9002 or ISO 9003 specifically for small
businesses Also, SBTG did not agree the need
for MSMEs to focus on using ISO 90003
24
Handbook - Key issues examined during
development Commercial pressures Considered
outside the remit of TC 176 and SBTG However,
some guidance on obtaining registration given in
an annex to the Handbook. Costs Disproportionately
high for MSMEs Considered outside the remit of
TC 176 and SBTG, but pleased to note recent
Certification body small business, lower cost,
registration schemes However, approach by
Certification bodies is often as with large
businesses, and does not recognize the
flexibility of communication paths in MSMEs
25
Handbook - Key issues examined during
development Difficulty of understanding and
applying the standards Language - Historically
derived from military/large manufacturing
organisation standards, whereas many MSMEs
operate in the services sector. Also many MSMEs
have never used a formal standard before.
Organizational structure - Standards imply a
large organisational structure with defined,
separate roles e.g. Inspector, or Internal
Auditor Quality system requirements - MSMEs that
survive start-up are usually efficient, and can
be shown to be generally in compliance with the
standards. However, some requirements e.g. formal
Management Reviews, Internal Audits, are not
familiar practice.
26
  • Handbook - Key issues examined during development
  • Minimum availability of resources
  • costs of establishing and maintaining a formal
    QMS
  • Additional responsibilities usually held by
    members of MSMEs, so have multiple roles and
    pressure on personal availability
  • Time for registration, 18 months is a long time
    for an MSME
  • Lack of formal QMS knowledge, therefore training
    is needed for all staff
  • Documentation costs hire a consultant
  • 3rd party registration and surveillance fees

27
Focus of the ISO Small Businesses Guide How
to put an ISO 9000 quality system in place
Explain how the standards apply to the small
business sector Explain the requirements of
ISO 9001/ 9002
28
REVIEW / REVISION
ISO, CEN (and most national standards bodies)
mandate a (maximum) five year period between
reviews of individual standards. In 1990, ISO/TC
176 developed a revision strategy (Vision 2000)
for the ISO 9000 standards, including a two Phase
approach Phase 1 - Minor changes Phase 2 -
Fundamental revision
29
Vision 2000 recognised issues for Phase 2
- Proliferation of quality standards needs to
be prevented - The standards need to be
generic, addressing - all product categories
- all industry types - all sizes of
organisation - There should be compatibility
between the revisions of the standards
30
1999 Strategy Vision 2000
New Challenges - Other management systems
standards e.g. ISO 14000 - Sectoral needs and
sectoral documents e.g. QS-9000 - Too many ISO
9000 standards, many not being used - Where
should ISO 9004 be positioned - Need for greater
customer and interested party focus - Need for
emphasis of improvement - Need for greater
clarity/ease of understanding New ideas -
Single ISO 9001/2/3 standard - Consistency
between ISO 9001 and ISO 9004 - Use of a Process
Approach
31
Success of ISO 9000
  • ISO 9000 standards adopted in over 90 countries
  • ISO Certificates Survey to December 1998 shows
    271996 organizations have been certified, in 143
    countries. An increase of 48563 compared to the
    December 1997 reported result
  • Estimate directly effects over 3 m people

32
NEW PARTICIPATION APPROACHES
  • Project Management approach
  • Design Specifications
  • Direct User Inputs - User Survey
    - Validation Programme - Transition
    Planning - New Product Introduction Planning
  • Use of internet / web sites

33
Project Management approach - Work Breakdown
structure
34
Survey participants
Total 1120
Argentina
Australia
Austria
Belgium
Brazil
Canada
Chile
Colombia
Denmark
Egypt
Finland
France
Germany
Iceland
India
Indonesia
Ireland
Israel
Italy
Japan
Korea
Kuwait
Malaysia
Mauritius
Mexico
New Zealand
Norway
Poland
Portugal
Singapore
Slovenia
South Africa
Spain
Sweden
Switzerland
The Netherlands
Turkey
UK
USA
Zimbabwe
35
Summary of Survey results
  • Meet customer and relevant interested party needs
  • Connect quality management system to business
    processes
  • Usable by all sizes of organization, in all
    sectors
  • Adopt process approach, and have process model
    structure
  • Include requirement for continual improvement
  • Be clearly written for good comprehension and to
    aid translation
  • Provide for exclusion of ISO 9001 requirements
  • Have increased compatibility with ISO 14000
  • Clear transition to Year 2000 standards

36
Future ISO 9000 Family(Subject to Ballot)
ISO 9000 Core Standards
Brochures
Withdraw or transfer to other TC
Technical Reports
Technical Specs
10006 10007 10013 10014 10015 10017
9000 9001 9004 19011
10012
9000-3 9000-4 9004-2 9004-3 9004-4 10005
  • QMP
  • Sel Use
  • Small Bus
  • Handbook

Document status TR to be considered at next
revision
37
Where should ISO 9004 be positioned ?
- As an introductory guidance textbook ? - As a
direct guide to ISO 9001 ? - As a higher level
set of certification requirements than ISO 9001
(a competitor to the quality awards programmes )
? - As a guide on quality management or
business excellence ?
38
Other management systems standards
  • Industry wants one-stop-shop certification
  • Legislators and Regulators want control
  • Should the standards be integrated ? Or, to what
  • degree should the standards be aligned ?
  • How could their differing Aims and Requirements
  • be reconciled ?
  • Which approach or structural model should be
    used ?
  • Revision to ISO 14001/4 to be commenced
  • Under development - ISO/IEC Guide for the
    development
  • of management system standards
  • Increasing development of sectoral standards

39
Relationship ISO 9001/ISO 9004
A consistent pair of standards, but each
capable of being used on its own Allows for ready
transition between the two standards Harmonized
main clause titles, structures and
terminology Based on 8 Quality Management
Principles Process Approach
40
Quality management principles
  • Customer - focused organisation
  • Leadership
  • Involvement of people
  • Process approach
  • System approach to management
  • Continual improvement
  • Factual approach to decision making
  • Mutually beneficial supplier relationship

41
Process-based structure
Management responsibility Policy, objectives,
planning, system, review Resource
management Human resources, information,
facilities Product realization Customer, design,
purchasing, production, calibration Measurement,
analysis and improvement Audit, process/product
control, improvement
42
Basic process model
MANAGEMENT
CUSTOMER SATISFACTION
DESIRED
CUSTOMER
ACTIVITIES
OUTPUTS
INPUTS
ENABLERS
43
Process Model (ISO 90012000)
44
ISO 90002000 - Fundamentals and Vocabulary
  • Merger and revision of
  • ISO 9000-1 - Selection and Use
  • ISO 8402- Vocabulary
  • To be in two sections reflecting Fundamentals and
    Vocabulary
  • Vocabulary constructed using ISO/TC 37 Concept
    diagram approach

45
Revised ISO 9001
  • To provide confidence, as a result of
    demonstration, in product conformance to
    established requirements
  • New process based structure and focus
  • Single quality management system requirements
    standard (no ISO 9002, 9003)
  • Permissible exclusion of requirements to meet
    the application needs of different organisations

46
New Role for ISO 9004
  • "To achieve benefits for all stakeholders through
    sustained customer satisfaction
  • Based on eight quality management principles
    agreed by ISO/TC176/SC2
  • Towards performance improvement
  • Structure consistent with ISO 9001, but content
    not intended as a guide to its implementation
  • To be presented with ISO 9001 requirements
    included

47
"Target 2000"
  • Schedule
  • ? 1Q 1998 - Working draft - for info
  • ? 2Q 1998 - Working draft - for info
  • ? 3Q 1998 - Committee Draft (CD) - comment
  • ? 1Q 1999 - Committee Draft (CD) - vote
  • ? 4Q 1999 - Draft International Std. (DIS) -
    vote
  • 3Q 2000 - Final Draft (FDIS) - vote
  • 4Q 2000 - New Standards published

48
  • The future
  • Many of the external factors identified by the
    SBTG will not disappear, e.g.commercial
    pressures, minimum availability of resources.
  • Implementation will (hopefully) be eased, by
    better written standards, based on the process
    approach.
  • Generic standards may eliminate the need for
    specific MSME guidance

49
  • Recommendations
  • Understand and apply the 8 Quality Management
    Principles
  • Use ISO 9004 to aid development of your Quality
    Management System and for guidance on performance
    improvement
  • before seeking to implement ISO 90012000

50
Staying correctly informed
National standards body Professional
associations ISO 9000 News journal from
ISO ISO Online http//www.iso.ch ISO/TC
176/SC2 open access website http//www.bsi.org.uk/
iso-tc176-sc2
51
Conclusion Often MSMEs fail through fast growth
and breakdown of informal management systems. A
formal quality management system can help prevent
this. It is easier to implement a formal quality
system earlier rather than later. Recommend
adoption of an ISO 9000 based QMS as a starting
point on the road to excellence
52
Thank You for your attention Charles
Corrie Secretary ISO/TC 176/SC 2
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