In our last blog post we began to outline the steps needed to have a conversation with your senior management team about buy-in for ISO standards. The first step is to set the right expectations – the amount of support and commitment required to implement standards as the framework that can redefine your organizational system.
This time we’ll look at the benefits of ISO certification.
Step 2: Tell them the benefits
Management likes ROI. What’s the return on the time and money expended on achieving ISO certification?
Once you get your management team to understand what it will take to get certified, we turn our attention to the benefits of following international systems for operational excellence.
Certification can increase efficiency, improve morale, generate more business and increase profitability.
While results vary, of course, from company to company and industry to industry, in general being certified can lead to a 30% gain in productivity or 25% decline in rework.
It’s not uncommon to hear of an 80% reduction in customer complaints, a 33% increase in machine uptime, a 40% increase in on-time deliveries or a 35% decrease in scrap.
Here’s one example related to on-time delivery, or OTD. Prior to certification, one organization (yes, this is a real example) “guessed” its OTD was approximately 45%. Once the organization established OTD as an organizational quality objective, the OTD baseline was determined to be 52%. The company was able to identify root causes and action plans for deliveries that were late. Result: Now at 85% OTD within one year.
In another example, one organization was receiving customer complaints about product quality. The organization was using several suppliers to perform machining and welding. Once the organization started using ISO methodologies to include supplier evaluations – sending corrective actions to suppliers when they were determined to be the root cause – the RMA (Return Material) rate decreased by 25% in one year.
Many organizations are wary about setting requirements upon their suppliers because they are afraid they may lose them as a supplier. But our experience is that suppliers welcome the opportunity to know what their requirements are. It builds stronger relationships throughout the supply chain.
So, have that conversation with your management team about the potential ROI for your organization.
In our next blog we’ll look at the third step – getting started.
This post was written by Roy D'Ardenne