FRANKA PISKAR, Sanolabor, d. d., Ljubljana, Slovenia SLAVKO DOLINŠEK, Faculty of Management, University of Primorska, Koper; Faculty of Mechanical Engineering, University of Ljubljana, Slovenia
SUMMARY The main goal of this paper is to put forth and examine certain hypotheses about the effectiveness of quality standards certification. Assuming that companies have already received certification, we conducted an analysis of the implementation of standard (time, involvement of resources,..), how much companies actually gained from the acquisition of certification; not only the achievements, but also the conditions and problems that emerged after the acquisition of certification, and; of the ongoing activities of companies in the area of quality control and continual improvement after certification had been acquired. It has been also analysed if, as a result of the quality standards process, employees are more satisfied, customers are more satisfied and if the interests of the companies have been met.
ISO 9000 CERTIFICATION IN SLOVENIA – NEEDS AND BENEFITS
INTRODUCTION The ISO 9000 standards are widely accepted around the world. In the early nineteen-nineties, standardization and the ISO 9000 standards became the basic minimum that companies must respect if they want their products to be sold in the European Union. At the beginning of 1993, for example, companies in 48 countries throughout the world had received the ISO 9000 certification; by the end of 1998, the number had risen to 143 (Likar, 2000, p. 9). The globalization of markets and the elimination of trade barriers and borders between countries have both played a role in this process. The commonly accepted fact that the quality improvement of products and services positively influences the success of the business has never empirically been proven. In addition, the decision to acquire certification of quality standards is motivated more by factors related to general improvement of quality and business practices, and less by factors that improve actual business efficiency. There has also been very little analysis or precise evaluation of invested time and funds in connection with improved business practices. For these reasons, once certification has been obtained, it is often not clear that companies continue to improve standards with the same energy as before. In many companies, the effects of the ISO 9000 quality system have come under scrutiny. Has the introduction and maintenance of quality control
Key words: quality standards certification, continual improvement 37
systems actually delivered as much as expected or have expectations been too high? Which indicators of success and effectiveness should be used given that new standards demand the measuring and monitoring of transparent business processes? And what happens after the introduction of quality standards? Does it imply the introduction of a culture of constant improvement that drives the company to progress in areas where it is substandard and in all areas where improvements could be made?
2. companies experience a lower level of positive effects than they expected; 3. it is necessary to continue to strive for constant quality improvements, if not the quality standards stagnate and cease to show positive effects; 4. the companies must therefore incorporate not only ISO 9000 standards but other quality systems (such as the balanced scorecard and the business excellence model).
RESEARCH HYPOTHESES AND METHODOLOGY
This area has become extraordinarily important and companies around the world are dedicated an increasing amount of attention to it. In Table 1, the parameters and methods of data collection for later analysis is outlined.
The research has been focused on the empirical conclusions of analysis that studied the effects of acquiring quality certification on the continued activities of the companies. In terms of scientific method, four main hypotheses were defined. The goal was to use investigation and questionnaires to either confirm or reject the hypotheses, which have not yet been empirically researched. The four main hypotheses are as follows: 1. many companies who receive quality standard certification achieve a higher level of (technical) quality and are more successful (in business terms) then they were prior to acquiring certification;
The sample of companies was large and the responses required detailed analysis. The research was mainly focused in the effect of standards on individual factors such as business success and productivity and also in the continued activities of companies in this area. Median values (MV) and standard deviation (SD) based on the responses in the questionnaire (from 1 to 5: I strongly disagree, I disagree, I don’t know, I agree, I strongly agree) was calculated.
Table 1: Data collection methodology
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73%, cooperated with an outside company. This is of course a good decision. I believe the success of the introduction itself and later activities performed in this area are dependent on the start of the project, how it is planned and whether or not outside companies participate that easier assess how employees are motivated and prepared for the coming changes. On the inclusiveness of employees in the introduction after the certificate has been awarded, results of the survey according to the ranking – very satisfactory, satisfactory, less satisfactory, unsatisfactory – cooperation deteriorated from very satisfactory at the start, 22%, to only 11% after introduction. More companies showed less satisfaction with inclusiveness after introduction (only 7% at the start and 11% after introduction). This demonstrates the need for continuing activities or effects become stagnant.
SOME CHARACTERISTICS OF INTRODUCING THE ISO 9000 STANDARD The first part of the questionnaire was directed towards an analysis of how the standard was actually introduced in Slovenian companies. For example, was there cooperation with outside companies, how long did the introduction last, what was the inclusiveness of all participants, what were the activities performed aimed at assuring continual improvement, etc. The results of the survey show that the majority of companies (60%), have a quality control department but it is within the other functions in the company and not independent. Costs for an independent department are mostly high (some companies gave this as a reason for not having an independent department) and it is easier for a company to establish a quality system if it is within the framework of other functions. Employees accept it as their own.
Inclusion of principle managers significantly influences the success of introducing a quality system, the motivation of employees and continued activities of the company. In 44% of companies they were very satisfied. In the other half of the companies they were satisfied. This shows a great deal of trust and support from principle managers of the quality system although results could be questionable. Principle managers represent a barrier to the introduction of the system in many companies (Gunčar, 1998a, page 49). This is also shown by the answer to the question posed to principle managers, where 41% of companies chose “principle managers are over burdened with regular work” as one of the principle barriers to acquiring an ISO 9000 certificate or setting up other systems of quality.
Most companies, 90%, decided to introduce the standard throughout the entire company. The majority of these are manufacturing companies, where the percentage is 94%, with 80% of service companies. The introduction of the standard is costly to a company. If a part of the company is left out from the system, this does not mean there is a significant saving of time or money. It therefore pays to include it throughout the entire organisation. On the other hand the authority granting the certificate use outside assessment checks on the application of the sign. For incorrect application of the sign, e.g. where only one activity of the company is confirmed and others, not the company must define on all documentation the area covered, e.g. only for selling air conditioners. If the definitions do not comply with the area confirmed the company must change its definitions as soon as possible on all documentation or acquire certificates for all other activities, which of course increases the cost.
POSITIVE AND NEGATIVE EFFECTS OF INTRODUCTION ISO STANDARDS Table 2 outlines the most important positive effects of quality standards on individual factors of business success. In three questions, there was a high standard deviation factor which shows the variation of opinion among respondents. In other words, the answers of the respondents were widely dispersed around the median value which reduces the weight of the calculated average evaluation. The research shows the very strong effect of standards on improved quality of products and services, improved overview of the process,
In 67% of companies the system was introduced within a year and a half. Manufacturing companies with more than 250 employees took the longest with 86% taking a year and a half to two years and the remaining 14% up to a year. 86% of service companies having up to 50 employees introduced the system within one year. Most companies, 39
Table 2: Positive effect of standards on individual factors of business success
improved effectiveness of processes, improved reputation of the companies, improved customer satisfaction, improved production processes and technological enhancements, reduction in the number of customer complaints and generally higher quality of products sold (Table 2).
Because the area of research was exceptionally broad, we also discovered areas where the introduction of standards did not have a decisive impact. These are shown in Table 3. Median values are relatively low, and standard deviation relatively high, which indicates an weaker impact.
These positive changes are linked to improvements derived from the mastery of operational processes and the market. Given the stated results, it was can confirmed with certainty the first hypothesis i.e. that many companies who acquire quality standard certification achieve a higher level of quality on the technical level (for example, improved quality of goods and services, improved overview of processes, improved effectiveness of processes, information systems, etc.). On the level of business success, the effect of quality standards is seen indirectly.
As indicated in Table 3, the first hypothesis was rejected, being unable to confirm that quality standards positively influenced, for example, the number of innovations in business processes, the continual process of improvement, the increased number of new customers, sales and profitability, increased customer satisfaction, etc. The effect of quality standards on business results – that is on business success – also appears to be relatively small. In general, we see in this diagram direct effects that the company did not perceive; indirect effects were rated more positively.
Table 3: Weak effect of standards on individual factors of business success
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On the basis of research results, It was concluded that in several examples the standards had an indirect effect on the increase of profits, or on the improved business results of the organizations. While organizations are able to measure certain effects, there are other effects that they cannot measure. The impact of the standards on increased profitability (i.e. the recognition of all the other factors in the framework) remains dubious. The effect is 100% present, however, since the interest in acquiring the standards has not decreased. According to research and data, there is also a subsequent growth of several activities that before were not interesting and not a condition for acquiring supplier status. What follows, therefore, is the link between the effect of standards and the profitability of the company or, the positive influence on business success (for example, the reduced number of customer complaints, the increased level of customer sastisfaction, the better organization of work, better cooperation with suppliers, etc). The problem is therefore that companies do not recognize the effects or do not have the methodolgy to evaluate them.
improvements, on improved employee morale), • organizational factors (little effect on changes in strategy, vision and general business of the company; little effect on structures that support quality, on the increase of managers’ interest in training, on changes in the organizational structure and corporate culture). The effects (direct and indirect) of ISO 9000 standards on business success decline over a period of four years if the company does not supplement them with TQM (Ismail, 1999, pp. 853-860, Prabhu, 2000, pp. 84-91). According to research results, all of the companies begin in a certain period of time to prepare the ground for programs of continual improvement. Ideally, these long-term programs should be designed even before the introduction of standards. In this regard, an experienced external quality-consulting firm that knows the direction in which the company wishes to go can be of great assistance. CONCLUSION
In certain areas, the companies did achieve a positive effect, although the effect may have been too small according to either the results demanded by the standards themselves, or to the expectations that participatants evaluating the effect may have had; this confirms the second hyphothesis that the effects achieved were small relative to expectations, particulary: • production factors (too small effect on the reduction of material expenses, expenses to maintain equipment, machinery, labor force and on increase of added-value), • financial factors (too small an effect on the increase of payment capability, regular payment of customers, reduced business expenses, improved turnover of inventory, increased income, improved returns, improved business results), • customer satisfaction (too little effect on improved customer loyalty, increased number of new customers, increased sales, increased profitability), • supplier quality factors (too little effect on improved satisfaction of suppliers and on relations with business partners), • employee satisfaction (too little effect on satisfaction and loyalty of employees, on the implementation of suggested
The majority of effects of quality control standards on companies are positive. However, when companies conclude the process of introducing these standards and when the standards have been operating for some time, companies need to contemplate introducing long-term quality control systems. After the acquisition of standards the ongoing improvement of a given company will continue in many areas. Research results show that most frequent improvements take place in processes (reorganization of processes, decreasing the time it takes to perform certain tasks, reducing expenses). Another set of commonly observed improvements take place in the so-called Deming circle (P-D-C-A): namely, internal control measures that the company uses to improve processes, permanent quality control checks placed in phases of the production process that tend to cause problems (places where errors occur, where there is a potential for error, or places where quality issues are most decisive, or where process time must be shortened in order to meet an order deadline, or where necessary preventive or corrective actions must be introduced in the design of the organization). 41
4.
From the analysis of research results, it was concluded that more than 80% of companies realize the importance of continuing to implement programs in the area of quality control. This confirms the third hypothesis: namely, that it is of vital importance to continually work on improvement in quality control and, if not, quality standards will stagnate and no longer have perceivable effects. According to research results, the introduction of ISO 9000 standards also served to develop the general management of companies: organization of work as well as communication and general quality systems. An overall change of culture is necessary in order to introduce the continual process of improvement as a main tool in companies’ struggle for greater competitiveness and success.
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References: 1.
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PRABHU Vas, APPLEBY Alex, YARROW David, MITCHELL Ed: The Impact of ISO 9000 and TQM on Best Practice/Performance. The TQM Magazine, Bedford, Vol. 12, No. 2, 2000, pages 84-91. Tečaj za vodilne presojevalce sistemov kakovosti (Course for Quality System Auditors), SIQ, 2001, 69 pages.
ISO 9000 CERTIFICIRANJE U SLOVENIJI – POTREBE I PREDNOSTI
ISMAIL M. Y., HASHMI M. S. J.: The State of Quality Management in the Irish Manufacturing Industry. Total Quality Management, Abingdon, Vol. 10, No. 6, 1999, pages 853-862. LIKAR Igor: Kakovost vodenja ali vodenje kakovosti? (Quality of Management or Management of the Quality?) Finance, priloga kakovost, št. 31. Ljubljana. 2000, page 9. PISKAR Franka: Učinki pridobitve certifikata kakovosti slovenskih podjetij in nadaljevanje njihovih prizadevanj na področju kakovosti (The Influence of Ouality Certification on Slovenian Companies and their Continuing Efforts in this Field), doktorska diseretacija. Ljubljana: Ekonomska fakulteta Ljubljana, 2003. 237 pages.
SAŽETAK: Glavni cilj ovog rada je iznošenje i proučavanje nekih hipoteza o efektivnosti certificiranja prema normama kvalitete. Pretpostavljajući da su kompanije već dobile certifikat, proveli smo analizu same implementacije (vrijeme, korištenje resursa), i koliko su kompanije zapravo profitirale uvođenjem certifikata: uzevši u obzir ne samo uspjeh već i uvjete i probleme koji su se pojavili nakon certificiranja; i trajnih aktivnosti kompanija u području kontrole kvalitete i kontinuiranog poboljšavanja nakon uvođenja certifikata. Područje analize bilo je također promjena zadovoljstva zaposlenika i kupaca nakon uvođenja certifikata i da li su postignuti interesi kompanije.
Ključne riječi: certificiranje sustava kvalitete, stalno poboljšavanje
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