What can ISO 9001 do for you?
Growing Business learns how ISO 9001 can help you structure your company, build equity value and provide the proof of best practice you'll need to attract larger companies or the public sector
It's all well and good telling people you are a well-run business, it's quite another showing them proof. The ISO 9001 is an accreditation that provides a customer with precisely that. It is recognised across the globe, with an estimated 750,000 businesses (60,000 in the UK) deemed worthy of the mark. The International Standards Organisation (ISO) is run out of Geneva, while its UK equivalent is the British Standards Institute (BSI). But what exactly is ISO 9001 all about?
The standard definition
Companies of any size can gain the accreditation and it is not sector specific, but traditionally it has been used by manufacturers or production-type businesses. Accredited businesses will possess a company manual, which defines exactly how the business operates. This will have been independently assessed to ensure it matches the actual practices taking place.
Definition is key, but so is efficiency. To obtain the standard, you will have identified ways to improve efficiency, reduce costs and lower waste. You'll be taking on board customer feedback and reacting in a more systematic way. Finally, your staff will have clear roles, and there will be standardised lines of communication to improve management. Understandably, this appeals to manufacturers, because you are creating a company that is every bit a precision engineered machine.
“It makes a statement up the chain,” says Tim Champion, marketing director for Bedfordshire-based battery distributor H-Squared Electronics. “It says we have a system in place, we can be relied upon to fulfil orders, that we have a coherent business plan, we train our staff, monitor faults and are organised – all the things that ISO 9001 stipulates you must have in place ahead of being accredited.”
H-Squared's clients include large businesses and the public sector, and the firm wouldn't get past the first stage when tendering for contracts without being ISO 9001 approved.
“We pride ourselves on the service we give, but that's what they all say,” Champion adds. “With ISO 9001, we can offer independently verified proof. The fact that an outside body comes in and checks our systems and processes is powerful stuff for clients. It means they don't have to traipse around our offices or warehouse and check for themselves, because it's already been done.”
For Bryan Gurling, managing director of Sussex-based Stanley Plastics, getting ISO 9001 accredited has introduced a greater discipline to all aspects of the business. His company is one of the few in the UK that makes acrylic plastic products, anything from simple tubes to submarine windows. With this type of product, the audit trail must be clear. If something goes wrong with a submarine window, lives are at risk. Components must be traceable, something the ISO accreditation ensures the business is on top of.
“ISO also states that we must review the business every six months,” says Gurling. “That means the consultant comes in and the senior management looks at everything that has happened, mistakes that have been made, and we address the reasons why and look at rectifying the problem.”
Gurling says the consultant he uses has also brought invaluable insight to his business. “It's important to get a good consultant,” he says. “The first guy we had in was ripping us off and taking too long to do anything. It was like he was using us as a way to print money. I got rid of him in the end.”
Gurling now uses David Wadlow, and it's his job to check companies are up to the ISO 9001 mark. Wadlow says the big mistake was calling ISO 9001 a quality standard. He says it should have been labelled a business management standard, because that is what it is. In his view, the ISO standard is generic, covering aerospace and service companies employing thousands or just one other person.
“It's really just a business model,” says Wadlow. “It's about getting processes in place for every aspect of the business, from how orders are handled to how disciplinary matters are dealt with. It brings uniformity to handling complaints, for example, and can help businesses in terms of highlighting training requirements.”
Many businesses do all the things set out in ISO 9001 anyway. But while keeping on top of procedures and conforming to certain ways of working is easy when a business is small, when it starts to employ more than 50 people, sometimes systems slip. That's when referring to a business plan, or an ISO 9001 manual, can be useful.
Is it money well spent?
Charlie Gordon Lennox, managing director of The Keyholding Company, says there are many benefits. “If you fully embrace ISO 9001, it helps to structure your business,” he says. “Staff have a clear process to follow and it encourages continued improvement across the business. It also ensures continuity of the quality of the service offerings and encourages transparency and accountability, because of all the checks and balances that are in place.”
But it's not just important within the business. “It means you can build a business faster, as once the formula has been created and documented, it is easier to replicate as you expand. It also builds equity value, as potential purchasers are looking for a well-run company.”
Mike Debenham, from the Chartered Quality Institute, says if implemented correctly, ISO 9001 can help your business in many ways, from improving performance to increasing profit. But Debenham stresses that ISO 9001 will not do this by itself. It's the badge that says your company has set processes in place, and you can have those processes in place without ISO 9001. His organisation, a registered charity, offers a free guide to small firms on this very topic.
How much does it cost?
So you think it might be a good idea, now what? The ISO 9001 standard will cost you £80 from the British Standards Institute. That will get you a piece of paper. The real cost is in getting your processes checked and certified by an accredited body. This will mean paying a consultant to come in and check your paperwork to see that you have the processes in place and that everyone works to them. That equates to roughly three days' initial assessment, followed by one or two visits a year from then on. This costs anything from £600 to £900 per day. Champion says the total cost to H-Squared Electronics is around £3,000 annually – and that it's money well spent.
While the standard won't make you money in itself, getting accredited might well get you business from government or contracts from larger businesses who want some sort of proof that you can handle any orders they might put your way. For example, while the Olympic 2012 bidding process does not specify that companies should be ISO 9001 accredited, it does state that companies should have a quality policy in place. So being ISO 9001 certified might just get you in the door.