By Sharon Lewis and Reethu Ravi This article is the first of a four-part Tech’s Year in Review series reviewing developments across industries in 2020. This first installation discusses some industries spotlighted by the COVID-19 pandemic, namely edtech, logistics and supply chains, fintech, [...]
Ensuring quality in a continually-globalizing world
Globalization has provided a huge boost to the world economy in the past few decades. Countries have opened up their borders to embrace free trade, and global supply networks have expanded. Throughout this process, consumers have been exposed to a wider and wider range of products. And as the options available to consumers have grown in number, so have their expectations in terms of the quality of goods available.
However, the crucial question is, with products being made in different countries, all of which have diverging domestic regulations and quality standards, how can we ensure that the products circulating in the global market are of good quality? Quality Assurance Standards might be able to provide us with an answer.
What are Quality Assurance Standards?
The International Organization for Standardization (ISO), founded in 1947, aims to facilitate better quality and consumer protection by creating a set of common standards among nations. Multiple sets of standards have been developed by the ISO that can be applied to products across a wide range of industries.
ISO standards provide guidelines on regulating business practices, manufacturing, quality control, and more. These standards are recognized around the globe, since they were created by those with appropriate industrial expertise, and the adoption of ISO standards is regarded as an indication of commitment to delivering quality goods and services.
ISO Standards: A Selection
Since its beginnings, ISO has expanded its range of standards significantly, and the full list now ranges in the hundreds. However, some of the QA certifications issued by the organization are evergreen – here are some of the most popular.
- Quality Management — ISO 9001
This is the world’s most popular standard for quality management, applicable to companies of all sizes and industries. Over one million companies and organizations in over 170 countries are certified ISO 9001 holders.
ISO 9001 is a branch under the ISO 9000 family, which focuses on quality management of business. This standard consists of a set of principles to achieve improvements in production processes, such as a customer-centered policy, risk-based thinking in enhancing the application of the company’s process approach, and evidence-based decision-making.
- Information Security Management — ISO 27001
In this digitally-driven era, information security and data protection should be major concerns for businesses. This ISO standard outlines the requirements for establishing an effective information security management system. ISO 27001 is universally applicable to companies of all sizes and natures, and it helps companies assess their own information security risk. If their existing security practices are inadequate, this standard can provide guidance on producing security policies that are tailored to companies’ needs.
- Risk Management — ISO 31000
The world is constantly full of uncertainties, which more often than not reflect on businesses. Being able to optimize processes and reduce risks is often cited as the key to success in business.
ISO 31000 provides guidelines for managing risks. Although ISO 31000 cannot be used for certification purposes, companies can, by adopting the standard, enhance managerial efficiency and corporate governance.
- Environment Management — ISO 14001
In light of growing worldwide awareness surrounding environmental protection, more companies have decided to undertake corporate responsibility measures to pursue a sustainable future. ISO 14001 and all other standards in this category are dedicated to providing practical tools to manage companies’ environmental responsibilities.
- Occupational Health and Safety Management — ISO 45001
Employees are the pillars of a company’s daily operations. For companies who are serious about the safety and wellbeing of their employees, the ISO 45001 serves as a useful set of guidelines for establishing systematic procedures, setting up healthy and safe workplaces, preventing work-related illnesses and injuries, and promoting proactive improvements in occupational health and safety performance.
- Food Safety — ISO 22000
Food safety is paramount to our health. The consequences of unsafe food can range from benign stomach bugs to nasty parasites that can cause lasting damage. This industry-specific ISO standard is designed for organizations that are directly or indirectly involved in the food supply chain, regardless of size and complexity, including farmers, manufacturers, storage and distribution services, retailers, and more. With well-established principles, companies can produce quality food which consumers can put their faith in.
The Benefits of Adopting ISO Standards
- Effective internal management
One of the major benefits of adhering to ISO standards is the promotion of an effective internal management culture. ISO standards are essentially the experiences and advice of experts in business, crystallized into an easily-understandable framework.
Hence, adopting ISO standards can help companies to build a system for corporate management and establish sustainable business practices. With more standardized internal procedures, business and administrative efficiency has the potential to soar as redundancies and errors are minimized.
Plus, since ISO certifications can be applied to all organizations and companies, regardless of size and industry, the well-established standards can be especially beneficial to startups who are still finding their feet in the market.
- Reputational advantages
Adopting ISO standards also brings reputational advantages to the companies that do so. Establishing a good reputation is the key to business longevity, particularly in an age where consumers are much more informed and negative PR can have lasting consequences. Since the ISO standards are recognized around the world’s industries as a symbol of quality and credibility, they can help to offer legitimacy to new brands, and can be utilized as marketing tools to attract investors and businesses.
- Enjoy competitive advantages over non-certified companies
The effective management approach recommended by ISO standards can improve companies’ internal operations and become more competitive over companies that do not follow the standards. This can primarily manifest in terms of contracts with government institutions and multinational corporations, which sometimes require their suppliers to be ISO certified to ensure quality. In this sense, being ISO-certified will certainly provide the advantage of exposing a company to more business opportunities.
For the global economy:
In line with its primary objective, ISO standards promote the development of a standardized and systematic global framework that encourages the production of quality goods and efficient business management. Standardization of quality in turn facilitates more cross-border commerce and movement of merchandise, leading to greater variety on shelves around the globe and greater chances of cross-border business expansions succeeding.
Apart from benefiting businesses, ISO standards play a major role in the protection of consumers’ rights. Minimum consumers requirements for quality goods and services are incorporated into the standards by the experts who devise them. Hence, ISO standards can signal quality to consumers when making purchase decisions. Consumers can also benefit from the wide variety of available goods in the market, as ISO standards encourage international sales of quality products.
Obtaining ISO certification is voluntary and can be very time-consuming, but it provides companies with certain advantages and enhances their competitiveness in the market.
The Certification Process
The ISO certification process is typically divided into five stages: Documentation, Implementation, Internal Audit, Certification, and Ongoing Verification. The length of the whole process varies from organization to organization.
Stage 1: Documentation
The first stage in the certification process is to develop a management system that suits the company the best. It may involve scrutinizing the current business operations, creating and recording a quality policy, and developing a record of internal procedures. Documentation is important, as it lays down the foundations for certification and provides the entire company with procedures to follow, with objectives to achieve and policies with which to adhere.
Stage 2: Implementation
Throughout the implementation stage, the company needs to ensure that employees are properly trained for the new procedures. During this phase, it is important to monitor the effectiveness of the designed policies and make adjustments along the implementation process to achieve better results.
Stage 3: Internal Audit
Auditing is a continuous element of the certification process, not a one-off. Internal audits should be conducted during the implementation stage and after the completion of certification periodically. Independent inspectors chosen by the company should then conduct evaluations to ensure that ISO requirements are met as per the company’s standard operating procedures.
Stage 4: Certification
The certification audit can be performed after the internal audit is completed. Similar to an internal audit, a third-party auditor will conduct an on-site check to verify that all requirements have been implemented and are being followed by the company and its employees.
Stage 5: Ongoing Verification
A certified company needs to maintain its new management system even after certification. There are regular exercises that need to be completed, such as internal audits, document control, and management review meetings. Regular evaluations help ensure a consistent pursuit of quality management.
Considering the benefits an ISO certificate can offer to a company, it is understandable that a substantial investment of time, money, and effort is needed to obtain one.
Cost is one of the major factors that puts companies off getting ISO-certified. Since ISO is not responsible for the certification itself, companies wishing to be certified must turn to independent certification bodies, which offer different prices and plans.
Perhaps ironically, considering that the expense is in pursuit of a standardization certificate, there is no typical cost for an ISO certification. The price varies greatly depending on various factors, such as the size of the organization, nature of the business, and operation complexity. For example, it might cost a company of 11 to 15 employees approximately US$3000, excluding post-certification expenses, to acquire a three-year ISO 9001 certificate.
The total cost will be spread across the different stages of certification, from the implementation stage to post-certification. For instance, at the implementation stage, a company can choose either to hire external consultants to formulate management policies, or conduct in-house implementation directly, which will cost less money. Companies are recommended to request quotes from multiple certification bodies to search for the best price that suits their needs.
Limitations of the Certification
Despite the benefits it offers, the ISO certification does have its limitations. First is the validity of an ISO certificate: though the length of validity varies depending on the provider, a certificate usually lasts for three years, after which re-certification is required.
It should also be noted that while the certificate only shows that quality assurance standards are met within the organization, it does not guarantee the quality of an actual product or service, since it is the company rather than the product that is certified.
In addition to this, the certification does not authorize the use of ISO logos on any of the companies’ products, since the ISO logo is a registered trademark and cannot be used without the organization’s authorization. A company should contact its respective certifying body if it wishes to use the logo to demonstrate certification.
Given that so many ISO standards abound in the commercial world today, it can be tough for a startup to know which one to go for. This guide provides a brief overview of the main considerations around ISO certification. While expensive and sometimes time-consuming, businesses can benefit greatly from certification, and win loyal customers as a result.
Header image by sol on Unsplash.