To gain a certificate, organizations must implement and maintain all 131 of the “shalls” in the standard. The organization has flexibility on “how” it will meet them. When there is enough evidence that these requirements are sufficiently met, the certification body will visit with the company and can decide to issue a certificate that lasts up to 3 years. They normally check on progress annually to make sure companies are still meeting the requirements.
How Does it Help Your Company?
Certification to the standard can allow your company to expand into other markets, into other countries and certain industries. But fulfilling the requirements has an even bigger payoff:
According to the 9001 Council, recent studies show a comparison of certified and noncertified companies from studies conducted by Lloyd’s Register of Quality Assurance. Companies certified to the 9001 standard saw a strong correlation with increased profit margins and sales, up to TWICE the industry average within their niche. “In terms of return on assets (ROA), our findings showed that certified companies typically outperformed their non-certified counterparts by an average of slightly over 20 percent,” according to the study summary.
The authors also warn that simply adopting the requirements isn’t enough. “It must then become a major component of the company’s culture and daily practices” to bring about a competitive advantage.
Some specific outcomes:
At a European company, water potability increased from 91% to 99.1% after implementing ISO 9001.
ISO 9001 compliance facilitated better control of processes and a consequent 19% reduction in managerial staff. Cost savings over the following five years averaged roughly 4% per annum.
Staff costs traditionally represented 70% of expenditure. Through consistent application of ISO 9001, improvements in productivity led to an almost 10% reduction in staff.
Clark County School District, the largest school district in America, accommodated a rapidly expanding student population while achieving $174 million in cost avoidance and cost savings over 10 years after implementing ISO 9001.
A manufacturing site improved quality by 12/5% in their first-pass yield and increased throughput by 166% after implementing ISO 9001.
In another facility, two workers were redeployed for a new product line, facilitating a sales increase of 68%.
And the list goes on!
