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ISO certification in metal fabrication: Yes or no?

Is ISO 9001 certification worth the effort?

Recently a number of fabricators have asked me if I think ISO 9001 (called ISO in this column) certification is actually worth the time and expense involved. Like everything else, the only realistic answer is, It depends.

The companies I ran were all ISO-certified. But we also had other, industry-specific certifications. To this day I can’t say that ISO 9001 in these cases generated any more access to business than the industry-specific certifications did. However, many of the processes and procedures embedded in ISO 9001 certainly overlapped and in some cases were almost identical to the ones in the industry-specific certifications.

The real question is, In the absence of any specific certifications a fabricator must have to participate in a particular industry, does ISO certification provide any real benefits commensurate with the investment?

Let’s dispose of the easy answer—the revenue answer—first. If your major customers or prospects require ISO certification, then you really don’t have a choice. If you intend to play or keep playing in that space, just do it.

Exceptions

There are two exceptions to this, both of which I have witnessed with fabricator clients. The first is grandfathering of a supplier not certified when the customer initiated its ISO requirement. A pragmatic approach, grandfathering works best when a fabricator has exceptional past performance. The argument is that it is unlikely that ISO certification would have any effect on supplier performance. However, the grandfathering is conditional on continued exceptional performance.

The second exception is rather dicey. Those of you who follow this column know that I see evidence of “price-primacy” sourcing at more OEMs across a range of industries. In these cases, the OEM’s purchasing function has extraordinary power in sourcing decisions, and this power is focused on price.

In one case I witnessed, the OEM had a longstanding ISO requirement for suppliers but signed a significant contract with a non-ISO supplier that offered an attractive price. The contract didn’t even demand that the supplier become ISO certified. The only reference was a weakly worded separate “memorandum of understanding” that the supplier would make “all practical efforts to attain certification within the next 18 months.”

One can only imagine the fur that flew between purchasing, quality assurance, and production over that move. But it happened. It could also “un-happen” if the OEM suddenly starts demanding ISO certification. The problem is that these exceptions depend on specific customer policies in place at a certain time, and they can disappear quickly. So the only safe answer is, If ISO is required, it’s required—so do it.

But, let’s look at ISO not as a means of generating new business but as a tool to improve performance. It does have a lot going for it.

ISO’s Purpose

ISO 9001 is above all a quality management standard that has its roots in the total quality management (TQM) movement of the 1980s. As originally advocated and practiced, TQM was to many (including me) a case of theory suffocating practicality. Still, the core underlying principles were valid. It was its practice, not its concepts, that limited TQM’s deployment.

Each OEM had its own version of TQM that it inevitably foisted upon suppliers, usually to a degree well beyond what the OEM had imposed on or had achieved itself. At one time I had more than a dozen major OEMs with their own TQM requirements and auditors. More than once I had two OEMs in my company at the same time auditing our compliance to their TQM standards and interpretations, the latter of which were highly auditor-dependent. Yeah, nuts.

ISO is a mainly successful attempt to make TQM more practical, but with enough breadth to satisfy (and therefore replace) the individual requirements for most OEMs. It took a while. The original ISO preparation and certification process was at least as tough as the toughest OEM demands I’ve seen. Much of it suffered from the dogmatic approach that plagued the original TQM regime.

Over the years I have seen more practical requirements in the standards. The latest iteration, ISO 9001:2015, seems to carry on that trend and appears to reflect more of a best-practice approach to TQM.

As stated by ISO itself (in this case, the Switzerland-based International Organization for Standardization, www.iso.org), the purpose is to “set out the requirements for a (robust) quality management system.” The stated major benefit of these requirements is to “help businesses and organizations to be more efficient and improve customer satisfaction.” These requirements are based on the following quality management principles:

  • Customer focus: Meeting or exceeding customer needs and expectations, and having a means of hearing the voice(s) of the customer(s) and aligning with those voices.
  • Leadership: A clearly stated and communicated business focus or mission.
  • People engagement: Means of empowering the organization’s people to satisfy the customer focus and organization mission.
  • Process focus: A clear understanding and documentation of the organization’s key processes and their characteristics, and how they interrelate and function as an integrated system.
  • Improvement: Means of improving processes and results through formalized systems or structures that capture opportunities, prioritize them, and execute the initiatives.
  • Evidence-based decision-making: Basically maintaining and analyzing key metrics and data that act as feeders to the improvement system, and having a review process such that key company decisions are based on available evidence.
  • Relationship management: Means of involving key third parties, such as suppliers, in accomplishing the company’s mission and goals.

These are solid principles and indeed do form the foundation for a robust quality management system. ISO does not rank these principles, leaving much of that as well as actual processes employed to the individual company. However, a successful ISO deployment must touch on and account for each principle.

Paperwork, Paperwork

In practice, the most time-consuming part of ISO certification is the documentation. Companies must have documented proof that the principles are recognized, acted upon, and managed. Many find that the most burdensome of these is documenting the key processes and their interrelationships. It can be truly extensive if starting from scratch.

Understand that ISO requires not only a lot of documentation, but also a means of communicating to virtually the entire organization (as appropriate) what the documentation is and what it requires. It also requires a means of maintaining the documentation and putting it under formal revision control. For example, people must not only document a process change, but also analyze how the change affects other key processes.

This requirement is anything but trivial. Still, for complex organizations it’s difficult to imagine any other way of maintaining control and avoiding unintended negative consequences of a change that appears innocuous.

So what does this mean for the average fabricator? Happily, most fabricators have a relatively simple organizational structure and their key processes are straightforward. This helps a lot. Still, depending on a company’s current state, developing the baseline documentation can take one person almost half of his or her time for three to four months. The management team can spend up to a quarter of its time for one month reviewing the documentation and developing a maintenance system. And it takes even more time to launch, communicate, and monitor that system. One must also add in the cost of independent certification. It ain’t cheap.

ISO’s Real Value

Is it worth it? For companies looking to be significant suppliers to OEMs, I would say definitely yes. Most of the cost generally is a one-time expense, and the benefits are actually significant, particularly as a way to engage people and support improvement. ISO also gives the company and its customers the knowledge that the company’s quality management practices follow best-practice principles.

But to get the most out of ISO, the principles themselves must be practiced and continuously improved upon. Otherwise, ISO becomes window dressing, a marketing tool for which the return on investment comes solely from the business won due to ISO certification. That’s fine. But the real benefit of ISO comes from the internal improvement potential based on its underlying principles. From my experience, the gain is greater than the pain.

About the Author

Dick Kallage

Dick Kallage was a management consultant to the metal fabricating industry. Kallage was the author of The FABRICATOR's "Improvement Insights" column from May 2012 to March 2016.