Comparison of ISO 9001:2008 and ISO 9001:2000

This document aims to compare ISO 9001:2008 and ISO 9001:2000 to highlight changes.

The ISO 9001:2008 has been published and the standard is available through The American Society for Quality website at http://www.asq.org/. ISO 9001:2008 does not introduce any additional requirements beyond the current ISO 9001:2000. Although certification is not compulsory, it is estimated that over one million ISO 9001 certificates have been issued to organizations in private and public sectors, in manufacturing and services, and in 170 countries.


The new edition, however, will not require any specific reassessment for certification. ISO 9001:2008 will be the fourth edition of the standard which was first published in 1987. The third edition, published in 2000, represented a thorough revision, including new requirements and a sharpened customer focus, reflecting developments in quality management and experience gained since the publication of the initial version. Compared to the current 2000 edition, ISO 9001:2008 represents fine-tuning.


It introduces clarifications to the requirements in ISO 9001:2000, based on user experience over the last eight years, and changes that are intended to improve further compatibility with the ISO 14001:2004 environmental standard.


To accompany the publication of this new edition, ISO is working on implementation guidance for ISO 9001:2008, a reference table comparing and contrasting ISO 9001:2000 and ISO 9001:2008, and answers to Frequently Asked Questions.

Quality Guru Asks : What do you think of the value of this revision and will it improve your organizational effectiveness?

Benefits of an ISO 9001 Business Management System

What are the benefits of having an ISO 9001 based business management system? Lets begin by looking at the benefits to your employees and the organization:

Employee Benefits
To successfully implement and maintain a quality management system, employees need to understand its value to them. The better they understand what's in it for them personally, and how the organization also benefits, the more receptive they will be to the changes and work involved to make it happen.

Employees benefit from the improved internal communication and top management support. Conformity with ISO 9001 means suitable and well maintained equipment, along with the training needed to perform their jobs. Procedures and instructions, where necessary, will be available to guide them in their activities. Employees will have a better understanding of their role in the system and their contributions to meeting objectives. This sense of order and control will carry over into clean and well-organized work areas.

Since the organization will want to continually improve the system, employees will be encouraged to report problems and suggest improvements. As a result, they will be more satisfied and committed to the business.

Organization Benefits
The result of a conforming business management system will be better planned and coordinated activities. Any problems affecting product quality are identified and effective solutions are implemented.

Using the plan* do *check* act approach will lead to more efficient and effective processes and more productive employees. Higher quality products are delivered to more satisfied customers. As a result of your ISO 9001 based system and its well-defined policies, procedures, and information, the organization will be better managed for success. And the story only gets better, because your organization and its management system will be continually improved.

Perceived Disadvantages
Although we have been discussing the very real benefits of an ISO 9001 based system, you should be prepared to deal with its perceived disadvantages

1. Difficult to implement; need a consultantISO 9001 is just a collection of good, common-sense business rules. The difficulty factor depends on the state of your current management system.

2. Organization will resist the changes if introduced properly, with clear explanations of how it will directly benefit them, your employees should become big supporters of the new system.

3. Expensive to implement and maintain. You can reduce costs by comprehensive planning and avoiding the urge to put more into the system than is required for certification. Improve from that base.

4. Significant disruption to your business. Make sure it is supported by top management as a high priority project and integral to the business; not a separate effort by the quality department.

5. Yields unwieldy, ineffective documents. Only write the essential documents. You can rely on trained, experienced employees to perform any undocumented processes.

6. Cumbersome controls and bureaucracy. Keep it simple. Only implement what the business really needs. It may actually make the organization a better place to work.

Certification Benefits
In addition to the previously covered benefits, having the actual certificate in hand provides additional benefits. ISO 9001 is the international language of quality. Certification may help your organization gain expanded access to world markets. Prospective customers may require certification as a prerequisite to bid on contracts. With the certificate in place, your organization will be ready.

The ISO 9001 certificate may differentiate your organization from others in the marketplace and provide a competitive advantage. The certification mark recognizes a quality accomplishment that you continue to earn through successful surveillance audits. Display it with pride. And, don't underestimate the value of independent system assessments by well qualified professional auditors.

Due to its prevention focus, disciplined approach, and better controls, your organization may see an extra benefit of improved housekeeping and fewer accidents. As a result, you may qualify for lower insurance premiums.

Maintaining Benefits
Your organization will see some initial gains through the improved organizational focus and internal communications. These improvements, and other benefits, will be solidified by an active internal audit program and strengthened through the management review process.

Remember, an organization can't rest on its accomplishments. A quality management system will either improve or become less effective. The system will not stay in a steady state. You must listen to customers, meet objectives, stay conforming, and continually improve.

Quality Guru Asks: (1) Tell us the reasons your company acquired registration or the reasons your organization is considering registration? (2) What tangible benefits has your company realized from registration or ask me for hard fact evidence!!

Quality Guru Asks: What Methods are You and Your Company Using? What Measurable Results have you obtained, or not obtained? Share your thoughts with us!

Six Sigma, TQM, Lean?

With all the emphasis today on quality, and studies showing that quality is very important to the leaders of American business, why are so many organizations struggling to achieve and sustain quality systems? The answer is that managers have been inundated for 20 years with a parade of quality initiatives that have promised miraculous results in reducing costs and increasing profits. Consultants have peddled the promise of quality circles, self-directed teams, ISO 9001, theory of constraints (TOC), lean manufacturing, and Six Sigma to the point of near hysteria.

Each new system promises greater rewards. All of these systems have succeeded somewhere. Most have failed and died from neglect. My contention is that many managers do not have the time, knowledge, or resources for in-depth analysis of methods for process improvements. Competition has increased while pricing pressures from low cost countries have decreased profit margins. These lower profits make it extremely important that any money spent be able to show a return on the investment. A wrong decision on where to invest capital can be fatal to a company’s long-term health.

Any half-hearted implementation will probably fail, and every failure makes the next attempt even less likely to succeed. Let’s see if we can simplify the decision making.

What’s a manager to do? Here’s my list of questions to be answered by anyone looking to invest time and money in a quality-improvement system.

• Can the method be introduced to all types of business models?
• Will the method give a good return on investment?
• Is the method affordable?
• Is the method easily understood and assimilated into the company’s culture?

Let’s do a quick review of the heavy hitters in the quality arena.

Six Sigma

Six Sigma methodology involves two essential assumptions. The first is that people understand the ability of numbers to characterize a process. The second assumption is that reducing variation in a process— the cornerstone of Six Sigma—is always good. The goal of a business is to improve at the least possible cost, so the potential exists for savings to be less than the costs of the improvements. In addition, one process can be improved at the expense of another, causing the overall performance of a business to degrade.

Strengths of Six Sigma

• Projects have defined accounts to track money saved.
• Six Sigma can be used in either manufacturing or service industries.
• Because Six Sigma is driven by improvement in profitability, upper management is more likely to support it.
• Six Sigma isn’t viewed as a quality system, but a business system.
• Wall Street has become enamored of Six Sigma because of results reported by large companies. If Wall Street loves Six Sigma, business leaders have more freedom to invest capital without fear of failure.
• Six Sigma projects are intended to prevent defects before they can be created.
Weaknesses of Six Sigma
• Training costs are high. GE invested over $200 million dollars in the first year. Training a Black Belt can cost more than $40,000.
• The belt system can create a division between the “chosen ones” and everyone else.
• Turnover among trained Black Belts is high. Once trained, a Black Belt is valuable to other organizations. It may often be cheaper to hire a Black Belt than to train one.
• The cost savings reported are viewed skeptically by many, and predicted savings may not be tracked closely. Motorola reported in 1996 that it had savings of $16 billion from Six Sigma. From 1998 to 2003, Motorola gained no market share or improved stock value (Schniederman, Arthur M. (2004 March). Question: When is Six Sigma not Six Sigma, Answer: When it’s the Six Sigma Metric, posted on www.schneiderman.com). Where did the savings go? Schneiderman contends estimates don’t recognize that many costs are fixed or semi-fixed and don’t go away but show up elsewhere in the organization.
• The statistics involved are difficult for many employees to understand, and even experts cannot agree on the correct interpretation of the statistics. Try to figure out the argument about the 1.5 sigma shift and I guarantee your head will hurt!

Even if cost savings are accurately computed, eventually the big projects are completed and a cadre of highly trained specialists have fewer and smaller projects to work on, which may not justify full-time Black Belts.

Total Quality Management

Taguchi embraced the ideas of Deming and added to them. Kanbans, quality circles, just-in-time manufacturing and other concepts were combined to create the total quality control (TQC) system of continuous improvement that contributed to the rapid improvement of quality and productivity in the Japanese economy. The TQC concepts were Americanized to become TQM.
Strengths of TQM

• TQM organizations are typically flatter and Leaner than non-TQM companies
• TQM has worked in Japan, and benchmarking and training opportunities abound.
• TQM organizations are more customer-oriented than non-TQM companies.
• TQM stresses employee participation.
• TQM is adaptable to manufacturing or service industries.
Weaknesses of TQM
• TQM projects tend to focus on optimizing processes, rather than the whole system.
• TQM does not focus on bottom-line results to the extent other systems, like Six Sigma, do. Companies increasingly need to tie any investment to bottom-line improvement.
• Managers can be resistant to give up power. In a TQM organization, delegation is necessary for the system to succeed.
• Organizations may be hesitant to commit to the training necessary for employees to understand TQM concepts. Training can be viewed simply as a cost, not as an investment.
• TQM relies heavily on the team concept. Teams fail in organizations because of insufficient training and competing interests.
• Goals must be carefully established and communicated so everyone is working toward a common outcome, not individual achievement.

TQM typically seeks to optimize each process without considering the effect on the other processes in a system.

For example, if a team improves the efficiency of a piece of machining equipment by 20 percent, is that a good thing? Maybe. Improving a single piece of equipment may produce no savings at all. If the output of that equipment is waiting at the next process, inventory and waiting time have increased, and costs have actually risen. The entire process must be viewed as a whole. Many executives believe they “did quality” in the 1980s and it didn’t work. So TQM has fallen out of favor, and other initiatives, such as lean manufacturing and Six Sigma, have become more popular.

So far, neither TQM nor Six Sigma can answer our four questions with a yes. What about lean?

Lean
Lean is the reduction of waste. How do the types of waste factor into lost profitability? All waste can be classified as nonvalue-added. Nonvalue-added refers to some function or task the customer is not willing to pay for. Any overproduction uses labor, utilities, and space that might be used more profitably in other areas. Production that can’t be sold builds up inventory, and defective product is scrapped or reworked, causing lost productivity. Waiting time can never be recovered. Wasted motion is one of the most overlooked types of waste. Needless walking, turning, bending, and lifting are all nonvalue-added. Transportation waste is also often overlooked. A company that doesn’t use all its employees’ talents and ideas wastes possibly good ideas for improvement.

Extra inventory may have to be stored until it can be used. At some point in the process, the inventory has to be moved again when the next process is ready for it. To be successful in the global economy, where some countries such as China and Mexico have much lower labor rates, companies must do everything possible to cut costs and improve quality. Lean emphasizes teamwork, producing according to demand, smaller batches, quick setups, and cellular production.

Lean is the only methodology with which all four questions can be answered yes. Waste is present in all business models, whether they are service or manufacturing. Initial and ongoing training costs are low, and the concepts are easily understood. Many improvements can be made with little or no capital expenditures. Lean can be implemented on a small or grand scale. Departments from accounting to shipping can utilize lean techniques. The size of the business isn’t an issue, lean works just as well in a small business as a large one.

Six Sigma has too many negatives to be the first choice of a business as a methodology for continual improvement. Even proponents of Six Sigma admit that it’s not a good tool for small businesses. Because of the training cost and people resources required, a small company likely won’t have enough cost-reduction opportunities available to justify the investment. According to Got Six Sigma on the Brain, in the November 2004 Quality Digest, more than 66 percent of the companies using Six Sigma have more than 500 employees. In addition, the article points out that after three or four years companies abandon Six Sigma because the major cost savings have been realized. The math required in Six Sigma makes it difficult for everyone to understand the concepts. The tools of Six Sigma can be valuable for reducing variation in processes. The training to use these tools is readily available at local community colleges, on internet sites, and through other sources at much less cost than through the belt hierarchy.

Lean techniques should be investigated by any business interested in improving profitability and competitiveness. The principles translate to almost any business model. Results can be gained quickly and don’t require large expenditures at the beginning of the process. Many resources are available to gain the knowledge necessary to implement the methodology.

No one knows where the next quality guru will come from, but one thing is certain—the next “silver bullet" is just around the corner.

Article Written by Allen Huffman

"Buy American“? How about “Buy Quality” and then live up to expectations?

From: Quality Digest Magazine, Nov 2007
Written by Dirk Dusharme, Editor

"Made in the USA." What does it mean? What should it mean? To tell the truth, I’ve never thought all that much about it. My inclination has always been to buy the best product, with the features that I want, at a price that I can afford. Frankly, I’ve gotten used to those products being foreign-made, to the point that I just automatically gravitate toward Honda or Bosch or Zeiss.

But this month’s cover story by Nathalie Mitard (“Made in the USA,” beginning on page 26) made me think about it. I even posed the question to my wife. I asked her, “Everything else being equal, if you had the choice to buy a U.S.-made product or a foreign product of the same quality, which would you choose?”

Without hesitation, she said, “The U.S.-made product, because it supports our economy.”

“What if the foreign product was of slightly better quality?” I asked.
“Still U.S.,” she replied.

“Is there a point at which the better quality of a foreign product would persuade you to buy foreign rather than U.S?”

She had to think about that for a bit, but then acknowledged that, sure, at some point the quality of a product wins out over origin.

So, again, what should it mean to only buy products that are “Made in the USA”? Should I buy a U.S. product out of a sort of patriotism, or should I buy a U.S. product only if it’s better? I think it’s the latter. There’s just a little bit of hypocrisy tied up with how some U.S. manufacturers want me to blindly buy domestic. They want me to “Buy American,” but they definitely don’t want their Japanese customers to “Buy Japanese” or their Mexican customers to only buy products with a “Heche en Mexico” label.

I live in the rice-growing region of Northern California. This relatively small area exports more than 40 percent of its annual rice production to Asian countries; in fact, half of Japan’s total rice imports come from here. The total value of California’s 2002 rice exports was around $183 million. The industry creates more than 5,000 rural jobs.

Can you imagine what would happen to this area if Japan decided to embark on a “Buy Japanese Rice” campaign? “Buy [country here]” sounds good except when the shoe is on your customer’s foot.

Even with all that said, Mitard is right. There’s a trade deficit and it’s partially up to us as consumers to do something about it—but we shouldn’t do it blindly. We should buy from those U.S. producers, like Mitard’s, that put out a quality product—and, I would argue, only those. The others will learn the hard way, like our consumer electronics industry did as it crumbled beneath the onslaught of better and less-expensive Japanese-made products. Some industries, like the auto industry, learned, barely, and are now producing comparable products at comparable prices.

So I agree that maybe its time that we… I… take another look at U.S. products. The next time I get ready to make a purchase, I’ll evaluate whether the U.S. product (if it exists) is of comparable quality to the foreign. If it is, well, why not “Buy American”?

This isn’t just a blind allegiance to U.S. products, but rather an allegiance to quality U.S. products. So how about this? Let’s change the slogan from “Buy American” to “Buy Quality.” If we do that, eventually the “Made in the USA” label will mean more than just the place of manufacture.

QUALITY GURU IS ASKING FOR YOUR OPINION
We all know that many U.S. consumer products are made in other countries (example - no such thing as a Made in America automobile anymore). Does "Made in the USA" determine your buying experience or do you purchase solely on the best quality and price available?

Share your thoughts and purchasing decision process!

Internal Auditing: A Tool for Effective Process Mapping

Internal audits are often scheduled, and therefore conducted according to the ISO 9001:2000 clause structure. Most organizational audit systems start with a formalized checklist where auditors ask questions to ensure employees know their jobs, check for available procedures, and determine if documents and records are being utilized. These audits are mostly focused on judging conformity than evaluating effectiveness. Looking clause by clause, the quality management system may appear conforming, yet be fragmented and ineffective.

Auditors must adopt the process approach and assess the quality management and operational system through its natural workflow. Of course, this requires understanding the business, its processes and the integration of linkages that drives effective auditing and process mapping. Audit planning and interviews should identify for each process:

• Inputs: What, when, and from whom?
• Resources: With what people, materials, equipment?
• Methods: How done (procedures and instructions)?
• Controls: How monitored and controlled?
• Measures: What are performance indicators?
• Outputs: What is delivered, when, and to whom?

Auditors should view the quality management system as a set of integrated processes (by understanding the interfaces and interactions). Adopt the process approach for your audits. Add value by looking at more than just conformity. Evaluate the linked processes for their “effectiveness”. Verify their controls and identify any process risks. Also, determine opportunities for improvement. Auditors can promote the process approach through their own audit methods.

Share with us and our readers what method you and your company use to identify and document the Six "Process Based" outcomes identified above.

We will post all examples and discuss best practices next month!

Effective Procedure Writing

When writing a procedure, keep in mind these questions:



• What is the objective of process? Know its purpose before starting.
• Which activities are part of scope? Agree on coverage of activities.
• Who is responsible for these activities? Identify key process players.
• What are inputs and who are suppliers? Identify inputs and providers.
• What are outputs and who are customers? Identify outputs and recipients.
• What is referenced as an information source? Identify related documents.
• What is the logical series of steps? Organize the steps in a logical sequence.
• How are the activities performed? Interview users and observe operations.
• Which departments use the process? Know readers and users of the process.
• What reports or records are generated? Identify records for the process.
• What forms are used? Don’t overlook forms used to collect information.
• When and where is the work performed? Identify timing and location
of work.
• What products are covered by the process? Define its applicability.
• What process documentation already exists? See if documents can be adapted.
• What are the requirements of the process? Know user and organization needs.
• What are the quality criteria? Identify the acceptance criteria.
• What are the related procedures? Ensure compatibility with other processes.
• Which tasks have or need instructions? Add or refer to needed instructions.
• How might the process be audited? Be able to demonstrate conformity.

Receive A Tax Deduction for ISO 9001

The Internal Revenue Service issued a ruling in 2000 that allows businesses to take a tax deduction for the costs of implementing and maintaining ISO 9001 registration. Several organizations had petitioned the IRS to permit firms to deduct ISO 9001-related costs in a single year instead of spreading the expenses over several years. The IRS ruling stated, "Although ISO 9000 is voluntary, it increasingly is a contractual requirement for doing business with many organizations, both public and private, worldwide." A prior unofficial IRS position paper had concluded all ISO 9000 costs had to be capitalized over a three year period.

The costs of ISO 9001 are now viewed as satisfying the conditions for applying section 162 of the Income Tax Regulations: it is an expense, ordinary, necessary, paid or incurred during the tax year, and made to carry out a trade or business. The ruling that ISO 9001 registration is necessary was, in part, responsible for this policy change. "ISO 9000 certification does not itself result in the creation of an asset having a useful life substantially beyond the taxable year," according to the IRS ruling.

For more information, see: Internal Revenue Bulletin 2000–4. It states, “Cost incurred by a taxpayer to obtain, maintain, and renew ISO 9000 certification are deductible as ordinary and necessary business expenses under section 162 of the Code, except to the extent they result in the creation or acquisition of an asset having a useful life substantially beyond the taxable year (e.g., a quality manual).”

In addition, see: Internal Revenue Bulletin 2004- 7. It states in Example 4 for business process certification, “Z corporation, a manufacturer, seeks to obtain a certification that its quality control standards meet a series of international standards known as ISO 9000. Z pays $50,000 to an independent registrar to obtain a certification from the registrar that Z’s quality management system conforms to the ISO 9000 standard. Z’s payment is an amount paid to obtain a certification of Z’s business processes and is not required to be capitalized under this paragraph (d) (4).”