Using management systems to gain a competitive edge

Departments - Expert Opinion

To be competitive on both a national and a global basis, organizations must adopt a forward-thinking approach in developing their management strategies.

To be competitive on both a national and a global basis, organizations must adopt a forward-thinking approach in developing their management strategies. One of the foundations of a successful strategy is the management system. A management system may be well-defined and documented, or consist merely of a shared understanding of how things are done – but either way, the management system defines how work is done, the desired outcomes, and the controls imposed to ensure those outcomes.

Management system standards, such as ISO 9001 and ISO 14001, help an organization to better control its processes. The products and services that are the outcomes of these processes are only indirect concerns of the standards.

ISO 9001 provides guidance for quality management – what an organization does to fulfill requirements and ensure customer satisfaction, while continuously improving the effectiveness of its operations. ISO 14001 is for environmental management – what an organization does to minimize its effect on the environment. Conformance with these standards is voluntary: an organization can implement an ISO 9001- or ISO 14001-based management system solely for the internal benefits of increased effectiveness and operational efficiency.

The AS9100 series has been developed specifically for the Aerospace (AS) industry as a complement to ISO 9001, which does not address AS requirements. The International Aerospace Quality Group (IAQG) member companies have mandated that all companies in their supplier base must have a Quality Management System that conforms to a standard in the AS9100 series.

In the years since ISO 9001, ISO 14001, and AS9100 were published, many organizations have followed the models of these standards in designing their own management systems. However, many of those management systems are purely reactive – that is, they have been developed in response to customer requirements or legal regulations.

Here is a closer look at the standards – ISO 9001, ISO 14001, and AS9100 – and some suggestions on how they can enable your organization to compete more effectively in today’s global marketplace.

ISO 9001: Global Markets
First published in 1987, then revised in 1994, 2000, and 2008, ISO 9001 is a standard related to quality management and quality assurance. Quality management refers to what an organization does to fulfill requirements and ensure customer satisfaction, while continuously improving the effectiveness of its operations.

Because the ISO 9001 standard is neither industry- nor product-specific, it may be used by either manufacturing or service industries. More than 982,000 companies worldwide are currently registered to ISO 9001.

To become ISO 9001 registered, a company must hire an independent third party, commonly known as a registrar or certification body, to conduct an on-site audit of its operations and to verify that it is in compliance with the requirements of the standard. It is recommended – though not required – that the registrar be accredited by an internationally-recognized accreditation body. The accreditation body will ensure that the registrar is fully competent to provide certification to the standard in certain business sectors.

The main strength of the ISO 9001 standard, and the reason it has been adopted worldwide, is that it assures customers who do business with registered firms that fundamental quality systems are in place within those organizations. For many international companies, ISO 9001 is seen as a key to doing business in global markets and improving competitiveness, particularly since for many regulated products in the European Union, ISO 9001 registration is a requirement.

Standards and guidelines for conformity assessment activities and the organizations that perform them are developed by ISO’s Committee on conformity assessment. These requirements represent international consensus on what constitutes good practice. The use of these requirements ensures the consistency and coherence of conformity assessment worldwide and serves to facilitate global trade.

The advantages of ISO 9001 registration, whether perceived or real, are nonetheless marked. The most significant external benefits reported by ISO 9001 registered firms are:

  • Competitive advantage;
  • Higher perceived quality;
  • Reduced customer quality audits; and
  • Improved customer demand.
  • The internal benefits of registration include:
  • Better documentation of processes, procedures, and employee responsibilities;
  • Greater employee quality awareness;
  • Enhanced internal communication (i.e. because of the employee’s involvement); and
  • Increased operational efficiency and productivity.

ISO 14001: a Healthy Business
Whereas ISO 9001 deals with quality management, ISO 14001 is designed to provide a structure for the management of environmental compliance. The ISO 14000 series includes numerous individual generic standards, which may be broadly classified according to the following six categories: Environmental Management Systems (EMS), Auditing, Labeling, Performance Evaluations, Life Cycle Assessment, and Environmental Aspects of Product Standards.

The most familiar standard in the ISO 14000 series is ISO 14001, entitled “Environmental Management Systems, Specification with Guidance for Use.” Organizations can only register to this one standard; all other standards in the series are guidelines to help companies set up, audit, and improve their environmental management systems. More than 188,000 companies worldwide are currently registered to ISO 14001.

Like ISO 9001, ISO 14001 is neither industry- nor product-specific. The benefits of registration to this international standard include:

  • Worldwide focus on environmental management;
  • Promotion of a voluntary consensus standards approach;
  • Harmonization of national rules, labels, and methods through minimization of trade barriers and complications and promotion of predictability and consistency; and
  • Demonstrated commitment to maintaining and moving beyond regulatory environmental-performance compliance.

ISO 14001 provides multinational organizations with a single environmental management system that may be implemented wherever they operate, thus eliminating the need for multiple registrations, inspections, certifications, and labels, and doing away with conflicting requirements. As with ISO 9001, even though this is a voluntary standard, suppliers may find it hard to conduct international trade without being registered to it.

By implementing ISO 14001, any company can become truly competitive by:

  • Decreasing costs through increased efficiencies of profitability and productivity;
  • Creating and maintaining new market opportunities;
  • Demonstrating environmental leadership – earning customers’ trust und confidence;
  • Improving corporate image and community goodwill;
  • Enhancing credibility through third-party registration; and
  • Streamlining/simplifying its EMS.

AS9100 Series: for Aerospace
Quality management requirements in the Aerospace industry are continually evolving. As suppliers, OEMs, regulatory bodies, and certification bodies use the various standards and systems, opportunities for improvement become apparent. While these changes are beneficial to the quality control process as a whole, they can create problems when extensive adjustments are required to stay in compliance.

The AS9100 Series – an expansion of ISO 9001 – includes specific requirements for organizations in the aerospace industry. The base standard, AS9100, contains requirements for Quality Management Systems (QMS) that can be applied to companies that manufacture end item or detail parts (OEMs, supplier/sub-contractors) and service organizations (calibration, repair, testing, etc.).

Other standards in this family include:

  • AS9003: Requirements for aerospace manufacturers with no design or service functions;
  • AS9110: QMS requirements for maintenance, repair and overhaul organizations (MROs);
  • AS9120: QMS requirements for stockist distributors;
  • AS9102: First Article Inspection; and
  • AS9103: Management of Key Characteristics.

OASIS, the Online Aerospace Supplier Information System, is a repository of certification data managed by the International Aerospace Quality Group (IAQG). All third-party registrars are required to input data for all AS Series certificates they issue. The OASIS system is continually updated and improved. Entries in IAQG OASIS, and therefore the registrations to the AS9100 series, have increased by more than 350% within the last 5 years.

The most significant rewards of adopting an AS9100 Series standard are:

  • Competitive Edge – visibility among aerospace industry through IAQG OASIS database;
  • Expanded market access;
  • Reduced cost of sales;
  • Reduced transaction costs;
  • Improved overall performance;
  • Provides a quality system foundation that enables an organization to meet industry specific requirements; and
  • IAQG member companies have mandated that all companies in their supplier base must:
  1. Have a quality management system that conforms to the AS9100 standard;
  2. Obtain third-party certification of their QMS by an approved Certification Body; and
  3. Have third-party certification in order to accept any contracts for flight hardware.

The Future
The future of business is closely tied to the development and implementation of international standards such as ISO 9001 and ISO 14001, and specifically AS9100 for the Aerospace industry. A mutual commitment to management systems is a prerequisite for many business relationships. Internally, companies must be aware that certain system efficiencies, as well as opportunities, may be realized through the adoption of voluntary quality and environmental system standards. 

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