Beyond Certification: Bottom-line benefits of a Quality Management System
The sales pitch for implementing a quality management system (QMS), whether made by a consultant, a quality manager or a certification body, almost always includes the promise of gaining financial benefits. However, many organisations, especially small and medium-sized businesses, ask the question 'where are the financial benefits we have been promised?'. It is essential to state that where measurements and data have not been put in place for crucial quality management parameters, it will be tough to establish the direct benefits that a QMS brings. Where an organisation has a quality management system run by a professional quality manager, these measures can be put in place using advanced tools of quality data over and above the generic nature of ISO 9001, for example.
We have put together (using ISO 10014: 2006- Quality management- Guidelines for realising financial and economic benefits) the below, as a guide for the average small and medium-sized business that has implemented a QMS; whether that be based on ISO 9001 or otherwise. To make it appropriate to all categories of organisations (especially those with other sector-specific QMS; the benefits are defined based on agreed quality management principles rather than the individual requirements of any QMS system. Contained in the table will be the quality management principles and the corresponding direct financial benefits they can bring to the organisation's bottom line.
There are many specifics to the techniques within the quality toolbox that can be used to measure or implement improvements that can increase the bottom line in different parts of the business. This piece does not intend to go through those technical tools and techniques. Instead, it gives a generic clarification of what is achievable. This can help an organisation challenge its existence QMS and the responsible personnel (e.g. the quality manager or supporting consultant) to focus on achieving specific financial benefits, mainly where the QMS has provided the necessary data to get these wins.
The best approach for small and medium-sized businesses is to identify the opportunities where easy wins can be achieved. More extensive interventions run the risk of failure due to timelines, technical quality skillsets, and resources. Below is the simplistic table with which the average small business can work.
Quality Management Principle | Basic Tools/Techniques (Examples) | Bottom Line benefits (Examples) |
Customer Focus | Customer Feedback ANALYSIS, SWOT (Strength, Weaknesses, opportunities and Threats), CRM (Customer Relationship management), Market Appraisal |
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Leadership | Business planning, Risk Analysis, Succession Planning, Definition of Roles and responsibilities |
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Involvement of people | Competence Matrix, Management by (agreed) Objectives, Authority Matrix, Human resource planning |
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Process Approach | Flowcharting and process mapping, lean manufacturing, Quality Plans, process identification |
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System Approach to management | Preventive actions, Failure Mode and Effect Analysis (FMEA), Process Mapping, Strategic planning |
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Continual Improvement | Results of audits and management reviews, Results of statistical process controls, Outputs of benchmarking |
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Factual Approach to decision Making | Trend Analysis, return on investment (ROI), material requirements planning, data collection |
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Mutually beneficial Supplier Relationships | Material Requirements Planning (MRP), key Suppliers, Joint Strategic Planning, Supplier capability Evaluation | Improved supply chain performance
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By taking a detailed look at this table, and with a deep knowledge of your organisation, it can be easy to identify, even without data, where the best opportunity for improvement lies. Where these have been identified and using some of the tools and techniques here listed (and this is by no means an exhaustive list), you might just be able to get some bottom-line improvement plans operational in your organisation. The most important tip to note: “whatever you don’t measure, you can’t improve” (adapted from Peter Drucker- “You can’t manage what you can’t measure”. And indeed, if you do not measure it, then you are very much likely, after using these tools, to still ask the question, “where are the bottom line improvements I was promised?”.
References
ISO 10014: 2006- Quality Management- Guidelines for Realising Financial and Economic Benefits
ISO 9000:2015- Quality management Systems- Fundamentals and Vocabulary
ISO 9001:2015- Quality management Systems- Requirements