Explanation of the relationship between ISO 9000 and Total Quality Management. Also refer to TQM, international standards, customer satisfaction, records, documentation, profits, waste, losses, Ron Kurtus, School for Champions. Copyright © Restrictions
Comparing ISO 9000 and TQM
by Ron Kurtus (revised 11 March 2001)
Although Total Quality Management (TQM) came on the scene first as a method for companies to improve profits and repeat business, complying to the ISO 9000 standards is the first thing a company should consider to improve the way it does business.
Questions you may have include:
- Why should ISO 9000 be used first?
- What is the role of using TQM concepts?
- What are the benefits of using the two together?
This lesson will try to answer those questions. There is a mini-quiz near the end of the lesson.
Using ISO 9000 first
ISO 9000 consists of a set of international standards for running a business in an effective manner. These standards require a business to document their plans, specifications, procedures, activities, and such.
Like planning household finances
Using ISO 9000 is analogous to planning your household finances and keeping your records straight for paying your bills and taxes. Keeping your records straight, as recommended in the ISO 9000 standards, is the first step in effectively running a business.
Organizes business
Getting your house in order is the very first thing a company should do in order to run effectively. You must make sure you know where your money and goods are going. You need records for paying your bills and taxes. You need your employees to do consistent work.
A business that follows the ISO 9000 standards will usually eliminate wasteful and careless practices that can drain their profits.
Verify following standards
By becoming registered in ISO 9000, a company is verifying that it is fulfilling the general requirements for operating a business in an effective manner. It is also possible for a company to simply comply to the standards, as a business strategy, without formally becoming certified.
TQM enhances good company
On the other hand, TQM is a way of running a business that concentrates on satisfying the customer. Its use will result in repeat and continued business. TQM should usually be started after a business properly documents its activities, as per ISO 9000.
Besides satisfying the customer TQM also is concerned with empowering the workers, This will ensure that their skills are effectively used and that they feel they have a stake in the success of the organization.
A final aspect of TQM is the use of statistics to determine the correct areas to make changes and improvements.
Companies use both to their benefit
Companies that have effectively implemented ISO 9000 standards and TQM concepts have dramatically improved their profits and customer retention.
Can be misused
Unfortunately, both of these methods have been misinterpreted and misused by many companies.
Some companies have simply paid lip service to ISO 9000 and schemed to find ways to get around the requirements and to fool the auditors. They see ISO 9000 as an intrusion to the way they prefer to do business, instead of a good method to reduce costs in the long run.
Many companies have used TQM as an excuse to downsize and pressure their workers to produce more for less money. Downsizing was later taken over by the re-engineering movement. Customer satisfaction became more of a buzzword than a practice.
Proves beneficial
In general, companies that have honestly employed ISO 9000 and/or TQM have been proven to be better run, have fewer problems, have less waste, get more repeat business, and have increased profits.
Of course, having a well-run company is not the only thing that results in success. A good product line, effective marketing, and being able to beat out the competition are very important factors. But by employing first ISO 9000 and then TQM methods, a company can get a leg up on its competition.
Summary
ISO 9000 standards are concerned with effectively documents the way you run your business, in order to improve your profit margin. TQM concerns customer satisfaction and worker effectiveness, in order to increase business and cut costs.
A business should first follow ISO 9000 standards and then implement TQM practices to improve their profits and customer retention.
Do quality work
Resources
The following are some resources on this topic.
Websites
ISO Online - International Organization for Standardization website
ISO Standards Translated in Plain English - Extensive listing
ISO 9000 Certification Information - Good listing of ISO 9000 resources
ISO 9000 References and Resources
Books
Mini-quiz to check your understanding
1. Why should you use ISO 9000 first?
2. Why is customer satisfaction important?
3. Why would a company misuse ISO 9000 or TQM?
If you got all three correct, you are on your way to becoming a Champion in Improving your Business with ISO 9000. If you had problems, you had better look over the material again.
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Comparing ISO 9000 and TQM