Enterprise Minnesota Magazine - February 2012
HELPING MANUFACTURERS GROW PROFITABLY
Structuring for Growth
With careful preparation, the ISO certification process can transform your entire business, from smoother production lines to more efficient problem solving strategies.
BY KENT MYHRMAN
Manufacturers enter into the ISO 9001 certification process for a variety of reasons. On the revenue side of the equation, lack of certification can impede your ability to pursue new markets that require or desire it. It can also decrease the amount of business you receive from existing customers if they begin to prefer ISO certified suppliers. On the cost side of the business, having a better quality management system should allow you to deliver the same product at a lower cost.
In the companies I have helped to pursue ISO, there is another, unexpected benefit as well, and it is often the one that companies find most valuable. That benefit comes in the form of structure. Because ISO is not a quality system, it’s a quality management system. Even more than that, it’s a complete business management system. As companies grow and expand, there comes a point where the existing informal management system can no longer accommodate the growth, and so the growth plateaus. The ISO certification process is a process-based approach that allows you to shed that old system, and develop a more structured, formal one that can sustain continued growth.
A 2008 Harvard Business Review study entitled “Quality Management and Job Quality: How the ISO 9001 Standard for Quality Management Systems Affects Employees and Employers” supports this idea. The study observed 1,100 firms in California, half of which were ISO certified, and half of which were not. It found that ISO registered firms had about 9 percent higher revenues and about 10 percent higher employment than comparable firms without ISO registration. More ISO registered firms were also still in business four-and-a-half years later by a ratio of 99.5 percent to about 93 percent of firms without ISO registration.
The key to realizing ISO’s value as a business strategy lies in tailoring its requirements to fit your individual company, and not the other way around. Many business leaders share a misunderstanding that they must fit their company into an ISO mold. But the best way to develop ISO is to first ask what your business needs, develop processes to ensure those needs are being met, and then fine-tune those processes to meet ISO requirements. Though it takes time to develop and maintain this new system, it is time well-spent if the system helps the overall business in addition to providing it with ISO certified status.
If you’re considering ISO certification, look at the current frustrations you experience in your business. Then, compare those frustrations with some of the expected benefits from having a formal system. When I was a production manager at an OEM, I knew it was working when I could delegate to the system: not just to an individual person or to myself, but I could delegate the work to the system, and then I could track the system performance. If you’re feeling like you’re spending all of your time working in the business but not working on the business, ISO is one course of action you could take to develop not only your employees, but also the system that those employees will use to get the work done, and the management of that system. It puts the visibility, the skills and the good processes in place to perform well under a variety of situations.
Kent Myhrman is a Business Growth Advisor for Enterprise Minnesota. Drawing on more than 30 years of experience in manufacturing, engineering, and sales, Kent is an expert at helping clients improve efficiency and reduce their costs. From value stream mapping to quality management standards, Kent is a recognized lean expert throughout the state and country.
He has worked with companies to achieve operational excellence in every level and process. Kent has a strong professional background that includes supervision, management and executive management.
Prior to joining Enterprise Minnesota, he served as the vice president of manufacturing for FMH Corp, production supervisor for AGCO, area manager at Onan Corp., and served as engineering manager at Productivity, Inc.
Kent holds a bachelor’s degree in industrial technology and product development from the University of Wisconsin - Stout. He has also received professional training in lean manufacturing, CAD automation, and new product development.
To learn more about Kent Myhrman, visit www.enterpriseminnesota.org/about-us/enterprise-minnesota-team/kent-myhrman.html
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