Many Minnesota manufacturers have experienced the transformative power of ISO 9001 certification. A quality management system that helps companies get the most out of their employees and equipment, ISO also provides businesses with tools to get on and stay on a path of growth.
At a December business event hosted by Enterprise Minnesota called “Why ISO Transforms Your Business,” three Minnesota manufacturing executives shared their companies’ experiences with becoming ISO certified. What is ISO? It stands for the International Organization for Standards, and it develops globally recognized criteria used by 1 million companies for running a well-managed business.
ISO is never more important, a fact that came to light during surveys for the annual Enterprise Minnesota State of Manufacturing® survey project. While 89 percent of 400 manufacturing leaders said they were optimistic about the future of their companies, 33 percent had concerns about hiring and retaining enough qualified employees noted David Ahlquist, an Enterprise Minnesota business growth consultant.
While moderating the event, Ahlquist encouraged manufacturers to combat hiring challenges by focusing on productivity and implementing effective systems. Employees will stay on the job when they can work more effectively and strategically. “Do you have a good management system to get the most out of your resources and manage your resources the best? Don’t just focus on the people,” he said. “That’s why ISO gives us a nice focus.”
Overall, companies that complete their ISO certification develop written processes that make operations run consistently and with fewer mistakes. Without instituting such processes, company leaders end up over-controlling employees, much to their annoyance.
“Why do we like processes and procedures? Because they are easier to manage and you don’t have to micromanage what employees are doing,” Ahlquist noted. “When we don’t have the skills, the procedures, and the tools, it takes a lot more energy to manage a core process.”
The three speakers debunked many common assumptions about ISO and explained how the quality-management system fosters a culture of continuous improvement at their manufacturing companies. In addition, going through ISO certification engaged and energized their employees, enhanced their business growth strategy, and contributed to strong growth.
Read on for recaps of these businesses’ experience with becoming ISO 9001 certified.
For chemical manufacturer and distributor Seacole, the reasons to become ISO certified numbered in the millions. Several potential customers had lucrative business for the Plymouth company, but Seacole needed the ISO credential to win it.
CEO and owner Gregg Elliott found that requests for ISO vendors kept coming from higher up the supply chain in industries ranging from medical device to automotive and aerospace. If Seacole wanted to keep growing, it would need to take the ISO plunge.
“As we grew 20 percent last year, we realized we need some sort of management system in place to continue growing. We had a lot of best practices in-house but we hadn’t really documented a lot of them,” Elliott said. If a long-term employee retired, “we need a way to document best practices so they could be passed on to other people.”
Seacole, which has nearly 50 employees, buys chemical components and blends them into new products for customers. It manufactures 2,000 products in its 85,000-square-foot facility. Its capabilities include creating chemical products for surface finishing, printed circuit boards, industrial cleaning, railroad and other transportation, agriculture, and laboratories.
Because Seacole deals with significant quantities of chemicals, it is highly regulated by numerous agencies, from the DEA and EPA to the Department of Homeland Security. As the level of regulation continues to increase, many companies have started outsourcing their chemistry manufacturing to specialists like Seacole.
The manufacturer already has benefitted from this trend, and it will be compounded by Seacole’s ISO certification. Thanks to these factors and more, Seacole is on track to hit $35 million in revenue in three years, Elliott said.
Through the process, Seacole uncovered that it was making the same errors repeatedly. Obtaining ISO certification helped the manufacturer secure significant business from large customers like 3M and Dow, but it also prompted better workflow, reduced mistakes, and improved customer service, Elliott said.
“Incidents of both internal and customer complaints have gone way down since ISO was put in place,” he added. “And in this day of finding employees, I found this was a really good way to empower people. It gave them pride in the job they didn’t have before and it helps with retention of employees.”
Becoming ISO certified took about a year and cost roughly $30,000. During the most intense part of the process, it meant holding three-hour meetings every two weeks. One challenge involved getting all employees involved and invested in the ISO project.
To overcome that, Seacole conducted a series of tutorials for all employees that explained why the company was doing ISO, what would occur during the certification process, and how it would all work in action. This helped all staff support the process and follow the new policies and procedures—which is especially important because ISO really never ends, Elliott said. Companies are audited annually and recertified every three years.
Keys to making ISO successful are communicating regularly with all employees, investing the necessary time and energy in the process, and getting buy-in from all levels of a company. “If you don’t have commitment from the top management of the company, don’t bother going ISO,” Elliott advised. “It has to be driven from the top down.”
WESTERN SPRING MANUFACTURING
Alex Altstatt (far right) is director of business development at Hugo-based Western Spring Manufacturing.
In deciding whether to pursue ISO certification, Alex Altstatt of Western Spring Manufacturing keeps this Steve Jobs quote top of mind: “Quality is more important than quantity. One home run is much better than two doubles.”
The Hugo company has been manufacturing springs since 1909 and is in its third and fourth generation of leadership. Its leaders wanted to maintain the company’s reputation for agility and quality in creating a wide array of mechanical springs and wire forms for customers.
Becoming ISO certified helped the company and its 17 employees coalesce behind a newly stated mission. Western Spring aims to bring customers value by using state-of-the-art equipment that taps into its employees’ creativity and innovation. “Our goal is to be vendor of choice,” Altstatt said. “People have options, and we understand that.”
The company makes a broad variety of products including compression, extension, torsion, flat, and wire-form springs. The largest product category at Western Spring is compression springs, comprising 34 percent of its business. Western Spring serves diverse industries, from aerospace and medical to agriculture, defense, and commercial garage door businesses.
Management decided to pursue ISO to improve the company’s processes, enhance customer service, reduce its scrap and costs for rework, and keep Western Spring on its growth path, Altstatt noted. It became ISO certified in July 2014.
With ISO, the company now holds quarterly management review meetings to cover such topics as customer service, on-time delivery, customer returns, vendor performance, and profit margins. “All of these things we did in the past before ISO, but we didn’t do them formally,” Altstatt said. “Now we have this procedure in place and we do it on a quarterly basis.”
In addition, Western Spring has benefitted from a new internal audit committee that focuses on production, contract review, quality, management, and more. The company also implemented systems of both corrective and preventive action to track trends and focus on continuous improvement in production, product development, and outside services.
These systems built even more confidence with customers. “It’s important to show our customers that we’ve changed our system and we’re going to do it right,” Altstatt said.
Going through ISO certification definitely has been valuable for Western Spring, he added. Employees no longer need to spend time filling out quality expectations packets for new customers; instead they just send over a copy of the company’s ISO certification. Plus, ISO requirements helped the manufacturer improve its overall culture of safety.
“It also streamlines production costs and reduces customer returns,” Altstatt added. “Measurable customer satisfaction is important, and there is improved quality assurance. ISO ensures overall credibility for our organization.”
It took Western Springs about 10 months to complete its ISO certification, costing close to $35,000. There also was the cost of shutting down the office for regular ISO meetings because the company is so small. All in all, though, Western Spring benefitted from the process. “I think it was well worth it. It’s a commitment you have to make,” Altstatt said. “It really does add credibility.”
Fraisa USA is part of an 82-year-old Swiss manufacturer, but it has been functioning more like a start-up since the recession. Its parent company charged the New Brighton location with developing its own line of products for American customers, leading CEO Mathieu Tapp to operate the business like an entrepreneur.
Fraisa thrived with its new mission, growing to nearly 25 employees who manufacture thousands of cutting products for metal machining. It serves companies focused on tool and die, precision engineering, aerospace, medical device, and other industries. Its employees work closely with clients to make custom tools that suit their needs, testing a variety of materials and geometries to create the optimal implements.
As Tapp and his employees grew Fraisa from start-up to established business, it soon became time to institute more structure. Tapp decided to pursue ISO certification mainly to formalize processes and procedures, develop training for new and existing employees, and incorporate new technology for product development.
“Even though we had some support from Switzerland with protocols on how to make products, we were flying by the seat of our pants,” Tapp said. “We were like a quintessential start-up company. We had to bang through getting products out the door and didn’t write a single procedure down.”
Fraisa’s five other international locations previously went through the ISO process, and Tapp knew that the US site would be next. Regardless, he believed ISO would greatly improve the company’s operations.
“The benefits of ISO certification were clear,” Tapp said. “It’s going to reign in the cowboy actions we’ve been doing and it’s going to make us write down the policies and procedures that we already do on a day-to-day basis and tighten them up a bit.”
When Fraisa began ISO, it enlisted people from across the company to join the initiative. That meant employees from customer service, production, inventory management, and others worked together to develop formal policies and procedures. Now when new employees join Fraisa, it has a training program to bring them quickly up to speed.
“We used to have cheat sheets, and people had different ways of doing things throughout the business,” Tapp said. “It took going through the certification process to gather information out of everybody’s head and put together a training plan. Now we have procedures in place.”
Meeting every two weeks during the 11-month process helped Fraisa prepare for certification. It earned the ISO designation in May 2015.
By streamlining production through ISO, Tapp said, Fraisa better serves customers. It also more easily pushes the boundaries of technology and innovation, and continues to develop new products that helps its customers work better, faster, and cheaper. In addition, ISO prompted Fraisa to integrate new software that helps employees efficiently track production.
“If we didn’t go through ISO certification, I don’t think we would have completed all the steps along the way to bring up a software program like this,” Tapp said. “For us, that was a key aspect.”
What’s next for ISO 9001?
Just like any good manufacturer, ISO continues to evolve its standards to help companies operate efficiently and effectively. Its new ISO 9001:2015 puts increased emphasis on leadership and process management, including risks and opportunities, according to Ahlquist.
Released in September, the updated ISO 9001 standard will encourage participants to keep context in mind. Instead of just thinking about their own manufacturing operations, participants also must focus on regulators, customers, and other stakeholders. “The neat thing is that it’s less restrictive than before. It lets you be more flexible to meet your needs,” Ahlquist said. “With 2015 it makes it easier for companies to be certified.”
In addition, the leadership focus means that ISO prescribes what company leaders need to do to improve quality instead of giving that responsibility only to a quality manager. “They want to make sure that quality management objectives align with the business objectives. They want a system that supports the entire business, not just one part of it,” Ahlquist explained. “They want continuous improvement built into all key processes. It shows up 15 times in the new standard.”
Businesses also will need to assess their resource management, from their buildings and equipment to human resources. They also must have a deep grasp of their organizational knowledge and focus more on risk-based thinking and processes.
That means understanding who has authority over various resources and processes, and knowing the risks and opportunities for different outcomes, such as a late delivery or poor quality.
“There will be inputs and outputs. What controls do we put on processes to make sure we don’t have unintended consequences?” Ahlquist noted. “ISO wants you to think more formally about that.”
ISO is giving companies three years to get certified in the new standard.