Case Study: Benefits of Getting ISO 9001 Certified
Many organizations often struggle to understand the benefits and return on investment of getting ISO 9001 certified. Similarly, organizations have the some struggles with other quality and environmental management system standards such as: IATF 16949, ISO 17025, ISO 14001, API Spec Q1 and API Spec Q2. The perception of management system standards, is that its a lot of paperwork, which will place a burden on the business. This case study explores the actual business benefits and return on investment, that Shogyo International, an OEM supplier of electronic parts experienced, as a result of achieving ISO 9001:2015 Certification for their company.
Shogyo International Corporation, based in Syosset, NY, initially started their pursuit of ISO 9001 certification due to many of their customers requesting the company be ISO 9001 Certified, to even bid on projects. Mr. Evan Rubin, Vice President of Sales states, “The quality of Shogyo’s products were always at a high level, but a lot of customers were requesting Shogyo, to be ISO 9001 Certified to bid on projects. Simply put, there were jobs we could not bid on, due to not being ISO 9001 Certified. Achieving ISO 9001 Certification would allow us to qualify for more contracts.”
Shogyo contacted The ISO 9001 Group in July-2015 to pursue ISO 9001 Certification. Upon being awarded the project, The ISO 9001 Group designed a customized ISO 9001:2015 quality management system for the company, helped them implement it over a 3 months period and successfully assisted Shogyo in achieving ISO 9001 Certification through Smithers Quality Assessments (SQA). This case study summarizes a phone interview with Mr. Evan Rubin, Vice President of Sales for Shogyo with Mr. Oscar Combs, President and Sr. Consultant of The ISO 9001 Group. The interview discussed the benefits Shogyo has experienced, after 6 months of implementing their ISO 9001 quality management system and becoming ISO 9001:2015 Certified.
What types of issues were you encountering as a company that you were looking to address with your QMS?
The quality of Shogyo’s products were always at a high level, but a lot of customers were requesting Shogyo, to be ISO 9001 Certified to bid on projects. Simply put, there were jobs we could not bid on, due to not being ISO 9001 Certified. Achieving ISO 9001 Certification would allow us to qualify for more contracts.
What were some of the biggest challenges you faced, while implementing your QMS?
The biggest challenge initially was the paperwork. It was more paperwork than we were used to, but with the assistance provided by The ISO 9001 Group and their implementation support process, it became easier once we understood everything. We primarily had (1) person oversee the implementation of our quality management system, which was myself and I worked with the other team members. If we had more resources, it possibly would have been easier. We expected that we would have to do some work. Honestly now that I look back on it, I don’t think we could have asked for an easier process. There were no complaints the way everything was set up.
What are some of the biggest benefits you’ve noticed as a result of your QMS?
We have already notices some commercial and operational benefits, in the short time since we started implementing our QMS and achieved certification. At this point, we have primarily noticed improvements in these (3) areas:
We are able to qualify for projects that we previously were not able to, because we were not ISO 9001 Certified. These customers would not previously give us an opportunity to bid. We no longer have to complete lengthy questionnaires, because we are now ISO 9001 Certified.
We now have a better understanding of our nonconformities. When customers request corrective actions, we now understand the process.
We are also able to maintain better control on our vendor’s nonconformities. Managing nonconformities allows us to track and monitor trends.
What financial benefits have you noticed since the implementation of your QMS? For example, profitability, increased revenues, more customers, etc.
Although, our customers are not going to award us work, simply because we’re ISO 9001 Certified, it does increase our opportunities to win work. I’m confident that becoming ISO 9001 Certified will assist Shogyo with increasing revenues and gain more customers. I would estimate, over the next 5 years, this may translate into over a $200k increase in sales volume, due to achieving ISO 9001 Certification. Regarding expenses, our employees now spend less time filling out those long questionnaires during bids, because we are now ISO 9001 Certified. We are saving about $6,000 per year, just in this simple task alone. With just this one expense, we will recoup our investment for The ISO 9001 Group’s consulting service in less than 2 years. We expect other savings will become apparent, as our system matures.
Has there been an increase in profit margin for the company? If so, what is the estimated percentage of increase?
I expect an estimated 10% – 15% increase in profit margin over the next 3 years.
Do you feel that there has been a return on your investment into a QMS? If so, what is the estimated return you have seen?
We expect a full return on our ISO 9001 Certification investment, within 2 years. If just one company awards us a job, that we did not previously qualify for, due to not being ISO 9001 Certified, it was worth the investment. Achieving ISO 9001 Certification, is invaluable for Shogyo and is a powerful sales tool for the company. Shogyo will maintain its ISO 9001 Certification, as long as we are in business.
The Shogyo case study proves that there are very tangible business benefits of achieving ISO 9001 certification. Achieving certification helps improve the overall efficiency of an organization’s processes and allows the organization to get to the root cause of their problems; therefore increases its profitability. In addition to increasing profitability, achieving ISO 9001 certification allows an organization to increase its revenue, by becoming more marketable to companies where achieving certification would be considered a competitive advantage. It should be noted, that an organization can achieve the same results, by simply implementing a quality management system, without pursuing certification. Many organizations will qualify organization for simply being compliant. If you still have questions about the benefits of achieving certification of your quality management system, please feel free to contact us at firstname.lastname@example.org.
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