The effect of implementation of iso 9001 2008 qms organizational

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –
INTERNATIONAL JOURNAL OF MANAGEMENT (IJM)
6510(Online), Volume 4, Issue 1, January- February (2013)

ISSN 0976 – 6367(Print)
ISSN 0976 – 6375(Online)
Volume 4, Issue 1, January- February (2013), pp. 47-55
IJM
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THE EFFECT OF IMPLEMENTATION OF ISO 9001:2008 QMS ON
THE ORGANIZATIONAL PERFORMANCE IN AN R&D
ESTABLISHMENT
Neeti Jain*, Jimmy Kansal*#, AshwagoshaGanju*, Anil Khurana**, PramodSatyawali*
*
Snow & Avalanche Study Establishment, Sector - 37 A, Chandigarh, India.
**
Estate Management Unit (R&D), Sector – 29 A, Chandigarh, India.
jimmy.kansal@sase.drdo.in

ABSTRACT

One recurrent theme within the research into implementation of quality management
systems is the study of its effect on the organizationalperformance. However, most research
is focused on analyzing the effects of the implementation of different QM systems in either a
manufacturing industry or in production lines. This paper presents an empirical study, which
examines the effectiveness of ISO 9001:2008 QM system practices in an R&D establishment.
This study used data of an R&D establishment certified with ISO 9001:2008 by
Standardization, Testing & Quality Certification (STQC), Government of India. Two
research questions were posed, with the first pertaining to the effect of implementation of ISO
9001:2008 on the User satisfaction and the second focusing on the effect of QMS on the key
performance indicators viz. Project performance, Instrument management systems, Human
Resources Development, User communication and Management performance. The findings
showed significant contribution of ISO 9001:2008 QMS in enhancing the effectiveness of an
R&D organization. These results further suggest that ISO 9001:2008 as a set of generic
quality managementprinciples can be adapted in environments other than manufacturing or
production areas.

Keywords: ISO 9000, ISO 9001:2008, R&D, Quality Management Systems (QMS), User
Satisfaction Index (USI), Key Performance Indicator (KPI)

1.0 INTRODUCTION

The theory of Quality Management is the most popular and durable modern
management philosophies, which has a profound and unparalleled impact on modern business
industry (1).This theory lays emphasis on the documentation of various procedures and

47


adopts a process based approach. The standards and the framework of required
documents vary according to the objectives of the organization. The topmanagement,
leadership and people involvementare also important factors in successful QMS
implementation in any sector, as it is directly related to quality planning, human resource
management, learning and customer focus. Managers can integrate quality related issues
and plan accordingly, that helps in defining the goals with improved quality (2). QMS in
research and development begins with strict attention to precise documentation, uses of
appropriate methodology and scientific correctness. In R&D organization QMS promotes
collaborative accomplishments, reward both team as well as individual performance, and
initiates and maintains an environment conducive to achievement of set targets, whereas
in industries it starts with the aim of profitability.
ISO provide a normative framework and methodology to define a QMS in a consistent
way, paying special attention to user feedback, which is a function of user satisfaction,
timeliness and delivery. The aim of ISO is to promote the philosophy of standardization
and related activities in the world with a view to facilitate the exchange of goods,
services, intellectual, scientific, technological and economic activities globally. Two most
important objectives of the ISO 9001 series of standards are to develop a simplified set of
standards that are equally applicable to small as well as medium and large organizations
and the details of documentation required to be more relevant to the desired results of the
organization’s process activities.The ISO 9000 standard allows a registrar company to
conduct outside audits of a company’s quality management system (QMS), which
certifies the implementation and compliance of the QMS to the ISO standard (3).
ISO 9001: 2008 requires organizations to continually improve their business processes
which also force the firm to look at its institutional context and resource allocation
decisions. This enables each individual organization to develop the minimum amount of
documentation needed in order to demonstrate the effective planning, operation and
control of its processes. ISO 9001: 2008 is a process based, more generic and clearly
based on Plan, Do, Check and Act principle. An ISO 9001: 2008 guideline specifies the
standardized requirement for a quality management system implementation in order to
enhance user satisfaction and continual improvement, which can be achieved by
identifying and periodically measuring the KPI of institutionalactivities.KPI are the
indicators/ attributes of any task on which particular activity can be assessed and ranked
for their output. These KPIs are required to be documented, measured and analysed to
investigate the relationship between QMS and its effect on the performance.

2.0 METHODOLOGY

A case study of an R&D establishment has been carried out to assess the effect of
implementation of ISO 9001:2008 QMS on the organizational performance. The
establishment is working in the development of technologies for the mitigation of
avalanche hazards and providing area specific operational avalanche forecast to the
services, civilian population and disaster management agencies in Himalayas. At present
the establishment is certified as per ISO 9001: 2008 for its QMS. The methodology
adopted is to collect the data pertaining to various attributes of QMS and carry out their
analysis for organizational performance.For assessing the effect of QMS implementation,

48


various KPIs have been identified, selected and analyzed for their performance after a
year of implementing QMS. The data is collected by a closed questionnaire administered
in person as well as a set of open questions to clarify any kind of doubts.The
questionnaire is based on the past experience and literature survey. The process of
developing questionnaire included a number of brainstorming sessions to modify and
eliminate a number of variables. A pilot survey is then conducted to update version one to
make the questionnaire further free from any kind of errors as a step towards continual
improvement. The questionnaire is answered by the Divisional and Group heads
responsible for the implementation of quality practices in the respective departments.
Secondly for evaluatinguser satisfaction through USI and continual performance, data
was collected from various users of the establishment on a five point Likert scale. After
analyzing the KPI for various tasks, we have verified the extent of user satisfaction by
taking the feedback from the user and compared it with KPI markings. The effect of user
satisfaction on the continual performance of the establishmentwas also analyzed.

2.1 Model I

Clause 5.1of ISO 9001: 2008 standard defines thattop management shall provide
evidence of its commitment to the development and implementation of the quality
management system and continually improving its effectiveness. This is achieved by
establishing and reviewing quality policy, quality objectives for continuing suitability,
conducting management review and ensuring resource availability. In this study
management responsibilityis assessed after identifying KPI of management performance
viz. timeliness, resource allocation etc. Clause 7.6 of the standard emphasizes on the
control of monitoring and measuring equipmentbycalibration against international or
national measurement standards. Calibration of instruments has been kept as a key
performance indicator in the instrument management system. ISO standard for QMS lays
lot of emphasis on user satisfaction vide Clause 8.2.1 of ISO 9001:2008. This attribute is
shortlisted as one of the measurements of the effect of QMS on organizational
performance and analyzed under user communication system. Clause 6.2.2states that the
organization shall determine the necessary competence for personnel performing work
affecting conformity to product requirements (ISO 9001: 2008). The employees should be
competent on the basis of appropriate education, skill and experience considered
mandatory for the continuous growth of organisation. This aspect of competence, training
and awareness is captured and analyzed under the HR practices.
The validity of QMS implementation was measured using a second order measurement
model where QMS was treated as a second order KPI, which was measured by five first
order latent KPIs responsible for assessing effect of QMS on overall performance. The set
of five KPIs alongwith their attributes under this study areproject performance,
instrument management system, HR practices, user communication system and
management practices as mentioned in Table 1.In this paper we have analysed the effect
of implementation of QMS on all above identified performance based KPIs.

49


Table 1: Various KPI and their considered attributes

S. No KPI Attributes
1 Project performance Preparedness, Planning time, Over run time, Failure,
Performance
2 Instrument Preventive maintenance cost (PMC), Breakdown cost , Outage
management system time, Mean performance efficiency (MPE)
3 HR Practice Timeliness, Procedural correctness, Training Effectiveness
4 User Communication Involvement, Clarity in requirement, Satisfaction
system
5 Management Practice Timeliness, Problem solving, Budget planning,
Resource management

2.2 Model II
In user feedback form, grade points were sought from various users of the establishment. The
grade points were finalized based on various parameters namelyvision, mission, strategies, values and
roadmap of the establishment. A set ofperformance parameters were considered includingtimeliness
in services, consistency in results, promptness in query resolution and accuracy in results. User
feedback form was chosen for collection and analysis of data. The grades are shown as mean ± SEM
of all the 20 feedback forms. Evaluation of USI has been further done using ∑AGPi=1,n/ n.

3.0 RESULTS
ISO 9001: 2008 clause 4.2 gives detail requirements about management responsibility. In this
study we have analysed the effect of implementing ISO 9001:2008 QMS on management
performance (figure 1) in the establishment. Results indicate an improvement in the management
activities primarily focusing on timelinessthat has enhanced by about 20 % when compared to the
indices before implementing QMS. Problem solving capacity is also enhanced significantly. The
budget planning time required is reduced due to proper documentation of the procedures and
activities. Resources are used optimally as all the activities are well defined and management is aware
about the present competencies and required competencies for the organization as the responsibilities
and skill sets are available.

Figure 1: Effect of ISO 9001: 2008 QMS implementation on Organisational performance attributes

50


Figure 2 reflects the effect of QMS implementation on various attributes of project management.
Results revealed that after implementing QMS, the establishment is geared up to take new projects.
TheProject Directors and Project Leaders are spending more time in the conceptualization and
planning phase of the projects. Overrun time has reduced due to increased preparedness and
documentation, thus failure chances of projects has reduced. Overallperformance of project is
increased significantly.

100

B efo re IS O 9 0 0 1: 2 0 0 8
A fter IS O 9 0 0 1: 2 0 0 8
80
Percent (%)

60

40

20

0
P re p a re d n e s s P la n n in g tm O R T F aliu re R a te P e rfo rm a n c e
Figure 2: Effect of ISO 9001: 2008 QMS implementations on attributes of Project management.
Figure 3 indicates the benefits of QMS implementation on instrument management system of the
R&D establishment. The instrumentation is a major area of concern as the thrust areas of the
organization include development of technologies for the assessment and mitigation of cryospheric
hazards. Results indicate that after implementing QMS, there is a significant increase in preventive
maintenance, leading to a substantial reduction in breakdown cost of instruments and also reduction in
outage time of individual instrument. The instruments are forced to be calibrated, thereby enhancing
the effectiveness of the results.

Figure 3: Effect of ISO 9001: 2008 QMS implementation on Instrument Management System (IMS)
attributes.

51


Figure 4 shows effect of ISO certification on working of HR group, results revealed that QMShas led
to significant rise in timeliness of job, team work and communication. The procedures are streamlined
and documented. The clarity of goals is observed due to clear responsibility of each individual.
Various attributes of HR are also integrated. This has led to a transparent environment and overall
increase in the efficiency of the establishment.

Figure 4: Effect of ISO 9001: 2008 QMS implementations on Human Resource Group (HRG)
attributes

Figure 5 shows how implementation of QMS affected User attributes. After implementing QMS we
have observed significant increase in user involvement vis-a-vis clarity in requirement. Significant
rise is also observed in user satisfactionthat has beenanalysed through user feedback forms.

Figure 5: Effect of ISO 9001: 2008 QMS implementations on User Satisfaction Index (USI) and its
attributes.

52


Table 2 indicates the grade points awarded by user for various services provided to them by
the establishment. The grade points awarded by the users for various services after
implementation of ISO 9001:2008 vis-à-vis before the implementation of QMS were
analysed to evaluate USI. Results indicate the enhancement in the grades awarded by users
for various services.

S.No Services Grades awarded by Grades awarded remarks
user (Before ISO) by user (After
ISO)
1 Timeliness in services 2.13± 0.19 4.31± 0.34 Excellent
2 Promptness in query 3.01± 0.15 4.76± 0.12 Excellent
resolution
3 Consistency in results 2.76± 0.21 3.32± 0.17 Very good
4 Accuracy in results 2.29± 0.27 3.41± 0.31 Very good
5 Organisational 3.05± 0.25 4.71± 0.15 Excellent
performance
6 Design competency 2.11± 0.31 3.61± 0.26 Very good
7 Technical expertise 2.13± 0.17 3.47± 0.21 Very good
8 User Satisfaction Index 2.07± 0.025 4.65± 0.034 Excellent

( 1-2: poor; 2-3: good; 3-4: very good; 4-5: excellent)
Table 2: Grade points awarded by users for various services provided by organization and
user satisfaction index (USI)

4.0 DISCUSSIONS

Several studies have developed an instrument for measuring quality management,
assessing its reliability and validity applicable to industrial as well as service sector and R&D
(4,5,6). QMS also makes R&D more receptive to the concept of control and measurement. It
directs R&D divisions to focus on user needs and expectations (1, 7). Various studies have
been reported regarding QMS and performance by using different dimensions of performance
on basis of several criteria viz. customer results, people results, society results and quality
performance, some are found dependent and few have not found such link between QMS and
performance (8, 9,10,11). Nevertheless, the positive arguments listed earlier on the
applicability of QMS in R&D environments have also been supported by a number of studies
(8; 12). Szakonyiusing six case studies showed that R&D function should adapt quality
principles in order to achieve not only their own objectives but ultimate business successes,
QMS also reported to enhance project performance in defence R&D (12, 13).
The studies have also suggested that R&D practitioners are less prone to adopt quality
systems merely because of the organisational legitimation it brings (14). However later
studies have showed the link between quality management practices and improved
performance using both factual data and perceptual data (15). The conceptual development of
QMS has been reflected in its application, which has permeated beyond manufacturing or
production lines into wider functions in organisations(1).The literature also reflects that QMS
tools have a statistically significant effect on continuous improvement (16).

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This study has produced two interesting findings in terms of integration of KPIs and USI on
QMS and further its effect on organizational performance. The effect of QMS is in line with
findings reported in other studies primarily in production, manufacturing and other R&D
sectors (3, 16, 17). From the theoretical point of view, the integration of all the processes in
an establishment supports the proposition of QMS in synergizing the efforts in enhancing the
effectiveness and efficiency. Results revealed that organisation is excellent in terms of
timeliness in services and promptness in query resolution, very good in consistency and
accuracy in results. Evaluation of USI has been done using ∑AGPi=1,20/ 20. The average
grade point value corresponding to different services has yielded USI as 3.7175, which means
the organizational performance is close to excellent. This further implies that though the
overall view of the users about the establishment is encouraging, there is a definite scope for
continual improvement from Excellent to Outstanding.

5.0 CONCLUSION

The case study of an R&D establishment has been discussed in the context of effect of
implementation of ISO 9001:2008 on the organizational performance. The opportunity to
become wiser and the scope to excel in new areas is drawing attention. Quality Management
Systems has really served as a value addition. The establishment is more focused towards its
users and the USI has become an index in its annual reports. The identified KPIs have served
as a base in reflecting the tangible outputs after implementation of ISO 9001:2008. Overall
the findings have been quite encouraging and motivating.

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