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ISO Certification and Your Bottom Line - Part 2
Episode 9 – Part 2
ISO Certification and Your Bottom Line – Part 2
In this podcast episode, we continue our interview with Scott Dawson, President of Core Business Solutions, as he discusses the impact of ISO certification on an organization’s cost structure, product or service quality, customer satisfaction, and reputation in the market. He explains how ISO certification can streamline processes, reduce waste, and ultimately improve a company’s bottom line. He also highlights the positive effect of ISO certification on product quality, customer satisfaction, and reputation.
Core Business Solutions publishes ISO Certification podcast episodes weekly. You can find more episodes here.
Episode 9 – Part 2 Key Content
Hello again, everyone, and thanks for listening to the Quality Hub Chatting with ISO experts. My name is Xavier Francis and I’m thrilled to be your host today, accompanied by our distinguished guest, Scott Dawson, president of Core Business Solutions.
X, it is great to be here.
Awesome. Today’s episode is part two of ISO Certification and Your Bottom Line. We’ll be continuing our insightful conversation with Scott as we explore the potential long-term savings and the crucial roles that both management and employees play in realizing the benefits of a quality management system. Scott, we touched on this a little last week with the initial cost of getting an ISO certification, but what can a business expect as far as ongoing costs associated with maintaining ISO certification and how may that affect your bottom line?
Yeah, I think there’s a, it becomes a lie down in your budget, but it also has to become responsibilities in certain with certain employees in the company to maintain or improve certain things. So you have to kind of bake it into the cake.
To get that culture.
Exactly right. So there are ongoing costs. We mentioned that there are audits once every year. As we said, the first year is a full certification audit and then there are two surveillance audits. So what that means is the second audit is like half the requirements are audited. The third audit is the other half.
Okay.
So it’s like a full audit and two half audits, then a full audit, then two half audits is like a pattern to it.
As you continue.
And the cost of those kind of varies because you’re paying for the auditor’s time. So a full audit is going to take more time than one of the surveillance audits would. These are things that will be quoted by the registrar that you select by the certification body. You can lay out those costs ahead of time and recognize that.
So that’s you know, that’s out-of-pocket costs. You have to plan.
When you might have, have a group like us, like I know smaller companies, they find it hard to do internal audits and that’s something we do at Core Business Solutions. So that’s a cost that you may incur, but you may find value in it because you have that impartial internal audit where you’re not having a buddy auditing a buddy, or worse than that, their boss or maybe the president or somebody else.
So sometimes that’s a cost you might gain.
Yeah, but having a consultant involved in helping you to stay prepared and to drive benefit and improvement in your organization can be an impetus for real improvement and keep people’s eyes open a little bit more. Like you say impartiality, and independence can see things that maybe you don’t recognize as a problem or even as an opportunity our consultants do bring tremendous value in the time that they spend, whether it’s an internal audit or serving as the management representative or whatever the role is, because you’re getting decades of experience wrapped up in a pretty reasonable cost.
Whereas a small business, as you said, can’t afford a full-time quality manager in most cases who has the level of experience that our consultants do.
Right. And I mean, and, you know, if you’re going to have continuous improvement and you want to continue working with a quality management system, are you going to go buy books and figure out are going to listen to podcasts that you are like, okay, how do I do this? Or could you get somebody who knows how to do it and walk you through it, be impartial, and be there?
To be honest with you, the auditor might audit whether you’re good with the standard, but they’re not going to necessarily say you might want to try these things to continually improve.
Yeah, exactly right. Well, and that should lead to financial, you know, improvements that should lead to measurable gains in terms of dollars saved, in terms of production cycles that you can accomplish each week or each month, you know, be more productive in that regard in terms of reducing errors or reducing scrap material. So some companies will go to the extent of trying to assign dollars to the improvements that they make.
They’re not always it’s not always easy to do that. But I think where it’s possible to do so is good feedback to show that this investment is paying off.
Well. I know that in a previous podcast, we had somebody that had $2 million in scrap after they went through the process, it was cut in half. That is no, clearly, that wasn’t a mom-and-pop shop, but you know, $1,000,000 in savings just from scrap. Because you paid attention to what was going on.
A smaller business might have $20,000 in scrap. But boy, if you could save half of that
Or quarter! That’s more money in your pocket.
That’s more money in your pocket.
That’s right. Absolutely. Yeah, exactly right. So there’s a balance. There’s a balance between what is spent in terms of being certified, what’s spent in terms of external resources, and internal resources time that people would put into it. So you balance that with, All right, what are the most important areas of improvement that we can see a real payback in?
And then it helps you to prioritize where to put your time and attention. And like I said earlier, this is using ISO as an excuse to get some things done, that have been burning through your pocket.
And now is the time to get more structure. Now’s the time to put procedures in place and work instructions. Now is the time to utilize an internal audit to spot problems before they become big problems. You know, things like that. Measuring customer satisfaction formally. How eye-opening can that be?
Oh my goodness,
When you start asking for feedback when before maybe you weren’t in, you were sort of just happy to not hear.
Yeah. Or you said, Hey, this was a good customer. Let me give them a survey.
Yeah, yeah, exactly right. Yeah. It’s like those things where they say, Can you please rate us as a ten? You know, you go get a sandwich somewhere and they say, Can you fill out our survey? We’re looking forward to your rating us as a ten. Well, okay, You don’t want my feedback.
You don’t want my feedback. So everything considered, it does sound like ISO certification can save money in the long run, provided you put in the work. What are the keys though, to making these benefits tangible and real for a customer who pursues ISO certification?
Well, I know in this series we’ve talked a lot about management’s role in making things successful, and it’s no less important when you talk about trying to drive savings and improvement in your business. Management has to provide leadership. So that means management has to set the tone for the importance of the ISO process, and the quality management system that management has to understand the improvement processes that have been in place, such as corrective action and KPIs and internal audits and things like that.
How can we best utilize those investments that time in driving improvement? And what goals do we want to set? What goals for this quarter or what goals for this year? So if management doesn’t engage, then you’re kind of just hoping someone is going to do something important.
Someone’s going to care. Someone’s going to say, hey, this isn’t going well, maybe I’ll bring it to someone’s attention.
And then the small business management is very visible. People know exactly what’s on their minds and what they spend time on must be important. So, if management is disengaged and, uninterested people are going to be disengaged and uninterested across the board.
Yeah, we talk about that a lot in previous ones and probably will in some future ones where it has to come from the top down. Yeah. And get some ownership. When you get that, it’s amazing what to see. You give people accountability and you give them a little bit of ownership of something. How much that improves things.
And recognize when they make it, make the effort, and recognize when accomplishments are made and improvements are made, which then means the other part of this is employee involvement. So that means people are trained on what all this means and what their role is. They are trained on the policies and procedures that they need to follow. They’re allowed to raise their hand when there’s a problem and say that there’s a problem or report that there’s a problem, they’re able to give, you know, freely give suggestions for improvement without getting their hand slapped or say, hey, that’s not your job.
Just, you know, just do your job, but let me do my job. And if you create an environment where people are defensive or there are walls built-in in an organization, then people aren’t going to openly be involved in looking for improvement because they’re just going to say, I’ll do my job and go home.
Yeah, yeah.
You should appreciate the fact that people are putting their, thoughts into their job and they care enough about the business to suggest something or point something out. That’s, that’s vitally important.
Absolutely. And I think so many employees want to do a good job. I mean, we spend a third of our life at least at what we do. Most people take value in that. So it’s a win-win when you use that energy. And like, if I want to be here, let me do a great job and management says, Hey, we want you to do the job.
How can how can we help you? Help us?
Yeah. Employee involvement again starts at the top because management makes it a priority to create a culture of permission for people to be involved. And then there are more formal ways to get involved. Say you’re on a project team or helping to revise a procedure or you’re helping to dig into a corrective action, the root cause, or something, giving people time to do these things that ultimately will pay back because things will be improved and things will be better and customers will be more satisfied.
It’s amazing when you leverage all the talent in your business, What can be accomplished?
Oh, absolutely. I know there’s one thing that’s attractive for me here at Core Businesses. There’s not just an understanding that I can research my job to make it better. It’s almost expected, not forced, but it’s like you all know that if I’m going to try to get better at my job you give me time to do that.
It’s only going to benefit you know, and that’s.
And that’s true. That’s true throughout the organization. And, you know, and we bring in new employees. We, spend a full week up front talking about how employees can be plugged into this business and what, what role they have in not just their job, because there was time enough to learn the job, you know, but let’s learn the business.
Let’s learn what makes it the place to tick. Let’s meet people that I wouldn’t ordinarily work with. So at least I know who these friendly faces are. And if I had a question, I could reach out or have a problem. I could, I could get with somebody and try to get a resolution. So we work hard at getting off to a good start with every new employee to say, you know, you’re important.
Your experience is important to us, and your ideas are important to us. We value you. Boy, that pays back.
Yeah, it does. And actually, one thing that I like is when I do get the chance to talk to somebody that’s not in my realm of existence at work, you know, having you see them for having a big meeting or something or on whether it’s online or in person. But when you, you, you value them more, when you get to know who they are and what they do.
So you’re even going to support them more than just know that they’re there to support you.