What is ISO 9000?
| Reg Clause Revised, February 2006
Ag Marketing Resource Center
Iowa State University Extension
ISO 9000-2000 is a universal, quality management system (QMS) endorsed by more than 160 countries. The 2000 designation means it was revised in 2000. A QMS is a self created system of functions, policies and rules considered necessary to assure the quality of a company's products and services. The ISO standard establishes a firm’s quality system, manual, procedures, forms, etc. The system should reflect exactly what the firms does and be arranged so that the business can continually improve. The standards are purposely generic so that they can be used by manufacturing and service industries around the world. Agriculture has elements of both and is a perfect candidate to embrace certifications and operating at a higher level. ISO is the global standard for process control and holistic management.
Where did ISO 9000 come from?
The International Organization for Standards, based in Geneva, Switzerland, came together to create the ISO 9000 series in 1987. The establishment and refinement of this process standard came out the consensus work of all participant nations, including the US.
One goal was to head off proliferating standards and keep commerce more efficient. Another goal was the obvious need to improve processes for better efficiency and industry growth. At this time Iowa State University (with a growing host of others from around the globe) are working on an “Ag specific” version of ISO 9000-2000, which is really a guidance standard. It will help agricultural businesses work through the ISO process more easily. While various certifications exist, many are derived from ISO principles and none are as comprehensive. ISO is designed to manage business processes. It is not a product specification standard.
How can ISO work for a business that has its own unique products?
ISO 9000 is not product specific. It is a process oriented solution. ISO is completely tailored to a business and the firm creates its own procedures and general operating standard. Every business has three areas creating requirements. 1) Customers 2) Legal issues 3) Regulatory issues. There are different levels that can be applied depending on the nature of your business, its processes or products but must also the address all the business requirements with planned methods, sufficient resources, training as needed and measurements with analysis. ISO is designed to address the whole business and not just the physical processes.
Who will verify that the system is any good?
To reach full certification, a registrar group will help a firm through the steps and provides audit service ultimately signing off on a business’s system. Regular maintenance of this certification is required. The firm will be required to do internal auditing in order to maintain the quality management system. This is perhaps the most beneficial activity. As farmers act together in becoming certified it can almost become like a guild since everyone is operating at a high and generally equal standard, always looking to improve quality and customer satisfaction.
How can a company get paid for this effort?
By improving any quality issues in the production unit, the firm can find more value. The business will need to find the market for that value. Certain premium markets demand documentation and product perfection so ISO 9000 would apply. Certain supply networks offering higher prices will require certification. Brand name products can bring more money but brands need a quality system. Market access may be restricted if the company is not certified in some cases. Being ISO certified is not a sure ticket to premiums. It may get a company in the door and keep the customers happy however.
What drives the move to ISO 9000?
Agriculture suffers from over-supply of commodity produce, which has led to low or negative margins. To change that scenario supply networks, alliances and cooperatives form to find added value for production and control risk. ISO 9000 offers a ready-made framework for any business structure to apply, communicate, understand and document quality. Branding programs, highly differentiated product marketing or contract specialty production systems all require high levels of documentation, planning, measurement and process controls.
Global competition is intense so keeping costs down while satisfying customers is the challenge. ISO is a natural. It is the highest refinement of process management at the full business level.
Who drives this change?
Consumer expectations for value are at the bottom of this. First manufacturing moved to ISO or emulators of it and now the service sector has taken hold. The need for quality in food systems will be demanded by the consumer thus motivating the service sectors who will demand that suppliers comply with an integrated system of quality control. Traceability is becoming a requirement in supply chains just as it is in ISO. Food safety issues are paramount and require process control, documentation and traceability. Export customers are demanding certified systems to get both quality assurance and auditability. Global competitors have been ahead of the U.S. farmer on certifications and supply chain management.
How can this help a business?
ISO helps a business by creating benchmarks for process improvement; by offering ways for comparing the performance or the firm to a wider standard; by adding focus to the details that trip up sloppy business. By showing this commitment to the end user, the relationship is solidified, which mitigates risk and extends time horizons. Internal controls improve relationships with lenders. Market access may also be a reason a firm decides to seek ISO certification.
Are competitors for foreign markets using ISO 9000?
Yes. Denmark is a major force in global pork marketing and is embarking on an ambitious program of certification. Netherlands is another example. Japanese companies are moving to integrate quality systems in their supply chains. Most of the European Community is well familiar with EurepGap, ISO and other certifications to manage quality specifications. The Asian Tiger countries are far ahead of the United States in adoption. ISO certifications in China are rapidly growing and lead the globe in recent years.
What other reasons are there to consider ISO 9000?
- Government regulators such as EPA or FSIS are moving quickly to require more stringent controls for environmental and food safety issues at the production level. The ISO system can offer superior results in documentation.
- Quality oriented supply networks will require compliance to this standard or a firm may not be able to participate.
- Business risk and product liability, are on an up-trending path unless the business puts structures in place to control them.
- ISO 9000 is a perfect fit with ISO 14000, which is the environmental standard.