How standards create value for your company – The success stories
Following on from the previous blog where we demonstrated the framework that can bring economic benefits to your business by adopting Quality Standards, this blog will highlight those benefits with specific case studies. If you have a success story, following the implementation of Quality Standards, we would love to hear about it.
In 2010, ISO and its members initiated the undertaking of case studies, encompassing more than 20 countries and some 15 different industries. Interviews and workshops were used as a method of obtaining key data, along with company publications and research into already available industry data.
The companies that took part in the studies were selected to give a rounded view of how tangible benefits can be achieved regardless of the size of the company.
Recapping the benefits
1: Streamlining internal operations
Standards are used to streamline business functions by reducing the time required for performing specific activities such as, decreasing waste, reducing procurement and increasing productivity. The full number of case studies brought a figure of 0.15% – 5% gross profit increase on annual sales revenues.
2: Innovating and scaling up operations
The innovation of new business processes was responsible for companies expanding their supplier network or introducing and managing new product lines. Standards also helped mitigate the risk to companies which brought new products to the international market.
3: Creating or entering new markets
Finally the third way company benefits are measured is by studying the development of new products and creation of new markets (domestic and export). In some cases profit was measured at 33% of the annual revenue, positioning the company as market leaders.
Convincing results and substantial evidence
We have selected 3 case studies from the many available to view in the full ISO website document.
Plastic Pipes and Products Piping Systems Ltd.
Part of the Desbro Group, PPP PSL is a conglomerate, active in manufacturing and trading activities in a variety of sectors. Their main area of activities is in the pipes and fittings of pipes for water supply, sewerage, drainage and conduits for electrical wires. PPP PSL use standards mainly for procurement, including testing raw materials, production and process monitoring and final inspection.
With only 140 employees the documented economic benefits, generated by implementing quality standards amounts to between 4.5% and 9.2% of revenues. The functionality of the business was benefitted by:
- reducing costs by reducing waste and the number of rejected products and re-works
- using energy efficiently and applying more efficient procurement practices
- operating a highly reliable production chain
Standards allowed PPP PSL to be continuously innovative and a leader in its domestic market.
Water Senegal / Senegalaise Des Eaux (SDE)
This company were instrumental in establishing a viable urban drinking water system for Senegal in 1955. SDE is bound to government agencies by contracts that aim to improve public water services in Senegal, also setting technical and financial performance targets. The use of standards by SDE is mainly for streamlining operations in drinking water services.
With 1,139 employees the economic benefits were measured at 1.9% of annual sales revenue and the business was helped to manage operations more reliably and efficiently by:
- establishing well defined links between company strategies and their implementation, therefore meeting ambitious performance objectives and promoting a culture of continual improvement
- helping to meet the needs and raising customer satisfaction, of the Senegalese population
- Improving overall efficiencies in operations
- continuing to maintain the occupational health and safety conditions for SDE’s employees
Using quality standards has enabled the CEO of SDE to introduce an integrated management system, helping drive process efficiency and identify opportunities for future growth and development. Other systems ensured that the required volumes of water were delivered and met the agreed quality levels.
From foundations in 1847 Berlin as the Telegraph Construction Company, through to today’s world leaders in electro-technology, Siemens AG uses standards for design, production and sales of power switches, including high-voltage switches in power transmission and circuit breakers and earthing switches.
The total number of employees at Siemens AG is 405,000, all working with standards to:
- be aware of changes to procedures for developing and approving switches
- implement changes to the technical requirements of switches and switchgear
- embrace quality and service requirements
- adopt changes relevant to tendering
- take early steps to implement the standards in cost effective ways, acquiring a leadership position over competitors
Being active in the continuing development of standards allowed Siemens AG to be in the position to take early measures to accommodate reviews of their most important standards and be cost effective in implementing these changes in their products. In doing so, Siemens AG was able to generate profits at a time their competitors were struggling with the transition to the new standards.
The four step approach to assessment talked about in our previous blog, ‘How standards create value for your company’, offers a practical tool for you to better grasp the impact of quality standards on your activities and processes. The examples given here should demonstrate how companies of all sizes, nationalities and sectors can maximise the benefits to revenue using quality standards. The whole document is available to view on the ISO website, alongside further reading in the document ‘ISO Standards – What’s the bottom line?’
In the meantime, for more information and to arrange a time to talk over how quality standards will specifically benefit your company, please get in touch.