Today I have the pleasure to say that I've been working in Tequila Sauza for 22 years and that in my first days as an employee, the list of the products we elaborated was very reduced. Through work, leadership and different strategies coming from the best minds we had, we collaborated as a team to release the brand "Cien Años" (100 years) to the market. Its quality, low cost, and all the marketing strategies we implemented, made this tequila brand one of the most important products of our industry.
Day after day we realize that the goods that are being offered to us for the same price, satisfies certain needs, but sometimes a cheaper product satisfies even better our demands than others. It's time to take into count that companies who provide better quality products have the advantage of a higher profit margin in one market and due to its price, it may displace the competitors. Without any doubt, our competence is also implementing other strategies to position themselves within the international market.
Quality Has a Cost
Everything that we may think is normal in our business, should be changed and re-planned to be able to distinguish our organization from other competitors.
By using all the resources available, we can be sure how much does it cost to produce every piece, that is to say, manufacturing costs. The cost of a piece involves all the quality expenses that turn every product into a high value object, such as the prime materials, overwork, inspections, repairs, complains, devolutions, quality guarantees, training, audits, evaluations to providers, work accidents, waste management, penalizations, times when the sales were not possible because the product was not ready in stock, the brand image, publicity, among others.
The majority of this quality costs can be avoided; the main goal is to eliminate the avoidable quality costs and reduce the inevitable quality costs to the minimum amount possible, to do so it is necessary to prevent all the case scenarios implementing and updating training, audits, and providers evaluations.
Why Talking About Quality?
Without definitions! Let's be practical: The key is to do things well the first time. A well-done product meets the demand and the necessity it was planned for.
Satisfying the customer's needs includes respecting and meeting the official standards, as well as the waste of materials, client's devolutions, re-jobs or re-inspections, failures in the processes or problems in the equipment, work accidents and penalties, are the most evident symptoms of the lack of quality and they generate the highest costs for the organization. Costs that can be avoided, but how?
Quantify the evitable quality costs to determinate which ISO Rule is more appropriate for your organization.
How to Select an ISO Rule?
Classify the evitable quality costs by means of their impact, the same label of the ISO Rule will be useful for your organization: Product Quality, Environmental Impact, Health and Security at Work, and Food Safety.
Nowadays, most of the big companies in the market have implemented ISO 9001, and other medium and small businesses keep adding this ISO Rule to their system; it seems to be a tendency because clients and corporations are requiring it to measure the brand value and position in the market. Additionally, we can say another important reason is that organizations stop spending evitable expenses, due to the elimination of evitable quality costs and reduction of the inevitable ones.
Besides reducing the organization expenses, it generates trust and confidence among the consumers, actionists and employees. A good development of quality control strategies will definitely contribute positioning the brand in all the different market niches.
Another factor that impulses companies to implement these rules, is the convenience of managing all the legal requirements in a conscious way, without depending on antiquity and old processes regarding the experience of just one person, because when that individual is not present, no one knows what to do.
The Appropriate ISO Rule
There is an overlap between all the ISO Rules.
Defective products or raw material used in the process but are not being utilized because in certain stage of the process they were damaged, we think about a bad quality (ISO 9001), and if we focus our management to the waste volumes we have as a result, a negative environmental impact (ISO 14001).
Let's talk about a different case, let's think about an storage that burned down. All the preventive controls worked together to avoid another fire, and the response to this incident may be handled by the Environmental Management System (ISO 14001) or by the Health and Security Management System (ISO 45001). The same fire incident could have as well, the Quality Management System (ISO 9001) approach.
Even more important, when working with food and products, the most adequate approach is the Food Safety System (ISO 22000), necessary to assure that the affected material it's been handled carefully so that the equipment, the environment and workers conditions are optimes to start working again.
Quality Costs Reduction
Regardless the Management System selected, the importance of the ISO Rule relays on its quality costs reduction.
You have to ask yourself, does the organization know how much is it spending on quality costs? Let's take a work accident as an example:
Take into count the medical attention that the injured person will need, the harmed sensibility of the teamwork and other co-workers, the costs of the person who is going to substitute the functions of the injured individual, the lost time because of the stop of the line production, the products that were not produced during this time, the contaminated materials, etc...
To measure all these quality costs in terms of money is the potential benefit you will obtain when the Management System that you wish to implement, its been introduced in your business and maintained there. No matter what you choose, a combination of many of these systems, will assure you the best impact and results.
If you want to know how Tequila Sauza implemented its Management System, read my next articles and discover how this method was built, always looking after a continuous improvement in our organization.
- Continuous Improvement in Casa Sauza: ISO 9001
- Is Documents Control Only Important to Maintain the ISO Rule?
- ISO 9001 in Agave Production