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Quality Management Principles

The eight quality management principles are defined in ISO 9000:2000, Quality management systems Fundamentals and vocabulary, and in ISO 9004:2000, Quality Management systems Guidelines for performance improvements.

This document gives the standardized descriptions of the principles as they appear in ISO 9000:2000 and ISO 9004:2000. In addition, it provides examples of the benefits derived from their use and of actions that managers typically take in applying the principles to improve their organizations’ performance.

	Principle 1: Customer Focus
	Principle 2: Leadership
	Principle 3: Involvement of People
	Principle 4: Process Approach
	Principle 5: System Approach to Management
	Principle 6: Continual Improvement
	Principle 7: Factual Approach to Decision Making
	Principle 8: Mutually Beneficial Supplier Relationships

Principle 1: Customer Focus

Organizations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations.

Increased revenue and market share obtained through flexible and fast responses to market opportunities.

Increased effectiveness in the use of the organizations’ resources to enhance customer satisfaction.

Improved customer loyalty leading to repeat business.

Applying the principle of customer focus typically leads to:

Researching and understanding customer needs and expectations.

Ensuring that the objectives of the organization are linked to customer needs and expectations

Communicating customer needs and expectations throughout the organization.

Measuring customer satisfaction and acting on the results.

Systematically managing customer relationships.

Ensuring a balanced approach between satisfying customers and other interested parties (such as owners, employees, suppliers, financiers, local communities and society as a whole.)

Principle 2: Leadership

Leaders establish unity of purpose and direction of the organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization’s objectives.

Key benefits:

People will understand and be motivated towards the organization’s goals and objectives.

Activities are evaluated, aligned and implemented in a unified way.

Miscommunication between levels of an organization will be minimized.

Applying the principle of leadership typically leads to:

Considering the needs of all interested parties including, customers, owners, employees, suppliers, financers, local communities and societies as a whole.

Establishing a clear vision of the organization’s future.

Setting challenging goals and targets.

Creating and sustaining shared values, fairness and ethical role models at all levels of the organization.

Establishing trust and eliminating fear.

Providing people with the required resources, training and freedom to act with responsibility and accountability.

Inspiring, encouraging and recognizing people’s contributions.

Principle 3: Involvement of People

People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization’s benefit.

Motivated, committed and involved people within the organization.

Innovation and creativity in furthering the organization’s objectives.

People being accountable for their own performance.

People eager to participate in and contribute to continual improvement.

Applying the principle of involvement of people typically leads to:

People understanding the importance of their contribution and role in the organization.

People identifying constraints to their performance.

People accepting ownership of problems and their responsibility for solving them.

People evaluating their performance against their personal goals and objectives.

People actively seeking opportunities to enhance their competence, knowledge and experience.

People freely sharing knowledge and experience.

People openly discussing problems and issues.

Principle 4: Process Approach

A desired result is achieved more efficiently when activities and related resources are managed as a process.

Key benefits:

Lower costs and shorter cycle times through effective use of resources.

Improved consistent and predicable results.

Focused and prioritized improvement opportunity.

Applying the principle of process approach typically leads to:

Systematically defining the activities necessary to obtain a desired result.

Establishing clear responsibility and accountability for managing key activities.

Analyzing and measuring of the capability of key activities.

Identifying the interfaces of key activities within and between the functions of the organization.

Focusing on the factors such as resources, methods, and materials that will improve key activities of the organization.

Evaluating risks, consequences and impacts of activities on customers, suppliers and other interested parties.

Principle 5: System Approach to Management

Identifying, understanding and managing interrelated processes as a system contributes to the organization’s effectiveness and efficiency in achieving its objectives.

Key benefits:

Integration and alignment of the processes that will best achieve the desired results.

Ability to focus effort on the key processes.

Providing confidence to interested parties as to the consistency, effectiveness and efficiency of the organization.

Applying the principle of system approach to the management typically leads to:

Structuring a system to achieve the organization’s objectives in the most effective and efficient way.

Understanding the interdependencies between the processes of the system.

Structured approaches that harmonize and integrate processes.

Providing a better understanding of the roles and responsibilities necessary for achieving common objectives and thereby reducing cross functional barriers.

Understanding organization capabilities and establishing resource

Constraints prior to action.

Targeting and defining how specific activities within a system should operate.

Continually improving the system through measurement and evaluation.

Principle 6: Continual Improvement

Continual improvement of the organization’s overall performance should be a permanent objective of the organization.

Key benefits:

Performance advantage through improved organizational capabilities.

Alignment of improvement activities at all levels to an organization’s strategic intent.

Flexibility to react quickly to opportunities.

Applying the principle of continual improvement typically leads to:

Employing a consistent organization-wide approach to continual improvement of the organization’s performance.

Providing people with training in the methods and tools of continual improvement.

Making continual improvement of products, processes and systems an objective for every individual in the organization.

Establishing goals to guide, and measures to track, continual improvement.

Recognizing and acknowledging improvements.

Principle 7: Factual Approach to Decision Making

Effective decisions are based on the analysis of data and information.

Key benefits:

Informed decisions.

An increased ability to demonstrate the effectiveness of past decisions through reference to factual records.

Increased ability to review, challenge and change opinions and decisions.

Applying the principle of factual approach to decision making typically leads to:

Ensuring that data and information are sufficiently accurate and reliable.

Making data accessible to those who need it.

Analyzing data and information using valid methods.

Making decisions and taking action based on factual analysis, balanced with experience and intuition.

Principle 8: Mutually Beneficial Supplier Relationships

An organization and it suppliers are interdependent and a mutually beneficial relationship enhances the ability of both to create value.

Key benefits:

Increased ability to create value for both parties.

Flexibility and speed of joint responses to changing market or customer needs and expectations.

Optimization of costs and resources.

Applying the principles of mutually beneficial supplier relationships typically leads to:

Establishing relationships that balance short-term gains with long-term considerations.

Pooling of expertise and resources with partners.

Identifying and selecting key suppliers.

Clear and open communication

Sharing information and future plans.

Establishing joint development and improvement activities.

Inspiring, encouraging and recognizing improvements and achievements by suppliers.

The future evolution of ISO 9000

In order for the ISO 9000 family to maintain its effectiveness, the standards are periodically reviewed in order to benefit from new developments in the quality management field and also from user feedback. ISO/TC 176, which is made up of experts from businesses and other organizations around the world, monitors the use of the standards to determine how they can be improved to meet user needs and expectations when the next revisions are due in approximately five year’s time.

ISO/TC 176 will continue to integrate quality assurance, quality management, sector specific initiatives and various quality awards within the ISO 9000 family.

ISO’s commitment to sustaining the ISO 9000 momentum through reviews, improvement and streamlining of the standards guarantees that your investment in ISO 9000 today will continue to provide effective management solutions well into the future.

Maintaining the benefits and continual improvement

Most new users obtain measurable benefits early in the process of deploying the standard requirements in their operations. These initial benefits are generally due to improvements in their organization and internal communication. The benefits must be strengthened through effective internal auditing and management review of system performance. Like all systems, it either improves or becomes less effective. It does not remain static for long.

When you adopt ISO 9000:2000, you must strive for the satisfaction of your customers and the continual improvement of your quality management system. Continual improvement is a process of increasing the effectiveness of your organization to fulfill your quality policy and your quality objectives. ISO 9001:2000 requires that you plan and manage the processes necessary for the continual improvement of your quality management system. ISO 9004:2000 provides information that will be helpful in going beyond ISO9001:2000 to improving the efficiency of your operation. It is recommended that you obtain data from various sources, both internal and external, to assess the appropriateness of your quality system goals. This information can also be used to improve the performance of your processes.

Some organizations may expand their management systems by extending the ISO 9001:2000 structure to include the requirements of ISO 14001:1996, Environmental management systems. The structural and organizational requirements of the two management systems have been designed to be compatible.

Implementing your ISO 9001:2000 quality management system

Benefits of ISO 9000:2000

Be more efficient and profitable

Produce products and services that consistently meet customer requirements

Achieve customer satisfaction

Increase market share

Maintain market share

Improve communications and morale in the organization

Reduce costs and liabilities

Increase confidence in the production system

Examples of the ISO 9000 standards in use

ISO 9000:2000 is used if you are seeking to establish a management system that provides confidence in the conformance of your product to established or specified requirements. It is now the only standard in the ISO 9000 family against whose requirements your quality system can be certified by an external agency. The standard recognizes that the word “product” applies to services, processed material, hardware, and software intended for, or required by, your customer.

There are five sections in the standard that specify activities that need to be considered when you implement your system. You will describe the activities you use to supply your products and may exclude the parts of the Product Realization section that are not applicable to your operations. The requirements in the other four sections ? Quality management system, Management responsibility, Resource management and Measurement, analysis and improvement? Apply to all organizations and you will demonstrate how to apply them to your organization in your quality manual or documentation.

Together, the five sections of ISO 9001:2000 define what you should do consistently to provide product that meets customer and applicable statutory or regulatory requirements. In addition, you will seek to enhance customer satisfaction by improving your quality management system.

ISO 9004:2000 is used to extend the benefits obtained from ISO 9001:2000 to all parties that are interested in or affected by your business operation. Interested parties include your employees, owners, suppliers, and society in general.

ISO 9001:2000 and ISO 9004:2000 are harmonized in structure and terminology to assist you to move smoothly from one to the other. Both standards apply a process approach. Processes are recognized as consisting of one or more linked activities that require resources and must be managed to achieve predetermined output. The output of one process may directly form the input to the next process and the final product is often the result of a network or system of processes. The eight Quality Management Principles stated in ISO 9000:2000 and ISO 9004:2000 provide the basis for the performance involvement outlined in ISO 9004:2000.

The nature of your business and the specific demands you have will determine how you apply the standards to achieve your objectives.

Here are a few examples:

Example 1:

A metal parts fabricating company used ISO 9000:2000 to develop a plan to implement their quality management system. When they were ready, they prepared a quality manual and quality system procedures as required by ISO 9001:2000, excluding the requirements covering product design and development because their products are made to designs prepared by their customers. Later, in order to bid on the supply or parts to a major automotive company, they adapted their quality system to meet the sector specific requirements of ISO/TS 16949.

Example 2:

A welfare agency decided to establish a quality improvement strategy. It adopted ISO 9004:2000 as the basis for planning and implementing its system. The agency found that ISO 900:2000 provided useful additional guidance and plans to seek certification to ISO(001:2000 to gain more credibility.

Example 3:

A washing machine manufacturer had a well-established company culture of continual improvement and effective production control. The management decided to improve the company’s development processes and to implement ISO9001:2000 to obtain certification for commercial purposes. The company used ISO 9004:2000 to guide its improvement processes and ISO 10006:1997 to develop a project management plan.

Example 4:

A large chemical processing company was required by its major customers to gain registration/certification to ISO 9001:2000. In order to obtain additional benefits, company leadership planned a comprehensive management strategy based on ISO9000:2000 and ISO 9004:2000. A thorough review of their business processes indicated that all elements of ISO9001:2000 were applicable to their quality management system. The company used ISO 10013:1999 to guide the development of quality documentation in its various production divisions and ISO 10015:1999 for guidance in the preparation of training plans for their employees.

Example 5:

A firm of international lawyers wanted to improve their client management processes and to achieve registration/certification to ISO 9001:2000. Their quality management system provides for the design and development of new services such as international tax planning and modifying traditional services to meet the requirements of new or amended legislation. They include purchasing control to cover the selection of computer hardware and software, as well as purchasing the services of specialist lawyers as needed. After successfully implementing ISO 9001:2000, they used the self-assessment guidelines of ISO9004:2000 to monitor their progress as they improved their quality management system.

Example 6:

A computer software developer serving a niche market recognized that as their user base expanded they would be faced with issues concerning product management and configuration control. Changes to base products, user hardware and regulatory requirements were compounding customer service issues. ISO 9004:2000 provided the guidance they needed to establish documented procedures to control process change and improvement. ISO 10006:1997 and ISO 10007:1995 provided additional assistance as they managed the project and prepared procedures for configuration management. They later acquired another software developer and were able to use their quality management system. To integrate the acquisition into their own structure very quickly with a minimum of disruption to customers.

Example 7:

A bank decided to implement a quality management system for its on-line Internet banking services. They ensured that their quality manual made clear that their other conventional banking services were not included in their quality management system. While adopting the requirements of ISO 9001:2000, the bank obtained guidance from ISO 9000:2000 to interpret words and phrases used in the standard for their application. They applied all the requirements of Clause 7, recognizing that design and development is an important part of creating new service processes. The bank used ISO 10013:1995 to prepare their documentation, which they posted on their internal computer network to ensure current procedures are available to their staff.

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