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.
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.