Going ISO: What’s Connecting the Dots for Greater Certifications in the Secondary Market?

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By Matt Skoufalos

In the market share tug-of-war among original equipment manufacturers (OEMs) and independent service organizations (ISOs) for contracts to sell, refurbish and service medical imaging equipment and component parts, one of the biggest points of leverage has always been quality assurance. After cost (and likely, personal relationships), the ability to certify the quality of the work performed is commonly cited as a differentiator among companies that earn business and those that do not. Today, more ISOs are pursuing independent certification that describes and validates their processes as reliable, reproducible and vetted by accrediting agencies.

One of the most sought after and commonly understood signifiers of those best practices is adherence to standards published by the International Organization for Standardization (ISO), especially the ISO 9001 standard, which dictates the criteria for a quality management system. There is speculation among the secondary equipment industry that the U.S. Food and Drug Administration (FDA) may someday require third-party equipment parts, sales and service companies to adhere to such standards in the future as a risk mitigation measure; until then, however, many ISOs are pursuing the standards certification simply as a matter of process improvement or out of sheer competition.

Felicia DeJohn, quality assurance manager for Block Imaging Parts and Service said her company began the ISO certification process at the request of a customer. Once things were underway, DeJohn said the company began taking a closer look not only at its own processes but also the mechanisms behind them. Doing so revealed just how much had changed and reflected the amount of growth Block Imaging had undergone in the time since.

“It was a good launch pad,” she said. “We were a smaller organization years ago, but the standard makes you start digging into what you do and how you do it. When you have multiple, different departments within an organization, the opportunity for silo-ing is very much present. What I’ve found in my internal audits gives us the ability to tear down the silos, and make sure each department is able to interact well with each organization.”

DeJohn said going through the ISO certification process has been good for Block Imaging. The ISO requirements have given the business an attitude of refinement regarding the evaluation of its operations as well as the ability to instill confidence in customers and business partners. DeJohn talked about the “shared language” of the standardized process as having value internally and externally. The ability to track and be held accountable for shared metrics is something customers and partners appreciate, and those metrics help “communicate to the team why what they’re doing matters,” she said.

“The ultimate goal of ISO 9001 is customer expectations,” DeJohn said. “Customers appreciate having an ISO certification the same way that we do when we have customers that are vendors: it makes us easier to work with. The bar of trust is at a higher baseline than it would have been otherwise.”

Process improvement doesn’t have to be confined to the ISO standard to be valuable, DeJohn said, but the rigorous nature of the documentation and audit cycle involved inspire a deeper level of consumer confidence than do many unaccredited self-improvement processes. ISO-certified businesses are audited annually by a third-party certifier, which DeJohn said helps to drive continuous improvement.

“When you initiate conversation with a customer, there’s a confidence that you have processes in place,” she said. “[Our staff is] able to take a deeper dive, and I know that’s happening automatically because they’re audited on it from an outside organization every year.”

If and when changes are required, DeJohn said the processes for doing so are laid out in the standard, which makes those interactions “much more streamlined and easy to execute.”

“If you’ve got the knowledge that you have to do internal audits for your organization, when you go through the standard, and audit to the standard, you’re looking at each department,” she said. “You’re reviewing all of these metrics with the leadership.”

DeJohn said that although the audit can seem intimidating, she welcomes it as an opportunity for the business to make improvements. Some of the technical changes that ISO certification has effected within Block Imaging have helped shape processes for reporting product nonconformance and customer complaints, even how to handle corrective action planning when things are found to be out of compliance with the standard. The standard even requires that any outside vendors in its supply chain be able to provide products that maintain customer expectations. It all adds up to a push for verifiable process improvement and overall quality assurance.

“When you hear the word audit, people get this guard and this tension about them,” DeJohn said. “I remind myself that this is a practice to know what is the best thing to spend my time on. We just completed our transition audit in July; as we’re going through, if [the auditor] doesn’t find anything, this is a waste of time. I want him to help me improve the quality of our products.”

Where its internal processes intersect, the ISO standard also led Block Imaging to develop a process map that helps coordinate the activities of its various departments, from sharing improvements to receiving feedback from colleagues about the changes involved, and generally creating an open forum for dialogue.

“We’ve seen amplified communication; we’ve seen kind of an increase in momentum for synergy through our ISO certification,” DeJohn said. “I think there’s been a significant impact on our culture. It’s removing the finger-pointing.”

To best drive those cultural changes, DeJohn advocated that companies considering or pursuing ISO certifications begin internal conversations about the benefits of the process before embarking upon it. A conversation can clarify how the organization and its customers will benefit from the certification process, and smoothe the transitions that follow.

“Establishing and marketing why you’re doing it is important,” she said. “There can be some resistance; establish up front why you want to do it and how the customer and the organization is going to benefit up front.”

Kim Cole, director of customer care and quality officer at Tri-Imaging Solutions said that after undergoing ISO certification, there weren’t necessarily a lot of changes in the company’s day-to-day processes. However, the work of documenting what was being done on a daily basis led to greater codification of its practices overall, and greater consistency during onboarding of new employees or retraining of others.

“Making sure that you have a training program and everyone gets the same training helps ensure that you’re consistently putting out good products,” Cole said. “So does implementing a customer complaint and feedback process, so that if you do have an issue, you’ll be able to effectively address it.”

ISO certification helped Tri-Imaging establish and refine its processes around daily functions like: QA testing, shipping and receiving, harvesting of parts, inventory management and customer orders. A big change that Cole said truly served its business case was that the accreditation process led to Tri-Imaging tracking its warranty rate, commonly referred to in the medical parts industry as the out-of-box failure rate or D.O.A. (dead on arrival) rate of a freshly shipped part.

“Because we have a process in place for nonconformance, we were able to do a risk assessment, and do a deep dive into these products to see what’s causing the failure,” Cole said. “We might improve on the repair process, or change our testing procedure.”

“Part of the accountability that comes along with [the ISO certification] is making sure that the processes and procedures implemented, if there’re any shortfalls, you can identify them during your internal audits and get any needed corrections made,” she said.

The process and its related improvements led to Tri-Imaging being able to boast a warranty rate of less than 3 percent.

Another of the more complicated ambitions brought about by the ISO process was tightening supplier controls, which involved establishing parameters for purchases using an approved list of vetted vendors. Cole said doing so makes customers feel “that you’re doing your due diligence to ensure you’re partnering with the right people.”

“As we move toward greater expectations from the customers, we’ve made the investments into our personnel, systems and operations,” she said. “Achieving ISO certification gives you a competitive advantage over a company that does not have this program in place. It tells your customers that you’re here for the long haul; that you’re serious about what you’re doing. Customers want to know that you’re taking quality seriously.”

After four years in business, Tri-Imaging has grown to a 30-person company; with the implementation of standardized processes that emerged from the ISO certification process; Cole said that customer audits have led to positive feedback.

“We do have some customers that require ISO certification, so if we did not have those standards in place, we would not be able to do business with them,” she said. “As there are currently discussions happening concerning regulations that apply to our industry, maybe one day this will be something that’s required for all parts companies.”

Bob Clancy is senior vice president at BIZPHYX, a consultancy that helps businesses prepare for a variety of standards certifications – including TL 9000, ISO 9001 and ISO 140001 – as well as for quality assurance and internal auditing processed. Clancy said the majority of BIZPHYX clients operate in the telecommunications business, but that “in general, they acquire certification because somebody in their supply chain above them is interested in them having it … [and] put a requirement for a quality system or certification in their contract.”

“There are intrinsic benefits, but generally speaking, it’s more that companies who they supply to require them to be certified,” Clancy said. “When they come to us, they’re generally not familiar with ISO standards; we provide training and implementation services, and offer consulting to help companies interpret the standard.”

Clancy described the current ISO 9001 standard as “ubiquitous, and applicable to any industry.” The standard doesn’t require the certified company to be a standalone business – it could be pursued by a business unit or an individual department – which allows organizations to think about their business strategies differently, he said.

“Stakeholders have to think about interested parties and their quality system,” Clancy said. “They have to think about internal and external issues. They have to identify risks and plan actions to address them for managing services and projects. We help organizations to take a look at their business processes, their design and development, and the documentation. Once all that’s done, they can go through certification.”

Preparing for the ISO certification can take anywhere from seven months to a year depending on the size of the company and the nature of the certification sought. The financial impact of the process includes the man-hours of getting documentation completed, plus the cost of registration. Certification costs are based on number of audit days, which range from $1,200 to $1,500 per day. Total certification costs depend on employee headcount, number of locations and other factors. Certification bodies can provide quotes for the total cost of certification services. Firms like BIZPHYX can add some more up-front investment for companies that don’t have the resources in-house to tackle the project, but ISO audits are conducted by third-party credentialing bureaus that operate independently from the International Organization for Standardization entirely.

Whatever the results of the audit, Clancy said going through the process can help reduce costs; other market analyses said standards implementation can help businesses gain market share. Lean and Six Sigma tool sets can also be used in conjunction with or in place of those quality frameworks; a competing scheme called CMMI (Capable Maturity Model Integration) is a comparable development model, but is certified as a one-off.

“There’s quite a bit of empirical evidence for cost reduction for key performance improvement,” Clancy said. “One of the things that makes ISO really powerful is you have to be initially certified, and then surveilled once a year for a three-year cycle, and then certified as long as you desire to remain certified,” he said. “You’ve always got somebody independently looking over the company’s shoulder.” ICE

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