Background

It was in 1987 that the International Organization for Standardization (ISO) developed and published ISO 9001, 9002 and 9003 and other related guidelines on international standards. This gave birth to the currently popular ‘ISO 9000 family of standards’. The first revision of the ISO 9001, 9002 and 9003 standards took place in 1994 without much alteration in their structure. The second major revision was done in 2000, when ISO 9001, 9002 and 9003 were replaced by a single standard − ‘ISO 9001:2000 Quality Management Systems − Requirements’. This was revised again in 2008 as ISO 9001:2008. Both then ISO 9001 : 2015.

The ISO 9000 family

The ISO 9000 family of standards represents an international consensus on good quality management practices. It consists of standards and guidelines related to quality management systems (QMS) and supporting standards.  The adoption of all standards published by ISO, including standards in the ISO 9000 family, is voluntary in nature. Many countries have adopted the ISO 9000 family of standards as is and have also appropriated its numbering system for their national standards. For instance in the United Kingdom, ISO 9001 is referred to as BS EN ISO 9001:2008, with BS standing for British Standard and EN for European Norm. In Sri Lanka, the standard is numbered SLS ISO 9001:2008, with SLS denoting Sri Lankan Standard. The ISO standards can be purchased (hard or soft version) from ISO through its online store. Your country’s bureau of standards may also sell ISO publications as well as its adopted version of these standards (you will probably pay less for the national version).

ISO 9001

ISO 9001 is applicable to all sectors of industry, including manufacturing and service, and to organizations of all sizes. It is not a product standard but a management system standard to demonstrate an organization’s ability consistently to provide products or services that meet customer and regulatory requirements. ISO 9001 specifies ‘what’ is required to be done by an organization but does not indicate ‘how’ it should be done, thus giving you great flexibility in running your business. Furthermore, ISO 9001 does not set any particular level of quality. You and your customers do that. The standard will only help you to achieve the level you want. For example, if you set an objective that 99% of the time you will meet your delivery commitments, the system will help you to achieve that.

At both national and international levels, certification2 to ISO 9001 by accredited certification bodies has received wide acceptance. As of 31 December 2009, 1 064 785 certificates for ISO 9001 were issued in 178 countries. The highest share (47%) was achieved in Europe, followed by 37.4% in the Far East, 7.3% in Africa and West Asia, 3.4% in Central and South America and 0.1% in Australia and New Zealand.

ISO 9001 and the export trade

The ISO 9000 family of standards is increasingly becoming a symbol of quality in both the manufacturing and services industries. It engenders greater customer loyalty as implementation ensures that customer needs and expectations are continually met, giving customers less or no reasons to complain. More and more small and medium-sized firms are choosing to adopt the ISO 9000 family of standards – often because their customers expect them to have it. Adherence to the ISO standards can also be publicized to gain market access abroad, because many foreign buyers place a premium on these standards.

There is no definite answer to this popular question, as the cost of ISO 9001 certification depends on various factors, e.g. how long it takes to develop a quality management system, how many staff members are involved and whether an external consultant is hired or not. In view of this, this section considers only the broad cost categories and lists major cost items by category. The broad categories include the cost of establishing and implementing a quality management system, the cost of maintaining it, and the cost of the initial certification and its maintenance.

Cost of establishing and implementing the QMS

• Training of one or two of your company managers by an external trainer (preferably from an industry association or chamber) to get them to understand the requirements of ISO 9001 and the QMS related documentation needed by your organization.
• Assessing the current quality control practices and setting up additional routine test facilities if required.
• Revamping work space, equipment, machines, utilities, facilities support services, etc, if required. For example, additional test facilities may be required for conducting routine tests of the product during production and before dispatch to customers.
• Reviewing and providing lighting, ventilation, controls for temperature, humidity, noise and vibration, hygienic practices, as required.
• Reviewing and revamping arrangements for the proper and safe handling and storage of raw materials, semi-finished and finished products, as necessary. (At this point if you think it appropriate, you may implement good housekeeping practices or the Japanese 5S.
• Reviewing current procedures/practices and listing new procedures, checklists and records to be prepared.
• Developing QMS-related documents (e.g. quality policy, quality objectives, QMS manual, procedures, quality plans, specifications and drawings, formats for record-keeping).
• Conducting awareness training for all persons who have roles and responsibilities for implementing QMS.
• Miscellaneous expenditures like word processing, stationery and other consumables required for the preparation of manuals, procedures and the like.

Cost of maintaining the QMS

• Checking periodically the condition of measuring instruments for their repair, maintenance and calibration.
• Training some of your managers to perform periodic internal audits.
• Performing periodic internal QMS audits, corrective actions and management reviews.
• Reorienting, raising the awareness of, and training your employees to keep them up-to-date on changes in QMS, continual improvement of QMS and other matters.

Many of the activities listed above can be carried out by your employees after studying ISO 9001 and the guideline standards and brochures published by ISO (see question 29). While they may not incur direct costs, they will involve indirect costs arising from your employees’ efforts to educate themselves and to carry these activities out. To supplement their knowledge, you could ask one or two of your employees to undergo short training on the implementation of ISO 9001. Alternatively, you could outsource some of the above activities to consultants or experts known in the field.

Cost of initial certification and cost associated with the maintenance of certification

• Registration or certification fee payable to the certification body for a period of three years.
• Fees for the two-stage audit visit by the nominated certification body.
• Fee for periodic surveillance audits by the nominated certification body.
• Travel, board and lodging of auditor(s) from the certification body.

It may be added here that certification to ISO 9001 is not a mandatory step towards implementation of QMS. Your management should study whether it would be appropriate for strategic and other reasons for your company to implement ISO 9001 and to undergo certification before incurring the above costs.

Benefits of ISO 9001

If you implement and keep practicing the system well it will provide you with a number of benefits such as:

• Quality will be seen as everyone’s responsibility instead of being the sole responsibility of the quality control inspector or manager.
• QMS will provide you with a means of documenting the company’s experience in a structured manner (quality manual, procedures, instructions, etc).
• You will generate savings, as the costs of reprocessing, rework, repeat inspections, replacing products, penalties due to delayed deliveries, customer returns, customer complaints and warranty claims will gradually fall.
• You will be able to secure your customers’ loyalty as their needs and expectations will be continually met, leading to more business opportunities for you.
• You can use ISO 9001 for publicity to win more sales.
• You get preferential treatment from potential customers who themselves have implemented ISO 9001.
• Export marketing will be easier for you, as many foreign buyers place a premium on ISO 9001 systems.
• You will have a level playing field with large companies when bidding for new contracts.
• Obtaining certification will reduce the frequency of audits of your system by different customers.

The biggest benefit to be gained from maintaining a QMS (which is an investment in preventing failures) is the huge savings you can make by considerably reducing the cost of failures

Every person has the right to expect that the food he/she eats is safe and will not cause injury or illness.

The hazards related to food safety are known as biological, chemical and physical hazards, which, if present in food, may cause injury or illness to the human being.

Hazard Analysis and Critical Control Points (HACCP) is defined as “a system, which identifies, evaluates and controls hazards which are significant for food safety” (FAO).

HACCP is a proactive concept. It helps to ensure that food is safe from harvest to consumption (‘from farm to fork’). Each step involved in food production, i.e. purchasing, receiving, storage, processing, packaging, warehousing, distribution up to the point of consumption is subjected to hazard analysis and necessary controls are introduced. The premise is simple: if each step of the process is carried out correctly, the end product will be safe.

HACCP was first developed in 1960 in the early days of the space programme. NASA (National Aeronautics and Space Administration) wanted assurance that food taken on board space flights would not cause food-borne diseases. As a result of this requirement, the Pillsbury Company and the United States Army Natick Research Laboratories developed a process that would ensure production of safe food; the process was named HACCP.

In 1993, the Codex Alimentarius Commission (CAC) published guidelines for the application of the HACCP system. Later, in 1997, CAC incorporated HACCP into an appendix of the ‘Recommended International Code of Practice General Principles of Food Hygiene (latest version: Rev.4-2003).

The HACCP system consists of seven principles, which give an outline of how to establish, implement and maintain a HACCP plan.

HACCP is not a stand-alone system. Good hygiene practices and other prerequisites for food processing as well as strong management commitment are also necessary. HACCP is not a substitute for these.

If your company produces a variety of food products, you should develop a separate HACCP plan for each product, abiding by the seven principles outlined above.

During the 1990s, HACCP was adopted by many countries (Australia, Denmark, Germany, India, Ireland, Netherlands, United States and others) in national standards specifying requirements for a food safety management system. It was also included in the regulations of the European Community dealing with ‘Hygiene of foodstuffs’. The International Organization for Standardization (ISO) developed in 2005 an international standard, ‘ISO 22000:2005 Food Safety Management Systems − Requirements for any organization in the food chain’, which incorporates HACCP principles.

It is important for SMEs in the food processing business to use HACCP for two reasons. First, it brings internal benefits such as reduced risk of manufacturing and selling unsafe products, which will in turn generate greater consumer confidence in these products. Second, food regulatory authorities in many countries are adopting or are likely to adopt HACCP in their food regulations. By implementing HACCP, you will have greater chances of succeeding as an exporter to these countries. For example, in the guidance document entitled ‘Key questions related to import requirements and the new rules on food hygiene and official food control’, issued by the European Commission’s Directorate General, Health and Consumer Protection, EU has clarified that the new EU rules on food hygiene (effective 1 January 2006) confirm that all food businesses after primary production must put in place, implement and maintain a procedure based on HACCP principles. These rules are, however, more flexible than under the old system, as the HACCP-based procedures can be adapted to all situations (European Commission, 2006).

The primary objective of both the Codex HACCP principles and the ISO 22000 food safety management system (FSMS) is to ensure that the food produced by an organization is safe for human consumption.

The system elements of the Codex HACCP consist of seven principles and five presteps for developing and implementing a HACCP plan. All these elements have since been included in ISO 22000 (published in 2005 as ‘ISO 22000:2005 – Food safety management systems – Requirements for any organization in the food chain’) and many more management system requirements have been added. The format of ISO 22000 is in line with the format of ISO 9001 (‘Quality management system − Requirements’), thus making it compatible with other management systems.

The development of ISO 22000 was based on the assumption that the most effective food systems are designed, operated and continually improved within the framework of an organization’s structured management system. ISO 22000 thus carries some management system requirements that are not explicitly stated in Codex HACCP. These include a food safety policy and related objectives, planning and documenting the food safety system, effective external and internal communication arrangements, the assignment of specific responsibilities to the food safety team leader, internal audits, management reviews, continual improvement and updating of FSMS. Briefly, the ISO 22000 requirements are a combination of the following four key elements:

• Interactive communications
• System management
• Prerequisite programmes
• HACCP principles.

The Codex HACCP uses the last element and also recommends that prerequisite programmes related to food hygiene should be in place before the development of a HACCP plan.

ISO 22000, backed by international consensus, harmonizes the requirements for systematically managing safety in food supply chains, and offers a unique solution for good practice on a worldwide basis. ISO cooperated closely with the Codex Alimentarius Commission in developing this standard. ISO 22000 makes extensive reference to the Codex hygiene recommendations for the development of prerequisite programmes for different sectors of the food industry. ISO 22000 in its Annex B provides a comparison of the various requirements of FSMS with those of Codex HACCP.

ISO 22000 is designed to allow all types of organizations within the food chain to implement a food safety management system. These include crop producers, feed producers, primary producers, food manufacturers, transport and storage operators, retailers, food service operators and caterers together with related organizations such as producers of the equipment, packaging materials, cleaning agents, additives and ingredients needed during food processing.

As CODEX HACCP is a guidance document, certification to it is not possible. To fill this gap many countries such as Australia, Denmark, Germany, India, Ireland and the United States have developed national standards on the basis of the Codex HACCP. The Netherlands also did so, and the standard is popularly referred to as the Dutch HACCP. Certification against these standards is possible. ISO 22000 has made it easier for organizations worldwide to implement the Codex HACCP system for food safety in a harmonized way, i.e. it does not vary with the country or food product or service concerned. ISO 22000 can be used for certification, and this may be acceptable as an alternative to certification against different national standards.

Setting up an ISO 22000 FSMS and having it certified have cost implications. The costs fall under the following categories.

• Cost of establishing and implementing the FSMS;
• Cost of maintaining the FSMS;
• Cost of initial certification and cost of maintaining the certification.

These costs can vary greatly, depending on the size of your facility, range of products, nature of your operation, existing infrastructure and facilities. The cost items and the benefits of implementing FSMS are described below.

Costs of establishing and implementing FSMS

• Cost of obtaining copies of the national and international standards and food legislation. You will also need the Codex guidelines on the general and specific principles of food hygiene, but these Codex documents are freely downloadable from the Codex website.
• Depending on the background of your multidisciplinary food safety team members and its leader, cost of training them on food safety hazards and related control measures, hazard analysis, development of the HACCP plan, method of developing FSMS documentation and their related control measures. The overall cost will include both the direct costs of training and the indirect cost of the time spent by your FST team in training.
• Depending on the nature of your product and the associated hazards, cost of making necessary alterations in the layout of your premises, floors, walls, ceilings, ventilation system, employees’ facilities, waste disposal system, pest control system, water supply.
• Cost of introducing additional control measures to prevent, eliminate or reduce the hazards to an acceptable level. The direct costs involved may cover selection and acquisition of new processing equipment or technology; revamping temperature controls for storage (in freezers or cold storage) of raw materials and finished products; installing facilities for metal detection, packaging, heat treatment, freezing, brining, transport, personal hygiene, as needed; and the means for validating these control measures.
• Cost of developing FSMS documentation, e.g. documents on food safety policy and objectives, food safety procedures, prerequisite programmes, operational prerequisite programmes, HACCP plan.
• Cost of creating awareness in all persons who have roles and responsibilities for FSMS activities and cost of training when required.
• Cost of day-to-day monitoring activities, calibration of instruments, testing of raw materials and finished products, verification activities, product withdrawals, corrective actions.

Cost of maintaining the FSMS

• Cost of periodic reorientation, awareness generation and training of your employees to update them on new legislation and changes to your FSMS.
• Cost of training some of your managers to perform periodic internal audits.
• Cost of conducting periodic internal audits, corrective actions, continual improvement and management review of FSMS.

Cost of initial certification and cost associated with the maintenance of certification payable to the certification body you selected

• Registration or certification fee payable to the nominated certification body for a period of three years.
• Fee for a two-stage certification audit by the auditors of the certification body.
• Fee for periodic surveillance audits (at a frequency of every 6 to 12 months) by the auditors of the certification body.
• Travel, board and lodging of the auditor(s) of the certification body.

It may be added here that certification to ISO 22000 is not a mandatory step after the implementation of FSMS. The decision to have it is always a need-based decision, which your management should take before incurring the above costs.

Benefits

The implementation of ISO 22000 FSMS will provide both internal and external benefits, for example:

• Improved competence of employees through training and awareness generation, bringing about, among other benefits, clarity about their responsibilities and the designation of authority within FSMS.
• A defined system for obtaining information on emerging food safety hazards and control measures, and on applicable statutory and regulatory requirements.
• Cost savings from reduced instances of producing unsafe products, smaller number of customer complaints, low withdrawal levels of unsafe products from the supply chain.
• ISO 22000 compliance and its certification may generate opportunities for new business, including giving you a chance to become a preferred supplier of the big retail chains.
• Customers will have greater confidence in the food safety of products made by an ISO 22000 compliant or certified company.

OHSAS 18001 is a standard for establishing and practicing an occupational health and safety management system. It provides a framework for an organization to identify and control its health and safety risks, reduce its potential for accidents, ensure compliance with legislative requirements, and improve its overall health and safety performance.

OHSAS 18001 is not an ISO standard as it has not been developed by the International Organization for Standardization. It was formulated by three national standards bodies (those of Ireland, South Africa and the United Kingdom), 10 certification bodies and other stakeholders. The target was to address a gap where no third-party certifiable international standard existed. While developing this standard, in order to enhance its compatibility with other management system standards, due consideration was given to the provisions of ISO 9001, ISO 14001 and the guidelines for an occupational health and safety management system published by the International Labour Organization.

This standard can be used by all types (private, public, manufacturing, service) and size (small, mediumsized, large) of organizations. It can also accommodate diverse geographical, cultural and social conditions.

OHSAS 18001 only addresses occupational health and safety (OHS) issues at the workplace – for example, any physical location in which work-related activities are performed under the control of an organization. Health and safety at the workplace covers employees, individual contractors, customers and citizens. The standard does not deal with other health and safety areas such as the employees’ wellbeing or wellness, product safety, property damage or environmental impact.

OHSAS 18001 covers the following key areas:

• Planning for OHS hazard identification, risk assessment and risk control;
• OHS management programmes;
• Organizational structure and responsibilities for OHS;
• Training, awareness and competence;
• Consultation and communication with stakeholders;
• Operational control on OHS;
• OHS-related emergency preparedness and response; and
• OHS performance measurement, monitoring and improvement.

As with any other management system standard, you will need to follow some steps for the implementation of OHSAS 18001:

• Develop an OHS policy and objectives;
• Carry out risk assessment to identify significant OHS hazards;
• Determine which of the OHS legal requirements are applicable to your type of business activities;
• Define OHS objectives and related programmes for implementing those objectives;
• Develop an OHS manual, operational control procedures and the other documents you need for the effective planning and control of OHS processes; this also covers the records to be maintained;
• Implement the system and monitor compliance and effectiveness through internal audits.

Once the system stabilizes and if you wish to obtain certification, you may select an accredited certification body from among those who provide OHSAS 18001 certification services. According to the BSI group, by the end of December 2009, a total of 54 357 certificates to OHSAS 18001 or its equivalent had been issued by various certification bodies. The process of certification is the same as that followed for other management systems such as ISO 9001, ISO 22000 and ISO 14001.

It may be added here that compliance with OHSAS 18001 does not exempt you from fulfilling legal obligations. However, it will enable you to demonstrate legal compliance in a systematic way.

By implementing OHSAS 18001, you will be able to provide assurance of safe work practices to foreign buyers who prefer to trade with suppliers that provide a safe working environment to their employees

ISO 14000 family of standards

Organizations around the world as well as their stakeholders are becoming increasingly aware of the need for environmental protection. To enable organizations to manage environmental issues proactively, ISO has developed the ISO 14000 family of environmental management standards. Its two main standards are: ‘ISO 14001:2004 Environmental management systems − Requirements with guidance for use’ and ‘ISO 14004:2004 Environmental management systems − General guidelines on principles, systems and support techniques’.

ISO technical committee TC-207, which is responsible for developing the ISO 14000 family, has since 1996 been developing standards in other areas as well, such as environmental labelling, life cycle assessment, greenhouse gas management and related activities, and carbon footprint of products.

ISO 14001:2004

ISO 14001 is the world’s most recognized framework for environmental management systems (EMS).

The overall aim of an EMS based upon ISO 14001 is to support environmental protection and the prevention of pollution in a balance with socio-economic needs.

ISO 14001 can be implemented by any type (public, private, manufacturing, service) and size (small, medium-sized or large) of organization. An EMS based upon ISO 14001 provides a framework to help you identify those aspects of your business activities that have significant impacts on the environment, to set objectives and targets to minimize those impacts, and to develop programs to achieve targets and implement other operational control measures to ensure compliance with your environmental policy.

ISO 14001 does not establish a minimum level of environmental performance. Rather, it requires you to achieve the objectives for environmental performance that your management has set in your environmental policy. It also requires you to demonstrate a commitment to complying with the applicable environmental legislation and to the continual improvement of your environmental performance.

It will be possible for you to integrate your ISO 14001 EMS with your ISO 9001 QMS as they are compatible with each other.

The impact of the environmental performance of an organization goes beyond its customers and suppliers to a broader range of stakeholders − ordinary citizens, regulators, employees, insurance companies and shareholders. Everyone has an interest in the quality of the environment around them.

Thus, demonstrating compliance with an environmental management system based on ISO 14001:2004 is a sound business decision.

Certification to ISO 14001 has been constantly increasing. By the end of December 2009, a total of 223149 certificates had been issued to organizations in over 159 countries.

The costs of implementing ISO 14001 and obtaining certification for it vary greatly. They depend on the size of the facility and the nature of the operation. They can be divided into the following three categories.

• Cost of establishing and implementing the EMS;
• Cost of maintaining the EMS;
• Cost of initial certification and cost associated with maintenance of certification.

The main cost items under each category are listed below. A discussion of the benefits of implementing ISO 14000 follows.

Cost of establishing and implementing the EMS

• Purchase of standards and subscription to publications to enable you to obtain up-to-date knowledge on the EMS standards and the applicable environmental regulations.
• Training of one or two company managers by an external trainer to enable them to understand the ISO 14001 EMS requirements.
• Assessing the current status of waste and pollutant generation and resource (water, fuel, electricity, raw materials, etc.) use in your company. At this stage, also list any policy or procedure relating to EMS which may already be in practice in your company. This activity is called an initial environmental review.
• As a result of above, you may see that there is a need to revamp certain pollution abatement equipment or install new ones. There may also be a need to make arrangements for the proper and safe storage of chemicals, fuels and hazardous wastes.
• Development of EMS-related documents (environmental policy and objectives, EMS manual, operational control procedures, system-related procedures).
• Creating awareness in all persons who have roles in, and responsibilities for, EMS-related activities and providing training where required.

Cost of maintaining the EMS

• Periodic testing of effluent.
• Periodic calibration of your testing equipment.
• Training some managers to perform periodic internal audits.
• Periodic reorientation, awareness generation and training activities for your employees to update them on new legislation and to ensure the continual improvement of your EMS.

Many training activities can be handled by the employees themselves after studying the ISO 14001:2004 standard and ISO 14004:2004, the guideline standard. One or two of these can be asked to undergo a short course on implementing ISO 14001 to supplement their knowledge. Alternatively, you could hire consultants or experts known in the field to carry out a training programme for your employees.

Cost of initial certification and cost associated with maintenance of certification, payable to the certification body of your choice

• Registration or certification fee payable to the nominated certification body for a period of three years.
• Fee for two-stage certification audit by the auditors of the certification body.
• Fee for periodic surveillance audits by the auditors of the certification body.
• Travel, board and lodging of auditor(s) of the certification body for the above audits.

It may be added here that certification to ISO 14001 is not a mandatory step after the implementation of EMS. It is always a need-based decision which your management should take before incurring the above costs.

Benefits of implementing an ISO 14001 EMS

While there are several costs associated with implementing and maintaining an EMS, its many tangible and intangible benefits will offset these costs. The important benefits arising from implementing the EMS include the following:

• Enhanced public image leading to improved business opportunities, for both domestic and export trade.
• Many customers, including governmental procurement agencies, use ISO 14001 EMS as one of the criteria for evaluating their potential suppliers. The implementation of ISO 14001 EMS will give you an edge over other suppliers.
• Improved compliance with legislative and regulatory requirements will reduce penalties and remediation costs.
• EMS will help reduce incidents of release of uncontrolled pollutants and oil or chemical spills, for example, and thus cut expenses associated with their recovery.
• Cost savings can be obtained from recycling and reusing materials.
• One of the objectives of EMS is the reduction of waste and its possible reuse and recycling, which will result in lower disposal costs.
• Employees will have a safer work environment, thereby improving productivity, lowering the number of sick days and reducing insurable risks.

Here are some examples of the benefits that can be gained from an effective EMS.

In Singapore, SGS-Thomson has saved US$ 200,000 by improving the energy efficiency of its cooling plant. Another company, Sony Display Devices, has saved about US$ 7.5 million a year by eliminating raw material wastage. Baxter, which has obtained ISO 14001 certification, has disclosed savings and cost-avoidance of up to US$ 3.4 million by implementing an environmental management system.

A medium-sized manufacturer of precision fittings for the automotive and refrigeration industries identified inefficiencies in its oil recovery procedures in the course of the EMS implementation. By addressing the problem, the firm expects to realize more than US$ 20,000 per year in savings. Another manufacturer reported a 70% reduction in waste disposal costs as its ISO 14001 EMS was put into place.

Larger companies may not find it too difficult to implement the EMS – they have financial strength and economies of scale. However, many SMEs are likely to have problems in adopting environmental controls because of their lack of resources.

Some governments are therefore providing SMEs financial support for implementing EMS. For example, in Singapore, the government agency SPRING (Standards, Productivity and Innovation Board) has extended its Local Enterprise Technical Assistance Scheme to give financial assistance to SMEs wishing to implement EMS and gain certification to ISO 14001. In India, financial assistance is provided to SMEs for acquiring quality, environmental and food safety (HACCP) management systems.

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