Ims In Small And Medium Enterprises

TOTAL QUALITY MANAGEMENT, VOL. 11, NO. 4/5&6, 2000, S686± S690

Integrated management systems in small and medium enterprises Alex Douglas1 & David Glen2 1

Operations Management, Liverpool Business School, John Foster Building, 98 Mount Pleasant, Liverpool L3 5UZ, UK & 2Quality Manager, John W. Hannay & Company Ltd, Linwood Avenue, East Kilbride, G74 5NE, UK

Introduction Integrated management systems (IMSs) have been discussed and written about by both quality professionals and academic researchers for a number of years now. Such literature has discussed pathways to integration, bene® ts of integration as well as obstacles to integration. Much of what has been written has been based on individual case studies. This paper reports on an empirical study of small and medium-size enterprises (SMEs) that have implemented ISO 9000 quality management systems (QMSs) and ISO 14001 environmental management systems (EMSs). The millions of SMEs in the UK are extremely important to the economic development of the country because of their contribution to outputs and employment (Husband & Mandal, 1999). Systems integration may be particularly appealing to SMEs because of the potential for reducing paperwork, audit time and costs. The main aims of this study were to determine: · · · · · ·

The organizations’ implementation strategies, i.e. which system was implemented ® rst. Whether the same certi® cation body was used for quality and environmental systems. The degree of integration of the two systems. The reaction of the certi® cation bodies to systems integration. Whether any cost bene® ts had accrued due to integration. Perceived bene® ts of integration.

Integrated management systems Integration of systems results when two or more systems are linked such that the independence of one or both systems is lost. Integration should result in a more comprehensive and stronger management system (Karapetrovic & Willborn, 1998b). Today there are a large number of systems in use, QMSs, EMSs, health and safety systems, information systems, security systems, software standards, automotive industry standards and others, all of which can be integrated to some extent. Wilkinson and Dale (1999) suggest that integration can take place in a number of diVerent ways or levels. ISSN 0954-4127 print/ISSN 1360-0613 online/00/04S686-05

€ 2000 Taylor & Francis Ltd

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Level 1 involves achieving a fully integrated, company-wide QMS to ISO 9000. Level 2 integration is based on combining linkages shared by the various standards. · Level 3 integration involves linking QMS and EMS systems with other certi® cated systems such as Investors In People (IIP). · Level 4 integration involves the integration of certi® cated and uncerti® cated systems with the overall management system which, they suggest, results in a `true IMS’ . ·

It is, however, a management decision as to whether or not integration is in the best interests of an organization. Management must determine a strategy to allow integration to happen. Where such a strategy is ¯ awed, the results are parallel policy distribution, discontent and wasted resources ( Jonker & Klaver, 1998). Karapetrovic and Willborn (1998a) oVer three alternative strategies for integration: (1) Establish the QMS ® rst and then the EMS. (2) Establish the EMS ® rst and then the QMS. (3) Establish the QMS and EMS simultaneously. Whichever strategy is used, the development of seamless integrated systems would enable organizations to maximize bene® ts from auditing against a combination of diVerent standards such as those for quality, environment and health and safety. A number of writers have reported on the bene® ts of integrated systems (Karapetrovic & Willborn, 1998a; Keisegen, 1995) as well as some of the problems that need to be overcome to allow integration to occur (Renfrew and Muir, 1998; Tranmer, 1996; Wilkinson & Dale, 1999). Wilkinson and Dale (1998) uncovered a somewhat surprising potential problem area regarding systems integration. They found that some of the UK’s leading certi® cation bodies were not actively promoting integration and, where there was an interest, it was in promoting integration via the identi® ed linkages between systems standards. Hoyle (1998), however, takes the view that not only do certi® cation bodies encourage integration, but they are also prepared to certify the integrated systems. There is a plethora of organizational case studies within the literature reporting the bene® ts that systems integration can bring if implemented successfully (Corcoran, 1996; Gould, 1998; Massey, 1996; Moore, 1998). This paper reports a survey of SMEs that aims to examine some of the issues raised in previous research and literature on IMSs. Methodology A mailed survey was undertaken of a sample of 50 SMEs that had achieved ISO 9000 and ISO 14001. One of the problems in trying to identify a sample for study was the lack of a register, similar to the DTI ISO 9000 register, of organizations that had achieved ISO 14001. The survey questionnaire was sent to the quality /environmental representative in each organization. Thirty questionnaires were returned, of which 28 were usable, giving a response rate of 56%. Results Implementation All of the respondent organizations had implemented their QMS prior to introducing the EMS. As regards certi® cation bodies, 75% (21) of respondents had used the same body for both systems/standards. The remaining 25% (7) had used diVerent bodies. Management of both systems was the responsibility of one representative in 57% (16) of cases, the quality

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Table 1. Most Common Areas of Integration Respondents Area where integration has occurred Auditing Training Management Review Purchasing Supplier Assessment Corrective/Preventive Action Document Control Other

%

n

85 60 65 70 70

17 12 13 14 14

70 90 15

14 18 3

Total n 5 20

representative being the preferred person. Twenty-six respondents (93%) stated that the experiences gained in developing the QMS had helped in developing the EMS. Of those 26 respondents, 20 (77%) felt that they had achieved some cost bene® ts because of it, and this despite the fact that 17 (65%) of them had used external expertise in the form of consultants to help them develop their EMS. Degree of integration Of all the respondents, 71% (20) stated that they had integrated some aspects of both their QMS and EMS. Those areas where integration had taken place are given in Table 1. Of the 20 companies that had integrated their systems to some degree, nine (45%) had developed a single manual and procedures incorporating both systems. Those companies that used separate documentation for both systems (11 or 55%) cited a number of reasons for this, including: · · · · · ·

Reduced audit time by keeping them separate. External approval (other than third party) was required for certain documents. ISO 14001 was still new and not applicable to all the sections of the company that operated to ISO 9000. Too early to assess integration of the systems. Not all procedures are common to the two systems. Not enough common ground between the two standards.

Of the eight organizations that had not integrated any parts of their two systems, only three (35%) had discussed integration with their third party certi® cation body. A large majority of all the organizations surveyed (20 or 71%) felt that the reaction of their certi® cation body to possible integration of the two systems had been positive and, in some instances, integration was actively encouraged. Auditing Of the 20 organizations that had integrated their systems, seven (35%) had separate auditors for each system. The remaining 13 (65%) organizations used the same auditors for both systems. However, seven out of the eight organizations that had not integrated their systems had cross-trained their auditors to allow them to audit both systems because they were

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Table 2. Bene® ts of Integration Yes

No

Bene® ts of Integration

%

n

%

n

Less Procedures Less Paperwork Multi-Functional Auditors Easier to Manage Systems More EVectiveness ± Internally & Externally Better Communications Between StaV Improved Image with Customers Reduced Costs

82 86 89 82 82 61 50 71

23 24 25 23 23 17 14 20

18 14 11 18 18 39 50 29

5 4 3 5 5 11 14 8

Total n 5 28

considering integrating both systems in the future. Of the 28 respondents, 14 (50%) believed that there was a cost bene® t to having auditors trained to audit both systems. The majority of organizations sampled (24 or 86%) stated that they would welcome a single auditing standard, while 23 of those 24 organizations thought that a single auditing standard would encourage integration of the auditing process, which in turn would reduce audit time, disruption and costs. Perceived bene® ts of integration When asked about the range of possible bene® ts that systems integration had brought, or would bring, to their organizations, the representatives responded as in Table 2. Analysis of results All the organizations in this study developed a QMS ® rst, re¯ ecting the ® rst of Karapetrovic and Willborn’ s (1998a) alternative strategies. This is not surprising given that over 75 000 UK organizations have an ISO 9000-certi® ed QMS in place, whereas only slightly in excess of 800 UK organizations have registered with ISO 14001 (Old® eld, 1997). It may be some time before a signi® cant number of organizations adopt either of the alternative implementation strategies, thus allowing comparisons to be investigated. The majority of organizations in this study had achieved levels 1 and 2 integration, as suggested by Wilkinson and Dale (1999). All had company-wide quality systems in place, and those that had integrated their EMS and QMS had done so based on the shared linkages of the standards, for example, document control and auditing. This in turn had given the bene® ts of less paperwork, less procedures, multi-functional auditors, reduced costs and easier to manage systems. Those organizations that had discussed systems integration with their certi® cation body found that their reaction was positive and in many cases they had actively encouraged moves towards integration. This is in marked contrast to the ® ndings of Wilkinson and Dale (1998), who found that some of the UK’s main certi® cation bodies did not actively promote standards integration. However, it does con® rm the views of Hoyle (1998). This may be because Wilkinson and Dale examined the UK’s top ® ve certi® cation bodies and those organizations in this study probably used certi® cation bodies without the top ® ve. Single-sourcing of certifying bodies (achieved by 75% of the organizations in this study) was seen as a means of reducing audit costs through time-saving. Those organizations that

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had diVerent bodies for both systems also agreed that having the same body for both systems would lead to reduced costs. The majority of respondents would welcome a single auditing standard as they viewed this as one way of encouraging integration of the auditing process, which would lead to reduced audit costs through the more eYcient deployment of both human and material resources. Conclusions Where integration of QMS and EMS has occurred in the SMEs studied, it has been based on combining similar aspects of the two standards, thus re¯ ecting Wilkinson and Dale’s (1999) level 2 integration. These organizations have a considerable way to go before `true’ integration can be said to have been achieved. Perhaps this is not surprising given the design of both systems standards and the demands of certi® cation bodies regarding the auditing of the systems. The SMEs are simplifying their management systems within the constraints laid down by the standards themselves and the certi® cation bodies. As more and more systems are introduced, whether certi® cated or uncerti® cated, their management will become more complex and so `true’ integration will become more desirable. However, such a desired state may become yet more diYcult to achieve. References Concoran, I. (1996) One goal one standard, Quality World, 22, pp. 724± 726. Gould, R. (1998) Integrated management systems, Business Standards, September, pp. 20± 21. Hoyle, D. (1998) Question time, Quality World, August, pp. 24± 25. Husband, S. & Mandal, P. (1999) A conceptual model for quality integrated management in small to medium size enterprises, International Journal of Quality and Reliability Management, 16, pp. 699± 713. Jonker, J. & Klaver, J. (1998) Integration: a methodological perspective, Quality World, August, pp. 22± 23. Karapetrovic, S. & Willborn, W. (1998a) Integration of quality and environmental management systems, The TQM Magazine, 10, pp. 204± 213. Karapetrovic, S. & Willborn, W. (1998b) The system’s view for clari® cation of quality vocabulary, International Journal of Quality and Reliability Management, 15(4), pp. 99± 120. Keisegen, G. (1995) The marriage of environment to quality, European Quality, 2, pp. 44± 46. Massey, G. (1996) Tasman hold the combination to management systems, Quality World, October, pp. 727± 730. Moore, S. (1998) On ® rm ground: the Tarmac approach to integration, Quality World, August, pp. 20± 21. Oldfield, H. (1997) Integrating quality into the management mosaic, Quality World, May, pp. 404± 407. Renfrew, D. & Muir, G. (1998) QUENSHing the thirst for integration, Quality World, August, pp. 10± 13. Tranmer, J. (1996) Overcoming the problems to integrated management systems, Quality World, October, pp. 714± 718. Wilkinson, G. & Dale, B.G. (1998) Systems integration: the views and the activities of the certi® cation bodies, TQM Magazine, 10, pp. 288± 299. Wilkinson, G. & Dale, B.G. (1999) Integrated management systems: an examination of the concept and theory, The TQM Magazine, 11, pp. 95± 104.