Implementing a Quality Management System (QMS) can offer noticeable benefits to your entire organization.
Some of these benefits can be measured using financial metrics such as return-on-investment (ROI). One study found the average QMS implementation yields 300% ROI. Empirical studies confirm that organizations also achieve less easily measured returns, most commonly a greater awareness of quality, happier customers, improved brand valuation, and more consistent operations.
If you're researching Quality Management Systems, you're likely already aware that QMS can mitigate regulatory risk by helping your organization comply with requirements and standards for quality-driven operations. However, risk reduction isn't the only noticeable benefit. An effective QMS can have a transformative impact on company culture by creating a formal system of process, procedure, responsibilities, and software.
Regulatory risk, compliance, and certification are critically important objectives for implementing a QMS. However, they're not the only outcomes you can expect when adopting the right quality system. In this post, you'll learn five of the most common benefits organizations in highly regulated industries enjoy with QMS adoption.
The Top 5 Benefits of Implementing A Quality Management System
Quality Management Systems enable businesses in highly regulated industries to consistently apply quality processes to produce products which meet customer expectations and regulatory requirements. QMS frameworks such as ISO 9001:2015 provide a comprehensive blueprint for customer-focused quality management based on principles for leadership, the workforce, processes, improvement, evidence-based decisions, and relationships.
Research confirms that implementing a QMS such as ISO 9001 or 13485 can offer near-term benefits to adopting organizations. One Harvard Business Review study focused on organizations who achieved ISO certification, and found these companies have higher rates of "corporate survival, sales, employment growth, and wage increases than a matched group of non-adopters." Sixty-five percent of organizations achieve at least $25,000 in savings within one year of adopting a formal QMS, with 27 percent saving at least $100,000.
Despite the abundant positive evidence, there is a certain number of myths which surround QMS among prospective adopters in highly regulated industries. Some companies believe that systems and certification are limited to large, well-established firms. Others feel certification has little practical value. In actuality, small firms achieve disproportionate benefits from implementing QMS compared to their larger peers. For most organizations, a QMS is not just a piece of software or a cost center. QMS adoption can offer obvious benefits such as operational consistency, efficiency, improvement, and collaboration.
For a comprehensive look at how QMS adoption can benefit your bottom line, we recommend 13 Bottom Line-Boosting Benefits of a Quality Management System.
1. Operational Consistency
Inconsistent operations are the enemy of total quality management. Without standardized operations, your organization cannot consistently ensure the quality of products or improve efficiency. Business researchers have found that inconsistent business processes can have five times more negative impact on the customer than the delivery of an inferior product. In highly regulated industries, inconsistent processes which result in unreliable product quality can have particularly severe consequences.
Operational consistency is a foundational component of Quality Management Systems. Implementing a QMS requires companies to define and describe the best practices for all business responsibilities, from quality control to management review. Creating standard operating procedures (SOPs) and a prescribed series of checks and balances minimizes the risks of nonconformances and maximizes organizational efficiency.
QMS implementation helps companies achieve stability in project activity and aligns efforts towards the production of quality products which meet customer expectations. A consistent approach to operations can save money. Business process standardization can reduce process costs by 15 percent and reduce errors by 30 percent. Operational consistency can offer other measurable benefits such as reduced process throughput times, fewer customer complaints, and superior forecasting ability.
2. Continuous Improvement
Continuous improvement is among the core principles of ISO 9001 and other quality management systems. ISO writes that “continual improvement should be a permanent objective of the organization.” When adopting a QMS leads to cultural change, embracing the principle of improvement can have lasting benefits to the organization such as stronger performance, strategic leadership, and staff engagement.
Continuous improvement should be a primary objective for every member of the workforce to adopt the principles of gradual improvement and breakthrough improvement. SOPs should support the use of regular audits and assessments against the QMS framework to ensure progress towards standards. By training every member of the organization on the use of Plan-Do-Check-Act or Deming cycles, the organization can create a culture of constant problem solving and innovation.
3. Employee Communications and Onboarding
Recently, Forbes predicted that “employee experience" would be the preeminent corporate priority for the year to come. Employee experience, or EX, is defined as the total of an employee's interactions with the organization and culture, spanning from recruitment and onboarding to environment and technology. "Experiential organizations" who invest in culture, collaboration, and education experience higher rates of innovation and customer satisfaction than other organizations.
ISO 9001 addresses the importance of internal communication, specifying that “top management shall ensure that appropriate communication processes are established within the organization and that communication takes place regarding the effectiveness of the Quality Management System.” This verbiage places the responsibility directly on senior leadership to drive a positive employee experience, but it also emphasizes the importance of two-way communication in the organization. Organizations are encouraged to create a collaborative culture where employees provide frequent feedback.
Without cultural change, a QMS is nothing more than a series of documents and policies. Employee communications are at the core of creating a quality-driven culture where people openly share information and understand the company's values. Communication and education are vital to obtaining employee buy-in to quality objectives. Educating employees on the customer and quality systems is an ongoing objective, but training and education efforts should begin with a standardized onboarding process for new hires.
4. Evidence-Based Decision Making
An effective Quality Management System should create standardization where standardized processes add value, and promote flexibility when needed to achieve quality objectives or continuous improvement. One area where QMS should encourage flexibility is the adoption of evidence-based decision making based on real-time oversight into systems and data.
In practice, the concept of evidence-based decision making involves the use of data gathered through monitoring and measurement methods. This data is compared to the desired outcomes and organizational quality objectives. The real-time use of data and metrics can provide an objective understanding of whether a process is successful or requires correction. Data-informed decisions are made possible by @MS software which provides real-time oversight into systems for training, document management, compliance, and CAPA.
Evidence-based decision making can benefit the organization by removing subjectivity from leadership. The real-time use of data can facilitate continuous improvement toward strategic goals. An eQMS system which provides transparency can enable organizations to mitigate the risks of non-compliance or product quality issues in real-time.
5. Increased Profits
Research has established that many organizations achieve a direct financial return on Quality Management System implementation. An ISO literature review of 42 studies identified several reasons QMS support profitability. Internal, external, and signaling benefits all collectively contribute to stronger financial performance:
- Internal benefits such as increased efficiency and productivity lower costs
- External benefits such as increased sales or new market access impact income
- Signaling benefits include new market access or increased market share
This study highlights the value of Quality Management System implementation for organizations that aren't positioned to profit from higher sales, such as startups in the R&D phases of product development. Adopting a QMS can maximize internal efficiency and create a reliable baseline as the company's product approaches market approval.
Management systems can improve efficiency by preventing problems throughout the product lifecycle by providing tools to identify issues before they result in rework, waste, or nonconformances.
Company Size Matters When Implementing a Quality Management System
Quality Management Systems can offer a diverse range of business benefits, but they're not a magic potion. Implementing a QMS cannot cure an organization which isn't led by quality-driven management. Successfully shifting to a quality-driven culture requires full support from the leadership team and a commitment to change.
Fit is among the most important considerations when evaluating certification, software, and vendor options for Quality Management. While QMS implementation can introduce significant change, the change should be logical and provide clear value. Trying to build your company to fit the wrong QMS software is a recipe for disaster. The right Quality Management System software should fit seamlessly into your organization and provide a framework for improvement.
To achieve the financial and collaborative benefits possible with adopting a QMS, make sure your selection is right-sized for your company's present state and near-term growth goals. Qualio is the first Quality Management System software designed specifically for the needs of life sciences companies with 5-250 employees following FDA and ISO standards. To learn more, request a demo of Qualio.