IMPLEMENTING A FUNCTIONAL ISO 9000 QUALITY MANAGEMENT SYSTEM AMONG MSMES IN A.P

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1 IMPLEMENTING A FUNCTIONAL ISO 9000 QUALITY MANAGEMENT SYSTEM AMONG MSMES IN A.P Dr. S. DILLI Associate Professor Bangalore Institute of Management Studies, Bangalore sdillisdilliphd@gmail.com Dr. N. GURAVAIAH Academic consultant,department of Commerce Vikrama Simhapuri University, Nellore. dr.ngr18@gmail.com Dr. P. SUBRAMANYAM Associate Professor, Department of Management Studies Kuppam Engineering College, Kuppam. subbu_phd@yahoo.com Abstract ISO International standards help business of all shapes and sizes to works more efficiently, increase productivity and access new markets. For micro small and medium enterprises these benefits can make a significant difference to annual turnover, sometimes the difference between success and failure. The aim of this paper is to provide guidance for the implementation of ISO 9000 quality management system (QMS) in MSMEs of Andhra Pradesh. This paper focuses on ISO 9000 standards and MSMEs. Use of international standards by MSMEs include the opening up of export markets as products will be compatible on a global scale, increased efficiency and increased credibility and confidence as customers from all over the world recognize ISO international standards. Key Words: ISO, MSMEs, Quality, QMS, TQM. 25

2 CONCEPTUAL FRAMEWORK ISO 9000 Standards ISO standards are developed and administered by the International Standards Organization. The general purpose of ISO 9000 standard is to provide standards for the development, implementation and management of a quality management system ISO 9000 is a great management tool to promote excellence throughout all functions or all enterprises in all sectors of the economy, from manufacturing companies to service businesses to health care providers. The ISO 9000 standards family of standards are related to quality management systems and designed to help organizations ensure that they meet the needs of customers and other stakeholders. The standards are published by ISO, the International Organization for Standardization and available through National standards bodies while meeting statutory and regulatory requirements. ISO 9000 deals with the fundamentals of quality management systems, the innovation friendly ISO standards for systems and procedures documentation have received nearly universal acceptance in business and industry and is a virtual necessity for companies of all kinds doing business in or with European countries. Role of MSMEs The role of micro, small and medium enterprises (MSMEs) in the economic and social development of the country is well established. The MSME sector is a nursery of entrepreneurship, often driven by individual creativity and innovation. This sector contributes 8 per cent of the country s GDP, 45 percent of the manufactured output and 40 percent of its exports. The MSMEs provide employment to about 60 million persons through 26 million enterprises. The labour to capital ratio in MSMEs and the overall growth in the MSME sector is much higher than in the large industries. The geographic distribution of the MSMEs is also more even. Thus, MSMEs are important for the national objectives of growth with equity and inclusion. Realizing the potential of the sector, the union government has recently taken major initiation to revitalize the sector including implementation of the MSMEs Act The role of ISO in MSMEs ISO International Standards help businesses of all shapes and sizes to work more efficiently, increase productivity and access new markets. ISO International Standards are developed on a consensus basis and reflect the views of many stakeholders including technical experts from business, government representatives, academics and consumers. Being actively involved in this process has widespread benefits for MSMEs as it allows them to play a role in the rule making process that will eventually define the sector. OBJECTIVES OF THE STUDY o To identify the reasons for implementing ISO 9000 among MSMEs In Andhra Pradesh 26

3 o To gain an insight about the benefits of implementing ISO9000 standards adopted and practiced by the MSMEs in Andhra Pradesh o To identify the difficulties in implementing and practicing ISO 9000 standards among MSMEs in Andhra Pradesh. RESEARCH METHODOLOGY The type of research used for this study was analytical research. The population of our research was all the MSMEs in A.P. The data was collected with the help of questionnaires and interaction with the employer and employees. The primary daia during the course of study was collected through questionnaire. The secondary data was collected from Reference books, Magazines and news papers, Articles, from internal etc. Analysis and interpretation means analyzing the primary data and interpreting the result. Here, primary data is first collected and it is edited, coded and tabulated to extract useful information. Percentage method is used to analyze the data. Percentage can be calculated by summing up the frequencies of each particular class of interval and taking it as percent age. Graphs are used to represent the information. It helps others to easily understand the data analysis and interpretation is the most important part of the project. Pie chart and bar diagram will help the reader to understand it easily. The sample size of the project is 25.Data is collected by giving questionnaires to the MSMEs who have implemented 9000 standards. The total investment of most of the firms is less than 50 lakhs with less than 25 years in business. All the enterprise are aware of IS09000 standards. FINDINGS * ISO as An Industrial Standard o Only 48%of the MSMI-s prefer ISO 9000 standard products for their products* process. o ISO 9000 Standards give MSMEs a competitive edge. o ISO 9000 Standards make the brand name of MSMEs products international^ recognized o MSME-s" very truly appreciates ISO 9000 certification for the company imaged quality in the market. * Ensured Quality o Only 40 % of the MSMEs' agree increased customer satisfaction in terms of quality) is a major benefit of' ISO 9000 certification. o Only 56% of the companies compulsorily ensure ISO 9000 certification from their suppliers. o Industrialists consider ISO 9000 Certification as a trusted framework to ensure quality. * Societal Image o MSMHs use ISO 9000 Certification as an industrial standard for focusing on customers. o MSMLs believe that continual improvement through ISO 9000 will add image to the company in the society. o Standards help MSMEs grow. * Difficulty in Implementing o Only 16% of MSMEs top management is committed towards ISO 9000 certification, 27

4 o Excessive control over procedures which make functioning of management rigid. SUGGESTIONS * ISO as an Industrial Standard o MSMEs should ensure Total Quality Management at all levels of the production process. o MSMEs should have continuous training programs for their employees to comply with the ISO 9000 standards. o ISO 9000 Standards to be implemented by MSMEs to compete on a level playing field with bigger enterprises. * Ensured Quality o MSMEs should set their own quality standards and not just fully rely on ISO certification. o Awareness programs should be conducted among the customers, employees and local community regarding the importance of ISO 9000 certification. * Societal Image o MSMHs should take adequate steps to ensure energy efficiency, pollution prevention, waste prevention and recycling which can result in significant cost reduction for the business. o ISO standards should be implemented to enhance credibility and confidence for the customers. * Difficulty in implementing o Top management of MSMEs should show more concern towards laying down ISO 9000 certification standards. o Ensure that there is trust between managers and employees. o Consult the employees on business matters and especially in laying standards. CONCLUSION Since MSMEs contribute significantly to the economy and are geographically widely spread in a country like India. ISO 9000 certification for MSMEs act as a Passport for International Market and helps to increase market image through increased customer confidence. It improves quality and cuts down costs owing to rejection control. It clearly defines responsibility and authority of the employees. ISO 9000 consistently improves quality and this states that company has a system in place to insure that any product or service it sells will consistently meet international standards of quality. REFERENCES 1. Summers S.C Donna.(2QQ5).Quality Management- creating and sustaining organizational effectiveness. Ohio: Pearson Prentice Hall. 2. Chase.B.Richard. Jacob Robert &Aquilano, J.Nicholas.(2Q03).Operation Management for competitive advantage,.nzv» Delhi: Tata McGraw-Hill Publishing Co.Ltd. 3. Furlong Nancy, Lovelace Eugena &Lovelace Kiisim.Research Method and Statistics. f2000).tokyo :Hear court college publishers. 4. Panneersel vam. R.( 20Q2)Production and operations Management..New Delhi :Prentice Hall of India Pvt Ltd. 5. Render Barry &HerzerJay( \996)Principles ofoperations Managemen., New Jersey:Prentice Hall International Inc. 28

5 6. Brace Ian( 2Q05)Questionnaire Design.Kogan page London 7. Paul Praveen &Arasu Senthil. (2007).TQM: 2nd edition Pune: Scitech publication( India) Pvt Ltd 8. Noon Hamid& Radford Russell (\995)Production andoperationsmanagement-total quality and responsiveness.snevtyqrk : McGraw-Hill Inc 9. Pandey.A.P (2QQ7).Indian MSMEs and their uniqueness in the country. MPRA Paper No.6086 ( 10. H.James Harrington, Total Management of Continuous Improvement, Editorial Mc.Graw Hill. Colombia 1996, pg. 378 (Text Guide) 29

MSMEs IN ECONOMIC DEVELOPMENT - A CASE STUDY OF SHIMOGGA AREA

MSMEs IN ECONOMIC DEVELOPMENT - A CASE STUDY OF SHIMOGGA AREA Appasaba L. V. 1, Kiran.G 2 and Dr. A. M. Kadakol 3 1 Research Scholar, Department of MBA, Kuvempu University, Shankaraghatta, India Email:meappu6877@gmail.com