QUALITY MANAGEMENT

ISO 9004 : 2018

QUALITY MANAGEMENT - QUALITY OF AN ORGANIZATION - GUIDANCE TO
ACHIEVE SUSTAINED SUCCESS

GROUP MEMBERS
KRITI JAIN (SPA/NS/BEM/843)
MAHIMA HARIT (SPA/NS/BEM/846)

School of Planning & Architecture, New Delhi

 TOTAL QUALITY MANAGEMENT

Total Quality Management (TQM) is a management approach that aims to improve the quality of products and
services offered by an organization by focusing on continuous improvement and involving all members of the
organization.
TQM involves the following key principles:

Customer Focused Fact-based decision making

• Understanding and meeting the needs of the customer is the • TQM relies on data and facts to make decisions, rather than
ultimate goal of TQM. Organizations must listen to their customers relying on intuition or guesswork.
and strive to exceed their expectations
Continual improvement Integrated system
• TQM is an ongoing process of improving all aspects of the • TQM is not a standalone process, but rather an integrated
organization, from products and services to processes and systems system that involves all aspects of the organization.
Total employee involvement Communications
• TQM involves all employees at all levels of the organization. • Communication plays a crucial role in TQM as it helps to
Employees are empowered to take responsibility for quality and are motivate employees and improve their morale during
encouraged to identify and solve problems. routine daily operations.
Process-centered Strategic and systematic approach
• TQM involves analyzing and improving processes within the • Critical to quality management is the existence of a strategic
organization, rather than focusing on individual tasks or plan that outlines how an organization intends to achieve its
departments. mission and business goals.
CUSTOMER SATISFACTION

According to ISO 9004, customer satisfaction is the result of meeting or exceeding customer expectations.

Customer satisfaction is an essential component of a sustainable quality management system that supports an
organization's long-term success.

By focusing on meeting and exceeding customer expectations and continuously improving customer satisfaction,
organizations can improve their reputation, increase customer loyalty, and ultimately improve their business
performance.
RISK BASED APPROACH
• According to ISO 9004, a risk-based approach involves identifying potential risks and opportunities related to
the organization's processes, products, and services, and then taking action to mitigate or capitalize on those
risks and opportunities. The standard emphasizes that risk management should be an integral part of an
organization's quality management system, and should be applied throughout the organization.
• Identify risks and opportunities- potential risks and opportunities, evaluating the likelihood and impact of
those risks and opportunities, and prioritizing them based on their significance.
• Develop a risk management plan- The plan should include actions to mitigate or capitalize on risks and
opportunities, and should assign responsibility for implementing those actions.
• Implement the risk management plan- implementing new processes, procedures, or controls to mitigate risks,
or taking advantage of opportunities to improve processes, products, or services.
• Monitor and review- involve regular reviews of the risk management plan and ongoing monitoring of key risk
indicators.
DIFFERENCE BETWEEN ISO 9001 AND ISO 9004

ISO 9001 ISO 9004

Purpose ISO 9001 provides a framework for a systematic SO 9004 is intended to help organizations
approach to managing an organization’s extend the benefits of their quality
processes so that their products or services are management system (QMS) to all interested
consistent and meet client expectations. parties, helping to give sustained success.

Certification ISO 9001 is a requirements document that an ISO 9004 is not intended for certification. It
organization can be certified against to is a guidance document on how to achieve
demonstrate conformance to its requirements. continuous improvement.

Focus ISO 9001 is primarily a customer requirements ISO 9004 focuses on meeting the
standard, ensuring conformance to defined requirements of customers and all other
customer requirements and ensuring effective interested parties to achieve sustained
response to customer feedback. success.

Continual In ISO 9001 continual improvement of the QMS ISO 9004 promotes self-assessment in order
Improvement is achieved mainly by performing management for organizations to identify areas of strength
reviews, internal/external audits and or weakness and opportunities for either
corrective/preventive actions. improvements or innovations, or both.
ISO 9004 VERSIONS

As of Now, there have been four versions of ISO 9004:

1. ISO 9004:1987 - This was the initial version of the standard that provided guidance for quality management
and quality system elements.
2. ISO 9004:2000 - This version provided guidance for performance improvement and included a self-
assessment tool for organizations to evaluate their performance.
3. ISO 9004:2009 - This version was revised to align with the 2008 version of ISO 9001 and provided guidance
for managing the performance of an organization.

4. ISO 9004:2018 - This version was further revised to align with the 2015 version of ISO 9001 and provides
guidance for sustained success of an organization.
ORGANIZATIONS THAT ARE USING ISO 9004

There are many companies in India that have adopted ISO 9004 as a framework for improving their overall
performance and enhancing their competitiveness in the marketplace. Some examples are:
1. Kirloskar Oil Engines Limited
2. Indus Towers
3. Mahindra & Mahindra
4. Godrej & Boyce Manufacturing Company Limited
5. Tata Group
6. Larsen & Toubro Limited (L&T)
7. Indian Oil Corporation Limited (IOCL)
8. Bharat Heavy Electricals Limited (BHEL)
9. Oil and Natural Gas Corporation (ONGC)
10. National Thermal Power Corporation (NTPC)
11. State Bank of India (SBI)
12. Indian Railways
13. Tata Consultancy Services (TCS)

For the purpose of this study, we have taken Larsen & Toubro (L&T) as an case example.
ISO 9004:2018 INTRODUCTION

• Provides guidelines for organizations to sustainably achieve success in the long term through effective quality
management.
• The sustained success of an organization is the result of its ability to achieve and maintain its objectives in the
long-term.
• Purpose: The standard aims to help organizations improve their performance by providing guidance on a
holistic approach to managing an organization.
• Scope: ISO 9004:2018 is applicable to all types of organizations, regardless of their size, type and activities. It
also provides a self assessment tool to review the extent to which the organization has adopted the
concepts
• While ISO 9001:2015 focuses on providing confidence in an organization’s products and services, ISO
9004:2018 focuses on providing confidence in the organization’s ability to achieve sustained success.
 QUALITY OF AN ORGANIZATION AND SUSTAINED SUCCESS
The degree to which the inherent characteristics of the organization fulfil the needs and expectations of its
customers and other interested parties, in order to achieve sustained success.

Customer Relationship
Focus management

Interested Partners/Supplie
Parties Society Employees Shareholders Customers Other
rs
• Sustainable • Environmental • Quality of • Sustainable • Quality of • As appropriate
Partnership protection and work life Growth and products and to the sector
Needs and social Profitability services or other
Expectations responsibility interested
parties
CONTEXT OF AN ORGANIZATION

Key factors to consider when determining the context of an organization

1. Interested parties: Those parties that can affect, be affected by, or perceive themselves to be affected by a
decision or activity of the organization.
2. External issues: Factors exist outside the organization that affect organization’s ability to achieve success.
Examples: statutory and regulatory requirements, competition, social, economic, political and cultural factors,
natural environment.
3. Internal issues: Factors exist within the organization that affect organization’s ability to achieve success.
Examples: size and complexity, type of products and services, activities and associated processes, strategy,
resources, levels of competence and organizational knowledge, innovation.
IDENTITY OF AN ORGANIZATION
Mission: The organization’s purpose for existing
Vision: Aspiration of what an organization would like to become
Values: Principles and thinking pattern of an organization in support of mission and vision.
Culture: Beliefs, history, ethics, observed behaviour and attitudes that are interrelated with the identity of the
organization.

Case Example - Identity of L&T Construction as an organization

Vision Mission Culture

• To be a global, socially • The mission of "L&T, is driven by • L&T has a strong organizational
responsible corporation that values, which is aimed at ensuring culture that is built on its core
provides innovative and a workplace that fosters fairness, values. The company's culture is
sustainable solutions, exceeding respect, transparency and integrity. characterized by a high degree
customer expectations and The Mission is to achieve of professionalism, a focus on
enhancing shareholder value. excellence in all their business innovation and excellence, a
activities, underpinned by the
commitment to continuous commitment to ethics and
improvement and innovation, and sustainability, and a
to contribute positively to the collaborative and diverse work
communities in which they environment.
operate.
LEADERSHIP
Policy and strategy
• Top management sets out organization’s policy to address aspects such as compliance, quality, environment,
energy, employment, occupational health and safety, quality of work life, innovation, security, privacy,
data protection and customer experience.
• Strategy should reflect the identity of the organization, its context and long-term perspective.
• Top management should demonstrate leadership in the organization by defining and maintaining the
organization’s objectives based on its policies and strategy, as well as by deploying the objectives
at relevant functions, levels and processes.
• Objectives should be defined for the short and long term and should be clearly understandable.
LEADERSHIP IN L&T

The top leaders of L&T consists of Chairman, MD, CEO and CFO. Some of the leadership qualities of top leaders in
L&T are:
1. Visionary: Visionary leaders who have transformed L&T from a construction company to a technology and
engineering conglomerate. They have a clear vision for the company's future and have implemented strategies
to achieve it.
2. Strategic thinking: The leaders here are strategic thinker who have expanded L&T's operations globally,
diversified the company's portfolio, and made significant investments in research and development.
3. Decisiveness: They are known for making tough decisions quickly and confidently, even in the face of
uncertainty and are willing to take risks to achieve the company's goals.
4. Innovation: They have a strong advocate for innovation and have encouraged L&T's employees to think
creatively and develop new solutions to challenges facing the company.
5. Empowerment: They are committed to empowering L&T's employees and have created a culture of
ownership and accountability.They have also encouraged diversity and inclusion within the company.
6. Integrity: They are man of integrity who have always prioritized ethical business practices. They have been
vocal about their commitment to transparency and corporate governance.
7. Resilience: They have faced many challenges throughout their career, but remained resilient and have always
bounced back stronger.They are known for their perseverance and determination.
PROCESS MANAGEMENT

Schematic representation of the elements of a single process

PROCESS MANAGEMENT

Determination of processes
The purpose, Objectives to be achieved, Outputs, Needs and expectations of interested parties, Changes in
operations, Impact of process, inputs and resources needed, activities, constraints, risk and opportunities.

Responsibility and authority for processes

For each process, the organization should appoint a person or a team depending on the nature of
the process and the organization’s culture, with defined responsibilities and authorities to determine,
maintain, control and improve the process and its interaction with other processes it impacts and
those that have impact on it.

Managing processes
• Manage the processes and their interactions, including externally provided processes, as a system to
enhance alignment/linkage between the processes;
• Visualize the network of processes, their sequence and interactions
• Determine criteria for the outputs of processes
• Assess the risks and opportunities
• Review the processes and their interrelationships on a regular basis and take suitable actions for
control and improvement.
 PROCESS MANAGEMENT IN L&T
L&T has implemented a robust process management system that is designed to ensure that its operations are
efficient, effective, and aligned with the company's strategic goals. The company's process management system
includes the following elements:
Process Process
Process mapping Process governance Process training
improvement automation

• They break down • Continuous • They have invested • They have • They provide regular
each process into its improvement in process established a robust process training to
component parts approach to process automation process governance its employees to
and identifying the management, which technologies to framework to ensure that they are
inputs, outputs, and involves regularly streamline its ensure that its familiar with the
key steps involved. reviewing and operations and processes are aligned company's processes
improving its reduce manual with the company's and procedures.
processes to make effort. strategic goals and
them more efficient comply with • Training on new
and effective. • They use robotics, regulatory processes, updates
artificial intelligence, requirements. to existing
• They use tools such and other advanced • They have processes, and
as Lean Six Sigma technologies to established process training on process
and Kaizen to automate repetitive ownership and improvement tools
identify and eliminate tasks and improve accountability, and techniques
waste and process efficiency. monitoring process
inefficiencies in its performance, and
processes. implementing
controls to mitigate
risks.
RESOURCE MANAGEMENT

• Resources support the operation of all processes in an organization

• Critical for ensuring effective and efficient performance and sustained success.
• Examples: Financial resources, people, Organizational knowledge, Technology, infrastructure, such as
equipment, facilities, energy and utilities, the materials needed for the provision of products and services,
information

1. People- Competent, engaged, empowered and motivated people are a key resource

• Engagement of people: developing a process to share knowledge, continually reviewing their level of
satisfaction, relevant needs and expectations, providing opportunities for mentoring and coaching, promoting
team improvement activities
• Empowerment and motivation of people: Recognition system, provide incentives, celebrating the
achievement of objectives
• Competence of people: determining, developing, evaluating and improving the competence of people at all
levels.

2. Organizational knowledge: lessons learned from failures and successful projects, knowledge, insights and
experience of its people.
3. Technology: the current levels, and emerging trends of technology, both within and external to the
organization, the financial resources needed to adopt the technological changes, the risks and opportunities.
RESOURCE MANAGEMENT
4. Infrastructure and work environment
The organization should determine what is needed and coordinate how these resources will be
allocated, provided, measured or monitored, optimized, maintained and protected.

4.1 Infrastructure
In managing its infrastructure, the organization should give appropriate consideration to factors such as:
• Dependability (including consideration of availability, reliability, maintainability and maintenance support,
as applicable, including safety and security);
• Infrastructure elements needed for the provision of processes, products and services;
• The efficiency, capacity and investment required;
4.2 Work environment
• Physical characteristics like Heat, Humidity,Airflow, Hygiene, Noise & cleanliness.
• Workstations and equipments and Facilities for people in the organization
• Psychological aspects
• Encouraging Personal growth learning, knowledge transfer and teamwork
• Health and safety guidelines
• Creative work methods to know the potential of employees in the organization

5. Externally provided resources

6. Natural resources: The organization should address how to determine, obtain, maintain, protect and use
essential resources such as water, soil, energy or raw materials.
 RESOURCE MANAGEMENT IN L&T

L&T has implemented a robust resource management system that is designed to ensure that its resources are
allocated and utilized effectively, efficiently, and in alignment with the company's strategic goals. The company's
resource management system includes the following elements:
Human resource Equipment Material Financial
Risk management
management: management management management

• L&T has a dedicated • L&T manages a large • L&T manages a large • L&T has a dedicated • L&T has established a
human resources fleet of construction inventory of finance and robust risk
department that is and engineering construction accounting management
responsible for equipment, including materials and supplies, department that is framework to identify,
managing the cranes, bulldozers, including steel, responsible for assess, and mitigate
company's workforce. and excavators. cement, and other managing the risks to its resources.
• This includes • The company uses building materials. company's financial • This includes
recruiting and hiring advanced • The company uses resources. establishing risk
employees, managing technologies such as advanced • This includes management policies
employee telematics and technologies such as budgeting and and procedures,
performance, predictive radio frequency forecasting, financial monitoring and
providing training and maintenance to identification (RFID) reporting, and reporting on risk
development ensure that its to track and manage managing the exposure, and
opportunities, and equipment is well- its inventory, ensuring company's cash flow implementing
ensuring compliance maintained and that materials are and investments. controls to minimize
with labor laws and available when available when risk.
regulations. needed. needed and
minimizing waste and
inefficiencies.
ANALYSIS AND EVALUATION OF AN ORGANIZATION’S PERFORMANCE

Systematic approach to collect, analyse and review available information.

• The organization’s performance

• The status of the organization’s internal activities and resources, which can be understood through internal
audits or self-assessment
• Changes in the organization’s external and internal issues and the needs and expectations of the
interested parties.

Performance indicators

Steps for using performance indicators

ANALYSIS AND EVALUATION OF AN ORGANIZATION’S PERFORMANCE
1. Performance analysis- Analysis of the organization’s performance should enable identification of issues,
such as insufficient or ineffective resources, competencies, organizational knowledge and inappropriate
behaviour, risks and opportunities, weakness in leadership activities, potential strengths etc.
2. Performance evaluation- from the viewpoint of the needs and expectations of its interested parties,
applicable objectives.
3. Internal audits- determining the levels of conformity of the organization’s management system to its
selected criteria.
4. Self assessment- Self-assessment should be used to determine the strengths and weaknesses of the
organization as well as best practices,
5. Reviews- Reviews of performance measurement, benchmarking, analysis and evaluations, internal audits and
self-assessments should be performed by appropriate levels and functions of the organization, as well
as by top management.
 ANALYSIS AND EVALUATION OF AN ORGANIZATION’S PERFORMANCE AT L&T

The company's performance can be evaluated based on several key indicators, including financial performance,
customer satisfaction, employee engagement, and social responsibility.

Financial performance Customer satisfaction Employee engagement Social responsibility

•L&T's financial performance can •L&T's customer satisfaction can •L&T's employee engagement •L&T's social responsibility can
be evaluated based on metrics be evaluated based on metrics can be evaluated based on be evaluated based on metrics
such as revenue growth, such as customer retention, metrics such as employee such as environmental
profitability, and return on repeat business, and customer satisfaction, retention, and sustainability, community
investment. feedback. productivity. engagement, and ethical
•According to the company's •Diverse range of customers •Large and diverse workforce, business practices.
annual report for fiscal year across its various business with employees from various •Strong commitment to
2021, L&T's consolidated segments, including government backgrounds and skill sets. environmental sustainability and
revenue increased by 6% agencies, private companies, •Implemented several initiatives has implemented several
compared to the previous year, and individual consumers. to promote employee initiatives to reduce its
while its net profit increased by •Strong reputation for quality engagement, including environmental impact, such as
12%. and reliability, which is employee training and using renewable energy sources
•The company's return on reflected in its high customer development programs, and implementing waste
equity (ROE) was 16.7%, which retention rates and repeat performance management reduction programs.
is above the industry average. business. systems, and employee •Strong commitment to
•These metrics indicate that •Solicits feedback from its recognition programs. community engagement, with
L&T is performing well customers and uses this •Strong employee retention rate initiatives such as supporting
financially and generating value feedback to improve its and a low attrition rate, education and healthcare
for its shareholders. products and services. indicating that employees are programs.
satisfied with their work and •Strong reputation for ethical
the company's culture. business practices, with a focus
on transparency and integrity.
IMPROVEMENT, LEARNING AND INNOVATION

Improvement- activity to enhance performance

1. Learning
• Collected information relating to various external and internal issues and interested parties, including
success stories and failures;
• Insight through in-depth analysis of the information collected.
1. Innovation
Innovation should result in improvement leading to new or changed products or services, processes,
market position, or performance, enabling realization or redistribution of value.

• Application
• Timing and risk
 IMPROVEMENT, LEARNING AND INNOVATION AT L&T
Larsen & Toubro (L&T) is committed to continuous improvement, learning, and innovation to ensure that it remains
competitive and delivers high-quality products and services. The company has several initiatives in place to foster
innovation and learning, including:

Research and Learning and Continuous Innovation

Development Development Improvement Challenges

• L&T invests heavily in • L&T has a • L&T is committed to • L&T organizes

research and comprehensive learning continuous innovation challenges
development to drive and development improvement and has to encourage
innovation and stay program that provides implemented various employees to develop
ahead of the curve. employees with the initiatives to drive new ideas and solutions
• It has several research necessary skills and efficiency and to address business
centers, including the knowledge to perform productivity. challenges.
L&T Technology Centre their jobs effectively. • It has a structured • It provides a platform
in Chennai, which • It offers training approach to process for employees to
focuses on developing programs, workshops, improvement, using showcase their ideas
cutting-edge and leadership tools such as Six Sigma and offers support to
technologies. development initiatives and Lean Manufacturing bring those ideas to
to help employees to eliminate waste and fruition.
grow and develop their improve quality.
careers.
SELF ASSESSMENT TOOL

● To provide an overall view of the

performance of an organization
● To provide degree of maturity of its
management system
● It helps to identify area of
improvement
● It uses five maturity levels, which can
be extended to include additional
levels or otherwise customized as
needed.
● An organization can identify its
strength and weaknesses by
identifying the current maturity level
● The information gained from self
assessment will be used to
benchmark with other organizations,
monitor the progress of the
organization with time and share
learning throughout the organization.
PROS AND CONS OF ISO 9004

PROS CONS
Holistic approach: Comprehensive and holistic approach Not a certification standard: It is a guidance document
to improving organizational performance. It provides and not a certification standard. This means that
guidance on managing not only quality but also other aspects organizations cannot obtain certification to ISO 9004:2018,
of the organization, such as leadership, strategy, resources, which may limit its appeal to some organizations.
and knowledge management.
Continuous improvement: Emphasizes the importance Limited focus on specific areas: While it provides
of continuous improvement and encourages organizations to guidance on improving overall organizational performance, it
identify and implement opportunities for improvement in all may not provide specific guidance on certain areas of the
areas of their operations. organization, such as marketing, sales, or finance.
Customer focus: Places a strong emphasis on meeting Not a guarantee of success: While it provides guidelines
customer needs and expectations. It encourages for achieving sustained success, it does not guarantee
organizations to understand their customers' requirements success. Organizations must still work hard to implement
and to use this knowledge to drive improvement. the standard effectively and continuously improve their
processes
Global recognition: An internationally recognized Can be complex: The guidance provided in it can be
standard, which means that organizations that implement it complex and may require significant effort and resources to
can demonstrate to their customers and stakeholders that implement effectively. Smaller organizations may struggle to
they are committed to excellence and continuous implement some of the recommendations.
improvement.
CHARACTERISTICS OF A SUCCESSFUL ORGANIZATION
There are several characteristics that successful organizations tend to have in common.

Clear Mission and

Strong Leadership Adaptability
Vision

Employee
Customer Focus Strong Culture
Engagement

Focus on Results
SUCCESSFUL ORGANIZATIONS NOT FOLLOWING ISO 9004

Organizations Factors that lead to success

Apple • Stringent quality control measures, which include testing its products
rigorously before release to ensure they meet the company's high
standards.
• Emphasis on innovation and design, which have helped the company to
stay ahead of its competitors in the tech industry.
• Strong brand identity
• Customer loyalty
• Marketing strategies
Amazon • Customer-centric approach
• Innovative technology
• Logistics operations
Google • Innovation
• Data-driven decision-making
• Strong corporate culture
Zara • Ability to respond quickly to changing fashion trends and bring new
products to market in a timely manner.
Tesla • Innovation and disruptive approach to the automotive industry
CONCLUSION

CONCLUSION • ISO 9004 focuses mainly on

customer satisfaction and
relationship management which
includes factors like identity of an
organization, leadership, process
management, resource management,
evaluation of organization’s
performance, improvement, learning
and innovation.
• Also there are other organizations
which do not follow ISO 9004 but
still successful because of major
focus on innovation and
disruptive approach, marketing
strategies, finance, sales.
• Hence we can say that ISO 9004
does not guarantee success of an
organization but incorporating
other aspects of successful
organizations can improve the
guidelines to achieve success.