Use ISO 9004 To Improve Performance

It's a powerful modern business management tool

by J.P. Russell

ISO 9004:2000 is a valuable tool for improving an organization's effectiveness, efficiency and the quality of its products and services. It is a standalone document that should be used for improving organization performance. Quality management and business principles are deeply rooted in it, and there are clause-by-clause links to ISO 9001:2000.

The biggest misconception about ISO 9004:2000 is that it is supposed to be used as an implementation guide for ISO 9001. Even though ISO 9004 may promote a better understanding of the intent of the ISO 9001 requirements, ISO 9004 is much more valuable than that.

ISO 9004 was written for top management to use. However, it is not written like a book or a procedure. Instead, it is a technical document top managers must study to know how to use it to improve organization performance, reduce costs, satisfy customers and improve competitiveness.

Few quality professionals and managers seem to understand the tremendous opportunity ISO 9004 represents. Most are still struggling with "what good is it?" and "why use it?" questions.

Assess Your Organization

ISO 9004 can be used for self-assessment to determine how your organization compares to the performance improvement guidelines. The standard is a collection of statements indicating what the organization should do. The should-do statements can be used to create a checklist for evaluators.

The ISO 9001 shall requirements are included in ISO 9004:2000 so that it will be easy to link them to the more challenging should performance improvement guideline statements of ISO 9004. Many of the 280 individual should statements are expanded with a list of tasks or activities that should be considered for implementation.

Organizations may either self-assess or hire outside auditors to evaluate them against the ISO 9004 criteria. Many organizations conduct periodic self-assessments to provide fact based information to management about how they compare to performance improvement criteria and to better determine where additional resources should be applied.

Using the ISO 9004 criteria, organizations can assess the maturity of their quality management system (QMS) compared to world-class performance. The self-assessment can be used to identify opportunities for improvement. In fact, if the assessment team has the necessary resources, its members should forecast the benefits of improving the QMS based on ISO 9004 considerations. It is not uncommon for assessment teams to be multidisciplinary.

Organizations commonly use quality award criteria, such as the Malcolm Baldrige National Quality Award program in the United States, to conduct self-assessments. Conducting an assessment using the ISO 9004 criteria is not the same as using quality award criteria. But, if your organization conducted an ISO 9004 assessment and wanted to move to the quality award criteria, it would be like taking another step up a ladder instead of needing a new ladder.

Appendix A in the ISO 9004 standard contains useful information about self-assessments and a maturity model to grade your organization. Organizations can also use the 57 questions provided in Appendix A3 or develop their own questions based on the should statements. The appendix also proposes benefits resulting from improvement actions.

Better Risk Assessment

QMS standards are really a set of controls for specified activities or actions. The standards list activities, processes or transformations that represent risk to organizations. To better manage risk, organizations can compare the processes they currently control to the new ISO 9004 processes and process enhancements.

Perhaps measuring and monitoring customer satisfaction of all interested parties may be appropriate to lower management risk. ISO 9004 establishes controls to measure satisfaction of interested parties such as local government, regulators, suppliers, bankers, union officers and partners. ISO 9004 has also added topics such as information and financial resource controls.

The writers of ISO 9004 identified processes that could add value to an organization. Since the clause numbering of ISO 9001 and ISO 9004 is the same for the first two number levels (8.4 in ISO 9001 is the same as clause 8.4 of ISO 9004), it is easy to cross-reference ISO 9004 to determine what controls could benefit your organization.

The infrastructure (clause 6.3) and work environment (clause 6.4) criteria demonstrate how ISO 9004 is more comprehensive than ISO 9001 for assessing risk.

Build a Business Improvement Model

Organizations can use ISO 9004 as a business model instead of having a separate quality system and management or business system models. ISO 9004 allows for considering both effectiveness and efficiency of organizations. For most companies quality and organizational wealth go hand in hand. Quality is a vital business strategy for long-term profitability.

ISO 9004 was not written by a university professor, nor was it created by a business or quality guru. It is probably much better than anything a single professor could construct or an inventive author or speaker could create.

ISO 9004 is the result of input from experts around the world. It passed multiple reviews and is a consensus standard. It is what everyone on the international committee and voting member countries agreed is important for performance improvement.

All the pet peeves and baseless inputs have been removed. What is left are the bricks and mortar for solid and proven business controls. The ISO 9004 guideline standard may not be as fun to read as books such as The One Minute Manager,1 but managers, officers and business owners can count on every sentence being important and deserving attention.

The parts of ISO 9004 that do not apply to your organization do not need to be added to your business system. Once you determine the parts that will benefit your organization, the same process approach as in ISO 9001 can be used to expand your business management system.

Next you can develop measurable business objectives, not just quality objectives. In fact, once organizations implement ISO 9001, they may ask why the quality objectives are different from the business objectives. Aren't the quality objectives linked to business risk and opportunity for improvement?

Enhance Management Review

Using ISO 9004 at management reviews and during management planning will add value. Most of ISO 9001 improvement is reacting--to customer complaints, audit findings and daily process management issues. ISO 9004 is a proactive tool used to evaluate and improve the suitability of the QMS. The comparison of your QMS to ISO 9004 at management reviews will result in recommendations for improvement that will change the existing system. Use of ISO 9004 criteria will lead to preventive action and continual improvement.

Because ISO 9004 links financial benefit (efficiency) and the QMS, there is greater buy-in from top management. ISO 9004 also brings out potential upsides that will improve competitiveness. Sure, management wants to maintain what it has, but its real need is to stay competitive in an ever changing business environment.

Its writers recognized ISO 9004's usefulness in promoting continual improvement, so Appendix B provides the steps to follow, whether for small step ongoing improvement or breakthrough projects.

Assess Suppliers

Many organizations have been using ISO 9004 criteria to evaluate their suppliers. The criteria are tough, but organizations will know a lot more about their current or potential partners' strengths and weaknesses. With this new knowledge, they can take advantage of the strengths and either avoid or help shore up weaknesses.

A checklist referencing the should requirements found in ISO 9004 can be used once or over time to assess prospective or existing suppliers. This assessment can be linked to due diligence requirements needed to develop mutually beneficial supplier relationships.

ISO 9004 is probably the most powerful, yet underutilized, modern business tool in existence. There is no question it is a worthwhile tool. The question for modern business is, how can organizations afford not to use a consensus document outlining universally accepted criteria for performance improvement?


1. Kenneth H. Blanchard and Spencer Johnson, The One Minute Manager, Berkley Publishing, 1983.

J.P. RUSSELL is executive director for Quality WBT Center for Education. He is a Fellow of ASQ, secretary of the American National Standards Institute/ASQ Z1 committee, member of the U.S. technical advisory group for ISO Technical Committee 176 and secretary of Technical Group 9001. Russell is an ASQ certified quality auditor and a Registrar Accreditation Board quality system auditor. He is author of several Quality Press books, most recently Process Auditing Techniques, Internal Auditing Basics and ISO Lesson Guide 2000.

If you would like to comment on this article, please post your remarks on the Quality Progress Discussion Board on www.asqnet.org, or e-mail them to editor@asq.org.

Average Rating


Out of 0 Ratings
Rate this article

Add Comments

View comments
Comments FAQ

Featured advertisers