ISO 9001 Aspects Related to Performance and Their Level of Implementation

Purpose: In the last three decades, thousands of companies around the world have embraced the ISO 9001 standard in their quest to improve company performance and customer satisfaction. In recent literature, a number of authors have identified different “levels” of ISO 9001 implementation. This study aims to analyse these implementation levels in companies from the point of view of the customer, and provide guidelines for future improvement. Design/methodology/approach: Research was conducted based on the results of the secondparty audits (SPAs) of 90 suppliers, (including component suppliers, assemblers, and wind farm operation and maintenance services), to one of the wind power industry’s largest wind turbine manufacturers. The audits were carried out within the ISO 9001:2008 framework and conducted by one of this study’s authors in his role as the wind turbine company’s Director of Global Quality. Findings: Auditing suppliers plays a unique role in helping to isolate system weaknesses, identify opportunities and suggest areas for improvement. This study shows that, in terms of management commitment and culture and the good practices of an organization, ISO 9001 certified companies implement differing degrees of the standard. From the results of this research, a “road map” towards improvement can be established; one that allows companies in the sector to go beyond simply being accredited with the standard and instead to take advantage of ISO 9001 certification as a catalyst for change.


Introduction
In the past three decades, thousands of companies around the world have embraced the ISO 9001 standard in their quest to improve company performance and customer satisfaction. However, despite having been internationally recognized and widely accepted since its publication in 1987, the standard has been subject to controversy and criticism concerning the success or failure of its implementation and/or whether its costs outweigh the performance benefits for companies.
The literature is full of research articles describing ISO 9001 certification successes and failures and the resulting impacts on company profits and performance. For instance, Curkovic and Pagell (1999) point out that ISO 9001 is not connected directly to product quality, and Naveh and Marcus (2005) emphasize that a certified company could still have substandard processes and products because certification does not instruct the company on how to design more reliable and efficient products. Romano (2002) reported that ISO 9001 certification is a letter of access (a visiting card) for many companies and Sroufe and Curkovic (2008) state that, "ISO registration alone is not enough to do anything beyond ensure compliance with the registration standard". Some authors refer to the certification as a "meaningless piece of paper" which is nothing but a cost to a company. Other researchers argue that certification does not ensure an improvement in a firm's performance (Anderson, Daly & Johnson, 1999;Dimara, Skuras, Tsekouras, & Goutsos, 2004;Morris, 2006;Power & Terziovski, 2007;Tsekouras, Dimara, & Skuras, 2002) and there are many studies that show companies who have adopted ISO 9001 certification as a result of customer pressure (Anderson et al., 1999;Davis, 2004;Martínez-Costa, Martínez-Lorente & Choi, 2008). Nevertheless, it is not all criticism and controversy. There are studies that highlight how ISO 9001 can help companies improve their performance and efficiency. Some point out that certification improves product and service quality as well as collaboration with suppliers, and reduces customer complaints and internal costs, thus boosting company profitability (Zaramdini, 2007;Casadesús & Karapetrovic, 2005), while others stress that certification strengthens workforce motivation, increases market share and facilitates the international expansion of the company (Brown, Wiele & Loughton, 1998;Zaramdini, 2007). Chow-Chua, Goh and Boon-Wan (2003) also note that ISO certification improves processes and procedures, enhances a company's image in the marketplace, as well as assisting its international expansion.
As a result of the controversy aroused by the ISO 9001 standard and its supposed strengths and weaknesses, we were motivated to analyse to what levels it has been implemented in the wind energy sector by means of second-party audits (SPA).

Quality Audits
For many years the quality audit has played an important role in an organisation's quality management system. Initially used to control financial statements, it has gone on to become a useful management tool in business competitiveness and performance.
ISO 9001 accreditation requires a third-party audit (TPA) certification process to evaluate whether the quality management system complies with the standard's requirements. TPAs are performed by external, independent certification bodies free of any conflict of interest and thus, a key component of a TPA. However, after more than two decades of using TPAs, many quality and manufacturing managers and professionals do not see the value in or the need for them. Some studies reveal significant differences between the perceptions (in terms of profits, performance, standard compliance, improvements, etc.) of auditing that customers have and those that the auditors themselves have (Power & Terziovski, 2007;Castka, Prajogo, Sohal & Yeung, 2015). Consequently, there is no better understanding in how academics and practitioners perceive the TPAs process either (Kluse, 2013).
TPAs and their efficiency is a very commonplace theme for many academics and researchers, but very few a have actually focussed their work on SPAs, i.e. when a company performs an audit of a supplier and the impact they have on the whole quality control process (Ferenčíková & Briš, 2013) as well as in the process improvement (Prasad, Kamath, Barkur & Nayak, 2016).
The study carried out by Power and Terziovski (2007), highlights a number of differences in perceptions of auditing that customers and auditors have in terms of compliance versus improvement. Karapetrovic and Willborn (2000) point out that the quality audits typically evaluate whether the QMS activities conform to the documented procedures are effectively implemented and suitable for achieving the quality targets proposed.
In some industrial sectors, for instance the automotive sector, power systems, oil and gas, wind energy, aerospace and the food industry, purchasing managers push for ISO certification (TPAs) of their suppliers bidding for some projects or tenders. Following this, the customer quality team will later perform SPAs of the same suppliers in order to ensure product quality. However, TPAs, from the managers and practitioners' point of view, only consume resources, time, and money and do not add any value to the company.

ISO 9001 Implementation Levels
In recent literature, several authors have identified different "levels of implementation" of the ISO 9001 standard.
Naveh and Marcus (2004) classified ISO 9001 into two major levels based on practical issues: (i) assimilation, which means establishing rules that allow an organization to effectively adhere to ISO 9001 (quality manual, policies and procedures) and coordinating with external suppliers and customers so that the requirements of the standards fit the needs of the stakeholders, and (ii) go beyond, where the ISO 9001 is used as a springboard for developing additional quality initiatives. In other words, simply being ISO 9001 is not enough, the standard must be used in daily practice and as a catalyst for change (Naveh & Marcus, 2005).
Sroufe and Curkovic (2008), working with the Miles and Snow (1978) framework, classified the different levels of the ISO implementation into (i) defenders, (ii) reactors, (iii) analysers and (vi) prospectors.
Defenders look firstly at improving efficiency in existing operations and are focused on cost. Reactors perceive ISO certification as a cost of doing business, and may struggle with finding any real benefits from ISO certification. Analysers include firms that usually operate in two types of product-market, one which is relatively stable and the other which is changeable. While analysers are successfully operating in more than one product domain, they do not have ISO certification for all those domains. Finally, prospectors' firms are continuously searching for new market opportunities and perceive ISO certification as a new opportunity to achieve competitive advantages.
Prajogo, Huo and Han (2012) identified the following three levels of the ISO 9000 implementation, (i) basic (ii) advanced and (iii) supportive.
Basic implementation is when the company strictly follows the ISO 9001 requirements. According to Bradley (1994) and Naveh and Marcus (2005), while these practices are an important first step, they are not enough to yield successful improvements. Advanced implementation is when, rather than considering certification as an end point, the company uses the ISO 9000 as a stimulus for rethinking how it could conduct its business more effectively. Finally, supportive implementation is when top management takes an active (and key) role in a number of crucial resource support areas such as fostering a quality culture, supervising employee behaviour, arranging training programs for employees in order to facilitate skill improvements, and ensuring that a continuous improvement cycle exists within the organization (Sing, 2008;Nair & Prajogo, 2009).
However, the way a supplier belongs to one category or another very much depends on the result of the audit carried out by their customer. In these audits it is possible to qualify the implementation levels of every aspect of ISO 9001 and help the customer to determine if the supplier is more focused on accomplishing quality assurance procedures, than on product or production processes. In other words, to determine if they are good suppliers or if there is room for improvement.

Objectives
The aim of this research is to analyse the levels of implementation of the international standard ISO 9001 in the wind power (WP) sector from the point of view of the customer, and provide guidelines for future improvement.
This study also seeks to address the lack of empirical evidence on the relationship between ISO 9001 implementation and SPAs that an extensive literature review revealed.
Our primary objective is to determine which of the ISO 9001 aspects have an impact on the level of ISO 9001 implementation. The way to achieve this is through a data analysis of the SPAs collected by a manufacturer in the WP sector. Using these audits, the manufacturer classifies its suppliers into three categories, and we assume these correspond to the implementation of ISO standards found in the literature.
Our secondary objective is to define the constructs, i.e. the ISO aspects which are correlated in the audits a firm makes of its suppliers, and to measure the impact these constructs have on the level of adoption as determined by the customer company.

Methodology
In order to achieve our objectives, the research was carried out in WP sector supply chain firms (i.e. component suppliers, assemblers, and wind farm operation and maintenance services).
An extensive literature review reveals there is little empirical evidence of the relationship between ISO 9001 implementation and supplier activities (Lo & Yeung, 2006;Prajogo et al., 2012). The majority of the contributions referenced in the literature review section are based on surveys (subjective data). In this paper we use primary data (objective data) from the SPAs of suppliers. One of this paper's authors is the Director of Global Quality for the wind turbine manufacturer concerned and has collected and compiled data from the audits of suppliers which, in turn, is one of the most valuable aspects of this paper's contribution.
The data used here are based on the audits of 90 technical suppliers to one of the largest wind turbine manufacturers and ranked in the top 15 largest companies in the sector in terms of installed power (MAKE Consulting, 2013;BTM Consult, 2014). Located in Europe, but with production centres in both North and South America, it employs more than 1,500 workers and has an income of over €400m per annum.

Wind Turbine Manufacturer Supplier Audit
The questionnaire used to assess the suppliers in the audit is based on the ISO 9001:2008 requirements and organized into 21 main "items" spread over the four main processes: (P1) Management system and responsibility, (P2) Resource management, (P3) Product completion, (P4) Measuring, analysis and improvement. These items, classified into the four main ISO processes, are presented in Table 1.

Sample and Audit Process
Forty percent of the companies audited are global players and are referred to in the sector's specialized journals such as MAKE Consulting (2013)  The audits were carried out following the ISO 9001:2008 framework and under the supervision of one of the authors of this paper in his role as the Global Quality Director of the company. The audit team were trained in accordance with the company's audit procedures. All the suppliers audited work with the ISO 9001:2008 standard thanks to a specific requisite from the set of design requirements (IEC, 2010) that must be met to certify a wind turbine.
In addition, to become an authorized supplier, the audited companies had had to pass a previous assessment and selection process and product qualification, in accordance with the company's standard procedure. This procedure is a three-step process beginning with (i) supplier assessment, followed by (ii) supplier/component qualification and finishing when the (iii) supplier is authorized for future serial production. After approximately a year supplying components to the wind turbine manufacturer, the company's audit team visited the suppliers to carry out audits. These audits have three main objectives: (i) to monitor and verify the proper operation and implementation of the supplier quality management system, (ii) to demonstrate that customer requirements (purchase order, delivery time, technical specifications, drawings, customer quality requirements, and packaging) are effectively implemented and maintained over time, and (iii) to take any appropriate action to eliminate root causes of nonconformities and prevent their recurrence, and to identify any potential improvement areas.
At the end of the appraisal, a closed audit meeting is held with the suppliers. The scope of the meeting is to examine any major and/or minor findings and discuss any future opportunities for improvement.
More importantly, the company auditors and the suppliers then develop a plan for improvement together.
The audits were performed in accordance with the procedures and standards of the wind turbine manufacturer and took between three and five days, depending on the size of the company and the complexity of the product being produced.

Measures
The company auditors graded each item on a 4-point scale. The items audited are closely connected to ISO 9001:2008, but as the audit was performed by the customer the answers focused on evaluating the supply performance related to the product. By using a scale where 0 = not implemented item, 1 = partially implemented item with nonconformities, 2 = implemented item with observations and 3 = fully implemented item, each item's level of impact was then then able to be validated according to the value given in the answers, thus making it possible to determine the level of ISO implementation for each and every item asked about. As a result of the audit, the firm receives a Global Audit Score (GAS) when the average of all the audited items has been calculated. Following the criteria assigned to each company, we considered three levels of implementation. If the company scores 85% (GAS>2.55), the supplier has a HIGH level of implementation, if it is 70% (2.55>GAS>2.1) the supplier has a MEDIUM level of implementation, otherwise the supplier is considered as having a LOW level of implementation (GAS<2.1).

Results
Below, we present the data collected from the supplier classification according to GAS (Table 3). What is made abundantly clear is that more than 40% of suppliers do not and cannot have a positive relationship with the firm because they are classified as LOW. Therefore, we cannot conclude that the ISO 9001 standard ensures a certain level of quality from a supplier i.e. a level which would mean that supplier could be considered an extended capability for the firm. The analysis is divided into three. First, we present a descriptive analysis of the 21 items, followed by a factor analysis which allows us to group the 21 items from the audits into latent factors. Finally, the U Mann-Whitney test is applied, enabling us to compare latent factors of the categorized suppliers by GAS.

Grade GAS Europe South America North America Asia Total
In the Descriptive Analysis section, we analyse the implementation of the 21 items individually, while in Discussion and Findings, we argue the strengths and weaknesses of the sector and present potential areas for improvement. Table 4 shows that "Competence training and awareness" (v5-2.44), "Identification and traceability" (v14-2.4), "Product preservation" (v13-2.31) and "QMS and responsibility" (v1-2.29) are the items that obtained the best assessment in the implementation audits. In contrast, the items "Corrective and preventive actions" (v21-1.81), "Product and service provision" (v12-1.88), "Data analysis" (v19-1.90) and "Planning of product manufacture" (v7-1.94) were those which obtained the poorest implementation ratings in the audits. As a second step to our research methodology, we focussed on factor analysis of the data we collected in order to find homogeneous groups of correlated items that would help us verify the existence of latent variables indicating those ISO 9001 items that correlate with the levels of ISO 9001 implementation in the sector. The exploratory factor analysis, shown in Table 5, was performed using the Varimax rotation from the SPSS factor analysis procedure, to identify the latent dimensions (F1, F2, F3) derived from the data and used in the study. The scales were analysed in accordance with the recommendations of Ladhari (2010) who follows the criteria to retain items that (i) load at 0.50 or greater in a factor, (ii) do not load at greater than 0.50 in two factors and (iii) have an item reaching total correlation of more than 0.40.  (Visauta, 1998).
Confirmatory factor analysis (CFA) was applied to the sample data to verify the factor structure that emerged from the EFA. The reliability of the resulting factors was assessed using Cronbach's alpha. All the constructs had an alpha value of greater than 0.6 (Malhotra, 2004).
"Structural implementation" is the name we assign to the first factor (F1), as this factor focuses on the basic system requirements of assurance quality management. We called the second factor (F2) "Internal integration" and this consists of the requirements which drive the system such as document and record control and the performance of the product and its validation. Finally, the third factor (F3), coined "External integration and analysis", consists of requirements that most affect suppliers and customers, as well as process control.
The final step was to measure the impact of the factors on the level of ISO implementation we considered for each supplier. Table 6, which compares the average of factors among the three groups (HIGH, MEDIUM, and LOW) determined by the GAS, shows the factors that most affect determining the level of implementation. F1 and F2, are significantly different between HIGH and MEDIUM (p value 0.026 and p value 0.002) and MEDIUM and LOW (p value 0.003, p value, 0.030), but in F3 there are no differences between HIGH and MEDIUM (p value 0.708), but rather they are between MEDIUM and LOW (p value 0.002).
In Table 6, we see that F1 and F2 differ in implementation levels from lowest level (near 0.5) to medium level (near 0) or highest level (near 1) in the same way as GAS differs. However, F3, never achieves a HIGH level (near 1), although it does achieve a medium level according to HIGH or MEDIUM GAS. F1 and F2 Table 6. F i average, depending on GAS (Global Audit Score) implementation level

Discussion and Findings
As a result of this study, several conclusions can be drawn. First, there are some weaknesses in the sector which need to be addressed as they are "Product and service provision", "Data analysis", and "Corrective and preventive actions", all of which are related to the performance of the product and its processes, as well as its continuous improvement. In other words, analysing these would determine any corrective and/or preventative action to be taken. These findings show that SPAs play a unique and specific role by helping to identify system weaknesses that affect product and processes, by identifying opportunities for change and by suggesting areas for improvement.
Secondly, we can also demonstrate that there are companies in the WP industry, that have been certified Finally, from the results of this work, a "road map" towards improvement can be drawn. This road map would enable companies in the sector to go beyond simply applying standard and allow them to fully exploit ISO 9001 certification by using it as a lever for change. In other words, the statistical analysis shows us that companies rated as LOW must improve aspects of F1 (Structural implementation) and F2 (Internal integration) to become MEDIUM and then continue those improvements until they reach the so-called HIGH category. However, in the case of F3 (External integration and analysis) only one step from the LOW to MEDIUM or even HIGH category is required. For the companies in the MEDIUM category, they must consolidate and improve factors F1 and F2, but they do not need to focus on F3 to become HIGH. Firms with the highest implementation levels use ISO 9001 certification as a "lever" to attain business excellence and their daily practices often go beyond the requirements of ISO 9001 certification to follow the criteria we found in the literature. This article provides some theoretical implications i.e. viewing the standard from the customer's perspective which, in turn, leads to an understanding of the standard from the point of view of the customer's needs. Thus, the usefulness of the audits is clearly demonstrated along with the overall objective of ISO 9001: customer satisfaction.
This article has some limitations as it focuses only on the WP sector, although its findings could be extrapolated to similar sectors of high technology and high customization. It also highlights several implications for managers i.e. certification only implies conformity to the standard and SPAs provide valuable information about supplier quality commitment. Going beyond certification involves the support and commitment of management in a company's daily practices.