The impact of ISO/TS 16949 on automotive industries and created organizational capabilities from its implementation

doi:10.3926/jiem.2010.v3n3.p494-511 JIEM, 2010 – 3(3): 494-511 – Online ISSN: 2013-0953 Print ISSN: 2013-8423 The impact of ISO/TS 16949 on automotive industries and created organizational capabilities from its implementation Bakhtiar Ostadi, Mohammad Aghdasi, Reza Baradaran Kazemzadeh Department of Industrial Engineering, Faculty of Engineering, Tarbiat Modares University (IRAN) ; ; Received November 2009 Accepted September 2010 Abstract: ISO/TS 16949 is an ISO Technical Specification. ISO/TS 16949 achieves the objectives which are continually to improve the production of automobile parts and related services, and to strengthen the international competition for the automotive industry and its suppliers. By applying this quality system standard, automotive manufacturers could offer superior products and good services to customers. The more the companies know about the benefits if quality management systems such as ISO/TS 16949, better they can seek interest and determine indices of these systems. So, this standard has been implemented in companies considering a number of benefits. In this paper, we carry out an empirical study in order to verify the importance these benefits and ranking them based on the value of importance. Finally, the study tends to provide a reference guide considering benefits assessment and created organizational capabilities from this standard for the automotive industry in pursuing ISO/TS 16949 and procuring maximum benefit from the results. Keywords: ISO TS/16949, quality management system, assessment, organizational capabilities The impact of ISO/TS 16949 on automotive industries and created organizational… B. Ostadi; M. Aghdasi; R. Baradaran Kazemzadeh 494 doi:10.3926/jiem.2010.v3n3.p494-511 JIEM, 2010 – 3(3): 494-511 – Online ISSN: 2013-0953 Print ISSN: 2013-8423 1 Introduction 1.1 ISO/TS 16949:2009 In recent years, the importance lent to quality management, both in Total Quality Management (TQM) models and in ISO 9000 normalization and certification, has been overwhelming in the business world (Easton & Jarrel, 1998; Lee & Palmer, 1999; Koc, 2007; Ahire & Ravichandran, 2001). This has led to a numerous researchers to concentrate their efforts on studying the quality movement. Currently, there are several quality management strategies or philosophies that an organization can apply to maintain and improve quality of its processes, products, services and overall business performances. The most important of them are: • total quality management (TQM); • the Malcolm Baldrige Criteria for Performance Excellence; • the EFQM Excellence Model; and • the standard ISO 9001. ISO 9000 can be considered to be a subset of TQM. ISO 9000 mainly deals with quality management systems (QMSs) for the design, development, purchasing, production, installation, and servicing of products and services. The literature does not have unanimous agreement on the effects of ISO 9000 registration on organizational performance. Some of the previous studies found that ISO registration did not necessarily improve companies’ performance (Sila, 2007). On the other hand, according to the International Organization for Standardization, ISO 9000 can increase customer satisfaction, provide cost and risk-management benefits, and result in improved competitiveness (Sila, 2007). In fact, Rao, Raghunathan and Solis (1997) found that ISO-registered companies had better quality management practices and quality results than those companies that were neither ISO-registered nor interested in obtaining registration. Ismail and Hashmi (1999) also reported better performance for ISO-registered companies compared to non-ISO-registered companies. ISO 9000 provides the opportunity to evaluate suppliers' goods and services consistently. Many independent third parties or registrars are now using the ISO The impact of ISO/TS 16949 on automotive industries and created organizational… B. Ostadi; M. Aghdasi; R. Baradaran Kazemzadeh 495 doi:10.3926/jiem.2010.v3n3.p494-511 JIEM, 2010 – 3(3): 494-511 – Online ISSN: 2013-0953 Print ISSN: 2013-8423 9000 series standards to evaluate suppliers' quality systems. When a supplier's quality system conforms to the appropriate ISO 9000 standards, the registrar issues the supplier a certificate. The supplier is also listed in directories of registered suppliers (Lee & Palmer, 1999; Koc, 2007; Rao et al., 1997). ISO/TS 16949 is a standard for QMS. This standard outlines the specific requirements for the application of ISO 9001:2008 to automotive production and relevant service part organizations. It contains recommended automotive industry practices and examples. ISO 9001:2008 specifies requirements for a QMS that can be used for internal application by organizations, or for certification, or for contractual purposes. Both standards use the "process" approach, referring to the application of a system of processes (numerous linked activities) that allows the transformation of inputs into outputs, such as in the manufacture of cars and related parts. ISO/TS 16949 is developed by the International Automotive Task Force (IATF) for global recognition; it has become a mandatory set of requirements of many automotive Original Equipment Manufacturers (OEMs) in North America and Europe (ISO/TS 16949:2009; Lin, Liu, Hsu, & Lai, 2004). This standard recognizes the uniqueness of every automotive supplier's process, while providing critical tools to help your company better meet customer-specific requirements. Rather than using the "element" or checklist method of the QS-9000 standard, ISO/TS 16949:2009 is based on the process approach. It provides an organized way for business to document and codify specific work practices in ways that best serve customer needs (ISO/TS 16949:2009). ISO/TS 16949 eliminates redundancy, cost and administrative burdens imposed by multiple standard formerly mandated in various geographic regions. It will ultimately replace QS-9000 and European quality management standards for most North American and European Quality Environment Modules (QEMs) by the end of 2006 due to mandates by major automotive OEMs (Lin et al., 2004; Bayati & Taghavi, 2007). This paper consists of two sections. The first section comes with the statistical results of surveys of one of the biggest automotive industry in the Middle East that have failed and succeeded in ISO/TS 16949. Furthermore, the performances after executing ISO/TS 16949 were evaluated by assessment formula which it has been developed based on the refined benefits and defined factors. This formula can be The impact of ISO/TS 16949 on automotive industries and created organizational… B. Ostadi; M. Aghdasi; R. Baradaran Kazemzadeh 496 doi:10.3926/jiem.2010.v3n3.p494-511 JIEM, 2010 – 3(3): 494-511 – Online ISSN: 2013-0953 Print ISSN: 2013-8423 used by firms to analyze their status in achieved benefits during implementing ISO/TS 16949 in their organizations. Despite the import (...truncated)