Raising awareness of the benefits of certification and assurance services
In ‘Impact of ISO 9000 on Time-based Performance: An Event Study‘ (Lo, Yeung, Cheng, 2007) the research ‘analyzed the changes in operating cycle, inventory days, and account receivable days prior and after the implementation of ISO 9000 in 695 publicly listed manufacturing firms’. The findings produced some very positive quantitative results.
They ‘found that ISO 9000 certified firms shortened their operating cycle time by 5.28 days one year after the implementation of ISO 9000. In the long-run (3 years after certification), certified firms showed continuous improvement in time-based efficiency, and experienced a shorter operating cycle time of 11 days than that of non-certified firms. There was an average of 6.5% improvement in operating cycle time for ISO 9000 certified firms. Both inventory days and account receivable days showed similar significant improvements after the implementation of ISO 9000, too’.
The research also found ‘that ISO 9000 certified firms shortened the number of inventory days by 3.68 days 1 year after ISO 9000 implementation. They showed continuous improvement and shortened the number of inventory days by 8.75 days (8.29% shorter) 3 years after certification’.
A fuller presentation of these findings was also published in ‘ISO 9000 and supply chain efficiency: Empirical evidence on inventory and account receivable days’ (Lo, Yeung, Cheng, 2009).
The Hong Kong Polytechnic University (Lo, Yeung, Cheng)