Terminology gives service firms problem

PUBLISHED : Friday, 29 March, 1996, 12:00am
UPDATED : Friday, 29 March, 1996, 12:00am

Many service companies working towards ISO 9000 certification face difficulties in preparing for the audit that could deter them, according to a Hong Kong management consultant.

Nelson Law, managing director of N Law and Associates Management Consultancy, said manufacturing companies did not suffer from the same difficulties, largely because the ISO 9000 vocabulary was more relevant to them.

'Service companies need help to identify how their business relates to the language of manufacturing,' he said.

'When service organisations start to apply the ISO standard, they soon realise that the words 'production', 'product', 'inspection', 'test equipment' and 'installation' are difficult to put into their own terminology.

'For example, is the product of an architect the building or the drawings for that building? 'A manufacturing company is generally interested in only one building - the factory that is applying for ISO - but a telephone company will have many retail outlets and switching centres that make document control difficult.

'ISO requires documents to be on site but not necessarily a whole set and, when a transaction is undertaken away from the office, such as a visit to a customer's home, a mobile phone is acceptable.' The flexibility of service companies, particularly in such matters as processing purchase orders which are verbal in places like retail outlets, may also cause problems.

Consultancy manager Virginia Liu said: 'The security services are still more difficult. A lot of data is sensitive.

'When the Government Printing Office obtained ISO 9000, it excluded passport printing from the scope for obvious reasons but even sales data can be considered too sensitive.' In such a case, the main activity must be defined and then a decision made to include it in the scope, Ms Liu said.

'It is possible to audit a procedure but not its detailed content,' she said.

Customer satisfaction is more important to a service company than to a manufacturer and an operating procedure must be designed to cover it.

A further difference is that manufacturing industry has detailed work instructions, whereas these are rarely found in a service company.

Certain service industries have typical characteristics that cause problems. Design, both conceptual and detailed, is very important for architects and the drawings are vital, although more companies are using computer-aided design (CAD) and a back-up of electronic data.

The design stage is followed up by project administration and control and a defect liability period. During these stages, a lot of correspondence requires an operating procedure.

Mr Law said: 'Companies will generally have procedures already in place to cover these aspects but they may not be written down, or they may be outdated, and frequently the company will not know if they meet ISO requirements.' The telecommunications industry and post-sales support for the computer industry both have their own characteristics.

These include frequent changes in technology, which then require significant amendments to the operating procedures.

It is partly because different sectors of the industry have their own characteristics that companies need to develop their own ISO system.