Abstract
Previous research has emphasized the need to further investigate the impact of ISO 9001 on company performance in the manufacturing sector of developing countries. Indonesia is one of those developing countries where the implementation of ISO 9001 is yet to be adequately researched. The Indonesian automotive manufacturing industry is still unable to compete with Malaysia and Thailand even though many companies have implemented ISO 9001. This study aimed to examine the relationship between ISO 9001 and operational (productivity, customer satisfaction, and product quality) and business (sales growth, profit rate, and market share) performance of Indonesian automotive component manufacturing industries. It also aimed to identify major obstacles in the effective implementation of ISO 9001. Multiple linear regression analyses about operational and business performance were employed for this purpose. The sample size comprised 50 automotive component manufacturing industries located in the Jakarta, Bogor, Tangerang, and Bekasi region of Indonesia. The study demonstrates that the implementation of the ISO 9001:2015 quality management system has a significant positive impact on the operational performance as well as the business performance. Additionally, the operational performance has a significant positive impact on the business performance. This study also reveals the major obstacles in the effective implementation of ISO 9001 in the manufacturing industry, which include a lack of qualified personnel, inadequate training, employee resistance, and lack of commitment among top-level management executives. It offers clear implications for managers who focus on elements that will enhance the effectiveness of ISO 9001 implementation by choosing the correct strategies, allocating sufficient resources, and improving their firm's performance. The novelty of this study lies in filling the existing research gap, which involves a detailed examination of the relationship between the implementation of ISO 9001 and the company's performance, particularly in manufacturing industries of developing countries.
Highlights
In the era of globalization, companies must focus on the quality of products and services provided to customers, in order to maintain their competitive advantage (Al-Najjar and Jawad, 2011)
ISO 9001 is an international standard of quality management systems (Sari et al, 2017), which guarantees that the organization will provide products or services that meet the requirement of customers and relevant stakeholders (Yuri and Nurcahyo, 2013)
From the results of regression analysis, it can be concluded that all ISO 9001 variables simultaneously affect the operational performance and business performance
Summary
In the era of globalization, companies must focus on the quality of products and services provided to customers, in order to maintain their competitive advantage (Al-Najjar and Jawad, 2011). To enhance competitiveness, it is important for companies to foster a sense of innovation, and to focus on the quality of the products or services provided. Quality management is defined as a systematic organization that ensures the implementation of an efficient process to achieve the company's goal (Taylor and Pearson, 1994). ISO 9001 is an international standard of quality management systems (Sari et al, 2017), which guarantees that the organization will provide products or services that meet the requirement of customers and relevant stakeholders (Yuri and Nurcahyo, 2013). In 2015, the ISO 9001 was reviewed, and the latest version was introduced, namely ISO 9001:2015 (Chiarini, 2017) that emphasized the “process approach” and “risk-based thinking” in order to make the process stronger (Fonseca, 2015)
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