High School

ISO 9000 and Sears' Quality Management System

Sears, Roebuck and Co., a wholly owned subsidiary of Sears Holdings Corp., is one of the largest retailers in North America. Sears offers a range of home merchandise, apparel, and automotive products and services through more than 2,400 Sears-branded and affiliated stores in the United States and Canada, including about 926 full-line and 1,100 specialty stores in the United States alone. Sears is the largest national provider of product repair services, with more than 14 million repairs performed annually.

After an eight-year effort, the company registered its product repair centers and in-home service's quality management systems (QMS) to ISO 9001. Sears has always maintained a strong commitment to quality in its products and services. In 1998, the company decided to register all of its product repair centers to the ISO 9002:1994 quality management system standard (subsequently replaced by ISO 9001:2000). By the end of 2002, all 32 carry-in service centers were registered to ISO 9001.

Once the repair centers were registered, Sears turned to the in-home service side of its business. About 10,000 Sears technicians repair one of every five appliances in America. By the end of 2005, Sears had 383 locations under the scope of its ISO 9001 registration, including all six in-home regions. The company's 48 districts have their own certificates.

Recognizing that ISO 9001 provides a framework for large organizations to implement a consistent, cohesive program across geographic lines and throughout a multifaceted business, Sears sought registration to enhance its organizational process compliance. The company wanted a consistent process for improving customer satisfaction and enhancing service capabilities. ISO 9001 implementation played a large role in assisting with process standardization across the company.

ISO 9001 is often associated with the manufacturing industry, and one major hurdle Sears had to overcome was communicating the value of a QMS within a retail and service environment. ISO 9001 became a fundamental tool that provides the company a safe base for continued improvements. For example, Sears has made dramatic improvements in calibrating the tools used for repairs and service calls. Although the company had calibrated some of its tools prior to implementing ISO 9001, the standard requires 100-percent tool calibration for safety purposes. Not only does Sears have an expansive program for calibrating its tools, but it has also opened and registered its own calibration lab to ISO/IEC 17025. This move minimizes calibration costs and expands third-party business opportunities.

Another significant benefit of ISO 9001 involves the company's handling of refrigerant. Sears works with Freon and other hazardous materials, which could pose a serious environmental violation if not handled properly. As part of its ISO 9001 efforts, Sears improved its existing hazardous materials program by implementing a comprehensive program on refrigerant handling.

The standard also helped Sears' efficiency in completing repairs. For instance, in the Chattanooga, Tennessee, carry-in facility, the average daily completion rate for repairing lawnmowers or other items doubled from four or five to eight or nine per repairman as a result of ISO 9001 implementation. Sears' district office in Houston has improved its technician recall rate because of the QMS. The recall rate is the percentage of times service technicians must return to customers' homes for a second time within 30 days. Before the ISO 9001 implementation, the recall rate in Houston was about 12 percent. In 2004, Houston service technicians made more than a quarter of a million service calls, with a 93-percent recall rate. In 2005, the rate dropped to 7.9 percent.

ISO 9001 has been instrumental in helping to standardize the manner in which technicians record field observations. This is important for solving certain types of problems, such as an appliance or part malfunction, customer abuse, or an accident. To ensure consistency, technicians use a special toolkit for recording the event, including a disposable camera and standardized forms.

**Discussion Questions:**

1. How are the ISO 9000:2000 Quality Management Principles reflected in this example? How might these principles have helped Sears address the issues you identified in the first question?

Answer :

"The 150 9000:2000 Quality Management Principles are well reflected in Sears' implementation of ISO 9001 for its product repair centers and in-home service quality management systems. These principles include customer focus, leadership, involvement of people, process approach, system approach to management, continual improvement, factual approach to decision making, and mutually beneficial supplier relationships.

1. Customer Focus: Sears' commitment to improving customer satisfaction through consistent processes and enhanced service capabilities demonstrates its adherence to the customer focus principle. By registering its repair centers and in-home services to ISO 9001, Sears aimed to meet customer requirements and exceed their expectations.

2. Leadership: The leadership at Sears played a crucial role in driving the quality management initiatives and ensuring that the entire organization was aligned with the goal of achieving ISO 9001 registration. This leadership commitment was essential for the successful implementation of the QMS.

3. Involvement of People: Sears involved its large workforce of technicians in the QMS process, which was vital for the success of the ISO 9001 implementation. The improvements in tool calibration, refrigerant handling, and technician recall rates show the involvement and contribution of Sears' employees.

4. Process Approach: By standardizing processes across its repair centers and in-home services, Sears adopted a process approach to quality management. This approach helped in identifying, understanding, and managing interrelated processes to improve the effectiveness and efficiency of its operations.

5. System Approach to Management: Sears recognized the need for a consistent and cohesive QMS across its geographically dispersed and multifaceted business. The ISO 9001 framework provided the structure for integrating the QMS into the company's overall management system.

6. Continual Improvement: The company's efforts to improve its tool calibration program, refrigerant handling, and technician recall rates are examples of continual improvement. Sears' QMS is not static; it is designed to evolve and improve over time to enhance performance.

7. Factual Approach to Decision Making: Sears used data and facts to make informed decisions, such as the dramatic improvements in the average daily completion rate for repairs and the reduction in technician recall rates. This factual approach is a core aspect of the ISO 9001 standard.

8. Mutually Beneficial Supplier Relationships: While not explicitly mentioned in the case, it can be inferred that Sears' QMS includes the management of external providers to ensure that the products and services they supply meet the company's requirements. This would involve developing mutually beneficial relationships with suppliers to improve quality and create value.

By applying these principles, Sears was able to address issues such as inconsistent service quality, inefficient processes, and environmental risks associated with hazardous materials. The ISO 9001 standard provided a framework that helped Sears to standardize its processes, improve its service delivery, and enhance customer satisfaction, which are all critical components of a successful quality management system in the retail and service industry."

ISO 9000 is a group of principles and procedures that enable businesses to implement quality management.

ISO 9000 provides a quality assurance system that aids a company in providing high-quality goods and services, maintaining customer loyalty, and reducing waste. Sears' Quality Management System was implemented to improve customer satisfaction and improve service capabilities. ISO 9001 provided the framework for a consistent, cohesive program throughout the business that would provide customer satisfaction. Sears recognized that meeting customer needs and exceeding their expectations are critical for the long-term success of the company. This is reflected in its Quality Management System's implementation and Sears was able to address issues such as process standardization, customer satisfaction, efficiency improvements, environmental compliance, and continual improvement.

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