Wednesday, 27 September 2000

The Spanish company rounds off a decade of success with the most important international prize for business management

IRIZAR, the luxury coachbuilder from the Basque province of Gipuzkoa (Spain), has won the European Prize for Business Excellence ("European Quality Prize 2000"). These prizes, awarded annually by the European Foundation for Quality Management (EFQM), are the most prestigious recognition in the field of business excellence in Europe. IRIZAR, which was a finalist last year, is the only Spanish company to have qualified for the current edition. Only three Spanish companies among the large business section have won this prize to date. Of these, IRIZAR is the first that does not belong to a foreign multinational group.

The IRIZAR company from the Basque province of Gipuzkoa, a luxury coachbuilder, has won the European Quality Prize 2000 in the large businesses category. The prize was presented during the annual forum that the EFQM held from 27 to 28 September Istanbul (Turkey).

This European prize for business excellence was created by the EFQM in 1991, with the support of the European Commission and a number of leading companies from different sectors. The aim of this annual prize is to recognise and promote European business organisations that demonstrate maximum commitment to Excellence in Management and Total Quality.

IRIZAR, which was a finalist in 1999, is the only Spanish company selected in the five categories of the prize in 2000.

Among the large European companies that have been winners in what amounts to a "Nobel Prize" for excellence are firms from the following sectors: electronics (ST-Microelectronics and Texas Instruments), telecommunication (British Telecom -BT-), automotive (Volvo Cars), transport of goods (TNT) or information directories (Yellow Pages).

Until now, only three large Spanish companies have received this European prize: UBISA (Bekaert Group) in 1992, Ericsson España (Ericsson Group) in 1994, and IRIZAR in 2000.

Management of Business Excellence

As those in charge of the company point out, "IRIZAR is a project based on people", for several reasons. The organisation of the company is based on a system of self-management, participation, experience and leadership shared between people (which the EFQM has rated as among the best in the world), which searches for Excellence by means of the continuous satisfaction of workers, customers, external collaborators and society at large. This makes growth to generate wealth and new jobs possible.

IRIZAR is managed by processes and is committed to continuous, incremental and, above all, breakthrough improvement with Re-engineering as the basic element to ensure the future. The Basque company has managed to evolve from a traditional management system based on departments or functions to an organisation managed by interrelated processes, which enables efforts to be concentrated on those activities that add value for customers and increase their competitive advantage. The dynamics of these processes is based on multi-disciplinary and self-managed teams.

The use of the EFQM Model for Excellence since 1995, as a reference model for detecting opportunities for improvement by means of overall external assessments and detailed self-assessments following the model, has contributed to this. The external assessments, especially those carried out by the EFQM in 1999 and 2000 as a result of the company entering for the European prize, have contributed to strengthening the team spirit in search of a new challenge.

Because IRIZAR is, first and foremost, a Project based on people, its success is based on the way the whole organisation "gets into each customer's skin" to best satisfy their needs. IRIZAR's management philosophy, its organisational structure and work methods encourage direct contact between its people and customers, suppliers, external collaborators and society at large. In short, all key bodies with an interest in IRIZAR are involved in reviewing and improving its approaches, as a normal part of the development of the activities of the Project.

A spectacular improvement with palpable data

IRIZAR had serious business problems over the two year period 1990-91, when it recorded losses totalling Pta 1 billion. Since Koldo Saratxaga, the man currently in charge, led a viability plan in 1992, IRIZAR is "probably the most efficient company in its sector in the world", according to an article published by "The Economist" in the first quarter of this year. The strategic decisions that led to this change were, on the one hand, concentrating exclusively on the production of luxury coaches, as well as tackling the international market but, above all, revolutionising the company's organisational model by basing management on people united by the challenge of satisfying their customers.

IRIZAR coaches are sold in 45 countries, thanks to agreements with importers and distributors all over the world, as well as the international expansion started in 1995. The company currently has subsidiaries in Mexico and Brazil, and joint-ventures in China and Morocco and our shareholding in Hispacold in Sevilla. However, the division of the IRIZAR group that has won the prize is the company's headquarters located in Ormaiztegi (Gipuzkoa - Spain), the small Basque town where the company was set up in 1889 as a Public Limited Company. It became a co-operative in 1963.

The production rate of the Ormaiztegi plant has increased by 400% in 7 years (from 1.2 coaches/day in 1993, to six this year). IRIZAR has moved from sixth position in the European market to second over the same period.

IRIZAR is the leading coachbuilder in its sector and segment (luxury) in Spain and the second largest supplier on the European market. Both markets have been fragmented and subjected to a strong trend towards the concentration of supply, by means of alliances between builders of bodywork and chassis manufacturers which, in addition to coaches, also manufacture trucks (Mercedes, Volvo, Scania, Man, Iveco-Renault or DAF). In Europe, 10,000 luxury coaches are sold each year, but only 7 suppliers produce more than 600 coaches a year. Likewise, in Spain IRIZAR has a market share of 33%, while another 10 coach bodywork builders share the other two thirds of the market between them.

On a par with the best

As evidence of its desire to extend its horizons and rub shoulders with the best companies in the world, IRIZAR has compared its performance with those of leading publicly quoted companies and the leading international financial indices - like General Electric of the USA -, winners of the EFQM prizes in Europe, and their competitors. The results of these comparisons indicate that if IRIZAR were a publicly quoted company, its value would have increased more than the best companies in the world.

In spite of the positive economic results, IRIZAR emphasises that the ultimate aim of its mission statement is job creation. This is a critical success factor for IRIZAR and one of the most important factors in its contribution to the social environment in which it operates. Between 1993 and 1999, jobs have increased by 280% in the Ormaiztegi plant. Taking overseas expansion and the effect on local subcontractors into account, the number of jobs that directly result from IRIZAR's operation has increased by 471% in the same period.

Its great success is backed by many national and international awards for its management and its achievements, with the following standing out:

• First company in the sector in Europe to achieve ISO9001 (1994) and ISO14001 (1998) certification.
  
• First company to receive the Prince Philip Award for Business Excellence for Total Quality Management (1996) and the Award for Excellence in Business Management - Gold Q (1999) (the leading Spanish and Basque awards in this area).
  
• European Quality Award finalist (1999).
  
• World best-in-class in IQNET certification (2000), together with 11 other companies selected by countries.
  
• European Quality Prize winner (2000).

 

The EFQM in Istanbul

Coinciding with the IX edition of the prizes, under the slogan "Diversity in Management: a bridge towards excellence", the EFQM held its annual forum in Istanbul at the end of September. At the forum, more than 1,200 managers from all over the world presented and discussed innovative strategies for improving business competitiveness.

The European Foundation for Quality Management (EFQM) aims to improve the competitiveness of European organisations of all sizes and in all sectors, by identifying and promoting the best business practices. Its prizes for business excellence have been awarded annually since 1992 in five categories: large businesses, independent small and medium sized enterprises (SMEs), subsidiary SMEs, public sector organisations and operational units.

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Highest ranking official: Mr. Koldo Saratxaga, General Executive Coordinator of the IRIZAR project
Press contact: Ms. Mentxu Baldazo, Business Excellence and EFQM Coordinator
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