Wednesday, May 19th 1999

The project represented by IRIZAR, has been awarded, for the first time since its creation, with the Gold "Q" by the Basque Government. This award is the maximum recognition for Excellence in Business Management.

The Gold "Q" has been awarded to Irízar by the Department of Industry of the Basque Government, after an external evaluation carried out by the Euskalit Evaluators Club (Basque Foundation for the Promotion of Quality), taking the EFQM (European Foundation for Quality Management) Model for Excellence as the reference.

This Model, promoted by the European Foundation for Quality Management (EFQM) also serves as a reference for the top European award for Business Excellence "The European Quality Award". This award, in existence since 1992 has been won by companies as important as SGS-Thomson Microelectronics, British Telecom, Ericsson or Rank Xerox.

The EFQM model constitutes the basis of the European Quality award and is based on the following premise:

The satisfaction of Customers and Employees and Impact on Society are achieved by means of Leadership that drives Policy and Strategy, Management of Personnel, Resources and Processes towards the achievement of Excellence in Business Results.

In graphic terms, this principle is based on the following diagram:

IRIZAR: A PROJECT BASED ON PEOPLE

In 1991 IRIZAR was in a delicate situation in business terms, with significant losses that put the company's future at risk. This situation began to change as a result of the actions taken to save the company by the new management team, led by Koldo Saratxaga. These were fully supported by the people working in the co-operative.

The strategies opted for turned out to be the right ones and the team of people began to function. This marked a turning point in the performance of the company and the start of a spectacular rise towards Business Excellence.

This process gradually changed IRIZAR from a functional-hierarchical organisation managed on the basis of the interests of areas and departments, into one managed on the basis of customer-oriented processes, characterised by progressive self-management, basically by means of teamwork, to make IRIZAR A BUSINESS PROJECT BASED ON PEOPLE.

The main aim of this highly participatory business culture is to SERVE CUSTOMERS AND PROVIDE THEM WITH ADDED VALUE, by means of the key Customer-Line process, which covers from when an order is received up to the final delivery of the coach.

90% of the people form part of this process, grouped into Customer-Line Teams on each of the five production lines, together with suppliers and external customers. The current organisational chart is derived from this focus, with only two levels and the replacement of individual work by teamwork. Before, customers mainly dealt with salesmen. Now they deal with all the members of the team, and have periodic meetings with them.

All this goes hand-in-hand with an intensive participatory process to develop Policy and Strategy, both to establish the Mission and Common Values with a down-up focus, and to deploy Critical Factors for Success in Key Process Indicators and the corresponding targets in the Annual Business Plan.

KEY MANAGEMENT ELEMENTS

By way of a summary, it can be said that IRIZAR's Management System has the following key elements:

• Focus on the CUSTOMER.
• Based on PEOPLE, with a participatory, self-management system.
• Based on management by PROCESSES, aimed at both internal and external customers, with measurable targets.
• Commitment to the principle of improvement: in percentage terms in normal process management and, above all, of a radical nature through REENGINEERING, with a permanent effect on QUALITY, SERVICE, COST and INNOVATION.
• The taking of decisions with a view to the future.

PRINCIPAL MILESTONES ON THE ROAD TOWARDS BUSINESS EXCELLENCE

1994

IRIZAR became the first European manufacturer of luxury coaches to obtain ISO 9001 quality certification.

Strategy defined as: TO SERVE CUSTOMERS AND PROVIDE THEM WITH ADDED VALUE.

The Customer-Line Process established as the first key process, to personalise relations with the customer.

Focus on Management by processes and start of the application of radical changes, with the adoption of Reengineering as the Management Model based on People and a focus on the CUSTOMER.

1995

Incorporation of the EFQM Model as the Reference Model for the route towards Business Excellence. This generated a constant momentum towards self-evaluation, fomenting the use of questionnaires to find out the opinion of the people working at IRIZAR, its customers, its suppliers and institutions representative of society.

1996

Prince Philip of Asturias Prize for Business Excellence for Total Quality Management (TQM), awarded by the Ministry of Trade and Industry.

1998

First European manufacturer of luxury coaches to achieve the ISO 14001 Quality Certificate for Environmental Management.

Silver "Q", after an external evaluation in accordance with the EFQM Model, carried out by Euskalit (Basque Foundation for the Promotion of Quality).

1999

Participation in the European Quality Award. Gold "Q", first Basque company to obtain it.

THE RESULTS OF "EXCELLENT" MANAGEMENT
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From a company in crisis in 1991, IRIZAR has become one emblematic co-operative and one of the most dynamic companies in the Basque Country and Spain as a whole.

Thanks to its Management Model, today IRIZAR manufactures luxury coaches with enormous flexibility, based on technological innovations and developments, which can be adapted to many different chassis, markets and customer requirements and therefore offer a wide range of possibilities.

This FLEXIBILITY is what makes IRIZAR stand out and is one of the keys to the company's rapid growth and expansion. Between 1991 and 1999 Value Added per job went from 2.8 million pesetas to 12 million pesetas and sales per person from 11 to 29.8 million pesetas.

Over these eight years, sales have multiplied by 6.4 and exports by 35.2, going from sales in 3 countries in 1991 to sales in 42 countries today.

In 1992 one coach was manufactured per day, today the figure is 5.10. Then, 38 days were required to build a coach, today only 14.

In Europe, there are seven luxury coach manufacturers producing more than 400 coaches a year. In this European ranking IRIZAR has risen from 6th place in 1991 to 2nd place today. In Spain the company is the market leader with a share of 33%. The company's current share in the EU is 9.5%.

However, there are two aspects that stand out over the rest in this business development based on Excellence:

A customer loyalty ratio of more than 70%

The high level of job creation, a basic element of IRIZAR's mission as a co-operative enterprise. In 1991 the workforce totalled 225. Today 610 people work in the Ormaiztegui plant, and 160 more jobs have been created through subcontracting over the last four years.

The setting up of four new production plants in China, Morocco, Brazil and Mexico.