HomeAbout UsIndexEditor ProfileTerms and ConditionsContact Us

TAFaulhaber Photo


You, Your Customers
and ISO 9000:
Part Two


See also:
You, Your Customers and ISO 9000 -- Part One
You, Your Customers and ISO 9000 -- Part Three

          ISO 9000 product standards are developed through the national standards body in each resident nation. The American National Standards Institute (ANSI) founded in 1918 is the ISO member body for the United States. ANSI was a founding member of the ISO in 1947 and plays an active role in its governance; it is one of the five permanent members of the governing ISO Council and is one of four permanent members of ISO’s Technical Management Board. ANSI does not by itself develop American National Standards (ANSs) or ISO Standards; rather, it facilitates development by establishing consensus among qualified groups. The Institute ensures that its guiding principles -- consensus, due process, and openness --- are followed by the more than 175 distinct entities currently accredited under one of the Federation’s three methods of accreditation -- organization, committee, or canvass.

          ANSI’s governmental liaison is the National Institute of Standards and Technology (NIST) within the US Department of Commerce; ANSI’s upcoming National Standards Systems Network (NSSN) will eventually link the databases of hundreds of US organizations concerned with the development, production, distribution and use of technical standards. NSSN is partially funded by NIST, and is expected to enhance US business and government’s ability to exert leadership and achieve success in global markets through standards.

          ANSI offers a series of training and consulting services assisting US businesses and organizations maximize the benefits of strategic standardization. ANSI training programs have been developed by member companies and organizations that understand the issues and regulations involved in standardization, and that can help the smaller business and entrepreneur learn how to participate in standards development boards and committees.

          "There are sectors where aggressive competitors from other parts of the world have really started driving the agenda, and we have really got to get to the table and play. ... Standards are coming to the fore as a corporate strategic tool, very important for our companies, for their ability to compete, and therefore for our entire economy."

Dr. Arati Prabhakar, Director
National Institute of Standards and Technology

          It is essential to understand that ISO 9000 is site- or process-specific. Once a company believes it has fully instituted and documented all requisite quality management procedures, it may request an audit to register [in Europe: to accredit] the site or the process, although self-certification to any standard is always an option. An audit team is usually composed of two to six people who will be on-site for a number of days. At random, representative production or processing operations will be inspected, and then all operational, maintenance and quality management procedures and records will be examined, all instrument settings verified, all personnel quizzed, and comprehensive compliance with total standards confirmed.

          These audits can be exhaustive: it is estimated about 70 percent of companies fail their first audit. And once a site or process is registered, there is an agreed-upon schedule of follow-up audits.

          ISO 9000 registration is not cheap. Adding up the costs of retaining consultants, generating all manuals and documentation, engaging auditors to conduct the required examinations, and the salaries of internal staff to organize and implement the project, the average cost of registration is about $250,000 and usually takes at least a year. Obviously, there is quite a range in these costs, spanning from approximately $60,000 for smaller companies (annual sales of $10.0 million or less) to more than $600,000 for operations with annual revenues in excess of $1.0 billion.

          However, the operational cost improvements derived through the registration process are frequently prompt and substantial. Rework and scrap are often reduced significantly, and productivity improvements are quite common. Many companies that initially sought ISO 9000 registration to protect their competitive position in Europe now recognize that improved manufacturing operations are, in fact, the most important benefit. The first cost may be stiff, but the ROI can be most appealing. More companies are now finding the advantages of ISO 9000 in enhanced quality management and productivity to be far greater than its contributions to exports.

          An excellent case study of the registration process has been presented throughout 1996 in Quality Magazine (concluding with the January 1997 issue) in an ongoing study written by Melissa Larson titled "A Certification Chronicle": []. This series of articles reveal the arduous task of the preparation and the impending audit for ISO 9001 registration faced by Perfection Products Inc. -- a small ($4.6 million annual sales) manufacturer of components for the semiconductor industry in Lebanon, Indiana. These articles portray vividly the human factors at work during this registration process, as well as the inevitable roadblocks and frustrations to be encountered.

          The continued examination of the ISO 9000 registration process will be the focus of our next column.

Your comments and suggestions for these pages are most welcomed!

[Return to Main Index] [Return to Home Page]

Thomas A. Faulhaber, Editor

Telephone: 617.232.6596 -- FAX: 617.232.6674

227 Fuller Street
Brookline, Massachusetts 02446.5757

Outsourcing Placard

Revised: June 4, 1999 TAF

© Copyright 1997, 1999 Thomas A. Faulhaber / The Business Forum Online®, All Rights Reserved