The Value of Registering to an International Standard

By Lloyd A. Johnson

To register or not to register? So many businesses struggle with that question. Should we pursue registration to an International Standard like ISO 9001, ISO 14001, AS9100, or TS16949? What will it do for our business? Will it help us improve our quality and customer satisfaction? Will we attract new customers or open up new markets? Is it worth the time and expense?

According to ISO, the International Organization of Standardization, “ISO International Standards ensure that products and services are safe, reliable and of good quality. For business, they are strategic tools that reduce costs by minimizing waste and errors and increasing productivity. They help companies to access new markets, level the playing field … and facilitate free and fair global trade.” Sounds great, but what’s the value of registering to an International Standard?

In order to answer these questions, let’s first look at the different International Standards. Standards come in many flavors:
* ISO 9001 defines the requirements for an internationally recognized Quality Management System (QMS). The focus is on meeting customer requirements, improving customer satisfaction, and continually improving your processes. Most other Standards are based on the requirements defined in the ISO 9001 Standard.

• ISO 14001 defines the requirements for an Environmental Management System (EMS). The focus here is on helping an organization minimize negative affects to the environment and comply with regulations. The result is a system to continually reduce or eliminate waste streams and pollution.
• ISO 13845 defines the QMS requirements specific to the Medical Devices industry. It focuses on helping organization provide medical devices and related services that meet regulatory requirements and is applicable to both design and manufacturing processes.
• ISO 17025 defines the competency requirements for Laboratory Testing and Calibration Services. This Standard helps laboratory, testing, and calibration businesses demonstrate their technical competence in producing precise and accurate test and calibration data.
• ISO/TS 16949 defines the QMS requirements specific to the Automotive industry. The focus is on helping organizations in the automotive supply chain continually improve through reducing variations in processes resulting in defect prevention. All global automotive manufacturers require their Tier 1 & 2 suppliers to meet this Standard.
• AS9100 defines the QMS requirements for the Aerospace & Defense industry. It helps organizations meet the quality and safety requirements specific to Aerospace & Defense contractors. These contractors are usually monitored by government agencies.

Now, let’s get to those questions! We’ll start with “What will it do for our business? Will it help us improve quality and customer satisfaction?” From numerous studies and surveys conducted since 1990, becoming registered to a Standard leads to increased performance for an organization. Process variations are reduced through increased consistency and discipline. Everybody does it the same way, every time. Processes are tracked and performance reported regularly. More focus is placed on problem solving and customer satisfaction. Through continual improvement and capital investment, innovations in products and processes occur. All this leads to lower costs and higher profits.

How about attracting new customers and opening up new markets? Registration to a Standard makes your business more competitive. By being more competitive, you’ll see increased sales with existing customers. Who would you choose if prices are the same, the business who’s registered or the one who isn’t? It also leads to new opportunities in new markets. For example, if you’re a small parts manufacturer and haven’t been able to attract customers in the medical device industry because you’re not ISO 13485, getting registered will open this market to you.

Lastly, is it worth the time and expense? That depends. Becoming registered takes between 9-18 months, depending on the Standard you’re pursuing, the size of your business, and the stability of your current processes. The non-recurring costs associated with preparing for registration are typically $10-30K. Less if you can do it without outside help. The cost of registration ranges from $8-15K, depending on the Standard you pursue and the associated Registrar’s fees. Then there’s the recurring cost of sustaining your registration through a Registrar, which are typically between $4-10K per year. If you’re not being “pushed” by your customers to become registered, it might not make sense right now.

However…

The number of businesses registered to the various International Standards is continuing to grow and, the ROI from registration, can be significant. As an example, five businesses in the Southern Tier reported a total impact of ~$45M for FY 2012 and they attributed it to becoming registered to a Standard. This impact includes cost savings; capital improvements; sales retained; and new sales. Sooner or later, one of your current customers, or a potential new customer, will inquire as to “when will you be registered?” When that happens, you’ll quickly see the value of registering to an International Standard.

For more information about becoming registered to an International Standard, AM&T will be hosting a breakfast seminar on May 22, 2013 at the Owego Treadway to provide an overview and benefits of becoming registered to an International Standard. Watch for more information in future newsletters.

See this and other newsletter articles at http://amt-mep.org/files/3413/6250/0279/2013-03.pdf

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