Increasing Demand for ISO 9001.

In small business in particular--there's a quickening interest in the international quality standard known as ISO 9001 2000. More and more firms have come to realise that meeting this standard not only can ease entry into export markets but also can lead to significant cost savings.

Canon Virginia, Inc. (CVI)--a Newport News-based firm that assembles copiers, laser printers, and printer cartridges--is a good place to start an assessment of what ISO 9001 can mean to a small company. Not because CVI is in any sense a small company itself--it has 1,200 employees and is an arm of the Tokyo-based international powerhouse, Canon, Inc.--but because it proceeded so smoothly to certification and meeting the ISO 9001 standards.

The ISO 9000 standards were a good fit at Canon Virginia, Inc., because that company, like so many other internationally successful Japanese firms, has a long history of effective quality management. (Canon's version is known as the Canon Production System.) For CVI to be certified as meeting the ISO 9001 standard, it had to make a few changes, says Vice President Tadao Okabe--one of 35 Japanese nationals on the CVI staff--but, he adds, "we didn't find any big gaps" between what CVI was already doing and what ISO 9001 required.

CVI's experience shows that winning ISO 9000 certification can be a relatively simple and pain less process for a company that is prepared for it, and that certification can even benefit a company that already has a strong quality program. There is nothing to prevent many small companies from obtaining certification very much the way CVI did.

The ISO 9000 standards were created in 1987 by the International Organization for Standardization (ISO), in Geneva. To date, 95 countries have approved those standards for voluntary application in both the manufacturing and service sectors. In the U.S., almost 2,000 certificates have been issued, to about half as many companies, some of which have obtained certificates for more than one location.

Although ISO issues the standards, it does not regulate the program internationally; that is left to national accreditation organizations like the U.S. Registrar Accreditation Board. RAB and other such boards authorize registrars to issue ISO 9001 certificates.

In Europe, there is some government regulation of these boards, but not in the U.S. where RAB operates with the authorization of a widely respected private organization, the American National Standards Institute, in New York. ANSI is the American representative to ISO.

ISO 9001 certification does not necessarily relate to the quality of a company's products or services but signifies that a company has fully documented its quality-control procedures, whatever they are, and is abiding by them. (Thus the ISO 9000 mantra: Say what you do, do what you say.)

It's theoretically possible that a company could, while meeting the ISO 9001 standards, turn out consistently inferior products; but it's not likely. Tim Barry, quality-control manager at American Saw in East Longmeadow, Mass., believes that ISO 9000 certification contributed to declines in product defects at the 800-employee, family-owned firm. American Saw's certification, the first in its industry, also improved communication and helped reduce workplace accidents, he says.

For the smallest firms, though--those with only a few dozen employees--the costs associated with obtaining ISO certification can loom larger than the benefits. American Saw's cash outlay for certification was approximately $60,000, Barry says. All of that money went to outside consultants and registrars; the figure doesn't cover Barry's salary or the time spent on certification by other employees.

Costs that are manageable for an 800-employee firm can be daunting for someone like Dick Sunderland, a small manufacturer of customized precision machinery.

Sunderland, the owner of D&S Manufacturing, in Westfield, Mass., just a few miles down the road from American Saw, is seeking ISO 9001 certification "to get a leg up on the competition." Because of the cost of certification, though, Sunderland's ISO 9001 effort has stalled before really getting off the ground.

Through contacts familiar with ISO 9001, Sunderland was able to gain some sense of where his company stood vis-avis the ISO standards. An ISO 9000 consultant based in Europe ranked his company close to certification level.

The task remaining for Sunderland before D&S was audited for certification was documenting what he was doing-- that is, writing a quality-control manual that would meet ISO 9001 standards.

The problem is that Sunderland says he can't do the work at his current staffing. level of 25. He and a foreman can devote an average of five hours a week to the job, not enough to finish in what he considers a timely fashion. He can't afford to hire a full-time quality-control manager.

Sunderland is hardly alone, but there are ways small firms can deal with the costs associated with certification. Among them:

  • Negotiate. Registrars and ISO 9000 consultants are in business for profit; different registrars charge different amounts. Scott Laney, president of Griffith Rubber Mills, a 430-employee operation in Portland, Ore., advises all companies seeking ISO 9001 certification to try to negotiate a lower price with a prospective registrar; he thinks registrars' prices a re trending down. Other factors besides price are important, though: The registrar should be familiar with your industry and have credentials that will be accepted by your overseas customers.
  • Ask customers for subsidies Laney also suggests that companies seeking ISO 9001 certification ask their customers to subsidize the cost--especially if the customer is pushing its supplier to get the certification, and the customer obviously values the supplier. One of Griffith's main customers footed the entire bill for its ISO 9000 certification "because they needed our technology," Laney says.
  • Seek alternatives to consultants. Canon Virginia's Donna Voshell points to growing involvement by community colleges in Virginia and other states in preparing small businesses for ISO certification. She is working with a quality institute at a nearby community college, she says, "trying to get an ISO networking group set up. With ISO becoming so predominant now in the U.S., a lot of people are offering things now at a considerably reduced price from when it was first introduced."
  • Decide if you really need certification. Ultimately, what really matters for many small firms is not getting ISO 9001 certification, but meeting the standards that certification requires. Meeting the standards can be done for a lot less money than getting the certificate.

    Other companies see the certification itself as important, however. Canon Virginia's president, Shin-ichiro Nagashima, decided to seek ISO 9000 certification as a way to gain "worldwide recognition for our production system that we already had in place," says Voshell, who as CVI's calibration s upervisor led the certification efforts. (Voshells job entails verifying that the measuring equipment measures accurately.)

    January 1992 was when "we started our investigation of what was required," Voshell says. None of Canon's customers were insisting that it be ISO-certified even though such customer demands are what frequently lead companies to pursue certification. But, says Doug Grossenbaugh, CVI's quality-assurance manager, "we wanted to be ahead of the game."

    Voshell herself went through five days of training to be a lead assessor in an ISO-certification audit, and CVI assembled a task force to manage the changes that certification would require. "When we started running into problems that we needed some expert help with," Voshell says, "I made contact with a consultant," choosing one who had already conducted several certification audits. (Consultants can audit as well as consult, but not for the same company.) "Those are the people who are going to understand what's going on," she says.

    CVI had the consultant visit several different times, Voshell says, "to evaluate our progress and make sure we were approaching things in the correct manner." Then, near the end of the process, the consultant actually audited CVI's system, in a sort of dry run for the certification audit. The consultant was valuable to CVI "because he offered us various options"--different ways to meet the standards--"instead of just what we had thought of," Voshell says.

    Preparing for certification was "basically a matter of putting documentation in place," she says. "We already had a system, and there was nothing wrong with our system--we just needed to document it."

    Documenting procedures can be tricky, though, as Voshell says: "When people start writing down what they do, they think, 'Maybe I should add a little more here or a little more there.' That may have been the biggest problem that we ran into."

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