It's
a term that's been compared to "The Good Housekeeping Seal of
Approval." It assures that products are produced by meeting
well-defined standards of' quality and consistency. And, for
many companies and industries, it's fast becoming a
requirement of doing business.
In
fact, more and more, marketing and salespeople of small- to
mid-size manufacturing and supply companies are being asked by
their customers to demonstrate that they are international
Standards Organization (ISO) certified.
In
light of this, marketing and sales managers are beginning to
view ISO certification as an important element in their sales
success.
In
1987, the International Organization for Standardization set
three quality management standards to assure vendor quality:
ISO 9001 certifies those companies that do design and
development, product manufacturing, installation, final
inspection and testing; ISO 9002 covers companies doing
production and installation; and ISO 9003 affects companies
that handle final inspection and testing.
ISO
certification requires that a company must set up and document
all of its procedures including the procurement and storage of
materials, the manufacture and delivery of products, employees
training and customer support.
Originally, ISO involved only those companies doing business
in Europe. Today, however, businesses that supply those
companies (many of which are smaller firms that do business
only in the states) are being asked to meet ISO certification.
The
reason? The European Community requires companies in some
specifically regulated industries that sell products in
Europe, not only be ISO-certified themselves, but also that
they purchase only from suppliers and vendors that are also
ISO-qualified. More and more, large businesses, most of
whom do business in Europe and are already certified, are
requiring that their smaller suppliers here in the states are
certified.
The
standards were developed to help manufacturers and service
providers in the international marketplace develop a quality
conscious approach for their research, testing, manufacturing
and support operations.
Preparing for ISO 9000 certification can cost a small- to
mid-size company from $25,000 to $50,000 in consultant fees,
training programs, auditing costs and registration. Because of
these prohibitive costs, some uncertified companies are
finding themselves blocked from significant business
opportunities.
Still, production and quality assurance managers who support
ISO say that the process produces performance improvement and
cost savings over the long term. Rethinking and documenting
every aspect of a corporate process can help identify and
eliminate weaknesses and low productivity areas. Managers also
note that the payback from cost savings usually occurs within
a three to five-year period.
Skeptics point out that going through the certification
process creates increased paperwork and takes time away from
other issues. They argue that the long-term cost savings may
not be worth the investment.
For
marketing and sales managers, however, the real issue of value
is quickly becoming one of sales and profits. Those who can
readily answer "yes" to the question of certification say they
do have a competitive advantage because ISO is a powerful
marketing tool and an effective form of differentiation.
As
one of the oldest manufacturers of pressure relief valves,
Crosby Valve and Gauge Company has always been known for its
quality. According to quality assurance manager Joe Greene,
that company's need for certification became clear when one of
it's major international customers required that its
successful bidder be certified.
"The
need for certification was clear, and we found that compliance
to the standards was a natural progression in our quality
improvement process," Greene said. "The certification effort
not only improved our processes and products, but also helped
demonstrate Crosby's commitment to our customers."
A
recent survey of 1700 ISO certified firms in the U.S. and
Canada indicated that nearly all the respondents currently use
or plan to use certification status for public relations
purposes.
Already certified companies are using ISO to effectively
market and sell their products and services. Those who are not
certified are under increased pressure from marketing and
sales managers to make the investment.
EMC
Corp., a maker of data storage devices and one of the state's
leading growth companies, is a strong advocate for
certification. CEO Michael Ruettgers has this advice to those
on the fence: "When the time comes for your firm to decide on
ISO, don't hesitate. The resultant revenue jumps, system
improvements and employee enthusiasm make it worth the
hurdles."
Herbert Clifford is principal of Clifford
Marketing in Weymouth. John Martin is an ISO
and Quality Management consultant and principal of
Martin Associates Business Consulting Group in Tiverton, RI.
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