ISO 9000 Process Catching On
John Morrissey found out about ISO 9000 two years ago when his prime-contractor customers sent him letters telling him to get ISO-compliant if he wanted to do more business with them.
David Goodreau discovered that his Burbank machine shop needs ISO 9000 certification to do business with big companies outside his customary defense work.
Like many small manufacturers, Morrissey and Goodreau have discovered that the quality-control system known as ISO 9000 is no longer a buzzword to be scoffed at and ignored, but is fast becoming an essential business tool. The federal government, big commercial companies and international firms that provide meat-and-potatoes work for thousands of small manufacturers are increasingly demanding ISO 9000 compliance and registration.
Companies that refuse to get with the program risk losing business and becoming a third-rank manufacturing company consigned to leftover small jobs.
“If you’re going to be doing work in a manufacturing facility in the 21st century, this is a necessity,” said Goodreau, owner of Newman Machine Works and chairman of the California Small Manufacturers Assn.
Still, the most frequently asked question about ISO 9000, which most people know about only from “Dilbert,” probably is “What the heck is it?”
Begun in 1947 by the International Organization for Standardization, the system was devised to unify quality standards worldwide. The organization, headquartered in Geneva, Switzerland, took the name ISO from the Greek isos, meaning equal. European manufacturers in particular got behind the idea of unified standards, because firms there often had to make several versions of the same product for shipment to different countries.
ISO 9000 doesn’t set standards. Instead, it is a procedure in which companies detail how they make their products. Auditors verify that the explanation is being followed; then the companies can register for the certification. Customers can examine the paperwork and see if the manufacturer meets their standards. For example, customers can find out the frequency of equipment inspections, the kinds of materials and equipment used in the manufacturing process, emergency procedures and backup supply lines.
Although European companies embraced the concept, U.S. manufacturers kept their distance, mainly because the federal government had its own system of contractor quality standards, with paperwork to be filled out and inspectors sent to examine companies on-site. But as the government has cut costs, it has increasingly waived, in nonsensitive military and general services contracting, the requirement that companies meet federal standards and has allowed them to substitute ISO registration instead.
The result is that ISO has picked up steam. Now, many federal prime contractors want their subcontractors to be ISO-compliant, and commercial contractors are following suit. Meanwhile, as more U.S. companies engage in international trade, they must meet ISO procedures that overseas firms have been following for years.
“We’ve informed all our suppliers that this is the direction we’re going,” said Bob Jorgensen, spokesman for a Boeing Co. division, Boeing Shared Services Group, that alone has 17,000 supplier companies. Although ISO compliance is not a requirement to do business with any of Boeing’s four divisions, Jorgensen said the company uses it in part to determine whether to do business with a new company and to evaluate the quality of work of its existing suppliers.
More than 24,000 U.S. firms were ISO-registered as of December, with thousands more ISO-compliant, meaning they follow the procedures but have yet to register.
That relatively small number means manufacturers that have adopted the system have an advantage, said Brad Ward, chief executive of Ward Systems Group in Glendale, who helped devise an ISO program for the California Small Manufacturers Assn. He cited a Midwest candy company as an example: One of only three ISO-registered candy manufacturing companies in the United States, it was approached by a Scottish firm via the Internet and awarded a $300,000 contract to make ice cream cones.
A Northern California firm, Ceronix in Auburn, saw its sales increase 60% within 18 months of initiating the ISO 9000 system, said Bob Bishop, communications manager with the California Manufacturing Technology Center, which provides ISO training.
Morrissey, owner of Superior Jig Inc. in Anaheim, calls his ISO registration a good sales tool that gets him in the door when courting new companies. He credits his ISO status with winning him two new customers this month, each with fat contracts. Goodreau’s firm is now undergoing the process to become ISO-compliant because, he said, “if you’re just going to be a low-end company, somebody in Indonesia and Mexicali can do it cheaper. Americans want to be higher value and higher end, and that’s where I’m taking my company.”
Despite the increasing need for ISO compliance, many small manufacturers aren’t buying. An ISO outreach program in Sacramento by Goodreau’s association attracted only four companies. Faxes sent by the association to 400 or 500 companies in the San Fernando Valley recently drew only seven firms to an ISO program.
Not surprising, Ward and Goodreau say, given that many manufacturers recall all the hoopla about metric conversion, which never materialized. They see little need to enroll in a time-consuming and costly program that will disrupt the way they do business.
Undeniably, the ISO process is time-consuming and costly. It takes six to 18 months to document how a company operates, then another two to three months to double-check the documents against actual operations. To register as ISO-compliant, an outside auditor must observe the company. Audits are then conducted every year to keep registration current.
Fees start at $10,000 to $15,000 for a consultant to guide a company through the process and to audit and register the firm. In addition, manufacturing firms incur additional costs as employees take time away from production to undergo the process.
Help is plentiful for manufacturers in Southern California, with ISO training available from the California Small Manufacturers Assn.’s peer-based program at (818) 242-7658 and from a variety of state and federal sources, including the California Manufacturing Technology Center at (800) 300-2682, with seven locations. An ISO Web site is at https://www.iso.ch.
“I see it as absolutely vital to my business right now,” said Goodreau, who is about three months into what he knows will be a long process. “If I found one new customer because I was ISO 9000-compliant, wouldn’t it be worth it?”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
What Is ISO 9000?
ISO 9000 is an international quality management and assurance system for manufacturers created by the International Organization for Standardization, an association made up of national standard agencies from 130 countries. To qualify for ISO 9000 registration, companies prepare documents describing their manufacturing procedures and then call in auditors to compare the documents against actual operations. The documents are used by other companies to help gauge whether to do business with them.
Times staff writer Vicki Torres can be reached at (213) 237-6553 or at vicki.torres@latimes.com.
