There is no shortage of standards. There are standards that define how something should be made vs. those related to processes, such as ISO 9001. According to the International Organization for Standardization (ISO), standards that provide requirements or give guidance on good management practice are among the best known of ISO’s offerings. Having achieved truly global status and thoroughly integrated with the world economy, ISO 9001:2000 (the transition to ISO 9001:2008 is now taking place) establishes requirements for quality management systems (QMS). It’s the most implemented standard for providing assurance about an organization’s ability to satisfy quality requirements and enhance customer satisfaction in supplier-customer relationships.

At the most basic level, standards are simply the application of tried-and-tested best practices. Standards focus on the products or services delivered, the business processes followed, and the way a business is managed as a whole.

The ISO catalog includes more than 18,000 international standards on a variety of subjects, and the organization publishes some 1,100 new standards every year. The full range of technical fields is extensive, yet it is process standardization that probably will affect small business owners the most. These are the entrepreneurs who have endured roller-coaster business cycles during the last decade due to dramatic market fluctuations. To hone their competitive edge and improve their eligibility for bids in key market sectors, many of them are finding they must also drive efficiency and consistency in their products and services. By adopting recognized standards such as ISO 9001 for operations and processes, small to medium-sized businesses are better equipped to engage new customers, instill confidence in stakeholders, and boost their bottom lines.

The National Institute of Standards and Technology (NIST) accurately states the simple truth: Manufacturing matters in the United States. It creates wealth in the form of economic growth, increased jobs, and robust trade in world markets. According to the Bureau of Labor Statistics, in 2008 the United States had one of the largest increases in productivity of 17 countries, despite the dramatic downturn in the economy.

The British Standards Institution (BSI), a global provider of standards, management systems, business improvement, and regulatory approval information, is also one of the world’s leading providers of training, conferences, information, and knowledge on a wide range of standards. “Standards provide a practical framework for small business owners and employees to examine, review, and continuously improve any area of a business,” says Robert Whitcher, a BSI product manager. “Depending on the depth, scope, and needs of each organization, these standards can be followed informally as a best practice or, on a more formal level, with external confirmation from a recognized independent certification body.”

Standards provide solid benefits to small businesses

“An effective quality management system provides the framework needed to monitor and improve performance,” explains Whitcher. “Led by a company’s top management, an ISO 9001 implementation ensures a strategic approach to reviewing the management system. Investing in a quality management system leads to increased operational efficiency, improved customer services, increased sales, higher returns, and greater profitability. Today, there are more than 670,00 businesses in 154 countries using ISO 9001.”

When small enterprises take advantage of standards, solid benefits can be realized. Whitcher describes how BSI has identified several examples of how ISO 9001 can help small business. Among other benefits, the standard can:

• Provide a competitive advantage

• Improve business performance and manage business operations

• Attract investors

• Enhance brand reputation

• Remove barriers to trade

• Streamline operations, reduce waste, and save money

• Encourage internal communication and raise morale

• Increase customer satisfaction

The NIST suggests that today’s economy is characterized by a shifting U.S. gross domestic product (GDP), for which manufacturing remains an enormous and vital component. The U.S. Department of Commerce statistics show that in 2008, manufacturing directly accounted for nearly 11.5 percent of GDP. The U.S. manufacturing firms employ more than 13 million people in high-paying jobs with benefits, represent roughly two-thirds of total U.S. research and development expenditures, and account for more than 80 percent of all U.S. exports.

The BSI points out that small and mid-sized firms are facing new and significant challenges. Efficient shop floor operations are a large part of competitive manufacturing, but efficiency alone is not enough in today’s global marketplace. Cost and productivity cannot be the only or even primary measure upon which U.S. manufacturers compete.

There is no disputing the argument that U.S. manufacturers must revisit their strategies to leverage their capabilities, reduce their costs, and demonstrate their advantages to attract new customers and investors. “Manufacturers must rapidly adopt new technologies and develop innovative products as part of these strategies,” NIST urges. Manufacturers must also look to be more efficient with their processes and resources. 

Every ambitious business strives for quality, consistency, efficiency, and best practice. Standards help ensure small manufacturers are getting the best results from their processes and demonstrate commitment to continuous improvement.

Formal and informal standards

Some people think standards are only for big businesses or involve significant costs. Not true. Standards are valuable to even the smallest organizations. Every business uses some type of standard; some are simply more formal than others. Standards set the tone for how a business should be managed to deliver the quality and service it wants to project to its customers.

Informal standards can be as straightforward as having company guidelines on how phone calls should be answered, or following a trade association’s code of practice. Although informal, these standards are essential in achieving specific objectives and can be easily managed in-house.

Formal standards, which most people think of when standards are mentioned, go a step further by setting out criteria agreed within the industry. These standards draw together best practices from industry experts, government representatives, and certification organizations as well as academics, consumer groups, trade unions, and—most important—businesses.

A formal standard such as ISO 9001 can detail how to create, manage, and deliver goods or services to meet customers’ needs. It can also focus on the QMS currently underpinning a small business. 

The price of implementing a standard practice varies but is often far more cost-effective than those with small industrial concerns anticipate. Considering the business benefits of applying the standard, often it offers some of the best value for the money a small business can receive. 

With formal standards, companies can use certification services from respected third parties, giving independent verification and confirmation that an organization is meeting or exceeding best practices or requirements. Standards are easy to implement, and training is readily available to help a customer understand.

Finding the best standards for a small business

“Identifying the most suitable standards is easy if an organization knows its business goals and objectives,” Whitcher observes. “A methodical approach and clear examination of these goals allows for a simple path to finding the best standard.”

Many small manufacturers begin by talking to their appropriate trade association to find out if any essential requirements or recommended standards cover their industry sector. 

It is also wise to check out the competition. Perhaps raising service levels will attract more customers, or maybe reducing the rate of product returns would have a significant effect. In a marketplace where competitors are already using standards, it is crucial to see which ones they are using and why. Many small business owners must examine if they, too, would receive a competitive boost from adopting the same standard.

Many small manufacturers discover ISO 9001 to be the most beneficial because it incorporates a “plan-do-check-act” cycle for continuous improvement, preventing business operations and processes from becoming rote and stale. Obtaining certification can provide solid opportunities to tender for contracts or join supply chains that would otherwise be closed. If a business is part of a supply chain where standards are used throughout, a standard can ensure the company’s products, processes, and technologies will be compatible with the businesses throughout the supply chain.

The next step

Once a small business has identified the areas that would benefit most from the application of a standard like ISO 9001, working with knowledgeable experts will keep the process affordable, provide the training that is vital to appropriate implementation, and demonstrate rapid return on investment.