Quality Standards Update

by Paul Scicchitano

ISO 9000:
Not Just for the Big Guys

ISO 9000 registration is perceived as something large companies do, particularly those that export to Europe. But as a new study points out, this common perception is just plain wrong.

Whether a Fortune 500 company or a mom and pop, large and small businesses alike are seeking registration. A survey conducted by industry newsletter Quality Systems Update and co-published by Irwin Professional Publishing and Dun & Bradstreet Information Services provides us with the first statistically accurate snapshot of registration activity since 1993. Survey questionnaires were mailed in October to all known ISO 9000 certificate holders in the United States (about 7,000 in all.)

The results shed new light on which companies are getting registered and why. They also provide us with a better understanding of how the ISO 9000 phenomenon has changed since the first survey was taken.

The results of the 1996 survey show a fairly even distribution of certificates by sales volume. For example, about 24 percent of all U.S. registrants reported annual sales of $25 million or less. Of those, about 10 percent reported annual sales of $10 million or less. Another 31 percent reported annual sales between $26 million and $100 million, while about 28 percent reported annual sales between $101 million to $1 billion. About 12 percent of the respondents said they had sales exceeding $1 billion.

The breakdown of respondents is similar to that of the 1993 survey. But two years ago there were only about 1,700 certificates in the United States. The latest survey, which had a 26-percent response rate, also addresses the most commonly asked questions of companies considering registration as well as those that have already attained it.

About 85 percent of the registrants said their companies experienced external benefits, and 95 percent said they experienced internal benefits as a result of registration. Overwhelmingly, they cited higher perceived quality, competitive advantage and reduced customer quality audits as the fruits of their labor. Internally, they reported better documentation, greater quality awareness by employees, enhanced internal communications and increased operational efficiency.

The survey also confirms the 1993 findings that the explosion of ISO 9000 series registrations in the United States has not been driven by European Union requirements for exporting regulated products. Only about 8 percent of the respondents said their principal reason for pursuing registration was to comply with EU requirements.

An overwhelming number of respondents-77 percent -ranked quality benefits among their most important reasons for pursuing registration, according to a composite ranking. About 73 percent cited market advantage or preferred supplier status, and about 68 percent cited customer demands or expectations. In 1993, companies cited the same reasons for pursuing registration.

Not all assumptions proved to be false. For example, many people view the ISO 9000 management representative as someone grounded in corporate quality. They are right. About 63 percent of the respondents selected their ISO 9000 management representatives from the quality area. About 17 percent picked someone from upper management, while only 1 percent said their management representative came from purchasing.

The good news for ISO 9000 management representatives is that the job tends to be a fairly stable one. About 79 percent of the respondents said their company has had only one ISO 9000 management representative. Most companies seem to get by with just one or two full-time people to maintain their registrations.

Perhaps one of the biggest surprises in the survey is that companies are taking longer to get registered now than they did in 1993. They reported it took slightly longer than 15 months to attain ISO 9000 registration from the time senior management signed on. In contrast, the 1993 respondents said it took a little over a year to achieve registration. A number of industry experts had predicted that companies might achieve registration more quickly as their level of familiarity with the standards increased. But that hasn't happened yet, as the survey found.

Next month, we'll look at costs and benefits of ISO 9000 registration and assess how the marketplace will be affected by QS-9000 registration and the coming ISO 14001 registration for environmental management systems.

About the author . . .

Paul Scicchitano is managing editor of "Quality Systems Update," a monthly newsletter and information service by Irwin Professional Publishing devoted to ISO 9000 and ISO 14000 issues. For more information, telephone (703) 591-9008, fax (703) 591-0971 or e-mail isoeditor @aol.com.