by James P. O'Neil
In 1994, Industry Week hinted at the demise of ISO 9000. But as we approach the new millennium, as many as 250,000 companies are expected to have received certification. In hindsight, who would have predicted that the Korean stock market would dominate the front pages of U.S. newspapers in 1997? Who thought smoking cigars and eating steak would be fashionable in 1997? Who predicted that Janet Reno would threaten Microsoft with a $1 million per day fine in 1997? With these events and unforeseen developments in ISO 9000 in recent years, what changes are in store for the certification business beyond 1997?
Management systems standards, such as ISO 9000 and ISO 14000, have found a seemingly permanent home in the quality assurance world. The number of certified companies continues to increase rapidly and has greatly mitigated manufacturers' and service providers' quality concerns. There were about 27,000 ISO 9000 certified companies worldwide in 1993. That figure was projected to reach 250,000 by January 1998.
But as the number of management systems certifications continues to grow, certification will cease to become a competitive differentiator. Issues are already being addressed and standards drafted to illustrate some of the differentiators that may create the next wave in quality assurance and certification. Some of these future directions include certification that takes standards beyond quality systems to encompass other business factors.
One area that illustrates the continued growth of certification is industry-specific standards. For example, QS-9000 and AS9000, for the automotive and aerospace industries, respectively, have been created based on the ISO 9000 model and are already gaining strongholds on their industries. Likewise, many retail outlets may also implement their own quality assurance standards.
"Certification to industry-specific standards will not necessarily eliminate manufacturers' needs to enter suppliers' facilities," says Kenneth Legg of Intertek Services Corp. and a member of the Independent Association of Accredited Registrars' Technical and Standards Committees. "For example, the Big Three automakers may still wish to audit suppliers with QS-9000 certification, but with a quality system already in place, they can focus their time and efforts on specific areas rather than concerning themselves with an entire operation."
"I have seen systems that are very impressive, though clearly intrusive," remarks Richard C. Randall of Randall's Practical Resources, a Denver-based management consulting company, and author of Randall's Practical Guide to ISO 9000. "Companies want better control over their suppliers. They want to increase confidence with their suppliers and the suppliers' ability to manage themselves wisely."
The service industry is one in particular that Randall sees as a prime target for a common industry-specific standard. ISO 9000 was developed specifically for manufacturers. Applying that standard to the temporary staffing industry, for example, almost demands creation of another standard.
In addition to industry standards, independent organizations are also working to establish new standards that will ensure quality beyond the traditional systems with which many manufacturers are already familiar.
"We have seen a transformation in the public and corporate communities' vision of the mission and construction of business," explains Alice Tepper Marlin, executive director of the Council on Economic Priorities Accreditation Agency. "Views of the market are changing from a narrow goal of seeking market share and profit to a broader goal that includes a company's impact on the environment and community."
As was the case with quality assurance before the rise of ISO 9000 certification, these issues--including fair labor practices and environmental concerns in manufacturing--are currently controlled by hundreds of fragmented codes assumed to be monitored by local authorities. Manufacturers are beginning to act, enforcing codes of conduct on their suppliers and disregarding the premise that local authorities are responsible for governing standards that disallow the unfavorable conditions.
International standards regarding social concerns may soon create a new wave in certification. For example, Social Accountability 8000 has been drafted by the CEPAA. Geared primarily toward workers' rights, SA8000 was drafted with the assistance of union representatives, human rights and children's rights organizations, academia, retailers, manufacturers and contractors, as well as consulting, accounting and certification firms.
Issued on Oct. 10, 1997, SA8000 will provide effective tools for companies to ensure a fair and safe workplace for their suppliers, as well as their own operations. The standard is specific enough to be used by audit companies and contractors in multiple industries and countries. As with many of the new industry-specific standards, such as QS-9000 and AS9000, the process of receiving SA8000 certification will be similar to the way manufacturers currently seek certification through international quality and environmental management systems auditing.
"ISO 9000 was an enormously useful model in developing the standard, as well as audit procedures and the framework of accreditation and certification bodies," notes Tepper Marlin. "The areas where you see the sharpest difference are in the fairly explicit performance requirements."
The CEPAA is preparing to assess certification bodies early this year. These certification firms will be able to certify whether a manufacturer's system complies with the SA8000 standard. Eileen Kaufman, the program director with the CEPAA, expects that many organizations will seek certification after the first quarter of 1998.
Industry experts also have opinions on the continued growth of existing standards. For example, the rapid growth of ISO 9000 certifications and acceptance may have had a direct link to the global economy. That connection may well affect future certification practices.
There is a logical link between the status of the economy and the growth of certification. Because certification comes with an added expense, a weaker market may have limited the number of companies seeking certification throughout the past decade, despite the obvious advantage of quality.
Many companies included in the recent certification rush have been small to mid-sized organizations. A battle between quality and the bottom line could come into play should the market take a downturn. Financial assistance from outside sources may become necessary to help prevent a potential slowdown in quality progress, particularly with the likely addition of common and industry-specific standards beyond ISO 9000.
"With the concern that small firms integral in the supply chain may have more difficulty in financing and managing the process of certification, we're hopeful that special assistance may be available," says Tepper Marlin. "It could come from several sources, such as government or international development agency subsidies or technical assistance, as well as the corporate customers demanding certification."
Should the global economy continue to strengthen as it has in the recent past, however, certification can be expected to continue to increase. Geographical business territories that are expanding to encompass the entire globe are also indicators that the need for international quality standards will rise.
With an expected increase in quality certification demands come additional issues that will affect registrars. The current quality system is only as strong as the registrars offering certification. Auditors' continued quality and competency directly affects the value of certification. Should the current rush for certification force registrars to employ inexperienced or inadequate auditors, the system could fail.
"The certification process will continue being popular and successful as long as it continues to add value," explains Norm Siefert, an original contributor to the foundation of the Registrar Accreditation Board. "It is the registrar's responsibility to maintain and enhance the competency and consistency of the auditors to ensure that this happens."
Beyond the individual auditors, some responsibility falls upon manufacturers, service providers and retailers when choosing business partners. As the number of certifications and related demand has increased, so has the number of registrars performing these services. The IAAR currently consists of about 35 accredited registrars, representing roughly 50 percent of those in existence. Many registration listings do not indicate whether an accredited registrar was responsible for registering a company. Under the current system, it is not enough for manufacturers and retailers to simply accept a company's ISO 9000 certification.
One safeguard is determining whether a company was registered by an accredited registrar. Some accreditation bodies do not perform assessments on the same level as an RAB-accredited organization, for example. That can bring down the value of certain manufacturers' certifications. Accreditors need to look at registrars and make tough decisions on the quality of their services. Likewise, management of registered companies need to review the management systems' effectiveness by margin comparisons and other financial measuring tools to determine the continued value of certification and the organization that offered it.
"The future in certification is upholding the value of the piece of paper [that indicates certification]," says Legg. "Registrars need to begin governing themselves to ensure the continued growth and, more importantly, value of quality certification. The IAAR was established to create value in our certificates and the registration services."
As quality management systems have matured, many certification practices within those systems have matured as well. Companies creating and enforcing their own standards are doing so because of lost confidence in their suppliers and their quality systems. This could be avoided with more careful consideration in choosing registrars for ISO 9000-certified organizations. At the same time, however, industries have clearly recognized the strength in ISO 9000 standards in choosing to model their own standards based on the ISO 9000 model and simply filling in the blanks for issues that may be specific to their industry.
The need to continue enhancing quality measures around the globe is clear. Social accountability, certification financing for smaller companies and qualified registrars are among the myriad issues facing the certification industry. The promising future of quality certification depends upon cooperation between all parties involved, including the accreditation organizations, registrars, service providers and manufacturers that rely on it.
About the author
James P. O'Neil is president of ITS Intertek Services, one of the leading internationally recognized registrars certifying quality (ISO 9000), automotive (QS-9000), aerospace (AS9000) and environmental (ISO 14000) management systems.
O'Neil holds IRCA and RAB registered lead assessor certifications and is on the board of directors for the International Standards Institution.