Full access to Entrepreneur for $5

Meeting ISO Standards

Small companies pool their resources to improve their quality management and manufacturing processes

Opinions expressed by Entrepreneur contributors are their own.

In these challenging times, standing out from your competition is more critical than ever. That's why thousands of small companies are investing time and money to improve their manufacturing processes so they can meet what are known as "ISO 9000" standards. ("Iso" means "equal" in Greek.)

The standards, established to encourage quality management and manufacturing processes, are based in part on standards set by the U.S. Department of Defense and international military organizations for defense contractors. The International Organization for Standardization in Switzerland publishes hundreds of standards for just about every product made worldwide, according to ISO experts.

Many big companies and prime government contractors prefer to do business with ISO-certified manufacturing companies, according to Charlie Scalies, president of Source4Quality.com, a consulting firm that helps companies prepare to meet the standards and apply for ISO certification. There are several companies authorized to issue the actual certificates. "We are talking about process management--that's what it's all about," said Scalies, a former contract manager for Litton Industries. "You design your manufacturing system so the process is seamless and everything is trackable."

Scalies likes to compare meeting ISO standards to the adventures experienced by the characters in The Wizard of Oz. "You must have qualified and trained people to make sure the Yellow Brick Road is built right to get you to that big green thing called Emerald City," he said.

Scalies works with many small clients to prepare them for the certification process, which can take months and cost thousands of dollars, depending on what equipment and systems are needed to improve quality. Scalies also trains internal auditors to make sure companies continue meeting the quality standards necessary to keep their ISO certification. "We bring a lot more to the table with ISO certification and new equipment," said Stephen Reh, president of Rehtek Machine Co. in Passaic, New Jersey. Reh hired Scalies to improve Rehtek's manufacturing processes so the company could be ISO-certified last year.

Reh said he spent about $30,000 to upgrade equipment and computerize operations at his 12-employee contract manufacturing company. "The employees embraced the changes because we set procedures that streamlined our manufacturing process, and everything was done according to detailed instructions," he said. Reh, who received a federal matching grant designed to help small firms improve their manufacturing operations, said the ISO certification process "transformed the business from a little job shop to a contract production facility."

"Everything is traceable from when it comes in the door to when it leaves," he said. "There is no more confusion on the shop floor. With set procedures in place, I can sleep at night, knowing everyone is making parts according to written specifications."

Small Companies Benefit From Standards

More than 400,000 companies worldwide hold some type of ISO certification, according to industry experts. "We are seeing a lot of smaller companies with enough confidence in their processes to be certified and move to the front of the line to deal with major customers," said John Glavey, regional Midwest representative for DNV Certification, which registers companies.

Glavey and others involved in the certification arena said small companies benefit financially by upgrading their manufacturing and quality-control processes to meet the ISO standards. Why? Because better quality products mean a company keeps its customers happy and generates more business. "One of the first things our clients ask is are we ISO-certified," said Mike Herot, quality assurance manager for Da-Tech Corp. in Ivyland, Pennsylvania. "We give them a copy of our certificate rather than filling out the pages and pages of answers to questions."

Da-Tech, which has 100 employees, manufacturers printed circuit boards used in medical devices, telecommunications equipment and heater controls. The company received its initial certification in 1998. "You have to do an internal check-up every six months to see if you are still in compliance," he explained. He said Da-Tech hired Scalies to train three employees as internal auditors.

"The internal audits prevent catastrophic errors you may not notice without a system in place," said Herot, adding that maintaining high standards requires top-down support. "It's has to be an organization-wide effort and not just a one- or two-man show."

Dana DeNinno, recruitment and career development administrator for Tolas Healthcare Packaging in Feasterville, Pennsylvania, said getting employees involved in improving quality is a great morale booster and motivator. The company, which does contract manufacturing for the medical device industry, has created a team of 15 internal auditors drawn from different departments. "We would lose a lot of business if we didn't have the ISO certification," she said. "It's very important to our company."

DeNinno cautioned that the certification process requires more than just setting up quality manufacturing procedures and writing reports. "You can't just set it up and walk away," said DeNinno. "You need to measure and evaluate your systems frequently."

In the News

The SBA has extended the Physical Loss Disaster Loan application deadline to March 11 from January 10, according to Rep. Nydia M. Velazquez, ranking Democratic member of the House Small Business Committee. "Small businesses, which we depend on for our recovery and rejuvenation, are still hurting," said Velazquez. "Many of them are just now discovering how badly they have suffered over the past three months. It is important to keep these resources open to them."

Velazquez said she hopes Congress will past a pending bill that provides grants, no- to low-cost loans and loan forgiveness. "These will be the expanded tools we can use to help small businesses survive, thrive and lead us back to economic recovery with more jobs and greater growth. I hope the whole House will act on our bill quickly when it returns for the second session on January 23."

Back on Track America
Entrepreneur magazine is proud to be a sponsor of Jane Applegate's Back on Track America, a coalition of small-business experts--including our own Editorial Director Rieva Lesonsky--who are embarking on a rail journey across the United States to bring free guidance to the doorsteps of America's small businesses. The effort is dedicated to revitalizing those small businesses still reeling from the recession and the September 11 attacks. Visit www.backontrackamerica.com or www.entrepreneur.com/backontrack for more information and a schedule of upcoming events.

Jane Applegate is a syndicated columnist and the author of 201 Great Ideas for Your Small Business. For a free copy of her "Business Owner's Check Up," send your name and address to Check Up, P.O. Box 768, Pelham NY 10803 or e-mail it to info@sbtv.com.