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

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

The standards, established to encourage quality management andmanufacturing processes, are based in part on standards set by theU.S. Department of Defense and international military organizationsfor defense contractors. The International Organization forStandardization in Switzerland publishes hundreds of standards forjust about every product made worldwide, according to ISOexperts.

Many big companies and prime government contractors prefer to dobusiness with ISO-certified manufacturing companies, according toCharlie Scalies, president of Source4Quality.com, a consulting firmthat helps companies prepare to meet the standards and apply forISO certification. There are several companies authorized to issuethe actual certificates. "We are talking about processmanagement--that's what it's all about," said Scalies,a former contract manager for Litton Industries. "You designyour manufacturing system so the process is seamless and everythingis trackable."

Scalies likes to compare meeting ISO standards to the adventuresexperienced by the characters in The Wizard of Oz. "Youmust have qualified and trained people to make sure the YellowBrick Road is built right to get you to that big green thing calledEmerald City," he said.

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

Reh said he spent about $30,000 to upgrade equipment andcomputerize operations at his 12-employee contract manufacturingcompany. "The employees embraced the changes because we setprocedures that streamlined our manufacturing process, andeverything was done according to detailed instructions," hesaid. Reh, who received a federal matching grant designed to helpsmall firms improve their manufacturing operations, said the ISOcertification process "transformed the business from a littlejob shop to a contract production facility."

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

Small Companies Benefit From Standards

More than 400,000 companies worldwide hold some type of ISOcertification, according to industry experts. "We are seeing alot of smaller companies with enough confidence in their processesto be certified and move to the front of the line to deal withmajor customers," said John Glavey, regional Midwestrepresentative for DNV Certification, which registers companies.

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

Da-Tech, which has 100 employees, manufacturers printed circuitboards used in medical devices, telecommunications equipment andheater controls. The company received its initial certification in1998. "You have to do an internal check-up every six months tosee if you are still in compliance," he explained. He saidDa-Tech hired Scalies to train three employees as internalauditors.

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

Dana DeNinno, recruitment and career development administratorfor Tolas Healthcare Packaging in Feasterville, Pennsylvania, saidgetting employees involved in improving quality is a great moralebooster and motivator. The company, which does contractmanufacturing for the medical device industry, has created a teamof 15 internal auditors drawn from different departments. "Wewould lose a lot of business if we didn't have the ISOcertification," she said. "It's very important to ourcompany."

DeNinno cautioned that the certification process requires morethan just setting up quality manufacturing procedures and writingreports. "You can't just set it up and walk away,"said DeNinno. "You need to measure and evaluate your systemsfrequently."

In the News
The SBA has extended the Physical Loss Disaster Loan applicationdeadline to March 11 from January 10, according to Rep. Nydia M.Velazquez, ranking Democratic member of the House Small BusinessCommittee. "Small businesses, which we depend on for ourrecovery and rejuvenation, are still hurting," said Velazquez."Many of them are just now discovering how badly they havesuffered over the past three months. It is important to keep theseresources open to them."

Velazquez said she hopes Congress will past a pending bill thatprovides grants, no- to low-cost loans and loan forgiveness."These will be the expanded tools we can use to help smallbusinesses survive, thrive and lead us back to economic recoverywith more jobs and greater growth. I hope the whole House will acton our bill quickly when it returns for the second session onJanuary 23."

Back on Track America
Entrepreneur magazine is proud to be a sponsor ofJane Applegate's Back on TrackAmerica, a coalition of small-businessexperts--including our own Editorial Director Rieva Lesonsky--whoare embarking on a rail journey across the United States to bringfree guidance to the doorsteps of America's small businesses.The effort is dedicated to revitalizing those small businessesstill reeling from the recession and the September 11 attacks.Visit www.backontrackamerica.com or www.entrepreneur.com/backontrack for moreinformation and a schedule of upcoming events.

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

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