Dollars and Sense: Holding onto sunk costs drowns success

Published 12:00 am Wednesday, June 20, 2007

For businesses looking to improve the efficiency and effectiveness of their processes or standardize processes as a baseline for continual improvement, International Organization of Standards certification is an option worth researching, as it can also create opportunities to attract new business in industries that require such certification.

ISO 9001 Quality Management System certification benefits all businesses that produce a product or provide a service. The certification deals directly with the efficiency and effectiveness of processes. The management system is an international standard centered on four basic concepts: understanding and meeting standard requirements, emphasizing the need to consider processes in terms of value added, obtaining results of process performance and effectiveness and implementing continual improvement of processes based on objective measures.

ISO certification deals with process standardization. Creating a process establishes a standard for a given activity, which provides a means for internal personnel or external parties, such as customers or registrars, to measure and check the organization. Businesses spend a lot of time finding the best way to produce a product or provide a service. The key to process standardization for ISO certification is to document those efforts. Developing a standard does not mean the process cannot be improved upon or changed, but simply that when this occurs, documentation must be revised.

Also, ISO certification provides marketing opportunities for businesses, giving them the chance to pursue business with industries that require suppliers to have it. For example, most automotive manufacturers and their top-tier suppliers require, at a minimum, ISO 9001 certification. Steel producers, foundries, aircraft parts manufacturers, government agencies and other businesses also require the certification.

In today&8217;s world, ISO 9001 Quality Management System requirements, such as customer satisfaction, continuous improvement and corrective actions, are important. ISO certification means that a company holds itself to a high standard and demonstrates it by voluntarily allowing an independent external source to audit its processes.

Chris Whaley is an adjunct instructor of economics at Jefferson State Community College. He can be reached by e-mail at

mailto:cwhaley@jeffstateonline.com