Page 536 - Business Principles and Management

Chapter 19 • Product Planning and Production Management

Focus On...

Global Quality–ISO Standards

Global trade has created a variety of problems for companies, along
with opportunities to reach new customers with their products and ser-
vices. One of the greatest challenges has been the lack of standardiza-
tion among the products produced by different companies. Consider
the problems that a company creates when it produces machinery that
cannot be sold in another country because it is not compatible with the
machinery that customers in that country already use. What if a com-
pany needs to make repairs and the available parts don’t match the
broken parts?
The International Organization for Standardization (ISO) was
organized to deal with the standardization issue, which is a barrier
to international trade. The two primary goals of this international
organization are:
• to develop agreements on production designs to increase com-
patibility among products that are used with each other, and
• to establish standards to ensure quality and reliability when one
company purchases the products of another company.
Over 130 countries participate in the voluntary organization. Because
of the agreements developed by the ISO, products such as credit cards
can be used in cash machines in any country and batteries produced in
one country will work in a CD player produced in another country. If an
airline needs to replace a bolt in an engine mount while the plane is in
another country, it can be assured that the bolt produced in that coun-
try will fit.
Standards known as ISO 9000 establish very specific require-
ments for manufacturing processes and product specifications. Think Critically
Any business that works with another ISO-certified business
can trust that the requirements have been met. A newer set 1. What are some examples of
of standards, ISO 14000, describes specific requirements for products that are not standard-
environmental management. A company that agrees to these ized, resulting in problems using
standards assures that it will follow rigorous guidelines in the one brand with another?
use of resources and protection of the environment. 2. Why would a company refuse to
Many government agencies and individual companies do work with other companies that
not purchase products from a company that is not ISO certified. are not ISO certified?
Companies spend a great deal of time and undertake expensive 3. Why might a company decide
training programs to make sure that their products and processes not to meet the standards
meet ISO requirements. The result is much more efficient trade established by ISO?
among businesses and countries, plus a higher quality of prod- 4. Use the Internet to locate com-
ucts and operations in thousands of companies. panies that identify themselves
The International Organization for Standardization has had as ISO certified. Find Web sites
a big impact on the ways businesses interact with each other. that provide additional informa-
It continues its work as new technologies emerge and as manu- tion or that describe specific ISO
facturing problems are identified to make the process of inter- standards.
national trade easier.

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