|The Need for Effective Standardization Management
by Richard J. Forselius, Sc.D.
In the October 2002 issue of SN the author presented an article titled A Holistic Approach to Management Systems Standards. In that article, it was declared that management of any organization is improved when the organization is seen as a group of interrelated systems. The systems approach suggests that internal management systems are both intra- and inter-related within the environment of the organization and are best managed by an internal generalist who can step back and assess emerging management systems standards (MSS) in a wide array of disciplines. This article further substantiates a process to undertake and why it is essential for many organizations.
Strategic Standardization ManagementTM (SSM) is a methodology to employ to effectively manage and control standards-related activities. Research conducted by the author suggests that many organizations recognize standardization as a viable competitiveness strategy.
There is also growing awareness that the term standards connotes much more than just the documents that prescribe technical requirements and specialized test methods that demonstrate compliance. Standards are now gaining higher recognition as the non-prejudicial methodology to achieve greater consumer benefits. Standards are one of the best marketing tools ever conceived and standards technology is critical to the U.S. economy and global competitiveness.
Standards are also facilitators for change, integrating economic concerns into technical harmonization. The importance of standards in a global economy is well understood by major European and Asian companies; U.S. companies in some industries appear to be lagging.
U.S. business is changing to keep pace with unprecedented changes in political conditions and the marketplace. As the marketplace becomes more globalized, the ability of organizations to respond rapidly is critical to being internationally competitive. SSM is an important asset in helping businesses to achieve international market penetration goals. An SSM approach is already a priority in a few large, successful, international corporations but may not be explicitly recognized as such. This is because it has evolved as a pragmatic approach to sustain technology advancements and to open up market entry, both domestic and foreign. By developing a strategic standardization assessment model, an organization can analyze the importance and relevance of standardization to its operations. This strategic model evaluates all standardization activities related to the organizations businesses and then provides a process for defining, communicating, and implementing appropriate strategic plans and policies to enhance competitive advantages. Examples of this were provided in a model called A Recipe for Success published in SN (December 1996); a methodology for developing a return on investment calculation was also published in A Return on Investment Model (December 1997).
Supporting Study SSM Survey
The author has completed a dissertation study of SSM and competitive advantage with the assistance of 121 U.S. Fortune 500 companies.
A model of competitive advantage based on organizational recognition of standardization issues was developed. This model was tested to assess an organizations strategies regarding standardization and standards issues and to relate this to the market leadership position of the organizations principal products. Organizations were further analyzed relative to industry classifications to determine if any differences by industry classification were apparent. Also, the nature of the respondent organizations products through the use of a high technology classification was assessed against their degree of strategic engagement in standardization activities.
Corporate Leaders in SSM
Almost all companies studied in this survey that are engaged in high technology design, development, and manufacturing endorse strategic standardization because it is recognized as crucial to their survival. There were a wide variety of key standardization issues identified by representatives of respondent organizations.
Several telecommunication and computer equipment companies are evidently leaders in their utilization of standardization as a competitiveness strategy: AMP Incorporated (now a Tyco company), American Telephone and Telegraph, Hewlett Packard, Intel, International Business Machines and Motorola. Because products in these industries have evolved very quickly into one industry group, become obsolete very quickly, and are mostly based on consensus industry standards, it is requisite for these products to be based on industry-accepted standards platforms in order to be interoperable.
Specific Research Findings
The results show primarily qualitative evidence of standardization strategies producing competitiveness results. It is certain that those organizations that are engaged in standardization initiatives tend to be better performers than those that are not. The following findings were significant:
87 percent of respondent organizations agree somewhat or totally agree that standardization is recognized by their organization as a strategic business process.
66 percent include standardization issues in strategic plans.
78 percent include standardization issues in business plans.
82 percent include standardization issues in policies.
90 percent include standardization issues in procedures.
Other relevant responses:
70 percent totally agree or agree somewhat that the respondent organizations assess their representation on SDO committees.
69 percent totally agree or agree somewhat that respondent organizations conduct a continuing assessment of the impact of standardization on major businesses.
In the category of consumer benefits, the findings revealed that respondents believe that the voluntary system of standards clearly enhances value to consumers. According to the majority of respondents, abiding by recognized standards also enhances consumer confidence in respondent organizations products.
The internal coordination of standardization activities varies in the respondent organizations, however, the findings showed that most frequently coordination takes place within the organizations engineering department (49%), followed by, in ranked order: operations, corporate office, standardization department, marketing, other location (not tabulated) and business planning.
Other questions assessed the respondent organizations commitment to management systems standards:
72 percent totally agree or agree somewhat that the organization has a strategic global approach in implementing ISO 9000 series of Quality Management Standards.
51 percent have an interest in ISO 14000 Environmental Management Standards initiatives.
At the time of the study, the wholesale promulgation of MSS had not been anticipated. Further scholarly work needs to be accomplished to study the acceptance in industry of the wide range of emerging MSS.
Many leading U.S. companies, regardless of the context of standardization, develop business standardization policies and strategies. These policies are often technically based without regard to the inter- and intra-relatedness of various management systems.
Strategic Standardization Management should be considered an enterprise-wide, systemic competitiveness strategy and a clear on-going process that must be carefully managed. Management can be improved if the organization is considered a series of interrelated systems. It is imperative to perform return on investment analyses periodically to ensure added benefits or avoid future costs. //
Copyright 2003, ASTM