Standards Boost Business
Reap the Rewards of Standards and Conformity Assessment
You know all about standards, but can you explain their value to the uninitiated? Standards Boost Business is a new outreach effort that provides the tools for showing corporate and government decision-makers why investment in standards development makes good business sense.
If you could save your business millions of dollars, would you do it?
Of course, your answer is “yes,” and yet far too often I see company executives overlook a business tool that can do just that.
This incredibly powerful tool has the potential to save your company time and money on research and development. It can help you accelerate time to market, keep you informed on issues impacting your business, and expand and open new markets.
I’m talking about standardization — and there has never been a more critical time for American businesses to leverage standards and conformance to build business performance and drive growth.
That is why the American National Standards Institute, together with ASTM International and 25 other partners across industry and the standardization community, have launched Standards Boost Business to help companies understand the strategic and economic value of standards to business.
Dollars and Sense
The U.S. Department of Commerce estimates that more than 80 percent of the global commodity trade is impacted by standardization; that amounts to more than $13 trillion each year. With numbers like these, it is easy to see why companies that participate actively in standardization enjoy a competitive edge in the marketplace.
From design and manufacturing to distribution and marketing, all products and services are affected at some point by standardization. But standards and conformance also underpin global commerce, inform the direction of innovation and impact the strength of the American workforce. Standards have the power to turbo-charge innovation and fuel the growth of your business.
Put simply, standards boost business.
In recent years, we have seen standards evolve to address broad and global issues such as energy, sustainability, transportation and cybersecurity. From alternative energy and emerging technologies to electric vehicles, vast opportunities for U.S. innovation and economic growth are developing in new and expanding industry sectors. Standards are absolutely key to helping U.S. industry tap into these technologies and bring them to market.
As the technical underpinning of many products and services, standards play a critical role in removing barriers to trade, enforcing free trade agreements and expanding markets for U.S. goods and services. Particularly in high-tech industries — including nuclear, wind and solar technologies; smart grid; and cybersecurity — standardization can help U.S. business contribute to enormous growth and reap the rewards from that influence. This results in increased export opportunities for U.S. companies abroad, which in turn helps create more jobs here at home.
A Dangerous Gamble
Unfortunately — and far too often — decision makers and executive leaders in many areas of U.S. industry today have a marked lack of standards and conformance-related knowledge. And at a time when standards professionals are needed most, this information gap has led to corporate decisions to downsize or eliminate standards-related positions and programs in an effort to cut costs. More and more, corporate standards professionals are not being replaced when they retire, and younger professionals are not being groomed for corporate standards roles. On top of that, the challenging economic climate has resulted in some companies further decreasing their levels of involvement in standardization.
This is a very expensive mistake. Failing to recruit and develop standards-based personnel is a dangerous gamble that will always leave companies coming up short in the long-term. Not only are companies hurting their own bottom line when they miss out on the opportunities standards provide, U.S. industry as a whole is shooting itself in the foot in terms of global market share and long-term economic strength. Now more than ever, it is time to train, retain and invest in the standards professionals who play such a key role in our economic growth.
Standards = Influence
Those who understand how to effectively influence and address standardization and compliance issues have the greatest success in the global marketplace. Think about it: if your technical experts are active participants in standards development, they will be the ones to help shape issues that impact your industry. They will be the ones to influence the global standards that cross borders and expand markets worldwide.
The U.S. government recognizes the advantages of a flexible, responsive, timely and reliable standards and conformance system. And through the NTTAA — the National Technology Transfer and Advancement Act — the federal government has affirmed its commitment to using standards developed by private-sector standards bodies as a means to carry out their policy objectives or activities whenever possible. Another thing to keep in mind is that voluntary standards are often later adopted into legislation. Consider the advantage afforded to those companies that participate in the shaping of those standards: not only are they ahead of the game in aligning with regulation, but they are actually influencing the way their entire industry has to do business. This is a huge competitive edge.
Reap the Rewards
Time and again we have seen that those companies that leverage standardization are the ones to capture opportunities in the domestic and international markets. Participation in standards development enables a company to exert influence on technical content and align its products and services with changing market demand. Participation provides insiders with knowledge and early access to information on emerging issues, and it helps reduce redundancy, minimize errors and shorten time to market.
Here are three important steps you can take today to make sure that your company reaps the rewards standards and conformance provide:
- Participate in standards development activities, both domestic and international. This allows your company to exert influence on technical content and to align your products and services with market demand. By participating in standards development activities, you have an opportunity to directly influence requirements and guidelines for your product.
- Rely on standards to design your products and services, and turn to recognized conformity assessment systems to test, inspect, certify and accredit them. Not only will this help you assure quality and customer satisfaction, it will also facilitate cross-border interoperability, ensuring market access for components and products you manufacture in all countries you want to sell in.
- Treat standardization as a strategic business tool. Put in place a corporate policy that supports standards development and use it right alongside policies for quality, safety, intellectual property and environmental performance. It is just as important to the long-term health of your business.
You really have two choices: position your organization to take a seat at the table and be part of the process, or let your competitors — both foreign and domestic — dictate the way you will be doing business. Remember, standards and conformance are critical business tools that must be managed alongside your organization’s quality, safety and environmental policies.
By participating in standards development activities, and by implementing standards and conformance tools, you too can streamline processes, trim costs, earn market access and boost your company’s bottom line.
Visit Standards Boost Business and get involved in standardization today.
S. Joe Bhatia is president and chief executive officer of the American National Standards Institute. Prior to joining ANSI in 2006, Bhatia served as executive vice president and chief operating officer of the international group at Underwriters Laboratories Inc. He also currently serves as vice president for the Pan American Standards Commission and vice chairman of the Industry Trade Advisory Committee on Standards and Technical Trade Barriers.
About Standards Boost Business
Standards Boost Business is an outreach initiative to help U.S. businesses understand the power of standardization in driving business growth, spurring innovation and advancing U.S. competitiveness. Coordinated by the American National Standards Institute in partnership with companies and organizations from across the U.S. standardization community – including ASTM International – this free online resource is designed to help corporate leaders understand the strategic and economic value of standards to business and to our overall national competitiveness.
Safety: Smoke, but No Fire
Cigarette-generated fires can destroy property and kill not only the smoker but also nearby adults and children. The National Fire Protection Association, ASTM International and the National Institute of Standards and Technology developed a standard test method that determines a cigarette’s ability to ignite bedding and upholstered furniture. As a result, tobacco companies can use this standard to develop cigarettes less likely to ignite a fire. As of July 2011, all 50 states in the United States had enacted legislation mandating that cigarette manufacturers produce and market cigarettes that adhere to an established fire safety performance standard based on ASTM standard E2187, Test Method for Measuring the Ignition Strength of Cigarettes.
Defense: $789 Million in Cost Avoidance
The Virginia-class attack submarine is one of the most powerful and complex naval combatant vessels ever created. But firepower and enhanced stealth were not the only considerations facing the U.S. Navy when it needed to update the fleet with the post-Cold War security environment in mind. The cost of building nuclear powered submarines is vast, each ship running into the billions of dollars. At the same time, budgetary pressures are significant. Obviously, developing new efficiencies in design, production and ongoing maintenance offers the potential for tremendous cost savings on such large-scale projects.
Historically, nuclear submarine shipbuilding development and construction focused on custom designs because of the relatively limited number of ships being built in this category. Over time, this practice resulted in a proliferation of functionally similar or nearly identical parts and specifications. In a major cooperative initiative, the U.S. Department of Defense, the Navy, the industrial shipbuilding community and academia identified two key areas to improve: parts standardization and process standardization.
The bottom line: over the life of the Virginia-class program, an investment of $27 million in parts standardization is projected to lead to $789 million in cost avoidance. The number of procured parts was reduced by 60 percent. The USS Virginia lead ship was launched ahead of the threshold delivery requirement determined 10 years earlier. Moreover, the USS Virginia is already showing a marked improvement in crew readiness and cost-effective onboard parts support.
Data Security: Making Modern Banking Possible
If you have ever used an ATM, then you’ve benefited from the financial services industry’s reliance on standardization. Banking and financial transactions — card/retail, corporate, credit, payments, securities, etc. — are made up of standards, including codes, transaction sets, data and more.
Banks and financial services companies rely on data security standards to protect transactions. Standards allow financial transactions to flow with “straight-through processing” in an efficient, effective and secure manner.
Interoperability: “It takes a staggering 9 million parts to build the C-17 - and thousands of standards to define those parts.”*
Aerospace has been at the center of America’s technological leadership for the last century. Underpinning all these accomplishments is the vast wealth of technical data housed, maintained and disseminated through standards.
*From “The Future of Aerospace Standardization,” Aerospace Industries Association of America Inc., January 2005.
Cost Savings: Enhance Safety, Increase Efficiency and Save Millions
The American Society of Mechanical Engineers has developed codes, standards and conformity assessment programs for more than 125 years to guide engineers and regulators in creating more efficient and safer production and work environments. One code in particular, the ASME Boiler and Pressure Vessel Code, is often utilized at nuclear power plants and contributes to safer, cleaner and more profitable energy production. By following the ASME BPV Code, many companies, including Dominion Resources, have saved millions of dollars by enhancing safety protocols and keeping their equipment running at high efficiencies.
One of the nation’s largest producers and transporters of energy, Dominion has saved tens of millions of dollars in avoiding unwanted repairs, time delays, outages and lost revenue by implementing Section XI of the ASME BPV Code, which focuses on in-service inspection of nuclear power plant components. And every ten years, Dominion saves $2.6 million from a nuclear safety innovation called Risk-Informed ISI (in-service inspection) that was generated for the code specific to piping welds. Section XI has changed the way inspections are performed on piping welds, making the process more efficient and less time-consuming. This has saved Dominion millions of dollars and has enhanced productivity and safety throughout the nuclear industry.
This article appears in the issue of Standardization News.