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 December 2005 Word from the Chairman

Fulfilling Our Mission Statement

Each July, Maryann Gorman, SN editor in chief, contacts sitting chairmen to inquire if they wish to write a column for the December issue. Maryann offered to send me copies of the “Word from the Chairman” articles written by the three past chairs and I took her up on the offer.

After reviewing the excellent articles written by past chairmen Art Schwope, Wayne Holliday, and Richard Schulte, I was at a loss as to what to write that would be new. Appropriately and accurately my predecessors heaped praise upon the many accomplishments of the Society, the work of our many volunteer members, and the excellent ASTM International staff. I can testify that every word of praise is accurate.

During my term as chairman I witnessed the tireless work of our volunteer members and the professionalism of ASTM’s very dedicated staff. Rather than try to outdo Art, Wayne, and Richard, I want to reflect on an observation that keeps coming back to me as I ponder ASTM’s history and what the future may hold.

As everyone knows, ASTM was founded in 1898. For the past 107 years, the Society has fulfilled its public mission — which can roughly be described as being the foremost developer of voluntary consensus standards for the betterment of mankind. By any measure, ASTM has been very successful in fulfilling its mission. ASTM’s standards are arguably the best in the world as measured by various criteria. In my opinion, the best measure is demand, and each year the demand for ASTM’s products (measured in sales revenue) continues to increase. In today’s global and competitive world, the users of standards have choices, and ASTM’s standards continue to be the standards of choice.

If ASTM were a typical business, the stockholders would be happy. The workers (volunteer members) are busy developing new products and upgrading the existing product lines. Management (ASTM staff) is making the right decisions on strategic investments such as enhanced information technology capabilities in online standards development— electronic balloting and communications, virtual meetings, and the ability to sell standards 24/7, all of which benefit ASTM’s customers and the workers. The marketing department (ASTM staff) is finding new ways to promote and package products so that annual sales continue to grow. The directors are happy because they see a global business with happy workers and customers, a business open to any person or group regardless of their location, a healthy bottom line, and management that is constantly achieving the goal of better, faster, and cheaper.

ASTM’s business model has been and continues to be successful. The business model is based on developing standards that have commercial value. Currently, ASTM derives approximately 75 percent of its income through the sale of standards as compared to member dues, which account for about 6 percent of income. Yes, the business model is successful, but as everyone knows, past success does not guarantee future success. Many large, successful companies have faded into oblivion because they failed to keep pace with the times or failed to recognize the changing desires of their customers.

Other standards developing organizations operate under a different business model. They impose significant membership dues and may charge project fees to fully recover expenses whenever a new project is undertaken. Their standards are available to members on a “free” basis. I put “free” in quotes because I equate their version of free to the same business model as my cell phone company. My cell phone plan is not free; I have prepaid for the minutes, but the company spends much money and energy to convince me I am getting something for nothing. This model is popular and one that has universal appeal. So, can ASTM continue to sell its standards while other organizations “give away” their standards? To me this is an intriguing question.

Under ASTM’s extremely popular memorandum of understanding program, a complete set of standards is given to each national standards body that signs an MOU with ASTM. To date, 42 countries have signed. At some point, the loss of potential revenue may become an issue for ASTM’s business model. Yet ASTM is fulfilling its mission to provide standards for the betterment of mankind because most, it not all, of the MOU signers can be classified as representing developing countries.

If you read ASTM’s mission statement, you will see that the Society’s mission is to provide standards that “promote public health and safety and the overall quality of life; contribute to the reliability of materials, products, systems and services; and facilitate national, regional, and international commerce.” Given the quality of ASTM’s standards, it is easy to understand why developing countries are so eager to participate in the MOU program. They see having access to ASTM standards as a vehicle to enhance their citizens’ quality of life.

I don’t know which business model will ultimately be successful. I am confident that ASTM’s future leaders and volunteer members will weigh all the possibilities and chart a course that will continue to position ASTM’s standards as the world’s standards of choice.

Lastly, I want to say I am proud to be part of an organization that recognizes its obligation to help those that have been overwhelmed by unforeseen events. The Southeast Asia tsunami and the hurricane that hit the Gulf region of the United States left death, destruction and misery. ASTM contributed more than $100,000 to the relief efforts. Although that is a small amount of money given the level of destruction, it further exemplifies ASTM’s dedication to its mission.

Thank you for allowing me to be your chairman. Good luck to Anthony Fiorato, who will be taking up the reins in 2006.

N. David Smith
2005 Chairman of the ASTM Board of Directors

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