Many people in business today are familiar with ISO, and their series of standards that have been in the marketplace now for decades. Opinions on the effectiveness of ISO vary, and most people that I talk to think of it simply as the dreaded annual audit they go through to ensure that their organization maintains their ISO registration.
Once upon a time, global sourcing activities were not nearly as widespread as they are in today’s globalized world, and travel to the supplier’s country a rare event, if it happened at all. What this meant was that the purchasing organization had increased risk sourcing internationally, and that many of the common purchasing protocols they typically used for domestic suppliers (such as vendor visits) were no longer in play. As a result, the concept of an organization such as ISO, who could provide some level of assurance as to the quality of the supplier, was an idea that had a high degree of perceived value.
I use the term “perceived value” as the actual impact on the supplier’s quality level often remained unproven, and in many cases the standard did little more than result in non-tariff barriers limiting trade distribution, and the options available to the purchaser. Despite this, the growth in awareness of the ISO standard, as well as the expectation that suppliers be ISO certified grew, and ISO registration became commonplace throughout the global business world.
As the level of international trade has continued to grow over the past few decades, many have started to question not only the effectiveness of ISO, but of the necessity of such a system. Some point to the lack of product quality from suppliers who indeed have the ISO certification as criticism, while others question the value of what some feel are significant costs in maintenance and annual audits, especially in industries where customers do not see the value of ISO registered suppliers.
In the end, it would appear prudent that organizations examine their industry and the expectation of the marketplace, before making a final decision on the value of acquiring and maintaining an ISO registration. Registration is not free, and maintaining such a system can indeed be quite costly, and in some cases, may provide minimal value for the investment. Like many strategic business decisions, it all comes down to Return on Investment.