Last Man Standing

© Laurence B. Winn

September 1, 1999

In May of 1998, Groupe Michelin Chairman Francois Michelin delivered a keynote speech at the International Rubber Conference in Paris. In it, he attacked the gimmick which had become global manufacturing's foremost sacred cow.

The ISO 9000 quality standard "stifles innovation" and seems designed to keep the status quo, he told his audience. He called "absolutely tragic" and "a catastrophe" the mentality that says "I have applied the standard, so all is OK; I have filled in the charts and made the graphs."

The French tire company is noted for innovation. American drivers are accustomed to asking for Michelin tires when they want, and can afford, the best. Moreover, Michelin himself was on hand to receive the Lavoisier Medal from the French rubber and plastics engineer's professional association, AFICEP. It is hardly likely that Messr. Michelin has anything against high quality standards.

Francois Michelin has the reputation and the position to say aloud what most in the automotive industry will only whisper - that ISO 9000 and its relatives, all derived from an old U.S. military standard, do not guarantee, or even encourage, quality. They do create an atmosphere of conformity, which Michelin called a "very terrifying form of racism".

ISO 9000 has other vocal detractors, all apparently speaking from experience.

James Allen Smith, an American management guru (coauthor of Optimizing Quality in Electronics Assembly), seems to delight in tweaking the noses of Corporate America and the Quality Mafia. He calls ISO bureaucratic, costly, and unlikely to improve real quality. However, he says, it does generate income for consultants and standard-setting bodies that govern registration and sell documents.

Claudia Bach, who is president of Document Center, Inc., one of the document-selling organizations that presumably profit from the widespread use of international standards, notes that their short-term effect has been to balkanize the marketplace.

Says Bach, "Manufacturers are finding that more countries are setting up unique regulations, along with the testing facilities to verify those regulations. Countries that previously have not paid particular attention to standards are now using this situation as a business opportunity to set up a conformance structure that burdens manufacturers as never before."

U.S. standards organizations have not been prepared for the politics of world standards "harmonization", which seem to become less harmonious all the time. According to Bach, "We are discovering that we are involved in a political process, not a technical one."

The former standards officer at the U.S. mission to the European Union, Helen Delaney, points out that standards have been used as barriers to trade for U.S. companies. First, European standards negotiations are closed to Americans. U.S. companies that regularly trade with Europe cannot participate in the European standards process unless they have manufacturing plants in Europe. Second, products produced in Europe to European standards benefit from a "presumption of conformity". Those which are produced to American standards enjoy no such advantage.

Delaney's response accurately reflects the U.S. perspective: "I don't think anyone would challenge the notion that a society that can put a man on the moon can also produce a standard that will meet European safety requirements for roofing shingles." However, she may be missing the point.

ISO 9000 may have been merely the opening volley in a trade war that uses arbitrary standards to exclude the competition rather than tariffs and import restrictions. Not long after ISO 9000 became the "in" thing in the automobile industry, Detroit (General Motors, Ford and Chrysler) put together a bigger and badder version of the same thing that they called QS-9000. Virtually every tier one supplier to the Big Three must comply. Resistance is futile (to employ a Borgism from Star Trek).

Not to be outdone, the German automotive industry issued VDA 6.1.

The International Organization for Standardization (ISO, Geneva) defends the rest of Europe with TS 16949, which it claims consolidates the requirements of the United States, Germany, France and Italy.

The merger of Daimler Benz with Chrysler to form Daimler Chrysler AG may have signaled a takeover by the Germans in the standards arms race. Volkswagen sites in Mexico are requiring VDA 6.1 registration from North American suppliers. It is the expectation of some in the industry that, within two years, all Daimler Chrysler suppliers will be required to register to VDA 6.1.

Now that a spotlight has fallen on the players in the automotive market zero-sum game, it is possible that they will all run for cover in the shadow of ISO's TS 16949. Then each will have to find another way to undermine the other's market share. The next step in the hostilities between manufacturing moguls may have been foreshadowed already in the software industry.

Australian Ricardo Peculis proposes the use of chaos management to adjust to the constraints on creativity imposed by the quality standards trade wars. While he is talking about software development, the ideas should be applicable to manufacturing as well. Of course, the adaptation will be costly.

Like the expenses imposed by ISO 9000, this new one will do consumers no service. But it will provide business with a weapon to speed the absorption of smaller manufacturers and continue the concentration of wealth into larger and larger corporate entities. By the new rules, whoever can make the biggest asset of the arbitrary standards straight jacket will become the last man standing.