Ohio: Ohio Manufacturers Reap the Benefits of ISO Certification
30 Jun, 2005By: Bruce Johnson
In the always-evolving world of manufacturing, it’s important to stay ahead of the competition. New and innovative products are being discovered and produced every day, but if the quality of the product is lacking, manufacturers cannot survive in today’s tough, globally competitive economy.
There are many processes and standards that have become commonplace in the manufacturing world, but none piques the attention of customers and end users more than the term “ISO certified.” ISO (International Organization for Standardization) standards are useful to many sectors, including industrial and business organizations that depend on high quality products and services. For businesses and manufacturers being ISO certified means that suppliers can base the development of their products and services on specifications that have wide acceptance in their sectors. This, in turn, means that businesses using International Standards are increasingly free to compete in many more markets around the world. Consumers benefit by the conformity of products and services to International Standards, which provide assurance about their quality, safety and reliability.
In Ohio, more than 2,700 companies are ISO certified. The Ohio Department of Development (ODOD) provides assistance through the Ohio Investment in Training Program to colleges and other organizations that assist Ohio firms in learning techniques and building business plans that assist them in becoming ISO certified. Funding for the program has increased in each fiscal year since its inception as Ohio lawmakers have recognized its importance with overwhelming bipartisan support.
One such recipient of this assistance is Solutions, etc…, located within Rhodes State College in Lima. Through the ODOD, Solutions received assistance to provide ISO and Information Technology training and instruction, which has been essential in the success of at least 18 companies in northwest Ohio. Led by Project Coordinator Beth Burnett, Solutions develops individualized plans that are tailored to company needs and goals, while meeting the regulations of the ISO program - which stresses quality and continuous improvement. Solutions has experienced an outstanding success rate of 100% participation by companies that have committed to becoming involved in the program.
One of these companies, Gasdorf Tool and Machine, has been recognized for its outstanding production and maintenance of precision machinery for more than 50 years. Company owners Dick Rapp and Lynn Krohn admit that while the business was running well, essential processes were not consistent and there was definitely room for improvement. The owners knew that to remain competitive in the industry, they needed to streamline the business to modern standards and practices. “In 2000, we got serious about ISO, but couldn’t get it together,” Rapp said. When working with previous ISO consultants, the tasks involved in gaining certification seemed overwhelming for the small company. But it soon became obvious to the owners that more suppliers were demanding the certification, and the company’s bottom line was about to be affected.
In 2000, Rapp and Krohn inquired about Rhodes State’s ISO program. The owners credit Beth Burnett with creating a program that was a perfect fit for the company, making the process of becoming ISO certified a non-intimidating and rewarding experience. Gasdorf became ISO 9001-2000 certified in December 2002 and can now see the results and the rewards. “We’re able to track job costs and productivity,” Krohn said. The certification, along with improved processes, has resulted in new business for the company and has allowed Gasdorf to keep major customers that include: General Electric, Dana Corporation and Procter and Gamble. Today, the company works closely with Solutions, etc… for continuous improvement and training opportunities.
A second company, Randall Bearings, Inc., was facing a situation much like Gasdorf had experienced. In 2003, the nearly 100-year old company was in danger of closing, and owner Jeff Hager knew it was time to take action to save the business. ISO certification had been something Hager was interested in pursuing, but he was driven to change when the company’s primary customer said the bronze-bearing maker must become ISO certified or lose its business. Around that time, Hager received a flier from Gasdorf Tool and Machine stating that it had recently become ISO certified. Hager called Gasdorf’s owners Dick Rapp and Lynn Krohn for more information about how they accomplished certification and was referred to the staff of Solutions, etc… at Rhodes State College.
Randall Bearings was on a tight deadline to become ISO certified and worked closely with Beth Burnett of Solutions to achieve its goal. The company already had good processes in place on its manufacturing side, making the transition quite easy. “The stars just lined right up,” Hager said. “It was extremely seamless for us. Beth did an outstanding job and we were ISO certified on our first attempt.” The company was ISO 9001-2000 certified in April 2004.
Certification has made a tremendous impact on Randall Bearings’ bottom line, increasing by 50 percent in the first year and adding more than 20 employees to the business. “ISO opens up the door of opportunity for us,” Hager said. “We’ve got a lot of new business and the certification gives us credibility.” The owners have renewed hope for the future and intend to build the business internationally. Hager adds, “When you grow you have to be flexible, and you have to be flexible to grow.”
The ISO program is just the beginning when it comes to incentives available to businesses in Ohio. Tax credits and abatements for businesses that create and retain jobs and expand their operations in the state allow businesses to invest more in new equipment and technology. The state’s revolutionary Third Frontier Program, which invests state dollars in projects that develop new technologies and methods in fields ranging from medical technology to agricultural-based plastics and lubricants, supports companies on the cutting edge. To date, $325 million has been invested. And the innovative shovel-ready sites program, which invests state dollars in the preparation of land by putting water, sewer, electrical and other infrastructure necessities in place before a company even breaks ground, curbs costly construction hold-ups that might otherwise bog down a business’ expansion.
Perhaps the most important development in Ohio’s business climate occurred on June 30, 2005, when Governor Bob Taft signed into law sweeping changes to Ohio’s antiquated business tax code, and lowered Ohio’s personal income tax by 21% over the next five years. Under the new law, both the corporate franchise tax, which taxes profits, and the tangible personal property tax, which penalized investments and upgrades, will be phased out and replaced by a low-rate, broad-based commercial activities, or CAT, tax. The new tax, which will be applied to evenly to all gross receipts at .26% levels the playing field for manufacturers in the state who had long bourn a greater share of the tax burden than businesses in other sectors.
“We’ve gone from a state that penalized profitable companies and taxed investments in productivity-enhancing machinery and equipment to a state that encourages such investments, and maintains the perfect business climate for exports,” says Lt. Governor Bruce Johnson, who also serves as Director of Development for Ohio. He points out that Ohio’s new tax structure, based on gross receipts only applies to sales destined for Ohio and benefits small and start-up companies by exempting the first $1 million in sales.
Johnson says changes to Ohio’s business climate, including tax reform and recent comprehensive civil justice reform, are building on an already sound economic foundation in Ohio. With nine ports on Lake Erie, 16 terminals on the Ohio River, 36 railroads, 3 air cargo hubs, 33,000 trucking companies, and the fourth largest highway system in the country, which puts Ohio less than a one-day drive from 60% of U.S. markets, the Buckeye State is perfectly positioned to meet the needs of successful companies.
“Our message to the world is simple,” says Johnson. “When it comes to helping Ohio companies succeed in today’s global marketplace, ‘Ohio Means Business.’”