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ISO CERTIFICATION - ITS GAIS AND ADVANTAGES IN TEXTILE SECTOR

Introduction

1. Textile industry has been the bulwark of Pakistan's economy. It contributes

more than 60% to the total export earnings of the country, accounts for 46% of

the total manufacturing and provides employment to 38% of the manufacturing

labor force. The availability of basic raw material for textile industry, cotton, has

played a principal role in the growth of the industry.

2. In this era of rapid technological changes and new innovations, every

customer has become quality conscious. Customers now a day want the

assurance of quality either through product design or through image or the

personality of the product. In response to this trend, marketers all over the world

are either offering to the customers, products with high quality design

specifications or they are concentrating on the image marketing. The ISO 9000 is

the answer of every customer demand through which the organizations can

assure customers of their products, high quality. Coping with this many Textile

Mills in Pakistan have achieved “ISO 9002” Quality Award. It gives those Textile

Mills the international recognition as the producer of High Quality Yarn and Grey

Cloth.

3. In the whole world, it is now a general rule that without ISO Certificate, an

organization cannot export. Hence for Textile Mills also, ISO has become a basic

requirement.

Textile Industry in Pakistan

4. Textile industry has been

premier industry in Pakistan and

a major source of export earning

and employment. It also helps in

value addition to the

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manufacturing sector of the economy. During the six years between 1993 and

1998, production of yarn (in quantity terms) registered a steady annual growth

rate of 302% in Bangladesh and 405% in India. On the contrary, Pakistan

registered a growth rate of 101% per annum in yarn production although it

ranked third after China and India in the global yarn production during the same

six years. In exports, while Taiwan, India and the republic of Korea registered an

annual increase of 18.1%, 27.7% and 5.4% respectively during 1993-1998,

Pakistan registered a negative growth of 4.8% one important development was

that till 1997, Pakistan was the world’s largest exporter yarn followed by India.

However, in 1998, India gained the NO 1 position, leaving Pakistan at NO 2 In

the case of cotton cloth production, a number of Asian countries have been

emerging in the international market to compete with Pakistan. These countries

are Bangladesh, India, Taiwan, Indonesia, Thailand, Turkey, Sri Lanka and Iran.

The latest available date on overall export performance of Pakistan comported

with some regional countries is given in table : The above-mentioned

presentation in the context of international scenario highlights the adverse

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position of Pakistan’s textile industry when is likely to continue further following

the full implementation of WTO agreement from 2005 onwards when an era of

free trade will start globally. Notwithstanding the above fact, current stagnation in

the local textile industry can be overcome through efforts, consistent with

charges occurring in the international market. It must be appreciated that all

successive governments since the birth of cotton textile industry in Pakistan have

been encouraging the textile exporters to penetrate into new market and also to

broaden the base of exportable commodities by including value added textile

goods so that reliance on exports of cotton, cotton yarn and coarse fabrics

gradually become minimal.

5. During the period 1973 to December 1992, some 71 spinning units with

1,136, 835 spindles, 6,600 rotors ands 7,329 looms were closed down. In 1992,

a foreign consultant form was hired by the government to look into the stagnating

conditions in the local textile industry. One of the observations of the foreign

consultant was “Pakistan has failed to make real progress in the international

market and is being over taken by many of the neighboring competitor countries.

The spinning sector, traditionally the core of the industry, is already in the crisis

with many spindles lying idle and mills being forced to close. Worse still, this

sector will be hit by the projected decline of its major markets in Japan and Hong

Kong in the coming years.”

6. Pakistan’s textile sector earned US$5.77 billion during the outgoing year,

compared with US$5.577 BILLION OF 2000-2001 indicating a growth of 0.69%.

“Textile vision 2005” has identified the present status and opportunities to make

in roads in conventional and hew markets and has developed sectarian

recommendations, hence the sectarian committees set up by the federal textile

Board (FTB) would play an important role be ensuring the availability of quality

raw materials on competitive prices and improvement in designing, and would

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adopt quality standards and increase productivity levels. It would attract foreign

brands and promote Pakistani brands with world-class standers.

7. Apparel manufacture is an important value-added sector of the textile

industry of Pakistan. This sector manufactures and exports ready-made

garments, woven as well as knitted, of all types such as trousers, ladies suits,

jeans, Children garments, maxi’s, blouses, skirts etc. There are 12,000 knitting

machines, which spreads all over the country. The capacity utilization is approx

70 percent. Besides locally manufactured machinery, liberal import of machinery

under different modes is also being made and the capacity based on exports is

being developed. This sector has tremendous export potential. However, the

sub-sector remained under pressure from its competitors during the year under

review and recorded a decline of 8.0 percent in exports as against last year amid

tough competition emerging from the newly-inducted members to the European

Union (EU) belonging to the former East European bloc.

8. Exports from ready-made garments and knitwear sectors crossed $1.0

billion mark each for the first time in the history of Pakistan in 2002-03,

contributing about 30.27% to total textile and clothing exports and 52.78% to total

value-added exports. The jump in apparel (ready- made garments and knitwear)

exports from $ 1,723 million in 2001-02 to $2.24 billion in 2002-03 was mainly

due to the concessions allowed by the E.U, mainly increase of quota by 15% with

effect from 01.12.2001 and abolition of import duty with effect from 2002.

9. However, with effect from March 2004, the E.U. re-imposed import duty @

12%. Currently, textile and clothing exports from Pakistan to E.U. are subject to

an import duty of 9.6% because these are more than 1% of the E.U. market for

textile and clothing. Consequently, these exports being ineligible for GSP

concessions have remained almost stagnant in 2003-04 and 2004-05 at about

$2.47 and $2.74 billion. In fact, textile and clothing exports from Pakistan are

under severe strain after the commencement of WTO, the World Trade

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Organization, with effect from 01.01.2005. In contrast, Bangladesh and Sri-Lanka

enjoy better access to the E.U. market. The textile and clothing exports from

these countries are subject to Zero and 50% of import duty respectively as

compared to Pakistan’s textile and clothing exports.

Compliance Issue

10. In post WTO era, sectors of Pakistani economy particularly industry, agriculture and

services are increasingly exposed to various challenges. One of the major challenges for low-

income countries towards adopting the path of sustainable development is the limited enterprise

capacity to comply with the international buyers’ requirements. International buyers are

increasingly demanding compliance on quality, safety, environment and social standards.

11. Compliance in Certification . Compliance to international standards on

quality, environment and social accountability has been universally recognized as

one of the key strategic elements of product competitiveness in both domestic

and international markets, along with price and delivery factors. Quality is the

pre-requisite for successful market access and for achieving continued customer

satisfaction.

a. The Standards and Quality Management program address the

quality related needs of exporters and concentrate on institutional

and capacity development in the export quality management.

b. Companies use international standards that either want to

implement their own in-house systems or to ensure that suppliers

have appropriate systems in place. International standards promote

international trade by providing one consistent set of requirements

recognized around the world.

c. These systems and standards define and establish an organization's

policy and objectives. It also allows an organization to document and

implement the procedures needed to attain these goals. A properly

implemented systems ensure that procedures are carried out

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consistently, that problems can be identified and resolved, and that

the organization can continuously review and improve its

procedures, products and services.

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d. For example, ISO 9000 quality management system can enable

your enterprise to increase profitability and customer satisfaction

through reduced waste and rework, shortened cycle times, improved

problem tracking and resolution and better supplier relations. The

primary value of this certification is consistent delivery of a product

or service to a defined standard and improved bottom line

performance. It results into perceived higher quality product/service.

The standards are voluntary or are required by the buyers. ISO

certification also has a significant bearing on market credibility as

well. Enterprises wishing to do business in Europe may have no

choice but to adopt it as it is an accepted part of doing business.

12. How much does a certification cost to a Company? The certification

firms give quotation of their services in regard of any certification considering the

following factors

a. Size of organization

b. Number of employees

c. Complexity of situation

d. Complexity of site.

13. Consultancy services for certification if required may cost ranging from Rs.

100,000 to Rs. 300,000 depending upon the above-mentioned factors.

Consultancy may not be required if the staff is competent for carrying out the

requirements of implementation of a standard.

ISO Certification

14. What is ISO . The International Organization for Standardization (ISO) is

a worldwide federation of national standards bodies from some 130 countries,

one from each country. ISO is a non-governmental organization established in

1947. The mission of ISO is to promote the development of standardization and

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related activities in the world with a view to facilitating the international exchange

of goods and services, and to developing cooperation in the spheres of

intellectual, scientific, technological and economic activity. ISO's work results in

international agreements which are published as International Standards.

15. Why is international standardization needed? The existence of non-

harmonized standards for similar technologies in different countries or regions

can contribute to so-called "technical barriers to trade". Export-minded industries

have long sensed the need to agree on world standards to help rationalize the

international trading process. This was the origin of the establishment of ISO.

International standardization is well-established for many technologies in such

diverse fields as information processing and communications, textiles,

packaging, distribution of goods, energy production and utilization, shipbuilding,

banking and financial services. It will continue to grow in importance for all

sectors of industrial activity for the foreseeable future.

16. What is the difference between ISO 9001, 2 and 3 ? If you have heard of

ISO 9000, then it is most probably through ISO 9001, ISO 9002 or ISO 9003, the

three quality assurance models against which organizations can be certified. At

some stage, you have probably wondered what the difference between them is.

The answer is that the difference is simply one of scope. It works like this:

a. ISO 9001 sets out the requirements for an organization whose

business processes range all the way from design and development,

to production, installation and servicing;

b. For an organization which does not carry out design and

development, ISO 9002 is the appropriate standard, since it does

not include the design control requirements of ISO 9001 - otherwise,

its requirements are identical;

c. ISO 9003 is the appropriate standard for an organization whose

business processes do not include design control, process control,

purchasing or servicing, and which basically uses inspection and

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testing to ensure that final products and services meet specified

requirements.

d. So, an organization chooses that its quality system be certified

against ISO 9001, ISO 9002 or ISO 9003 according to the business

processes covered by the quality system. There is no difference of

quality ranking between the three standards.

17. How does the ISO 9000 family of standards work? The requirements

for a quality system have been standardized - but most of us like to think our

business is unique. So how does ISO 9000 allow for the diversity of say, on the

one hand, a "Mr. and Mrs." enterprise, and on the other, to a multinational

manufacturing company with service components, or a public utility, or a

government administration?

a. The answer is that ISO 9000 lays down what requirements your

quality system must meet, but does not dictate how they should be

met in your organization - which leaves great scope and flexibility for

implementation in different business sectors and business

cultures...as well as different national cultures.

b. So, the ISO 9000 family includes standards that give organizations

guidance and requirements on what constitutes an effective quality

management system. ISO 9004-1 (and the other parts of ISO 9004)

are the standards giving guidelines on the elements of quality

management and a quality system.

c. The family also includes models against which this system can be

audited to give the organization and its clients assurance that the

system is operating effectively. The three quality assurance models

are ISO 9001, ISO 9002 and ISO 9003.

d. Lastly, the family includes a standard on terminology, and other

standards, which can be described as "supporting tools", that give

guidance on specific aspects, such as auditing quality systems.

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18. Why should an organization implement ISO 9000? To keep customers

- and to keep them satisfied - your product (which may, in fact, be a service)

needs to meet their requirements. ISO 9000 provides a tried and tested

framework for taking a systematic approach to managing your business

processes (your organization's activities) so that they consistently turn out

product conforming to the customer's expectations. And that means consistently

happy customers

19. How are ISO standards developed? ISO standards are developed

according to the following principles:

a. Consensus . The views of all interests are taken into account:

manufacturers, vendors and users, consumer groups, testing

laboratories, governments, engineering professions and research

organizations.

b. Industry-wide . Global solutions to satisfy industries and customers

worldwide.

c. Voluntary . International standardization is market-driven and

therefore based on voluntary involvement of all interests in the

market-place.

20. Clauses in ISO . Each model is comprised of clauses. There are a total of

20 clauses that apply to one or more of the ISO quality models. Some models

share clauses, and others may pertain to only one specific model. The quality

manual will document and incorporate those clauses that apply to the

organization's function(s). Listed below is a brief description of each ISO

clauses :

a. Management Responsibility . This clause requires that

management be committed to establishing and maintaining a quality

management system. Management must appoint a Management

Representative (MR) to oversee the quality system. The MR should

possess appropriate rank and authority in the organization to

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establish, implement and maintain the quality system. The MR is

responsible for coordinating responses to ISO standards, for

initiating action to prevent nonconformity in the quality system, for

identifying and recording quality problems, for initiating and

recommending solutions to quality issues, for auditing ISO

compliance, and for serving as a liaison between management and

the ISO registrar.

b. Quality System . The organization must prepare a quality manual

that documents the development and implementation of policies,

procedures, and work instructions that relate to the ISO standards.

The front of the manual will include an outline on the enclosed

documentation.

c. Contract Review . This clause mandates that prior to accepting a

contract that customer requirements must be documented, roles of

all contract parties will be understood, resources will be available,

and contract performance must be within the organization's

capabilities.

d. Design Control . This clause requires the establishment and

maintenance of documented procedures that verify and control the

design process to ensure that products satisfy the customer's

requirements.

e. Document and Data Control . This clause standard requires the

establishment of procedures to ensure that the organization uses

only current documentation and data for producing quality products

and services. Documentation should address the quality manual,

referenced procedures, operating instructions, and design

documents.

f. Purchasing . This clause requires procedures that specify what is

being purchased, ensures that suppliers can deliver the required

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product or service, and verifies that what is delivered by the supplier

conforms to applicable procurement requirements.

g. Control of Customer-Supplied Product . Documented procedures

are required to protect customer provided supplies from theft or

destruction.

h. Product Identification and Traceability . This clause requires that

the organization have an audit trail for its products during any stage

of the production, delivery, or installation process.

i. Process Control . The organization must have documented controls

for business practices that affect quality. Practices include: detailed

procedures, work instructions, personnel assignments, and

equipment used.

j. Inspection and Testing . This clause requires that the organization

establish acceptance criteria for work to ensure that customer

product requirements are met.

k. Control of Inspection, Measuring and Test Equipment .

Procedures are required to ensure that equipment used to inspect,

test, and measure products and services are properly calibrated and

maintained.

l. Inspection and Test Status . This clause requires testing (pass/fail)

the status of products throughout the production process.

m. Control of Nonconforming Product . The organization must be

able to identify products that do not comply with the customers'

requirements. This identification will take place before the product is

delivered to the customer.

n. Corrective and Preventive Action . This clause mandates that

steps be in place to detect nonconformity, and to implement

corrective and preventive actions.

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o. Handling, Storage, Packaging, and Delivery . The organization

must protect the product and service from damage or deterioration.

p. Control of Quality Records . This clause requires documentation

on the collection, indexing, accessing, filing, maintenance, disposal,

and storing of materials that address quality records.

q. Internal Quality Audits . The organization shall document the audits

of its quality process to identify nonconformity thus ensuring

compliance with the standard.

r. Training . The organization shall train their employees on ISO to

ensure that duties are carried out consistently to support the

objectives of the quality system. The organization will maintain the

records of employees that receive training.

s. Servicing . The organization will document those services provided

on customer products, and verify that products provided comply with

the customer's requirements.

t. Statistical Techniques . The organization will draft procedures that

implement and control the use of statistical techniques for the quality

system.

Example – Mehmood Textile Study

21. In the whole world, it is now a general rule that without ISO Certificate, an

organization cannot export. Hence for Mehmood Textile Mills also, ISO has

become a basic requirement.

22. At MTM, management has a formal procedure to comply with the

ISO 9002 requirements. The organization keeps formal record of establishing

and maintaining procedures for every kind of activity starting from purchase of

raw materials till the dispatch of finished products. All the procedures

documented in the ISO 9002 requirements are thoroughly followed at each and

every activity. Moreover MTM carries out periodic Quality Control Audits to

confirm its compliance with the ISO 9002 requirements. The Internal Audits are

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carried out almost once in a month, but the External Audits are carried out after

six months (Each External Audit Costs almost Rs 90,000). In each External

Audit, the auditors sec the compliance of the organization with the ISO

standards. They see the various clauses of ISO that whether org is implementing

them. Moreover they see various documents. They see people working, their

awareness about ISO and their training levels. The company is implementing

following clauses of ISO :-

a. Management Responsibility.

b. Quality System.

c. Contract Review.

d. Document and Data Control.

e. Purchasing.

f. Control of Customer Supplied Products.

g. Product Identification and Traceability.

h. Process Control.

i. Inspection and Testing.

j. Control of Inspection, Measuring and Test Equipment.

k. Inspection and Test Status.

l. Control of Non-Confirming Products.

m. Corrective and Preventive Action.

n. Handling, Storage, Packaging, Preservation and Delivery.

o. Control of Quality Records.

p. Internal Quality Audits.

q. Training.

r. Statistical Techniques.

23. MTM prouds to have achieved this award and hopes to keep up its

compliance with it in the long run.

Conclusion

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24. Quality of textile products is crucial to improve the image of Pakistan textile

industry internationally, which currently is the perceived to be the lowest. The

quality standards of a wide range of textile products are non-existent. The textile

board will have the task to formulate product standards for textiles and implement

them. Similarly lowering of tariff barriers will start a new phase of non-tariff

barriers for the exporters of developing countries, these include quality system

compliance with ISO, standards of engagement, child labor and environment

standards. This will be another important function of the board to facilitate the

industry gear itself and compete globally.