Towards a standards-based approach in business


Fadilah says that standards help to develop new markets for existing goods and services resulting in a broadening market access.  Datuk Fadilah says that standards help to develop new markets for existing goods and services resulting in a broadening market access.

When laptop computers were first equipped with Wi-Fi in Malaysia back in 2003 or so, very few people were able to connect their devices to Wi-Fi hotspots. Today, everywhere we go, we expect to be connected via Wi-Fi, and not only on laptops but our smartphones and tablet computers too.

What was the driving force behind the proliferation and popularity of Wi-Fi? Put simply, it was a common technical specification that all laptop computer, smartphone and tablet makers adhered to that allowed them to work in concert with each other, whether you’re in Malaysia or in another part of the world.

The standard was the Wi-Fi 802.11 standard, defined by the Institute of Electrical and Electronic Engineers or IEEE and was the de facto standard for Wi-Fi connections worldwide. Thus, the emergence of a common standard helped Wi-Fi technology spread and it became useful to society at large.

Standards, however, do not just benefit manufacturers nor is it just about technical conformance.

According to Standards Malaysia, a government agency under Ministry of Science, Technology and Innovation (MOSTI), the application of standards and conformance even covers issues and aspects of protection of health, safety and the environment and enhances the industry’s competitiveness.

“Standards is not just about producing norms for given products and services in given markets, but it also contributes to credibility, focus and critical mass in markets for new technologies as well. In fact, a standards-based approach to products and services enhances competitiveness and broadens market access,” says Datuk Fadilah Baharin, Director General, Department of Standards Malaysia, MOSTI.

According to Fadilah, standards are important for three reasons. Firstly, they increase market access as a standards-based approach to products and services will allow industries to develop conformance-based goods and services which contributes to customer confidence and marketability.

She adds that this also helps to develop new markets for existing goods and services resulting in a broadening market access.

“This is vital to businesses especially the small and medium enteprises (SMEs) to tap into the global supply chain,” said Fadilah. “The information provided by standards will also reduce the problem of information asymmetry, which can lead to market failure.” 

Secondly, she says, standards enhance competitiveness as complying with standards and conformance helps to reduce costs, increases productivity and increases the quality of the goods and services to meet domestic and international regulatory requirements.

Thirdly, standards help companies manage risk.

Fadilah says embracing standards helps industries to reduce uncertainty through managing risk, enhancing global trade and facilitating the widespread adoption of new and emerging technology.

“Complying with management system standards such as MS ISO 9001 for Quality Management System helps to reduce business risk against reworking of products and non-conformance.

“ISO 27001 standards is yet another example that provides a framework for Information Security Management System that can help to protect businesses’ information and assets from virtual and physical security threats.”

Getting SMEs on board

While logically speaking, the application of standards brings productivity gains and cost efficiencies to enterprises, many SMEs, in particular, are still slow to embrace a standards-based mindset.

So how do you get these SMEs on board?

Fadilah acknowledges this as a challenge but believes too that the information on the need for standards is key and how the information is communicated with people is just as important.

In fact, realising this, we have developed a comprehensive communication plan to address these matters, she says.

“Beginning in 2011, we have gone on a nationwide campaign through the media to inform the public and the industries on the importance of standards.

“We have also carried out sectoral articles targeted at specific group of SMEs on standards compliance. We are also gathering success stories from successful SMEs and industry players, and how they have benefited from standards.

“These will serve as examples that standards do work and they are beneficial to an organisation. We hope to further elevate these living examples and actively promote them in the various media.”

Fadilah says Standards Malaysia has also developed videos to inform industries on the various related standards and how they can comply.

“With this initiative, we also hope the consumers will come on board and put pressure on companies particularly SMEs to comply with standards.”

One of the fears facing SMEs is the cost of standards certification, which Fadilah says is not as prohibitive as many think.

She says the cost of certification varies from RM200 to a few thousand ringgit depending on the type of certification, scope and other requirements that may lead to other expenses such as renovation and hiring of specific-skilled workers.

“Halal certification for example only costs RM200 per application for two years for SMEs with annual income of less than RM500,000.

“Other certifications like Goods Manufacturing Practices (GMP) and Hazard Analysis and Critical Control Points (HACCP) for food safety might involve renovation costs that may reach a hundred thousand ringgit while the certification fees is just a few thousand ringgit.  

Despite some costs involved in standardisation, companies that strive for a standards-based approach to business will benefit in the long run, especially SMEs.

“Standards Malaysia’s mission is to improve the quality of life of our citizens and empower Malaysian companies to gain global competitiveness,” Fadilah says.

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Here are some best practices recommended by Standards Malaysia for certification. 

  1. Obtain the correct information and advice from reliable sources such as through certification bodies like Standards Malaysia
  2. Understand priorities and needs of your business and match with the relevant certification as this will involve cost and other resources
  3. Involve top management and get commitment from them to obtain and sustain certification.

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