Heinz Product and Technology Standards

Product and Technology Standards

Heinz in Chile & South Korea

Introduction

“International markets have become increasingly attractive to companies hoping to secure new customers and add revenues. As barriers to trade have diminished, more and more companies have found attractive opportunities for expansion in countries outside their traditional home markets (Lovka & Powers, 2003).” The globalization of markets is the principal driving force behind the need for global product standardization theory.

Product and technology standardization is the process establishing a common set of parameters within an industry so that items produced by different manufacture are not only of great quality but also they can work together when needed. Standardization refers to the consistency of a product or service and the ability of the manufacturer to produce and reproduce that product or service with as little variation as possible. Standardization is necessary in order to ensure that consumers around the world receive the same quality of product or service regardless of where and how they are produced. The benefits of standardization may not always clearly be visible but it is enormous for our society. Multinational Organizations who conforms to International Standards can easily compete on many markets around the world. When products and services are based on International Standards, customers have more choices because of worldwide compatibility of these products. Standardization benefits all stakeholders because it acts to enhance the activity of global trade by eliminating a barrier to interoperability. International Standards can contribute to the quality of life in general by ensuring that the product and services we use are safe, reliable, efficient and interchangeable easily.

ISO and Standards

“From invention to implementation to business management, standardization played a key role in launching the electric era economic boom (Wright, 2003)”. In 1901, the U.S. government formed the National Institute of Standards and Technology with the mission to develop and promote "measurements, standards, and technology to enhance productivity, facilitate trade, and improve the quality of life". International Electrotechnical Commission (IEC) was established in 1906, which led to the formation of ISO with a stated objective "to facilitate the international coordination and unification of industrial standards". According to ISO web site, International Standards provide a reference framework, or a common technological language, between suppliers and their customers - which facilitates trade and the transfer of technology. The ISO 9000, one of the most widely known standards ever, has become an international reference for quality requirements in business-to-business dealings.

Chile and Standards

“Chile is both a standards maker and a standards taker” (“Standards in Chile”). As a member body of ISO, Chile’s INN (Instituto Nacional de Normalizaciуn) is the institution that oversees, fosters and develops the use of standards in Chile for three areas: Standardization, accreditation and metrology. Until the early 1970s Chile maintained an inward-looking development strategy, which combined an import substitution bias, high levels of protection for local industry and extensive public-sector participation in the economy. But in recent days, Chile has taken a new direction to standardization. Besides becoming a member of ISO, its policy is to use and comply with international standards under the guidelines of WTO.

In terms of governance, Chile’s performance is also strong. The World Bank uses six composite indicators of the quality of governance. Chile performs well above Latin American averages across all the indicators dealing with ‘rule of law’, ‘control of corruption’ and ‘regulatory quality’ (please see Figure 1). In 2002, Chile signed the FTA with US that addresses technical barriers and calls on both parties to “intensify their joint work in the field of standards, technical regulations, and conformity assessment procedures with a view to facilitating access to each other’s market (“WTO”). Chile’s INN works collaboratively with other International Standards Institutions around the world e.g. NIST, ANSI and ASTM. EU and US, the largest trading partners of Chile, are normally looked upon for accepted norms when standards does not exist.

Figure 1: Six Governance Indicators for Chile compared to Latin America averages, 2004

South Korea & Standards

In Korea the modernized industrial standardization system started at 1961, when