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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;
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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
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
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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.

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
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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
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.
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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
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.
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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.

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.
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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
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.
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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

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.
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