The 87th General Meeting Speaker Presentation
"ASME Conformity Assessment: A Closer Look"
The following presentation was delivered at the 87th General Meeting Monday General Session, May 7, 2018. It has been edited for content and phrasing.
INTRODUCTION: Jon Labrador's career in ASME standards and certifications spans 23 years. He is presently the managing director of all ASME conformity assessment. In that role he is responsible for conformity assessment, certification and accreditation.
Mr. Labrador's slide presentation can be accessed here.
MR. LABRADOR: Good afternoon, everybody. My name is Jon Labrador. I can't believe that I have been with ASME for 23 years now. I started out in the standards side like many of you. I worked with Chuck Withers on Section 9 for about five years, headed into B31.3 post-construction, and now I'm in this wonderful world called conformity assessment.
I want to give you a closer look at how we operate not only from an operations standpoint, but also what we are doing to reach out to many of the folks—certificate holders, potential certificate holders, agencies and ministries—on the value of conformity assessment.
It all starts with our programs. We have thirteen programs at the moment: Four on the product certification side, four on the quality program certification side, two on the accreditation side, and three on the personnel certification side. Our newest program, the ANDE program, was just launched last year, November of 2017, and we are looking to expand that program as we speak.
Our main focus in this area, though, is the ASME Boiler and Pressure Vessel Code. Ninety-eight percent of our activity revolves around the ASME Boiler and Pressure Vessel Code, about 16,000 pages that are updated every two years. Most of it is centered on the BPV program, but we also have a nuclear program as well. And this is where we are at the moment. We currently have 7,348 certified companies holding almost 13,000 certificates in what I think now is 79 countries—we recently added Macedonia.
And there is a certain advantage to ASME. First and foremost, it's the maturity of our standards. We have over 100 years of consensus-developed content that advances with the technology and really ensures the high quality of those products and an overall commitment to public safety.
We are also very globally recognized and accepted. When they see that mark, they know what they are getting—they know the quality, they know that we adhere to several safety standards—and they choose the ASME mark over other products that aren't stamped.
We also have true third-party oversight, a very valuable piece of our program. And that is the inspection force which is independent of the manufacturer and the end purchaser, the purchaser of that product, and which is qualified through the National Board. We also ensure compliance to the standard and support the manufacturers' public commitment to safety and quality.
And last, but not least, is our expert auditors. We have a qualified auditing force of 44. They have over 22 years of experience on average, auditing specifically on ASME certification and accreditation programs. So we believe our auditing force is second to none.
We also have a tremendous ASME committee support system –27 different conformity assessment committees and over 250 volunteers across all of those industries participating in the conformity assessment system. They handle things like investigations, re-reviews, follow-ups, reviews of our code compliance rules and revisions to them.
Not only are they here for boiler code week for the standards development part of it, they are also here for the conformity assessment side of things, and they are all here to really participate in that vigorous protection of the ASME mark.
The value and benefits of ASME certification stretch out across many different users. We benefit the public, protecting public safety and welfare. We benefit the government, supporting policies on public safety and fair trade. We also relieve the burden of having the government spend on standards and certification and really have the industry move it in that direction. Purchasers benefit from that, from supply chain management, increasing the choices that they have and reducing the cost. In the end, we also benefit the manufacturers.
And it all comes down to support for that certificate holder. And what I have here are all the different groups that really support that certificate holder in the products that they are producing. ASME, the inspection agencies that are part of this process, the jurisdictions and the National Board, all work together for cooperative enforcement and cooperative protection of the ASME mark.
So where have we been over the last few years?
We really took off around 2009 and 2010. That is the point where we had more international companies certified than the U.S. Although the U.S. has been growing steadily, the growth for us is international. From a targeted standpoint, China really has taken off over the last few years. We took off basically in 2004 growing from about 100 manufacturers to 954 and climbing. India is also an area where we are seeing a lot of growth.
But one of the areas that really snuck upon people is Italy. It's hard to believe that growth is even there because of the Pressure Equipment Directive and all those other pieces in Europe, but Italy has steadily grown to where we are almost at 300 certified manufacturers in that area.
Breaking down by country, the United States obviously has the most certified manufacturers. But China is there as well, Korea is there, India is somewhere in the middle. And one area that is growing as well for us is the United Arab Emirates, which recently broke into our top ten. So there are opportunities in many parts of the world for increased growth.
In the United States this is the breakdown. Texas has about 659 certified manufacturers, followed by Pennsylvania with 213 and California with 153. The three areas that I wanted to point out are Texas, Louisiana, and Florida. They were severely affected by several hurricanes last year, and just those three states alone account for about 26 percent of our certificates in the United States. So we made sure that we took care of those companies and granted as many extensions as we could as they recovered from the hurricanes. Hopefully they are recovered enough to continue on with the renewal of their certificates.
Back in 2007, when I started working my way into conformity assessment, there really wasn't too much of an outreach to certificate holders and potential certificate holders in the U.S. or throughout the world. We basically said, “Let them come to us and learn about our programs.” We never really reached out to those groups internationally or domestically to tell them about the ASME brand and the value that we offer as best in class and as the gold standard of conformity assessment programs.
So some of us at ASME got together and said, “Let's put together an outreach program to talk to many of the certified manufacturers there.” But not just limited to them, talk to the ministries, talk to the agencies, talk to the government, talk to the authorized inspection agencies, talk to them about the value of conformity assessment and what we have to offer.
We put together what was called a Certification 360 Workshop. This was targeting existing certificate holders, potential certificate holders, ministries, agencies, and government officials. Really the big piece of this was to retain our certificate holders, to make sure that they see the value in this, and to try to keep them, so that they can keep renewing into the program. But we also wanted to reach out to the potential certificate holders that were out there, people that were on the fence and wanting to be certified but really didn't know what that brand had to offer to them.
Many of them were very afraid of the auditing process. And many, when they hear audit, get scared and afraid. And we were there to just demystify that auditing process for them and also help them prepare for the audits to come. The biggest fear that you have when you are about to be a certified company is the amount of money, time and effort spent preparing for the audit and the fear that you may not pass that audit. So we want to give you as much preparation as possible, without giving all the answers away obviously, but prepare you enough so that you could feel confident that you can go through that audit and be able to pass it. So these workshops help prepare those companies in that way.
We also obviously wanted to provide them with our ASME value proposition against competing programs or against no program. The dreaded self-declaration—“ Trust me, my products are great,” and then the product unfortunately wouldn't last as long as it should, and you realize you probably should have gotten an extended warranty.
And finally, we wanted some explanation of the ASME programs themselves and why we are best in class and why many people still consider us the gold standard.
So we went out on an international tour. These are the locations in which we have held our workshops since 2015. As you see, we have been to Korea, China, India, back to China and to Argentina. We also held one in Columbus, Italy, and the Middle East. And we just returned from Madrid, where we held our first workshop there, and we are going to Kazakhstan next week.
These may seem like random locations, but actually there was a rhyme and reason for it. One location led to another location which led to another location. We went to China and found out they were attempting to build nuclear power plants in Argentina. And our good friends at the National Board said, “Hey, you guys really need to come down here and talk to them about ASME certification and talk about the value proposition that you have to offer.” So we went to Argentina, finding out that many of the imports in Argentina or exports came from Spain. We ended up talking to our friends in Spain, the manufacturers, and held a workshop there as well.
Italy, believe it or not, had a very strong connection to the United Arab Emirates and the Middle East in general. I didn't know this, but there are more flights going in and out of Italy to the Middle East than in any other area. And there is a reason for that. There is a strong manufacturing connection between Italy and the Middle East. So we ended up holding a workshop in the United Arab Emirates as well. These connections really helped us reach out to many more certified manufacturers and potential manufacturers that want to be certified.
We had 168 people in India attend a workshop. And by the way, we had no marketing. This was basically word of mouth, talking to many of the authorized inspection agencies to reach out to certificate holders and potential certificate holders. Three hundred people showed up in Shanghai in 2015. And we had 108 people show up just for an NQA-1 certification workshop in India. Argentina had 189 people show up. And this isn't just a mix of potential certificate holders and certificate holders. There were ministry people there, people from government, and also authorized inspectors.
This is the granddaddy of them all. I believe it was probably last year when Paul Lang and I were asked to hold the keynote speech on the value of ASME conformity assessment, and over 600 people showed up. I was actually slightly afraid because they just kept adding chairs, and more chairs. I was wondering if there was a fire code in China for such things. We were a little worried that in case of an emergency, something bad was going to happen.
But really this is great, because this allowed us to not only talk to the potential certificate holders, but it allowed us to empower the existing certificate holders to really advertise what they have—and a lot of times these guys don't understand what they have when they have that certification—and it empowered them into convincing their end users and purchasers what the value is in that mark.
So I am going to jump a little bit into an area that really is an unsung hero of conformity assessment, and that's the operation side of things.
Few people know that from application to certification to renewal, it involves 351 different checkpoints per application, and all of those checkpoints likely are automated through our CA Connect system which I helped develop around 2010.
A small piece of it, which is our scheduling piece, where we send our auditors out and basically coordinate with other auditors, the inspection agencies, and the National Board, involves 24 different factors before you can actually schedule that BPV review or survey. These are the 24 different factors that Bibi Rahim, our scheduling manager, goes through for each review, and you can see it's quite comprehensive.
Now, take into consideration that for one ASME consultant that involves probably six different reviews, surveys, or re-reviews. For a monthly schedule, this is what a typical ASME consultant will go through.
Add to that a grouping— you now have four ASME consultants, possibly two National Board consultants, a jurisdiction, and a couple of AIAs involved in one grouping—and this involves 24 different reviews and surveys.
Bibi and her staff take that one consultant and kind of group them together, because if there is a nuclear survey, for example, that's a team of two, three or four she has to combine to make sure they all get to the same place at the same time. She takes that in groups, and there are 24 different reviews and surveys. She schedules about 120 different reviews and surveys every month.
And there are requests for rescheduling for a boiler, and then you have another, and another. Then you have a nuclear scheduling that you have to take into account, and another boiler, another boiler, and another boiler. And suddenly you have a cancellation, and you have another cancellation. And all these trickle back down into those groupings and affect all those different groupings at that point. What our schedule manager sees is this. Then when you have a catastrophic event, like a volcano or something that really prevents travel in one specific large area at one time, this is what you end up with.
And really this is what ends up happening: You end up driving the cost to the customer. Because a lot of times you share the airfare and travel costs involved when you go through that string of reviews for a consultant. When you pull one of those out, you now have to have those five companies share the costs as opposed to six companies, and that drives up the cost, unfortunately.
So what we would try to do as much as possible is to keep that schedule. Understanding that there are things that you have to do, people get sick, there are travel restrictions, things like that. But we try to avoid that as much as possible.
So this is what's involved in a monthly schedule. Basically out of 120 companies, 44 consultants, 34 AIAs, possibly seven different cancellations and reschedule requests, coordination—heavy coordination with the National Board, with the jurisdictions, you possibly have ten different committee actions that you have to go through, an investigation, a re-review and that kind of thing. And this is all handled by two and a half dedicated scheduling staff every month. The 15th of every month the schedule has to come out, so you see what's involved in a monthly schedule like this. As much as we like to try to insert automation in this as much as possible, there really is a lot more art in scheduling these reviews than science.
And it's no different on the finance side. There’s a list of all the finance checkpoints that we have to go through in order to issue a certificate. The coordination on this is on the back end of things where you basically have an expense report bundle.
So you’ll have one consultant with six different reviews and surveys, you now have six different expense reports, and you have to comb through that from this bundle and check the links between one person's expense report to another person's expense report, then another person's expense report, to that person's expense report. So our finance manager basically takes that big ball of string and starts unraveling it and trying to work it out so that people don't get double-booked and double-charged, etc. They go through it, but in the reverse way. So there is a lot involved on the finance side as well.
My department of 28 people makes that happen. This is the product and personnel certification group led by Paul Lang, director of product and personnel certification. That's where all the technical things happen, management of the committees, technical requirements, etc.
We have a process management area, which is shared with the standards side. They handle all the electronic tools. Ted Lazar manages the CNS Connect and CA Connect side of things. So this group is responsible for making all of those 351 different checkpoints happen.
One of the things that I also wanted to mention was what I call the ASME standards ecosystem. We really need strength in all three components in order to maintain this ecosystem.
I've always said that the strength of conformity assessment is only contingent upon the strength of your standards. If you don't have strong standards, you are not going to have a strong conformity assessment program. Luckily we have a wonderful, strong standard in the boiler and pressure vessel code that keeps us going. And that has turned into a very strong conformity assessment program for us.
But we also need training on those standards. Because you have people graduating now that aren't familiar with the boiler and pressure vessel code, we need to make sure that we have vigorous and affordable training for those people so they can continue to use the ASME code.
The bubble there on conformity assessment really encompasses not just ASME, but our partnership with the National Board, the AIAs, and the jurisdictions as well. We have a strong partnership now with the National Board, a wonderful partnership. I think it's stronger than it's ever been. We work and communicate constantly with Dave Douin and his group, especially Gary Scribner who attends many of these workshops with us throughout the world, as did Chuck Withers before he retired. We get together at least twice a year to communicate and talk about how we can make this program stronger than it is. And I think it's working out pretty well for all of us, and many thanks to Dave for making a lot of this happen.
We do have some challenges ahead, unfortunately.
As the co-developer of CNS Connect, I'm very flattered that they are still using the system after 17 years, but that system was built with the latest and greatest technology that the 1990s had to offer. We really need to step it up and get a new system. And I think we finally have a solution to that. We finally got the funding for it, so they are looking at a replacement to the CNS Connect system.
We are also working vigorously to replace our CA Connect system. I know we had some struggles in the beginning with it. We are looking at revamping that entire system. We spend a lot of time automating, revising, and upgrading the process internally first. You really have to set yourself straight internally before you can look outward. With CA Connect we tried to do two things at once. We failed with the outward portion; we succeeded with the inner portion. But with this new system that we are hopefully going to launch sometime next year, we will be able to take care of both. So we are looking for strength in those two areas.
We have this stigma also about ISO meaning international. People don't understand that ASME also means international, and that ASME ecosystem with the National Board, the AIAs, jurisdictions and ASME mean an international program as well.
Our competitors are up to the task. They are really competing against our programs, and what they are using as a hook is free training, saying we will provide you as much training as you want on the standards as long as you come to our ecosystem. So we are fighting that. Unfortunately, we don't have as robust a training program as we would like, but we really need to get into that a little more because that's what our competitors are using to hook these other groups into their standards ecosystem.
The Russians, Chinese and Koreans, are basically using their design spec subsidies for these power plant constructions, and we can't fight against that. We don't offer subsidies for those kinds of things.
And unfortunately, there is a new generation of engineers out there that are unfamiliar with the ASME code. Thankfully for us, the authorized inspection agencies have stepped up in many ways to provide training for those using the ASME code. We really should be doing more of that on the ASME side. We developed the standard; we should be good at providing training. And we are going to work towards that.
There's government funding provided in other countries for the development of regional certification programs, but we don't get government funding, so we are fighting an uphill battle there.
KEPIC is also doing the same thing that Ariva is doing, basically offering free training and orientation on their standards to the international workforce so that they buy into their system. So training is that big hook.
Unfortunately, we are running into a little bit of a problem with technology as it may be advancing quicker than ASME can produce a stand-alone standard, so we need to look at ways to insert that technology back into our standards. And I think we are doing a good job of that. We need to do more, but we are doing a good job.
And there is that cost consideration. I am aware that ASME certification is expensive, and it is more expensive than many of the competing certifications out there, so we are going to do our best to try to reduce those costs.
We want to continue with the success of the C-360 workshops. I think they have been very successful. It allows the existing certificate holder to realize the value of their certifications, and almost become our advertisers for the ASME mark itself. They can then go out and provide the purchaser with the reason why they should purchase only ASME-stamped products.
We need to continue to maintain our strong partnerships with the jurisdictions, the National Board, and the AIAs. With the National Board, I'm going to make sure that we continue that strong partnership, and I’m sure Dave and Gary will also. We work very well together. It's a wonderful thing when the National Board and ASME are in lockstep with each other. It just makes everybody so much stronger.
We are going to continue our aggressive outreach with the ministries, agencies, and government bodies. For example, with the help of Dave and Gary, we got word of the ministry of production in Argentina, and they are now offering subsidies for nuclear certifications. We are working on them for the BPV side too. But it was only through Dave's assertion that we go down there and talk to them that we even gained an audience with the ministry.
And finally one of the things that we want to do is push the marketing to the end user. Many of you have probably seen all sorts of advertisements—“look for the mark, demand the mark.” We want to get into that space with the end user—“show me the mark”—because you never know what you are going to get if you don't have the mark on that product, right?
So we are going to push that "demand the mark" campaign out, but we are not going to be the only ones that are going to do it. We are going to ask the certificate holders to help us spread the message. We are going to basically give them a marketing tool kit for them to advertise on their websites, on their brochures, and on their pamphlets for why they should demand the mark for their products.
And finally, we are going to work with learning and development for the availability of the standards training globally, not just in the U.S.
As far as certification costs are concerned, again we realize how expensive we are. We are going to continue to reduce expenses by trying to increase regional auditors. Over 50 percent of our auditing force is now outside of the United States. It's a lot cheaper to send somebody to a BPV certification review in China if they take their training from Beijing to Nanjing, as opposed to going from California to Beijing. So that reduces the costs dramatically as well.
We have already tightened our financial guidelines for expense reimbursement. And we are going to further tighten them. The reason the finance staff unravels that ball of string is to make sure that there isn't any double-dipping in expenses and that kind of stuff.
We are going to look to try to reduce our overhead. It’s a little bit of an uphill battle only because we not only have to fight at my level, but at the ASME Board of Governors' level as well. We need to begin reducing our prices. We are just way too expensive. We have to do this.
And one of the things that I really wanted to promote at our Board of Governors' level is for them to realize the difference between growth and revenue growth. They need to really determine whether growth at the expense of short-term revenue is a path forward. I really, truly believe it is, because with that growth comes global acceptance, more people using, more people accepting. We are a non-profit organization anyway. We should be doing things for quality and safety, not for revenue. And so that's the message that I'm presenting to the Board of Governors in making sure that they understand what our stand is.
As far as maintaining high quality, we are looking to be ISO 17065 compliant by FY '21. And we are looking to be ISO 17024 compliant by FY '21 as well. One is for product certification, 65, and one is for personnel certification, 24.
We will continue to review our committee processes for conformity assessment and for standards, and revise those as necessary. And our internal processes too. Our quality control manual and associated procedures amount to about 2,000 pages right now. So we've really increased the quality in that area.
We are going to continue this code verification program to level the playing field amongst the certificate holders. I don't know how many of you are familiar with this code verification program. We have armed our 44 ASME consultants with an embosser and a stamp, and the first thing they do at the open session is ask to see the code books, and when they show us the code books, we emboss them, stamp them, and identify that that set of code books belongs to that company. So we eliminate this idea of traveling code books. As reviews go from one area to the other, the same code books magically end up going from one shop to the other. So with this embosser and this stamp, hopefully we help eliminate that and level the playing field with the legitimate copies of the code that people, that certificate holders, are purchasing.
And finally on the CA Connect side, when we launched CA Connect, we instantly automated 50 percent of the 351 checkpoints that I mentioned. We are looking to automate an additional 25 percent through the new software system that we are going to launch next year.
We are looking for true press-of-the- button analytics so that we can know in real time where things stand, where the hold-ups are in the process, where we can improve on things. We are looking at robust reporting capabilities for our system so that we can produce them and target specific areas we might be lacking. You keep hearing about smart manufacturing, but there is this smart processing that needs to be done so that we can eliminate additional checkpoints that are really unnecessary.
We are looking to dramatically increase our customer performance and service in that area as well. That piece, the external piece, is really going to get improved.
We are looking at full integration with our membership system, our finance system, and finally hoping to upgrade our ASME.org system. That's been in the works for the last five years, but unfortunately they didn't take standards and certification into account. We are looking for them to finally put standards and certification back up at the top level where we should be so that people can easily access our information.
And that's it, that's conformity assessment in a nutshell for you. Hopefully that gives you a better education of what we do, how we do it, and what we are going to be doing in the future to continue to make sure that we strive for the high quality and enhancement to public safety that we all want.
MR. LABRADOR: Any questions at all? Yes, sir?
PARTICIPANT: Is there a breakdown in assessment of your competitors' programs to the ASME program that identifies the advantages of the ASME program over that of your competitors?
MR. LABRADOR: We do, we have that breakdown. We usually present it at our workshops to identify the differences between the two. The biggest portion of that is our standard obviously. It's the technical viability of our standard. And we do give a point-by-point indication of where we are strong and where their standard is weak. But as far as we are concerned, the biggest advantage to us from a conformity assessment point of view is that true third-party inspection piece. That's a clear advantage on our end, and really I don't know if any other competitor can match that portion of things.
PARTICIPANT: Yes, I agree with that part.
MR. LABRADOR: Yeah.
PARTICIPANT: The situation is that as a jurisdiction, I have to report back to higher authorities, legislatures and all of that stuff.
MR. LABRADOR: One of the things we can do is probably produce some type of report or brochure for distribution to you to let you know of that. Would that help?
MR. LABRADOR: Okay. And we can produce something like that and probably distribute it to the jurisdictions, and that way you will have something that you can refer to. Because that helps everybody, right?
PARTICIPANT: It helps everybody.
MR. LABRADOR: Absolutely. Did I answer everybody's question? I did? All right. Thank you very much.