TESTING LABORATORIES



Testing laboratories are utilized by all manner of businesses to provide objective analytical data on the quality of a product or process. Some companies look to testing labs for product certification, which can be a significant marketing tool, while others use testing labs to analyze the results of employee drug tests. Still others secure the services of environmental testing laboratories to check on water and soil quality before making a major land and/or facility purchase. Whatever the reason, the services offered by testing laboratories are often of great usefulness to businesses in a wide range of industry sectors.

The number and size of testing laboratories operating in the United States and many other industrialized nations has increased significantly over the last number of years. There are myriad reasons for this growth, but observers generally point to the rise in product testing for the bulk of the increase. "It's the significant diversity in products, growth in consumer demand, and the globalization of sourcing that are providing the major thrust behind testing and certification," claimed a testing industry executive in Appliance Manufacturer. Experts agree that these product analysis factors have had a significant impact, but several other trends have also been cited as key to the increased reliance on external testing labs. The rising expense of product liability insurance, for instance, has led many companies to utilize testing labs to check out new or "improved" products prior to general release. "Small to mid-sized companies," wrote Food Processing contributor Robert Morgan, "often are looking for a lab to serve as what amounts to their quality control department." Testing laboratories have assumed this role with smaller companies in large measure because of the expense of maintaining comparable facilities in-house. Still, many big firms use them as well in order to secure independent results in areas of quality control and failure analysis.

It should be noted, however, that testing laboratories generally limit themselves to one specific testing area. For example, a company that conducts analysis of employee drug tests will rarely offer services in the realm of environmental analysis; similarly, a company that conducts tests on soil or water will not be of use to a small business owner who is seeking product quality testing services.

ADVANTAGES OF USING A TESTING LABORATORY

Business analysts, laboratory managers, and business owners—both large and small—agree that there are several significant advantages associated with utilizing the services of an independent testing lab. Morgan cited three primary reasons why businesses choose off-site independent labs: objectivity, economic considerations, and safety.

OBJECTIVITY "The independent off-site testing laboratory focuses on its testing procedures to ensure accurate results," stated Morgan. " 'Third-party testing' or 'tested by an independent laboratory' is a common advertising claim that guarantees the test results are objective and free from the influence, guidance or control of interested parties. The independent laboratory exists for only one purpose: to provide objective analytical data on the quality of a product or process. The laboratory management invests considerable time, money and effort to ensure this objectivity." In keeping with this agenda, testing labs usually keep copious documentation on the internal processes that they follow to ensure objectivity and accuracy. Such information, said Morgan, usually includes requirements for: training of personnel, especially analysts; maintenance and calibration of equipment; standardization and adoption of analytical methods; verification of results; sample recovery and handling procedures; quality control measurement procedures; internal and external proficiency programs and certifications; and accreditations.

ECONOMIC CONSIDERATIONS Economics play a central role in the decision of many firms—and especially smaller businesses—to utilize an outside lab to conduct quality and safety tests. Indeed, small business owners engaged in establishing or fortifying their enterprises will likely have a host of things on which they will want to spend their money, from new equipment to new advertising campaigns to work force or facility expansion. These businesses may well be better off financially by securing the services of an outside entity, despite the expense involved there, rather than setting up internal testing facilities. Moreover, many businesses that decide to establish internal testing facilities do so without fully factoring in the ancillary costs associated with such activity. Morgan noted that laboratory activities are rife with such "hidden costs," including corporate or upper management salaries and benefits; liability insurance; additional professional services (legal or accounting); office supplies, accounts payable salaries, depreciation and interest expense; and "last but not least, lost opportunity for profits had the money been invested in profit-making activities."

SAFETY Many companies engaged in producing potentially hazardous materials prefer to utilize an outside testing firm to minimize the danger of in-house exposure to hazardous agents.

CHOOSING A TESTING LABORATORY

There are many criteria to consider when selecting a testing laboratory. These criteria will be shaped to some degree by the situation of the company making the selection; for example, a smaller company that needs only limited testing done may well make its selection exclusively on the basis of price and quality. But for many companies of varying sizes, several other factors are usually considered as well. As Raymond Luce wrote in Business First of Buffalo, "it's important to take as much care in selecting a lab as you would a financial advisor—the accuracy of the results may affect decisions worth thousands or even millions of dollars."

According to Luce, there are several basic criteria upon which testing laboratories should be selected:

QUALITY This is the most vital consideration in judging any testing lab. Small business owners should look for labs that maintain and adhere to documented quality control programs. "A good laboratory should be eager to discuss its quality control program and have a quality assurance manager whose sole responsibility is to implement and monitor proper use of the program," said Luce, who added that quality control programs should also: perform multi-point calibrations; analyze control standards; use analytical methods in testing; test for inadvertent skewing of results; and test for reproducible results.

TURNAROUND The amount of time necessary to get results on tests from independent labs depends to a large extent on the area in which the labs are involved. Product testing labs, for example, typically take months to complete their tests, and environmental analyses take longer than do medical or clinical tests. Still, most environmental tests can be completed in one or two weeks, and some environmental, clinical, or medical labs are able to speed up analyses in exchange for additional compensation.

NATURE OF SERVICES Businesses requiring environmental, clinical, or medical tests should find out about the following before committing to a testing laboratory:

EXPENSE Cost is always a concern, especially for smaller businesses with more modest financial resources. But small business owners should make sure that they fully understand the extent of the testing and other services that they are receiving before signing an agreement.

CERTIFICATION "You should ask what certifications or accreditations a laboratory has," said Luce. "Certification differs from state to state. The consequences of a poor choice range from worthless data to the potential staggering costs associated with correction actions based on incorrect data."

Companies preparing a product for testing and certification should make arrangements with a reliable testing laboratory early in the process, so that all procedural issues can be addressed in advance and so both sides are on the same page regarding such issues as timeline and necessary information exchange. "Communication is probably the most important aspect of dealing with an outside certification agency," stated one executive in Appliance Manufacturer.

FUTURE CHALLENGES

Several challenges loom for both the testing industry and those companies that utilize its services in the next few years. For example, the rapid expansion of the global marketplace has brought with it a corresponding expansion in the testing and certification offerings of laboratories. Most observers believe that American firms' ability to make inroads into international markets will partially depend on the pace at which the international business community is able to settle on common testing and certification standards. Observers point to the European Community's CE Mark as a key component of any harmonization. "[Harmonization is] becoming a major thrust mainly because testing and certification are built into the CE Marking approach created by the Europeans," one American executive told Appliance Manufacturer. "The CE Mark is the EU-required safety mark that must be affixed in order for products to travel freely throughout the EU." Most experts agree that the development of one globally accepted mark of certification lies some time off because of the lack of a single international legal system that can ensure compliance.

Another factor that is expected to have a significant impact on independent laboratory practices is the Internet. "The laboratory-services industry is eyeing the Internet as a potential tool for expansion," said Sue Robinson in Seafood Business. She noted that many analysts believe that testing companies will become even more vital as products are sold online because such sight-unseen transactions will place an even greater premium on third-party assurances of quality.

FURTHER READING:

"Circling the Globe." Appliance Manufacturer. August 1997.

Cook, Robert C. "A Tale of UL Testing." Security Management. July 1995.

Crowe, Michelle. "Testing Lab Provides Other Firms With a Competitive Edge." The Business Journal. February 9, 1998.

Litsikas, Mary. "Put Products Through Their Environmental Paces." Quality. February 1997.

Luce, Raymond. "Selecting a Testing Lab: Questions You Should Ask." Business First of Buffalo. April 1, 1991.

Morgan, Robert. "Off-Site Labs Right on Target: An Independent Lab May Be Better than Doing Your Own Testing." Food Processing. August 1995.

Munzer, Michael. "Research: Outsourcing of R&D, Testing Seen Increasing in Popularity." American Metal Market. May 14, 1996.

Robinson, Sue. "Lab Services." Seafood Business. December 2000.

Wingo, Walter S. "A Boom Time for Product Testing." Design News. March 9, 1992.

Winter, Drew. "Tough Quality Demands Spur Testing Business." Ward's Auto World. April 1992.

Zuckerman, Amy. "Sorting Out the Seals of Approval." New York Times. July 16, 2000.



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