Intertek Improving Product Testing Certification ROI

The Manufacturers Guide to Improving
Product Testing & Certification ROI

(Maximizing your revenue and minimising your
costs to increase your bottom line)
Intertek Italia
Via Principe di Udine, 114 - 33030 Campoformido (UD)
Via delle Industrie, 9/3 – Mezzago (MI)
info.etls-italy@intertek.com www.italy.intertek-etlsemko.com
Introduction
Every company wants to know how to get better returns on any investment they
make.
These efforts are not simply about easy measurables like money spent and money
made or about current and future values or even about improvements in
efficiency, but they’re also about aspects that are more complex to measure, like
public perception, commercial satisfaction, innovation and even excellence.
Intertek have been working with leading product

manufacturers around the globe for over a
hundred years to ensure that their products ‘Test’ and Certify’
comply with regulatory requirements. Through
this experience, we have seen first hand the real ‘Test’ - vb. “to do something in
returns that can be made with a full order to discover if something is
understanding of the testing and certification safe, works correctly, etc., or if
process – so in this paper we will explore how to something is present”
maximise the investment in the (in most cases) (Cambridge Dictionary)
mandatory product testing and assessment (and
accompanying certification) that the majority of ‘Certify’ – vb. “to state something
product manufacturers have to undertake officially, usually in writing,
anyway. We’ll look at some baseline return-on- especially that something is true
investment calculations and ways in which to or correct” (Cambridge
improve the process of testing and certification to Dictionary)
save time and money and increase revenue
opportunities.
The Costs
Tangibles - Money
For the purpose of our discussions in this paper, we’ll use a sample product to
illustrate costs and ROI:
10kW Electrical Shower Unit

To test to IEC EN 60335 - Full Product Safety Test & £8,000
Certification
Retail Unit Price £129
Wholesale Unit Price £85
Manufacturing cost per unit £45
Profit per unit £40
www.italy.intertek-etlsemko.com 1
Intangibles - Time
Aside for the actual numerical cost of paying for testing and certification it is easy
to overlook the hours of effort and liaison that internal staff undertake simply to
co-ordinate the project. Internal experts are generally salaried so their costs are
already accounted for, but imagine if that time were being charged out to a
partner or customer, what would the value of the man-hours be?
Assuming a normal test and certification process takes 4 weeks from start to
finish, and a compliance officer spends an hour a week liaising with the test house
and organising paperwork, arranging sample delivery and collection and simply
asking questions about the status of the project, then that’s the equivalent of a
half of a typical working day also ‘invested’ in testing and certification.
Obviously if a product fails the testing and needs to be reworked in order to pass,
then the process time will be extended with the re-test, perhaps adding another
half man-day to the project ‘costs’. If a manufacturer’s expert was contracted out
as a consultant – what would be the date rate for that expertise? £500 per day?
This kind of consideration makes identifying and calculating return on such a

process investment, even more important. More than likely though, not just one
person from an organisation will be involved in the testing and certification, so
when ‘costing’ a project the theoretical day rate could probably be factored.
The Testing & Certification Iceberg...often we focus on visible costs, missing a

thoroughly evaluation of hidden sources of extra costs and revenues...
Cost of Testing & Certification
Hidden Sources of potential Hidden Sources of potential

extra-cost extra-revenues
• time of internal personnel • Shorter time to market,
managing the project more selling days
• Extra time due to possible Hidden Sources of potential • Coordinated testing for
re-testing lesser costs multiple markets
• Extra time and cost due to • Anti-counterfeiting • Brand differentiation
possible re-workings /
design changes • Better liability management • Improved retailer
recognition
The Returns
How faster is better – Baseline ROI Statistics: Electrically Powered Shower Unit
Below, we have put together a basic set of ROI calculations for our fictional
Shower unit product. This highlights the potential for extra revenue that reducing
the testing and certification time could bring. All values are purely for illustration
purposes only.
10kW Electrical Shower Unit

To test to IEC EN 60335 - Full Product Safety Test & Certification £8,000
Retail Unit Price £129
Wholesale Unit Price £85
Manufacturing cost per unit £45
Profit per unit £40
Therefore 200 units need to be sold to recoup the cost of the £8,000/£40 =
testing and certification investment. 200
Number of outlets where the unit is sold 85
Average unit sale per outlet per week 2
So in 1 week all 85 Outlets sell between them 170 units
170 units per week x 52 weeks in the year = 8840 units
sold per year
Wholesale sell price = £85 x 8840
Units =
£751,400
Deduct the cost of manufacture £45 x 8840 = £397,800
Potential profit per year = £353,600
However, the selling year for this product is unlikely to be 52 weeks:
Testing Time is 4 weeks for the first attempt + 6 weeks for 10 weeks
product adjustments and retest =
+ 1 week of Manufacture & Ship = 11 Weeks
So the trading year for this product is potentially 41 weeks long
170 Units per week x 40 weeks = 6970 units
6970 units x £40 profit per unit = £278,800
Imagine you could get 4 selling weeks back – by avoiding re-test…
‘Re-invest’ 2 of the 6 weeks allocated to retest into extra consultation and

preparation for the compliance process by having the testing and certification
partner review the design and highlight potential non-conformities at the earlier
stages of product development. They can even conduct a basic bench assessment
with a prototype that will highlight any areas of risk.
170 units x 4 weeks = 680 units, then 680 Units x £40 profit per unit = £27,200
Even when the £8,000 investment in testing and certification and 1 man-day of
consultation time from internal staff (@ £500 per day for example) is subtracted,
this leaves £18,700 extra revenue (an increase of 6.7%)
Arguably ‘less measurable’ - but still valuable ROI:

1. Entering new markets abroad – Every country a manufacturer wishes to sell
products into will have its own national requirements for safety,
electromagnetic compatibility and energy consumption; and full
certification/approval can demonstrate conformity with these. If a
manufacturer is investing in testing and certification for country A - and
countries B & C have the same product regulations (even with some local
deviations), then B & C could be viable additional markets as the lion’s
share of the required compliance work will already be completed. Factoring
in the requirements for countries B & C during the product development
phase and planning this into compliance activities would give a wider
market access and increased revenue opportunities, without a significant
extra investment.
2. Differentiating yourself from competitors and boosting brand perception - If

every manufacturer of electrical or electronic products has to apply a
National or Regional Mark to their goods, how can distributors, retailers
and consumers differentiate between them? Investing in non-mandatory
product certification/approval can differentiate a brand from that
competitors and visibly demonstrates that a manufacturer has responded to
the legal duty of care to produce safe products by investing in 3rd party
validation.
Interestingly, many manufacturers have also found that an investment in

non-mandatory energy testing helps them to secure the ‘eco’ or ‘green’
consumer and expand their owner base - as securing validation of a
product’s energy consumption and using this information in promotion for
a product can give a further competitive advantage and even enable a
premium price to be charged for their product.
Additionally, by undergoing the certification/approval process a

manufacturer demonstrates support of recognised best practice. This helps
to boost brand and customer perception of both product and
manufacturer.
3. Anti-counterfeiting measures - Safety testing and certification also helps

protect manufacturers against counterfeiting. Even when unscrupulous
manufacturers produce counterfeit products with fake certifications, a
manufacturer with genuine products with genuine certifications has solid
evidence to show that their real products are safe, with documented
factory inspections, tested products and up-to-date technical files.
Furthermore, most product safety certification/approval schemes require
random samples of product to be checked regularly to ensure product
continuity. This provides greater chance of spotting a counterfeit early on.
4. Defence against accusations of liability - Should the worst happen and a

product unexpectedly fail – and accusations of product liability become
levelled against a manufacturer, certification/approval provides compelling
evidence that due care was taken to produce a safe product as prescribed
by applicable standards - and that can form the basis of your defence.
5. Recognition by retailers - Some retailers require products be independently

certified/approved by preferred laboratories before they can be stocked on
shelves. Such approval can therefore increase the number of viable
channels a manufacturer has to market their product.
What can a manufacturer do internally to further speed the

process?
In The Design Phase

Design for compliance - Knowing the safety (and EMC) regulations for a new
product in the target market is essential for the product development team. This
enables them to obtain appropriate Standards for those markets (indeed they can
select Standards that give them maximum geographical coverage) and design the
product with the requirements in mind.
Notes on Standards & Jurisdiction:
• US - FCC/ FDA
• US/EU - FCC, IEC, CENELEC
• Asia Pacific - FCC or IEC with deviations
Product Jurisdiction Standard

ITE USA FCC Part 15, 60950-1
ITE EU, Asia CISPR 22/EN 55022, CISPR 24/EN 55024
Medical USA, IEC 60601-1-2
International
Test/Measurement 61010-1
Audio/Visual 60065
Household Appliances 60335-1
Electrical Tools 60745-1
ISM USA FCC Part 18
ISM EU, Asia EN 55011 +…
Lab USA Exempt
Lab EU EN61326-x
Radio USA FCC Part 15, 22, 24, 25, 27, 74, 90, 95
Radio EU ETSI EN, EN 301 489 -x
Other issues that can be considered during the design phase:
• Materials – knowing the characteristics of the materials that could be used

in the product and how they behave in certain environments can help a
manufacturer choose materials that make optimum contribution to safety
and EMC compliance
• Printed Circuit Boards (PCBs) – Consider the architecture and positioning of
PCBs for optimum protection
• Ventilation – Keeping a product cool is important but will the venting
enable EM radiation to seep out at unacceptable levels? Or bring instability
to the system?
• Shielding – by adding shielding to prevent EMC emissions, is clearance
reduced for electrical components within the system? Will the extra
material enable the system to overheat?
• Family resemblance – Perhaps minimise the differences within suites of
products if you want to minimise the testing they have to undergo. The
fewer the differences between them the less complicated (and costly) the
testing will be.
• Cabling – does the cabling have optimum shielding and protection?
• Software and virtual testing – some immunity upsets can be corrected or
mitigated by suitable operating software/firmware design. Also, consider
the use of virtual testing software. A number of IT packages are available
that can model and analyse a product design that can help designers design
for compliance.
Design review
Many manufacturers have found it beneficial to have a design review conducted
by their test or certification partner. This highlights any design issues early and can
be conducted using the circuit diagrams, component lists, design drawings – and if
it is available, a prototype. Initial discussions with the certification partner can even
begin with an artists rendering or cardboard mock-up. If necessary the product can
then be modified or re-worked before ever reaches the laboratory.
A partner will not only review the product but they can also be used as a source of
reference for interpreting Standards. These can sometimes be confusing
documents open to a scope of interpretation that could lead a designer using
them as a guideline during the development phase to inadvertently miss-design a
product.
Internal staff, who are well placed with intimate product knowledge, can also
conduct some basic bench testing to help assess the product in the design stage –
again helping to show up any potential compliance issues.
Work with the Laboratory Quick Supplier Selection Checklist

Yes No
Choose the right partner Are service prices competitive? F F
Does the supplier offer ‘added value’? F F
No amount of preparation or good
Is the project queue time acceptable? F F
design will overcome having the wrong
Will they accept partial in-house testing? F F
test partner involved in a project. Is an early design review available? F F
Does the range of services meet the need? F F
Choosing a provider purely based on
Does the lab have facilities close to the
cost for example, can be the wrong
Manufacturing location? F F
decision - the location of the lab in
Is the staff responsive/knowledgeable? F F
relation to the point of manufacture,
Do they have the right scope? F F
the job queue time, the accreditations,
Do they hold the appropriate accreditations? F F
equipment, knowledge of the staff, the
reputation/recognition of the certificates
or approvals and even the helpfulness of the person on the other end of the
phone are all factors to consider when choosing a test partner.
It seems obvious to say too, but just because a manufacturer has always worked
with one lab doesn’t mean they are necessarily the right lab. Consider reviewing
the chosen laboratory every year or so to check that they have the right package
of services to meet evolving business needs.
Don’t take the hands off approach

More than anything else, optimising the testing and certification process is about
good communication between the test lab and the manufacturer. Some
manufacturers like to pass over a product for assessment and then receive the
product and a certificate back a little while later – without involving themselves in
the process. Some test and certification bodies prefer this approach themselves,
but in our experience good, regular communication leads to better project
visibility, enables flexibility where required and prevents potential
misunderstandings and delays.
In the compliance project file, it is therefore beneficial to keep a list of contact

names and numbers and email addresses for the team at the test lab, and some
calendar notes to check in regularly with them to get an update on the project
progress. Many manufacturers have found an active dialogue with the test house
and an understanding of and proactive involvement in the process can help reduce
the time it takes to complete it, minimises the chances of issues arising and aids
their speedy resolution if they do occur.
Be ready (forms, samples, spares etc)

The testing and certification team at your partner laboratory will require one or
multiple product samples (depending on the product), access to the component
and materials lists as well as circuit diagrams and drawings in order to be able to
test and assess the product.
Surprisingly, a great many testing and approval projects get delayed, not because
of the modification of product, or because a failure of tests, but because the test
lab hasn’t had the samples they need or all of the paperwork to move a project
forward. It seems bureaucratic, but as test houses and certifying bodies are
regularly audited to ensure the work they do is to a consistent and of high
standard, they need to have all of the relevant documentation necessary to
conduct the work. Sometimes the most simple of required ‘paperwork’ (user
manual, installation instructions, labelling information, product markings, etc.) is
not provided. If a manufacturer can have all of the relevant documentation ready
for the test house, frustrating (and costly) delays can be avoided.
Group Submissions
When submitting products to the laboratory for testing, grouping them into a
family of products, and submitting as many similar items as is feasible at the same
time will help to reduce the cost and time required for the compliance process for
multiple items. If that isn’t possible then try and arrange a worst case (fully loaded)
configuration that can represent the other units in the family.
Data Acceptance Programmes

Where possible, use a laboratory with a Data Acceptance Programme (DAP) to
reduce test costs and the time it takes to complete the process. In essence, a DAP
enables test work conducted at a manufacturers in-house laboratory to be
recognised by the Test & Certification Body – saving significant sums in actual test
fees and speeding a product to market.
This can either be achieved through a local observer witnessing the tests on behalf
for the CB, or through the laboratory and test processes being accredited in some
way.
Having the facility to test products in-house in an unbiased and audited way gives
manufacturers enormous flexibility about when they test. The schedule imposed
on the test programme is purely internal and is not impeded by the logistics of
sending samples, external queue times or even budget/purchasing constraints.
DAPs can vary widely in what they deliver in terms of ROI, but comparing schemes
can help manufacturers identify where they can minimise their costs and make
most return.
Speeding up the testing lead time...
Be ready with forms, samples...
Don’t take the Group

hands off approach submissions
Data acceptance
Choose the right programmes
testing partner
Design for
compliance
Conclusion
Improving the return on a compliance investment is straightforward, but does

require the orchestration of a number of factors to show the best results:
• A good understanding of the Standards that govern product types enables

a manufacturer to anticipate the challenges they will meet on the test
bench and in real-world use. Designing for compliance will help to reduce
the chances of failure during the testing phase saving time (which will help
companies to get to market faster and increase their selling days) and
money (in terms of re-designs, re-builds and re-tests).
• Asking a test and certification partner to conduct a design assessment at
drawing or prototype stage will enable potential non-compliances in the
product to be identified early in the design process – again reducing the risk
of costly redesign time and re-test fees.
• Conducting some in-house testing before starting the ‘official’ programme
of 3rd party testing, can again highlight potential failures before delays cost
money.
• Choose a test and certification partner that will work collaboratively to
make the test process as efficient as possible. If they have the facility of a
Data Acceptance Programme that accepts test reports from a
manufacturer’s in-house lab, check what value this gives by comparing it
with a similar scheme to ensure you’re getting the best return.
• If facilities to test in-house or participate in a DAP don’t exist, then
common-sense preparations for an outsourced compliance assessment will
certainly make the process more efficient. Ensure all paperwork is in order,
with drawings and component listings ready for the assessors, along with
user guides, product samples, spares and details of any listed critical
components – like controls and cut outs.
• When seeking certification (approval) consider what foreign markets the
product could be launched into. Check what the product requirements are
for the target regions and try to conduct all of the assessment needed at
the same time. If international sales channels are available and feasible to
leverage, you can significantly improve your revenue with such forward
planning.
• If possible, submit family variants of products for testing at the same time –
it is cheaper to conduct simultaneous testing on variants than linear testing
on these as individual items.
Unfortunately there is no single fix to ‘work’ the product testing and assessment
processes more efficiently to improve your bottom line, but an early discussion
with a test and certification partner will help to identify.
For more information on specific testing and certification information, please contact Intertek
email: info.etls-italy@intertek.com or visit www.italy.intertek-etlsemko.com
This publication is copyright Intertek and may not be reproduced or transmitted in any form in whole or in part without the
prior written permission of Intertek. While due care has been taken during the preparation of this document, Intertek
cannot be held responsible for the accuracy of the information herein or for any consequence arising from it. Clients are
encouraged to seek Intertek’s current advice on their specific needs before acting upon any of the content.

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The Manufacturers Guide to Improving

Product Testing & Certification ROI

Intertek have been working with leading product

10kW Electrical Shower Unit

This kind of consideration makes identifying and calculating return on such a

The Testing & Certification Iceberg...often we focus on visible costs, missing a

Cost of Testing & Certification

Hidden Sources of potential Hidden Sources of potential

10kW Electrical Shower Unit

Imagine you could get 4 selling weeks back – by avoiding re-test…

‘Re-invest’ 2 of the 6 weeks allocated to retest into extra consultation and

Arguably ‘less measurable’ - but still valuable ROI:

2. Differentiating yourself from competitors and boosting brand perception - If

Interestingly, many manufacturers have also found that an investment in

Additionally, by undergoing the certification/approval process a

3. Anti-counterfeiting measures - Safety testing and certification also helps

4. Defence against accusations of liability - Should the worst happen and a

5. Recognition by retailers - Some retailers require products be independently

What can a manufacturer do internally to further speed the

In The Design Phase

Notes on Standards & Jurisdiction:

Product Jurisdiction Standard

Other issues that can be considered during the design phase:

• Materials – knowing the characteristics of the materials that could be used

Work with the Laboratory Quick Supplier Selection Checklist

Don’t take the hands off approach

In the compliance project file, it is therefore beneficial to keep a list of contact

Be ready (forms, samples, spares etc)

Data Acceptance Programmes

Speeding up the testing lead time...

Be ready with forms, samples...

Don’t take the Group

Improving the return on a compliance investment is straightforward, but does

• A good understanding of the Standards that govern product types enables

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