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Does AS9100 Registration Impact Pricing? Is It Worth It?

Does AS9100 Registration Impact Pricing? Is it worth it?

You need to find a CNC machine shop.

There are a lot to choose from, so how do you tell them apart?

One way is to check to see if they have the AS9100 registration.

AS9100 may be a requirement for your industry or your customer. If it’s not and you have options, should you try to use an AS9100 shop.

Does that drive up the cost?

Is it worth it?!?

Three things we’ll cover in this blog:

  1. What is AS9100 registration
  2. Three reasons why an AS9100 shop might cost more.
  3. Two Questions to ask to see if it makes sense to pay more for an AS9100 shop.

What is AS9100 Registration?

Flying in an airplane seems like an unnatural act.

The idea of being up at 33,000 feet at hundreds of miles per hour is a remarkable representation of how our technology has advanced.

As the Aerospace industry grew in the early years, it was clear that maintaining high-quality standards was an essential aspect of making air travel safe.

Countries all over the world began to establish quality standards for aerospace and military manufacturing that ultimately evolved from the early days of ISO 9001 and is now officially recognized worldwide as AS9100.

AS9100 is now a widely adopted and standardized quality management system for the aerospace industry. Most major aerospace manufacturers and suppliers worldwide require compliance and/or registration to AS9100 as a condition of doing business with them.

A supplier that is not registered to AS9100 might state that they are “compliant” to the standard and typically that will require an audit by the aerospace manufacturer before they are willing to use them as a source.

AS9100 Registration

The success of the program has allowed air travel to remain relatively safe around the world and it’s commonly said that the drive to and from the airports is typically riskier than the flight.

Registration for AS9100 is done through certification audits on at least an annual basis to ensure that registered companies are maintaining their Quality Systems in accordance with the Standard.

The registrars are independent entities so that they may maintain objectivity and perform their audits for the good of the aerospace industry and its ultimate safety.

The length of the audits required varies based on the size of the company and the number of employees and encompasses relevant business processes from Management & Quality to Training & Material Traceability.

Three Reasons Why an AS9100 Shop Might Cost More than a Non-AS9100 Shop

There are three significant additional costs that AS9100 Registered Shops have to deal with that wouldn’t otherwise incur running a machine shop.

1. AS9100 System Establishment & Initial Audit

Embarking on AS9100 Registration involves most of the business systems of a company. Establishing and documenting the needed procedures to meet the AS9100 Standard is typically dramatically more documentation than a typical company already has in place.

Training costs associated with getting some of the key staff involved could range from $5K up to $25K+ depending on the size of the company and the number of employees being trained. Typically, the QA Manager and Quality Department receive the most training and are responsible for writing and/or rewriting the needed procedures to meet the AS9100 Standard, but Internal Auditors also need to be trained and they often come from any department. Typically, companies will spend 2-3 years in the training, preparation, and pre-audit work prior to the initial Registration Audit.

The initial Registration Audit is among the longest audit performed, as the entire system must be reviewed & verified. The cost for the Registrar to perform the AS9100 Registration Audit will vary by the size of the company being audited but is typically between $3K-$10K, plus travel expenses.

Needed follow-up to address any non-conformances from the Registration Audit is time-sensitive, so there is often plenty of additional work required once the audit is complete.

All-in-all, it’s reasonable to expect that the cost to establish AS9100 Registration starts near $10K and can easily hit upwards of $100K. Fortunately, the opportunity to maintain the Registration tends to be less costly than the initial workup to prepare for it.

2. Administrative Requirements and Internal Audits

Once a company is AS9100 Registered, it is required to both maintain & use the business systems properly.

Typically, there is additional documentation in most areas:

  • Material Traceability & Certification
  • Process Control
  • Training
  • Vendor Management
  • Contract Review
  • Gage Calibration
  • Risk Assessment
  • Sales & Quoting

This additional documentation does slow many of these processes down, adding some small costs to the price of operations. Some of the additional paperwork can be managed using electronic means, but the time required still tends to be additive.

In between the External Registration Audits, companies are required to perform Internal Audits. These audits are conducted by company personnel who must be trained as Internal Auditors and typically audit in pairs. A typical Internal Audit can take between 1-4 days, depending on the specific area being audited and the size of the company. Most often, the company personnel is selected from any of the operational or administrative roles, but typically needs considerable familiarity with company operations to perform the audit well.

The time and personnel resources required for both the additional administrative requirements to company systems to conform to the AS9100 Standard, along with the need for the staffing and execution of an Internal Auditing function add cost to the company operations.

3. Ongoing Audits and Re-Registration

Once a company completes the AS9100 Registration and adjusts its operations to continue to meet the standard during the 3-year length of the Registration, they are required to regularly allow ongoing External System Audits on at least an annual basis.

These audits are designed to ensure that the system is being maintained properly so that the Quality System continues to meet the AS9100 Standard throughout the 3-year term of the Registration.

Similar to the initial Registration Audit, the registrars for these ongoing External System Audits typically charge between $3K-$10K to conduct the audit and it requires company personnel to participate. Typically, the QA Manager and much of his staff are directly involved in most aspects of the audit while other company employees will be part of the audit as their areas are checked.

Both the prep time prior, and the employee time during these External Systems Audits is part of the time and resources required for maintaining the AS9100 Registration.

Two Questions to ask to see if it makes sense to pay more for an AS9100 shop.

1. Is AS9100 Registration required by your Customer?

Obviously, this one is pretty clear, but it’s an important part of the equation.

If your Customer requires suppliers to be AS9100 Registered, then it limits your options to those shops.

One caveat may be that you could audit them (or pay for an outside audit) to help demonstrate that they are in “compliance” with the AS9100 Standard.

That requires additional work (or cost) on your part, but it could be worth it.

2. Are your parts complicated enough to require significant technical horsepower?

This becomes a judgment call, based on experience and the shops available to you.

Typically, the less complicated work can be run by many of the small CNC shops that are in most communities. Trying out a few of them can typically yield one or two that can be dependable. Those small CNC shops can be a great fit for simpler work when AS9100 Registration is required.

More complicated work, on the other hand, typically requires a larger CNC shop for production. Having the stability and proven systems of an AS9100 Registered company can provide additional confidence. The regular review and auditing in an AS9100 Registered Shop forces more consistent business practices that tend to catch mistakes earlier and more systematically document issues or challenges.

Complicated work tends to be more expensive anyway, so the difference in price between an AS9100 Registered Shop and one that isn’t, shouldn’t be great.

Final Thoughts

AS9100 Registration was established for Manufacturing in the Aviation, Space, and Defense Industries to maintain Quality products and allow for the safety needed in products in those areas.

CNC Shops that invest in AS9100 Registration tend to have higher prices than other shops, due to the costs associated with establishing and maintaining the Registration.

There are certain circumstances where those increased costs are worthwhile, either due to customer & industry requirements or due to the complexity of the products involved.

As always, finding the proper fit for the type of work needed and the industry & customer requirements is essential to optimizing the value when using CNC Suppliers.

Our desire to be the Next Best Thing to an In-House Shop for our Customers starts with a thorough project review and a transparent review of the costs associated with producing the parts.

We love helping our Customers optimize their products so they can help their customers solve problems and win.

If you’re interested in having open conversations about your CNC Production Parts and you think you might need an AS9100 Registered shop, please contact us below and we’ll look forward to speaking with you soon.

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