November 2008

A regulatory agency run amok

By Richard Huffman

UL, everyone recognizes this symbol. 

It says safe, reliable, dependable, tested, fireproof, and any number of other adjectives you can associate with countless numbers of products.

The cold hard truth is UL, or Underwriters Laboratories, is costing individuals lost jobs, costing companies lost profits, stifling productivity, and hindering development of new products.

As I write this, I see knowing company executives and engineering managers starting to boil. Manufacturers who have been where I am going with this editorial are already experiencing blurred vision. 

I received the following information from UL on its new pricing policy. This policy and the arrogance and attitude in the explanation signal a regulatory agency run amok.

UL: "Based on customer demand, we have developed a new quoting system that will provide quick, consistent, and predictable quotes."

RH (my interpretation): UL is very busy and inept in their ability to keep pace with customer submittals and/or changes that we "ourselves" are forcing you to make. We have developed a new quoting system that will pigeonhole "everything" into categories.

UL: "To do this we developed a simplified pricing structure that establishes predictable, consistent costs based on the value to the customer and not based on the effort for each individual project."

RH: We have now simplified our charges, expensive, more expensive, most expensive, and absurd. Our charges do not depend on anything material to your product or on any relative work we may need to do. We are just trying to be consistent and speed up our billing. If all that is required is to wave our magic UL wand over your file it will still cost you. Our perceived value to you, "our valued customer," is worth whatever we charge you, so grin and bear it! 

UL: "It is very important to understand that this means that the effort involved in a project is no longer the basis for the price."

RH: It doesn't matter to us if we don't do any work or test your product. Even if we just change some text or a number in your UL file, we will bill you anyway and your costs will be excessive, regardless.

UL: "The value to the client is the UL mark, not the test program."

RH: OMG! Have you lost your mind? You manufacturers all want something for your money. You should bow down and be grateful almighty UL has blessed you.

UL: "Therefore whether a project has testing included or not has no effect on the price since the value to the client is not dependant on the test program."

RH: The purpose of our business is not what it used to be. We are growing, thanks to the U.S. government and OSHA, and we need to charge our customers according to our stature. Besides, there is a rumor we are trying to go public. We need to make the books look better.

UL: "We do have results on the new pricing and process, and the results have been very positive. Projects receive quotes earlier. After acceptance of the quote, the project is starting within three days. This is quite an improvement over the previous system where quotes took, on average, 12 days."

RH: This must be part of some internal UL report to some one's boss. It certainly isn't anything coming from a UL customer. Some moron at UL obviously has his nose somewhere it shouldn't be.

UL and similar non-governmental regulatory agencies are racing down a path that will undoubtedly lead to their demise and a foreign competitor offering a better and less expensive "MARK" will replace them.

It is certain at some point in the near future these agencies will look back with puzzled and twisted faces wondering what happened and where they went wrong.  

The high cost to manufacturers of submitting products to agencies such as UL cannot and will not be endured by America's manufacturers indefinitely. The sad truth is they will cease to exist.

ABOUT THE AUTHOR

Richard Huffman (rhuffman@wici.com) is the chief operating officer of Wilkerson Instrument Co. in Florida.