This is a standard for how the manufacturing plant is managed. It typically involves setting up writtem policy and procedure manuals for absolutely everything the manufacturing plant does. It's about creating a workplace where each job is so clearly defined and so well organized that a monkey could replace anyone in the plant and there would be no change in operations. It's supposed to make sure that the quailty of the widget being made is more consistant.

Alot of big companies require that their suppliers be ISO certified because it makes them feel that they'll get a more consistant quality product.

A friend of mine owns a small machine shop that makes parts for the used autopart remanufacturing industry. The Big auto makers are ISO certifed and as part of the certification, they are required to use ISO certified suppliers. So the used parts remanufacturers who do business with the Auto makers must also be certified. And to be certified they must use certified suppliers. So my friend's little machine shop has to go through the whole process of labeling tools, writing manuals, creating work flow diagrams and organizational charts, and lots of other stuff so he and two other employees can continue to do what they've done for 30 years.