Overview of Quality Management Systems and ISO 9001

228-January-2008

Why is ISO 9001 so popular?The scope of the Standard specifies requirements

intended to:

► demonstrate organization’s ability to consistently provide product meeting customer & applicable regulatory requirements

► enhance customer’s satisfaction through effective application of the system including processes for its continual improvement and assurance of conformity to customer and applicable regulatory requirements

328-January-2008

New Structure & Focus

Why is ISO 9001 so popular?

►Significantly less emphasis on procedures and records.

►Significantly more emphasis on management involvement and a system that works to achieve the goals of your business.

428-January-2008

The ISO 9000 “Family”► ISO 9000:2005 Quality management - Fundamentals and vocabulary

► ISO 9001:2000 Quality management systems - Requirements

► ISO 9004:2000 Quality management systems - Guidelines for performance improvements

► ISO 10006:2003 Quality management - Guidelines for quality management in projects

► ISO 10007:2003 Quality management systems - Guidelines for configuration management

► ISO 10012:2003 Measurement management systems - Requirements for measurement processes and measuring equipment

► ISO 19011:2002 Guidelines for quality and/or environmental management systems auditing

528-January-2008

Relationship with ISO 9004

► ISO 9001 & ISO 9004 - consistent pair

► Designed to complement each other

► Different scope - same structure

► ISO 9001 can apply for certification or contractual purposes and focuses on effectiveness

► ISO 9004 aims on improving performance and efficiency

628-January-2008

The Use of ISO 9004 as a Management Tool

► ISO 9004 includes all of ISO 9001 plus additional items to consider for improvement ideas.

► ISO 9004 should be regularly used throughout the organization to lead beyond the basics of ISO 9001 and improve the QMS.

► There is a possibility that we may offer ISO 9004 “certification” for clients seeking to achieve results beyond ISO 9001

728-January-2008

New Structure & Focus

►The ISO 9001 Standard is modelled for Quality Management with 5 Major clauses:

Quality Management System (QMS)

Management Responsibility

Resource Management

Product Realization

Measurement, Analysis & Improvement

828-January-2008

CUSTOMERS

CUSTOMERS

Management responsibility

Resourcemanagement

Measurement, analysis,improvement

ProductProduct

Continual Improvement of theQuality Management System

RequIrements

SatIsfactIon

InputOutput

System Approach of ISO 9k2k

The Deming Cycle

1028-January-2008

The Deming Cycle for improvement is the cornerstone of all Management Systems

1128-January-2008

1. PLAN: Design or revise business process components to improve results

2. DO: Implement the plan and measure its performance

3. CHECK / STUDY: Assess the measurements and report the results to decision makers

4. ACT: Decide on changes needed to improve the process

1228-January-2008

Every organization’s management systems are comprised of various processes, each with their own set of metrics, goals, targets and initiatives.

The key is to align each process’ PDCA cycle with the overall strategic effort of the organization.

1328-January-2008

As your Management Systems mature, effective use of the Deming Cycle will ensure continual improvement

1428-January-2008

CUSTOMERS

CUSTOMERS

Management responsibility

Resourcemanagement

Measurement, analysis,improvement

ProductProduct

Continual Improvement of theQuality Management System

RequIrements

SatIsfactIon

InputOutput

System Approach of ISO 9k2k

1528-January-2008

WASTE

VARIATION

SELL IT!PERFORMANCE

RISK

THE VALUE ADDED AUDITING APPROACH

PROCESS AUDITS

8 Management Principles

1728-January-2008

New Structure & Focus

► The intent of ISO 9001 is based on the 8 Management System Principles described in ISO 9004:

customer focus

leadership

involvement of people

process approach

system approach

continual improvement

factual approach to decision making

mutually beneficial supplier relationships

Customer Focus

1928-January-2008

Customer Focus

Customer Focus

“Organizations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations.”

2028-January-2008

CUSTOMERS

CUSTOMERS

Management responsibility

Resourcemanagement

Measurement, analysis,improvement

ProductProduct

Continual Improvement of theQuality Management System

RequIrements

SatIsfactIon

InputOutput

System Approach of ISO 9k2k

2128-January-2008

Customer Focus

►Information on Customer perception as to whether the organization has met their requirements must be collected, reviewed and appropriately acted upon (8.2.1).

►The methods of doing this are not prescribed by the standard but should be objective, representative of the customer base, and ADD VALUE.

2228-January-2008

Customer Focus

► The most common methods of collecting Customer Satisfaction data are customer surveys and customer report cards (when provided).

► Other methods include measuring repeat orders, market share, industry benchmarking, capturing info. from sales visits, focus groups, and hiring consulting firms.

► A good system will use multiple methods and compare data from multiple sources to comprehensively understand customer perceptions and balance out any potential biases.

2328-January-2008

Customer Focus

Additionally, the organization must demonstrate that effective arrangements for communicating with customers are in place in relation to:

2428-January-2008

Customer FocusProduct Information (7.2.3-a):

How well do you communicate your product information to your customers?

Consider the experiences of using your favorite store Catalogue, or browsing Amazon.com or ebay...

Were you satisfied with these experiences?

How do you know what your customers think about your ability to communicate information that they are looking for?

2528-January-2008

Customer Focus

Enquiries, contracts, and order handling, including changes (7.2.3-b):

Now consider the “buying experience” with these same companies and ask the same questions…

How do you think your customers feel about the ordering experience with your company? What about your quoting and order amendment processes?

2628-January-2008

Customer Focus

Customer feedback, including complaints (7.2.3-c)

Consider that a customer can be more loyal when you handle their problems to their satisfaction (or delight) vs. them never having a problem at all.

Your want to know whether your customers are satisfied with how you handle their feedback (even positive) and complaints.

Process and System Approach

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Process Approach“A desired result is

achieved more efficiently when activities and related resources are managed as

a process.”

The Process Approach

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System Approach“Identifying, understanding and

managing interrelated processes as a system contributes to the

organization’s effectiveness and efficiency in achieving its

objectives.”

The System Approach to Management

3028-January-2008

ISO 9000 – 2.4 The Process Approach

Any activity, or set of activities, that uses resources to transform inputs to outputs can be considered as a process.

For organizations to function effectively, they have to identify and manage numerous interrelated and interacting processes. Often, the output from one process will directly form the input into the next process. The systematic identification and management of the processes employed within an organization and particularly the interactions between such processes is referred to as the “process approach”.

3128-January-2008

ISO 9000 – 2.8.1 Evaluating processes within the quality management system

When evaluating quality management systems, there are four basic questions that should be asked in relation to every process being evaluated.

a) Is the process identified and appropriately defined?

b) Are responsibilities assigned?

c) Are the procedures implemented and maintained?

d) Is the process effective in achieving the required results?

The collective answers to the above questions can determine the result of the evaluation.

Process InteractionsInputs and Outputs

3328-January-2008

ProcessActivities

+Resources

InputsInputs OutputsOutputs

ControlsControls(procedures, inspections, training, etc.(procedures, inspections, training, etc.) )

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Management Systems – must define the sequence and interactions of processes

ProcessA

ProcessD

ProcessB

ProcessC

InputOutputControls

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Customerrequirements

CustomerSatisfaction

ProcessA

ProcessD

ProcessB

ProcessC

A Quality Management System is focussed on meeting customer requirements.

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Regulatoryrequirements

RegulatoryCompliance

ProcessA

ProcessD

ProcessB

ProcessC

Other Management Systems (Environmental, Safety, SOX, etc.) are mainly focussed on meeting regulatory requirements.

The Process Approach can be used for all Management Systems!

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Investment Profitability

ProcessA

ProcessD

ProcessB

ProcessC

Ultimately every Management System must be seen by Top Management as an effective method for ensuring financial performance (even though it’s not a requirement).

3828-January-2008

Compatibility with other management systems

Standard is intended to be compatible with other systems

It is aligned with ISO 14001 and 18001 to enhance compatibility

Standard does not include requirements for other management systems such as EMS, OHSM, or financial management

Integration of management systems is possible

3928-January-2008

The ultimate goal of any organization is to fully integrate all

customer

shareholder

regulatory

and any other requirements? (discuss)

into ONE Business Management System.

4028-January-2008

Ideal scenario:Our clients’ Quality, Health & Safety and Environmental Management Systems operate within their Business Management System

Their BMS =

•QMS+

•FMS+

•OHSM+

•EMS+

•ERP+

•HR

BMSQMS

OHSMS

EMS

4128-January-2008

All too common scenario that we need to help change:

Their QMS, OHSMS and EMS are seen as the “ISO systems” and operate mostly outside of their BMS. Management does not see the value of these. “It’s something that we have to do for ISO” BMS

QMS

OHSMS

EMS

4228-January-2008

This example clearly defines the sequence of processes but does it clearly define their interactions?

How should process interactions be defined?

ProcessA

ProcessD

ProcessB

ProcessC

Sequence versus Interactions

4328-January-2008

► Interaction should be defined using inputs and outputs

►Graphical representations such as process maps / flowcharts are perhaps the most easily understandable methods of describing interaction between processes, however not a specific requirement.

► Interaction can be described with words if desired

►At a minimum, the processes of the organization need to be identified as per 4.1a and their interaction needs to be clearly defined in the manual as per 4.2.2c.

Interaction of Processes

4428-January-2008

Common methods used to define process interactions:

1. Flowcharting

2. SIPOC diagrams (Six Sigma method)

3. Process Turtles (ISO 9001 method)

4. Value Stream Mapping (Lean Manufacturing method)

NOTE: How many times have your processes been defined in how many ways? Are all process definitions linked and do they complement each other (no redundancy)?

4528-January-2008

Process: Outputs:

Tools/Equipment: Personnel/Competency:

Inputs:

How/Methods/Controls Measurements:

4628-January-2008

With What?

CAD/ CAM systems Test equipment Warranty database Call center

With Who? Eng. Manager CAD Technicians Mech/ Elec Engineers Administrative assistance Service Technicians

PROCESS

Engineering

I NPUTS Lessons learned Service/ Warranty Customer needs Marketing data Charter

OUTPUTS Robust design, durability, reliability, maintainability

BOM/ purchasing data Specifications

Product standards

How? CAD systems and Database Engineering procedures 5-stage design process Test and build standards Warranty/ claim data

How Eff ective?

Status of projects – >90% First time capability >96% Eng. Warranty claims < 5%

of total Budget – within 10%

CUSTOMERS I nternal / External

Mfg. Consumer

SUPPLI ERS

Customer Consumer Marketing

Charter review and approval

PROCESS FLOW

Process I nteractions

Purchasing Marketing/ Sales Service I nsp / Test department

CAD drawings, approval Simulation, lif e cycle Prototype Supplier evaluation/ capability

5 Stage design plan Kick-off meeting multi-

f unctional

Pre-production run Capability Ppk/ Cpk Mfg. Feedback meeting Lessons learned

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4828-January-2008

Most importantly, does Top Management use their process definitions to

effectively manage their business (not just for audits)?

4928-January-2008

Every process has an owner.

The process outputs are their job description!

The process measures are their performance review!

5028-January-2008

Evidence to find and communicate:

Organization charts are process based and show clear process ownership

Business metrics are process based and ensure transparent accountability for process performance

Facility floor plans can be linked to processes

Business plans and budgets align with their process definitions.

Management reviews of “process performance” include ALL processes at some frequency

5128-January-2008

Quality Manual

ISO 9001, clause 4.2.2 requires:

►The organization shall establish and maintain a quality manual that includes

A) the scope of the quality management system, including any details of and justification for any exclusions

B) the documented procedures established for the QMS, or reference to them

C) a description of the interaction between the processes of the QMS

5228-January-2008

Quality Manual

► A QM that simply regurgitates the ISO clauses is not acceptable!

► A QM that includes a process map showing sequence only is not acceptable!

► The QM must define the process interactions (outputs & inputs)!

5328-January-2008

Quality Manual – potential uses

► To manage the business as a key input to organizational planning, resource allocation, goal setting, problem solving, etc.

► The training material for employee orientation, especially managers!

► A communication tool for external parties (customers, corporate management, board of directors, regulatory bodies, etc.)

Process Measurementand Objective Deployment

5528-January-2008

Factual Approach to Decision Making

Factual Approach to Decision Making

“Effective decisions are based on the analysis of data and information.”

5628-January-2008

Analysis of Data & Measurement

Food for Thought:

►Consider all the records and data that you collect and store in your company...

►How are each of these used for analysis, training, and improvement purposes?

► If you can’t answer this question for nearly every record you spend time and money collecting then why do you do it?

5728-January-2008

Analysis of Data & Measurement

8.4 - The organization shall determine, collect and analyze appropriate data to demonstrate the suitability and effectiveness of the quality management system and to evaluate where continual improvement of the effectiveness of the quality management system can be made. This shall include data generated as a result of monitoring and measurement and from other relevant sources.

The analysis of data shall provide information relating to

► customer satisfaction (see 8.2.1),

► conformity to product requirements (see 7.2.1),

► characteristics and trends of processes and products including opportunities for preventive action, and

► suppliers.

5828-January-2008

Continual Improvement

Continual Improvement

“Continual improvement of the organization’s overall performance should be a permanent objective of the organization.”

5928-January-2008

Continual Improvement

►The organization shall implement actions necessary to achieve planned results and continual improvement of the QMS processes (4.1-f).

►Top management shall provide evidence of its commitment to the development and implementation of the QMS and continually improve its effectiveness (5.1).

6028-January-2008

ISO 9000 – 2.11 Quality management systems and other management system focuses

The quality management system is that part of the organization's management system that focuses on the achievement of results, in relation to the quality objectives, to satisfy the needs, expectations and requirements of interested parties, as appropriate.

6128-January-2008

ISO 9000 - 2.8.2 Auditing the quality management system

Audit findings are used to assess the effectiveness of the quality management system

and to identify opportunities for improvement.

6228-January-2008

WASTE

VARIATION

SELL IT!PERFORMANCEPERFORMANCE

RISK

THE VALUE ADDED AUDITING APPROACH

PROCESS AUDIT

6328-January-2008

PROCEDURE*(“Specified way to carry out an activity or a

process” - may be documented or not)

PRODUCT(“Result of a

process”)

MONITORING AND MEASUREMENT OPPORTUNITIES

(Before, during and after the process)

OutputInput PROCESS(“Set of interrelated

or interacting activities”)

EFFECTIVENESSOF PROCESS =Ability to achievedesired results(Focus of ISO

9001:2000)

EFFECTIVENESSOF PROCESS =Ability to achievedesired results(Focus of ISO

9001:2000)

EFFICIENCY OF PROCESS =

Results achieved vs resources used

(Focus of ISO 9004:2000)

EFFICIENCY OF PROCESS =

Results achieved vs resources used

(Focus of ISO 9004:2000)

(Includes Resources)

* Note – This is the definition of “procedure” given in ISO 9000:2000. This does not necessarily mean one of the 6 “documented procedures” required by ISO 9001:2000

Process Monitoring and Measurement

6428-January-2008

Processes must be monitored and measured -

Measurement categories that need to be considered are:

Quality: Does the process consistently produce desired outputs?

Delivery: Does the process consistently deliver the outputs on time?

Efficiency: Does the process produce and deliver the outputs using the least amount of resources necessary

Others such as Cost, Safety, Regulatory Compliance, etc.

Too often only one of these categories is applied and that misleads management into thinking that everything is alright.

6528-January-2008

How does a company implement their BUSINESS PLAN?

The process approach is one of the best methods to implement a business plan

6628-January-2008

Policy

Management

System (Business)

Objectives

Process Objectives

•Project / Product / Sub-process objectives

Top Management

Process Owners

Operators

Top Management

Eff

ectiv

e P

lann

ing

and

Com

mun

icat

ion

Effective policy deployment through measurement is required by all ISO 9001 based standards.

6728-January-2008

Production Planning & Scheduling

Process

PurchasingProcess

MaintenanceProcess

Warehouse Process/Inventory

Management

OrderReview Process

OTD

We try to focus our audits on:

The linkage of the measures and objectives to customer satisfaction and business results

The planning and resource allocation activities that are necessary to achieve any improvement objective

The leadership and communications activities that engage the entire organization in this process

The effective use of the PDCA cycle in every process that is focused on company objectives

6828-January-2008

Policy – Defect free product, on time to the customer at a reasonable price and continually improving all processes in accordance with the requirements.

► Organizational objective – 98% on time to customer promise date

► Process objectives established to meet organizational goal

Order review processes – all orders processed within 2 days of receipt

Warehouse process – 100% compliance with FIFO, 18 inventory turns

Maintenance Process – 97% uptime, no past due scheduled items

Purchasing process – 95% of tier 1 suppliers on time and within window

Production Scheduling – all shop routers completed within 1 day of receipt and all orders scheduled to be completed 2 days prior to required ship date

Management Communicationand Employee Awareness

7028-January-2008

Leadership & Involvement of People

Leadership and Involvement of People

“Leaders establish unity of purpose and direction of the organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization’s objectives.”

“People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization’s benefit.”

7128-January-2008

Leadership & Involvement of People

►Top Management shall ensure that appropriate communication processes are established within the organization… (5.5.3)

►Specific requirements for communicating information regarding the effectiveness of the QMS and the importance of meeting customer and regulatory requirements (5.5.3 & 5.1-a).

7228-January-2008

Leadership & Involvement of People

►The organization shall ensure that all personnel are aware of the relevance and importance of their activities and how they contribute to the achievement of the quality objectives (6.2.2-d).

7328-January-2008

Imagine the power of an organization that has truly achieved Unity of Purpose?

7428-January-2008

On Time Delivery

0

20

40

60

80

100

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Actual

Goal

Is this enough information to ensure that everyone clearly understands what must be done to achieve the improvement goal?

7528-January-2008

Too often management only communicates partial information. To understand the complete path to improvement everyone needs to know the following:

Where are we now (measure) and where do we want to be (goal)?

Why are we here (causes of failure)?

What are we doing to improve (plan)?

How am I personally involved?

7628-January-2008

On Time Delivery

0

20

40

60

80

100

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Actual

Goal

0

20

40

60

80

100

1stQtr

2ndQtr

3rdQtr

4thQtr

Causes of Late Deliveries

machine down

part shortage

labor shortage

Tasks Resp. Due % Contribution Status

Increase PM frequencies on key machines

Joe K. 2/23/08 50 75% complete, Need more resources

Increase buffer inventories of critical parts

Janice Q. 4/1/08 30 50% complete, no issues

Plan for Improvement

7728-January-2008

EFFECTIVE Communication Too often management only communicates in one way (think -

quarterly all employee meeting)

Does this communication effectively reach everyone (think - kids in the back of the room)?

To truly achieve unity of purpose shouldn’t there be multiple communication methods happening all the time?

Will management have to adjust their communication methods and frequencies or do they normally achieve perfection on the first try?

Can management communication be considered a process with clear outputs (employee understanding, satisfaction, unity of purpose, etc.) and measures?

Summary

7928-January-2008

What is the role of an auditor?

Especially 3rd party “pros”

8028-January-2008

►To make sure that an organization is doing the right things, the right ways, all the time.

►To find evidence that what the organization does is conforming, effective and efficient.

►To add value by:

Identifying potential problems before they happen

Helping to solve existing problems, and

Identifying opportunities for improvement.

8128-January-2008

Hierarchy of Quality

QualityManagement

Quality Assurance

Quality Control

Advanced Auditing covers QA and QM more effectively

Basic “conformance” auditing covers QC level

8228-January-2008

It’s not about the paperwork…

It’s all about if it works!

Course Summary

8328-January-2008

The majority of the efforts needed to demonstrate

conformance to ISO 9001

lie with Top Management.

Course Summary

8428-January-2008

Run properly, by management, your QMS

will help you achieve your business goals.

Course Summary