Presentasi Danang W

Driving

Process

Excellence

Enterprise Audit

ManagementProcess driven combining audits on quality and

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audits on quality andenvironmental management systems

ISO 19011 supports new approaches in auditing

This presentation has made for

International Assessor/Auditor Conference

Indonesia, November 2008

Presented by :

Danang Widoyoko

IATF Auditor No.: 3UK-07-01-285

IRCA Lead Auditor No.: 1185731

2003 until Present join with SGS Indonesia

1995-2003 : Astra Daihatsu Motor Engine Plant

QA Mgr

Black Belt

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Black Belt

Engineering

1992-1995 : IPTN

Stress Analysis

Re-think about Quality Audit

A walk through the final frontier : topics cover

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Next door Stories

Shift to the next gear

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Re-think about Quality Audit :Auditing and being audited

“If we change the way we think about quality, we will imaginethat it is not about following procedures, inspection, rules andregulations. It is about establishing the needs and expectationsof those we choose to serve, setting goals for satisfying theseneeds, devising a system of processes to fulfil these goals,measuring performance and continually improving capabilityto satisfy the needs of all interested parties.”

Customer value proposition

Function

Strategic Planning

Mission & Vision

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Customer needs

Regulation

Image

Relationship

Strategic result & business strategic

Resources, Budget, action

plan

Strategic initiaves

Operation/Delivery

Input-process-output

But the main Stake holder’s idea of the

Stake holder’s comments during audit process : Frequently

confirmed satisfy

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.

PDCA audits are an excellent way to determine whether investments in processes are actually performing as expected

idea of the system : show the money…!

Next Door Stories of Quality Audit :

Untold stories of quality audit that shown looks like no added value given by quality audit

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by quality audit

Why it doesn’t work very well.?

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• Lack of objectives and resources

• Poor Preparation

• Broken Close-loop

Lack of objectives and resources

Lost objectives of the

quality audit

Quality audits, both internal and external should be cited as part of the organization preventive action program. They are part meant to detect problems early. Identified non conformances typically should trigger an investigation. Audits should be also cited as part of be also cited as part of the organization to seen any opportunities to enhance their system

Worse Resources for big

result Quality audits, both internal and external should be planned with appropriate objectives to deliver best result for the organization performance

Poor Preparation

Poor Qualification • Competence building takes not more than simple training

• Knowledge system and process as vital things not defined properly

• Monkey sees monkey does

• Poor mentoring and tutor including continues improvement plan

• Checklist mentality

Poor Audit Plan • Not base on Risk, and actual process performance

• Un-wise resources regular plan

• Wrong selection team, ever see new comers going to production line..?

Poor Preparation

Comfort ZoneThey will be known better than 3rd. party auditors. For them mostly left unchecked for their comfort zone. An auditor that is totally unfamiliar with (for example) product design process-according to poor qualification above-might shy away from performing thorough investigation, allowing, this way, for ineffective processes to go unchallenged.

Side JobsThe planning also not consider according to the complexity of the process, covering of the process etc. Meanwhile the activities only confirm as side jobs. You can imagine how the audit would be execute.

Broken Close Loops

Comfort ZoneThey will be known better than 3rd. party auditors. For them mostly left unchecked for their comfort zone. An auditor that is totally unfamiliar with (for example) product design process-according to poor qualification above-might shy away from performing thorough investigation, allowing, this way, for ineffective processes to go unchallenged.unchallenged.

Side JobsThe planning also not consider according to the complexity of the process, covering of the process etc. Meanwhile the activities only confirm as side jobs. You can imagine how the audit would be execute.

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SHIFT TO THE NEXT GEAR

Back to the future

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GENERATE ADDED VALUE BY

QUALITY AUDIT

• The quality audit

• Process Approach

• Compliance against PDCA Approach

“Systematic, independent and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which audit criteria are fulfilled.”

Audit criteria is a “set of policies, procedures, or other requirements against which collected audit evidence is compared.”

Audit evidence consists of “records, statements of fact or other information, relevant to the audit and which are verified.”

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THE QUALITY AUDIT

audit and which are verified.”

“Internal auditing is an independent, objective assurance and consulting activity designed

to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.”[i]

[i] “About Internal Auditing,” IIA Web Site, 2000.

An audit does not only provide information to determine conformity, but also information that can be used to direct an organization and improve its activities. This added value of auditing – compared to control or inspection activities – is, amongst others, related to the in-depth type of investigations and analysis and the search into the causes of any shortcomings or non-conformities

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THE QUALITY AUDIT

Systematic, independent, and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which the audit criteria are fulfilled.i]

[i] “ISO 19011:2002

shortcomings or non-conformities that form the basis of all audits

An organization will need to:•Identify what competencies are required• Identify which personnel already are competent

Role of auditor :• Catalyst• Reporter• Improvement Agent• Innovator • Motivator • Interface between linkage

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THE QUALITY AUDIT

competent• Decide what additional competencies are required.

• Decide how these are to be obtained• Train, hire or reassign personnel• review competence of personnel

Auditing 'competence' and 'effectiveness of actions taken'

•Identify business objectives

•Identify high risk processes

•Flowchart processes

•Identify process measures

•Evaluate process performance against measures

•Recommend improvements

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PROCESS APPROACH

Improvement base on actual process

An advantage of the process approach isthe ongoing control that it provides over thelinkage between the individual processeswithin the system of processes, as well asover their combination and interaction.When used within a quality managementsystem, such an approach emphasizes theimportance of• understanding and meeting requirements,• the need to consider processes in terms ofadded value,

• obtaining results of process performanceand effectiveness, and

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PROCESS APPROACH Improvement base on actual process

and effectiveness, and• continual improvement of processesbased on objective measurement.

•Efficiency•Effectiveness•Cost reduction•Waste elimination•Risk management•Controls

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PROCESS APPROACHValue Added Audit Objectives

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EFFECTIVENESS & EFFICIENT Compliance against PDCA Approach

EFFECTIVENESS AND EFFICIENT

IMPROVEMENT AND EFFECTIVENESSThere are many examples and requirements in ISO 9001:2000 that require the organization to address the effectiveness of its quality management system.

Further requirements specify the need for continual improvements to the quality management system – not just sporadic quality campaigns.

• Extent to which planned activities are realized and planned results achieved. - ISO 9000:2000 3.2.14

• ISO 9001 specifies requirements for a quality management system that can be used for internal application by organizations, or for certification, or for contractual purposes. It

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organizations, or for certification, or for contractual purposes. It focuses on the effectiveness of the quality management system in meeting customer requirements - ISO 9001: 2000 0.3

• Top Management shall ensure that the quality policy includes a commitment to comply with requirements and continually improve the effectiveness of the quality management system. - ISO 9001: 2000 5.3

• The organization shall continually improve the effectiveness of the quality management system through the use of the quality policy, quality objectives, audit results, analysis of data, corrective and preventive actions and management review. - ISO 9001: 2000 8.5


Measuring QMS effectiveness and improvementsEffectiveness : Planned result achieved for customer satisfaction driven

Efficiency : Result achieved against resources used

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Analysis of Data

OrganizationalObjectives

Customer requirements

Statutory & regulatory

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Statutory & regulatory requirements

Defect rate and customer returns

QMS controls

Purchasing

Examples of objectives set by the

Organization

Analysis of Data

OrganizationalResults

Customer satisfaction



Customer requirements


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Examples of results recorded by the Organization

Statutory & regulatory compliance

Quality system metrics

Inspection and test

Supplier performance

Statutory & regulatory requirements

Defect rate and customer returns

QMS controls

Purchasing

Effectiveness of the QMS


Organizational

Results

100 100

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0 0

The gap measures the lack of effectiveness of the quality management system.

The narrower the gap, the more effective the QMS.

Things are looking good!




100 100

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0 0

Management should get a wake up warning!





100 100

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0 0

The Organization is in trouble!


Improvement in the QMS



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% 100 75 50 25 0

Improvement can also be measured





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Customer Focus

Corrective Action

Procurement

Improvement Initiatives

These actions may cause the organization to revise its objectives.

What actions are taken when gaps are identified?

In this example, the organization identified three key areas for improvement.

Management Review

Organizational

Objectives

Organizational

Results

0 0

100 100

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Customer Focus

Corrective

Action

Procurement

Improvement

Initiatives

Management

Review

The improvement processes

are also evaluated during management review meetings

and appropriate action taken.

Which may cause

the organization to again revise its

objectives.


ISO 9004:2000 & The consistent pairTop management should therefore define methods for measurement of the organization's performance in order to determine whether planned objectives have been achieved.

Methods include• financial measurement,• measurement of process performance throughout the organization,

• external measurement, such as

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• external measurement, such as benchmarking and third-party evaluation,

• assessment of the perceptions of customers and other interested parties of performance of products provided, measurement of other success factors identified by management.

• assessment of the satisfaction of customers, people in the organization and other interested parties,

- ISO 9004:2000 5.1.1

The Effectiveness of the OrganizationAfter analyzing the data and reaching a conclusion on theeffectiveness of the QMS, the same process is then used todetermine if the quality management system has had an effecton the Organization’s business and/or financial results.

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Effectiveness of the Organization

QMS

Results

OrganizationalBusiness Results

100 100

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0 0

The gap now measures the lack of business effectiveness of the organization. The narrower the gap, the more effective the organization.

Business Improvement in the Organization



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% 100 75 50 25 0

And again, the improvements in the organization can be measured and managed.

Improvement in the organization

Analysis of Data



0 0

100 100

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Improvement Initiatives

Management Review

QMS Results

BusinessResults

The Sydney Model is cyclical and can be used as often as required by an Organization.

Continual Improvement

Zone 3 Zone 4

Zone 1 Zone 2

Confo

rmin

gN

on C

onfo

rmin

g

Maturity of “QMS”

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MEET THE CUSTOMER“Value-added” quality management systems with Value-added auditing

Zone 1 Zone 2

Low High

Maturity of “quality culture”

Non C

onfo

rmin

g

Maturity of “QMS”

VISION

Re-alignPlanning

Data GatheringAnalysis

RESPONDENGINEER Audit

Cycle

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MEET THE CUSTOMER

Compliance against PDCA Approach

“Value-added” quality management systems Value-added auditing

Data GatheringAnalysis

OPERATE

Control

Collaboration

Leverage Audit Data

• Audit observations• Prioritized Risks• Internal Controls• Process performance• Cost of Audit• Attention Areas

Visibility

• Audit Schedule

• Auditors team• Operations Team• External Auditors• Best Practices• Knowledgebase• Dashboard• Documents Attachment

• Cost Leaders

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• Audit Schedule• Process Improvements• Compliance Efforts• Team Accountability• Metrics Collection• Task Milestones

• Cost Leaders• Time Leaders• Unified View of Risks• Compliance Breach Alerts• Business Impact• Initiatives• Competitive Benefits

Internal Auditor

ManagementProcess Owner External Auditor Customer

Operations Team

+

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Audit Data Integration

Multi-Location Audit Multiple Audit Standards

Multi-LOB Audit Compliance Templates

+

Meet the customer


ComplianceAssurance

Risk Mitigation

Common tools and process, integrated with other Audit Data Sources

Dynamic link

Standards Driven Full-Cycle Audit Management Automation

+

+

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Meet the customerBusiness Benefits

Lower costs

Dynamic link between customer compliance needs and

+

Best practices Open standards Documents

Process AdherenceProcess Adherence

Process PerformanceProcess Performance

Quality of DecisionsQuality of Decisions

Audit CostAudit Cost

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Meet the customerBusiness Benefits

Audit TimeAudit Time

Reporting GapsReporting Gaps

Conclusion

The effectiveness of the quality managementsystem in meeting both quality and/or businessobjectives is likely to be the key attribute thatensures the on-going support and resourceallocation to maintain the ISO 9001:2000 quality

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allocation to maintain the ISO 9001:2000 qualitymanagement system within the corporateenvironment.

“Another challenge is to make sure we don’t cross the line between helping management and our role as the independent, objective audit function,” he says. “This is a constant challenge, because the more management perceives us as adding value, the more they call on us to participate in the process. When that involves

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value, the more they call on us to participate in the process. When that involves decision making, we must be careful to maintain our independence and objectivity.”

“Finally, as a global company, we have to be sensitive and aware that we are not living in one culture, but a multicultural world. What is good for the United States is not always good for the rest of the world, from both a business and an audit perspective.”

Chet Watson, general auditor, and Angie Chin, GM’s Audit Leadership Board executive for Business Risk Management, Sarbanes-Oxley 404 Support and Special Investigation

“The more that audit can be viewed as adding value beyond traditionalcompliance and operational auditing, the further the function will get.”

“My goal is significant reduction of total hours by leveraging existing documentation

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“My goal is significant reduction of total hours by leveraging existing documentation and automation, increasing control awareness and improving training of control ownership,”

“We want to be free to expand the work IA is doing in traditional audit areas. So far, we are well on our way to achieving our goal.”

Rob Gould, director of internal audit, Harley-Davidson

“When I was brought on board, my initial challenge was to find out from all the senior executives what kept them up at night. We still try to stay on top of business and process risk to make sure we are addressing the high-risk and high-payback opportunities.”

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opportunities.”

“One thing I’ve learned is that I am here to make the business better - by collaborating and listening, we can provide better service and meet the needs of management.”

Phil Bertram, director of internal audit, Komatsu

“We need empowerment, not only in terms of responsibility, but also in terms of the human resources assigned to the different offices, where these professionals will be autonomous as they perform different types of audits.”

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“All of this is based on one concept - and that is, in order to create a good auditor, a company must spend a great deal of money, both in formal development and in on-the-job training. Our goal is to keep talented people within the Fiat Group so that we can recover our investment of resources.”

– Mauro Di Gennaro, chief audit executive and compliance officer, Fiat.

I would like to say a lot of thanks following all valuable discussion and brain-stroming and supporting during preparation of this seminar and paper to :

• Mr. Santoso Catur Yugo, Head of Astra Daihatsu Motor Casting Plant

• Mr. Budi Agung P., Director Secretary Astra Daihatsu Motor

• Management of PT Asmo Indonesia : Mr. Okumura (Director), Mr. Satrio S. (GM) and Mr. Joko Isworo (Management Representative)

• Mr. Nyoman – Management representative GS Battery Indonesia – and his staff : Mr. Ricky

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• Management of PT Hamaden Indonesia : Mr. Denny Thamrin (Management Representative), Mr. Tri Harjanto (GM).

• Management of PT Denso Indonesia : Mr. Supriatna (Management Representative), Eko Widodo (QA)

• Mr. Sugeng – QA : PT Suzuki Indomobil International

• Mr. Muh. Sadewo Head of Inti Pantja Press Indonesia and executive director of Fuji technica Indonesia.

• All my colleagues at SGS Indonesia

All picture copy right confirmed by sxc.hu; Flickr.comReference presentation copy right confirmed by slideshare, ASQ,

www.theiia.org/Quality

ISO 9001 Auditing Practices Group Guidance on: How to add value during the audit process, Date: 14 October 2004, International Organization for Standardization and International Accreditation Forum

ISO 9001 Auditing Practices Group Guidance on: The role and value of the audit checklist, Date: 14 October 2004, International Organization for Standardization and International Accreditation Forum

Mills., Charles A., Quality Audit, A Management Evaluation Tool, © 1989 by Mc-Graw-Hill Inc.

ISO/TS 16949, IATF Auditor Training- 2007

Risk based assessment applied to QA GLP audits - Alain Piton Galderma R&D, Sophia-Antipolis, France

RISK MANAGEMENT IN THE SUPPLY CHAIN, April 5, 2005 Los Angeles Convention Center Los Angeles, CA, Copyright ©

REFERENCE List

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RISK MANAGEMENT IN THE SUPPLY CHAIN, April 5, 2005 Los Angeles Convention Center Los Angeles, CA, Copyright © 2005 –QPE –800.COMPETE

Palmes., Paul C-Process Driven Comprehensive Auditing A New Way to Conduct ISO 9001:2000 Internal Audits, American Society for Quality, Quality Press, Milwaukee 53203 © 2005 by American Society for Quality

Hortensius., Dick, ISO develops unique standard for auditing ISO 9000 and ISO 14000 systems, NEN,P.O. Box 5059, NL-2600 GB Delft, Netherlands.

Dick Hortensius and Annemarie de Jong, Co-secretaries of the ISO Joint Working Group on Auditing, Netherlands Standardization Institute, NENCombining audits on quality and environmental management systems

Mills., Charles A., Quality Audit, A Management Evaluation Tool, © 1989 by Mc-Graw-Hill Inc.

Thank youSee u

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See u next time

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