Iso Sustainability

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Managing for Sustainability(408) 451-8413

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QUALITY RESOURCE CENTER, INC.

ISO 9001




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The draft changes to ISO 9001 and ISO 9004 for 2008

Draft ISO 9001: Requirements Standard“Minor changes for clarification and compatibility with ISO 14001.”

“Even small changes to the Standard can dramatically impact a user’s QMS.”

Draft ISO 9004: Guidelines document

“A major revision, with a focus on providing guidance onorganizational sustainability rather than performance

improvement.”




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Draft ISO 9004: Managing for Sustainability

Definitions

Sustainability of an organization:

“Ability of an organization or activity to maintain or develop itsperformance in the long term.”




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Draft ISO 9004: Sustainability Issues

4. Managing for sustainability5. The organization's environment

6. Strategy policies and communication

7. Resources8. Processes

9. Measurement and analysis

10.Learning, improvement and innovation

A. Maturity Assessment




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Topics for our discussions that are relevant to ISO 9004

Company focused documentation

Service Level Agreements

Controlling processes

Risk reporting

Self Assessments of System Maturity




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Relevance to the ISO 9004 draft

4. Managing for sustainability

5. Organization's environment

6. Strategy policies and communication

7. Resources

8. Processes

9. Measurement and Analysis

10. Learning, improvement, innovation

A. Maturity assessments

Company documentation




Sustainability of processes


Risk reporting

Self assessments




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Some organizations that have worked with these methods

NYK LogisticsPoint TechnologiesDelta FaucetFAA (NSP)FAA AcademyTMX AerospaceMarvellDepartment of EnergyHitachiLucentBSI ServicesSDC ToshibaCovanta EnergyIron Systems

Chugach IndustriesFuture TechnologiesKSECQuantum 3DLogistics 2020Total Resources InternationalInterconexSensor PlatformsA & E AnodizingDelphonSensarraySigma DesignAirfield TechnologyKenergy




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Sustainability




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Traditional documentation method: The Pyramid

QUALITY POLICYMANUAL (Level One)

QUALITYOPERATING

PROCEDURES(Level Two)

PROCESSFLOWS(Level

Three)

QPM

Management Policies

QOP

How Management’s Policies are

implemented (Who, when, how)

WORK INSTRUCTIONS (PROCESS) Descriptions of processes in operation where people work

OTHER INSTRUCTIONS AND SPECIFICATIONS (TASK)(Technical Specs.; Standards; Job Descriptions etc.)

Reference

Reference

Reference

ISO 9000

Standards




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The impact of the Pyramid

Useful for documenting Element based ISO

Systems since 1987Easy for an ISO specialist to audit

Not so easy for a Manager to identify with

Loads of templates

A reason why ISO Quality ManagementSystems were identified primarily with theStandard and not the company’s operation

Helped ISO 9000’s reputation for creating abureaucracy

Give a perception of specialized “ISO”documents




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ISO 9001:2000 Documentation Checklist

The amount of documentation isdetermined by:

Type and size of organizationComplexity and interaction of processesCompetence of personnel

(ISO 9001: 4.2.1 Note 2)

Systems can be documented in a way that is appropriate and effective for the organization




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ISO 9001: What we document to be in compliance

The way the company's QMS addresses:

Clause 4: Quality Management System

Clause 5: Management Responsibility

Clause 6: Resource Management

Clause 7: Product Realization

Clause 8: Measurement Analysis and Improvement




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Option 1: Document the Clauses

QUALITY POLICYMANUAL (Level One)

QUALITYOPERATING

PROCEDURES(Level Two)

PROCESSFLOWS(Level

Three)

QPM

Management Policies

QOP

How Management’s Policies are

implemented (Who, when, how)

WORK INSTRUCTIONS (PROCESS) Descriptions of processes in operation where people work

OTHER INSTRUCTIONS AND SPECIFICATIONS (TASK)(Technical Specs.; Standards; Job Descriptions etc.)

Reference

Reference

Reference

ISO 9000

Standards




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Option 2: Focus on the company and not on Clauses

How does the company conduct Sales?

How does the company control Design?

How does the company meet product/servicerequirements?

How does the company furnish resources?

How does the company address required ISOprocedures?

How does the company encourageManagement Commitment to the QMS?




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Mix what the company does with what ISO requires

S a l e s D e s i g n

M a n u f a c t u r i n g T r a i n i n g

C l a u

s e 5 . 1

C l a u s e 7. 3

C l a u s e

6 . 2

C l a u s e

7. 1




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Good for the Company; good for the Auditor




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Response to Company focused documentation

In the last few years, the following Certification bodies haveprovided written compliments to companies working for initialCertification by using company focused documentation:

BVQIBSITUV RhinelandOrion




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Typical Company focused documents (Modules)

Management Sales ProductDevelopment

Operations Resources ManagementRepresentative




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The Management document

The Quality Manual is usually a document that engages theinterest of the Certification Auditor more than Top Management

The Management Commitment Module provides Top Managementwith one page summaries of their required commitment to each ofthe ISO 9001 Quality Management Principles (ISO 9000: 0.2)

These summaries include• Involvement activities• Identification of documents and records• A Checklist to evaluate the effectiveness (maturity) of the

organization's activities



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ISO 9000: 0.2 Quality Management Principles

1. Customer focus

2. Leadership

3. Involvement of people

4. Process approach

5. System approach to Management

6. Continual improvement

7. Factual approach to decision making





Content of operational focused documents

Policy Level

Summary of Services of the Department or Key FunctionService Level Agreement

Strategy LevelProcess criteria for:

• Inputs (process interactions with internal Suppliers)• Outputs (process interactions with internal Customers)• Goals (effectiveness in providing internal Customer satisfaction)

Tactical LevelList of process requirements

Evidence and Reference• List of Forms and Records• List of Reference documents• Revision History





Example of Sales Department document

The Customer Relations Management Module provides policy,strategy and tactical information for the following activities:

Customer focus

Requirements related to product

Review of requirements related to product

Customer communication

Monitoring and measuring customer satisfaction





Typical Document Ownership

QualityManual

Dept.Module

Dept.Module

Dept.Module

Process

RequirementsJobAids

JobAids

JobAids

TopManagement

MiddleManagement

Supervisors Employees

ProcessRequirements

ProcessRequirements





Applicability to draft ISO 9004:“Essential Features for Sustainability”

1. Articulate a mission and vision

2. Develop a Strategic Plan

3. Realization of Strategic Plan

Summary of Services

Goals

Process inputsProcess outputs


Process requirementsJob Aids





Sustainability





A process network within a Department

Operations

Example of a Purchasing Department as an Internal Supplier

ProcessRFQ

SelectSupplier

NegotiatePO

Evaluate

SuppliedProductQualityDept.

RFQ

Operations

Deliverable





Processing a PO: Usual problems

Typical Internal customerdysfunctions:

No Purchase Requisition

Unreasonable expectations

Requests are too late

Requests are badly defined

Last minute changes

Poor interactions

Typical Internal supplierdysfunctions:

o Operate without a Purchase Req.

o

Inadequate Supplier list

o Too willing to be flexible

o Unwilling to be flexible

o Using too many shortcuts

o Too busy





Objectives of the AgreementSupplier (Purchasing) Objectives:

a To purchase products according to the specifications of approved andagreed Purchase Requisitions

b. To conduct these purchases in accordance with the requirements of current Purchasing processes and ISO 9001 specifications

Customer (Operations) Expectations:a The availability, as required, of product specified in the approved and

agreed Purchase Requisition

Example of Purchasing SLA: Typical Objectives





Example of Purchasing SLA: Typical Agreement

Agreement

Purchasing will:a Review the Purchase Requisition for conformity with requirements(Process 3.1.1)

b. Source the best Supplier (Process 3.1.2)c. Process the Purchase Order (Process 3.1.1)d. Arrange Incoming Inspection of purchased item (Process 3.2.4)e. Implement Corrective Actions for nonconforming product (Process 5.3.3)

Operations will:a. Prepare a Purchase Requisition in accordance with process requirements

(Process 3.1.1)b. Validate the received item against the specifications contained in the

Purchase Requisitionc. Segregate the item if nonconforming (Process 5.3.2)d. Promptly advise Purchasing of nonconforming product (Process 5.3.3)





Example of Purchasing SLA: Document specifications

Incoming Inspection Report

PCAR Form (if required)Purchase Order

Purchase RequisitionApproved Vendor List

Modules 3 and 5Modules 3 and 5

By OperationsBy Purchasing

Forms, Records and Reference Documents





Example of Purchasing SLA: Sample Measures of Success

The Measures of Success of the process are:

a. Purchase Requisitions meet the requirements of Process3.1.1

b. Purchased products satisfy the specifications of theRequestor

c. Purchasing activities follow the requirements of theorganization’s processes and the ISO 9001 Standards

d. Corrective Actions follow the requirements of theorganization’s processes and the ISO 9001 Standards

e. There is appropriate evidence of activities





Use of a Service Level Agreement

Operations

The Service Level Agreement (SLA) is between

Purchasing and Operations

ProcessRFQ

SelectSupplier

NegotiatePO

Evaluate

SuppliedProductQualityDept.

RFQ

OperationsDeliverable

SLA




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Sustainability




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Usual problems with process integrity

Processes are constantly in danger because:

Not audited frequently enoughAudits not thorough enoughResistance from users

Pressures built into the processHuman natureThe processes are originally badly thought outHave not reacted to changes

Poor training of process usersPoor documentation of the process




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The anatomy of a typical daily processCoffee Break

Coffee Time Go to Canteen Get coffee Return to desk

Step 1 Step 2 Step 3 Step 4

“A process is an orderly or established series of steps oroperations toward a desired result or product”

Webster’s Dictionary




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Pressures on the process by the process users

Coffee Time(Priorities)

Go to Canteen(Time Allocation)

Get coffee(Quality Issues)

Return to desk(Consequences)


Is this clock reliable?

Do I want to interruptwhat I am doing?

Will that customer callwhile I am away frommy desk?

Will the Canteen be busy?

What will my boss think if I am away from my deskfor a long time?

How much time can Ispare?

Is this stuff fresh?

Where is the cream?Has this cup beenwashed?

I missed that call

Where did I put thatletter?

Who left this note?




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Sustaining the Process

Coffee Time(Priorities)

Go to Canteen(Resource Issues)

Get coffee(Quality Issues)

Return to desk(Risk prevention)


What are the objectivesof the coffee break?

Are these objectivesbeing met by thepresent policies?

How many people canbe served in theCanteen during theallotted coffee times?

How many people wantto use the canteen?

Who is responsible forthe quality of the coffeeservice?

How are complaintsdealt with?

Is there a back up systemfor people who leave theirdesks at coffee time?

How many times has thisback up been required?




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Sustaining the process through Process controls

• PreventiveControls that keep something bad fromhappening

• DetectiveControls that monitor activities and

processes to determine if preventivecontrols have failed and something isout of compliance

• CorrectiveControls that restore a situation back tothe expected state

As processes are developed, controls should be part of the development plan




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Examples of Preventive Controls

Using a “golden” measure asa check of accuracy at thebeginning of each Shift

Prevent Inspectionequipment from givingwrong measurements

Manufacture3

Application checking

processes

Prevent acceptance of

job applicants whomisrepresent theircredentials

HR2

Electronic signature approvalprocess

Prevent unauthorizedchanges to controlleddocuments

IT1

Preventive ControlObjectiveDepartmentI/D




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Examples of Detective Controls

Accuracy Test Log with dateand signature

Making sure the“golden” measure is

always used

Manufacture3

Information Checking Logwith date and signatureConfirm that theinformation checkingprocess is always used

HR2

Periodic tests of processsafeguards

Being sure that thesignature authorizationprocess cannot becircumvented

IT1

Detective ControlObjectiveDepartmentI/D




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Examples of Corrective Controls

Require confirmationsignature (separation ofduty)

Making an effectiveresponse when the TestLog is not consistentlycompleted

Manufacture3

Require confirmationsignature (separation ofduty)

Dealing with CheckingLog that is not beingconsistently completed

HR2

Back-up data securityprocess

Recovering fromsystem crash that losessignature authorizationlist

IT1

Corrective ControlObjectiveDepartmentI/D




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Consequences of controlling processes

Problem

Insufficient auditing

User resistance

Impact of changes

Response

o Provide preventive and detectivecontrols

o Understand potential pressureson the process’ use during theprocess design

o Provide corrective controls




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Sustainability




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Reasons for Risk Reporting

Audit reports are often phrased in ISO terms:

“The Approved Vendor List has been established as an on-linedatabase with suppliers qualified prior to 1 November 2006 beinggrandfathered. The one new supplier since November 2006,

(XXXXX) was added to the AVL database in February 2007 eventhough the qualification was completed (final approval) on 10 April2007.”

This is important to a Certification Auditor

How important is it to a Department Manager?




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Usual Management reaction to a perceivedISO nonconformity

Scope:

Evaluate the calibration status of test equipment in themanufacturing area.

Findings:

“Two test fixtures had not been calibrated as planned”Usual Management reaction:

Eight hours of aperson’s time tofind out two labelswere missing




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Setting up Risk Reporting

Process

Risk Reporting steps

1. Determine with the process owner and/or the process

“customer” the potential consequences of not meeting theprocess’ goals

2. Obtain management acceptance of consequences

3. Document the consequences as part of the process (Detective

Controls)4. Plans to avoid failure (and therefore the consequences)

(Corrective Controls) are added




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Risk Reporting the same findings

Findings:

“Two test fixtures had not been calibrated as planned. The unitswere out of calibration.The process records indicate that:

5,000 parts have been delivered to our major customer that may be

out of specificationConsideration may need to be given to recalling these parts”

Potential Management reaction:Let’s get this fixed

straight away andsee it doesn’thappen again




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Risk Reporting addresses the Rules of Communication

The basic rules of communication are:

What is said may not be what is heard

What is heard may not be what is understood

What is understood may not be accepted




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Sustainability




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What draft ISO 9004 says about Sustainability andAssessment

“Organizations should use an assessment tool --- to determine

their maturity level, i.e. how well their essential capabilities aredeveloping and growing towards the achievement ofsustainability”

“The completion of an assessment should be recognized as animportant step in identifying opportunities for future developmentof the organization”




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An earlier Self-Assessment Tool: SSQA

A 0 – 10 measure of the following categories

• Management Commitment (MC)

• Systems Approach (SA)

• Deployment (D)

• Results (R)




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Draft ISO 9004 Categories

Categories are measured by level of performance against the 31

Clauses of the draft ISO 9004

1. Beginner

2. Proactive

3. Flexible

4. Innovative

5. Sustainable




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A simpler approach

An Evaluation program that:

Can be applied to:• All or part of the organization• Any process• Any System

Can be conducted by people who work inor with the area being evaluated

Can be an input to a morecomprehensive evaluation system (e.g.Internal Audits)

Evaluate any part of

the business jigsaw as the need arises

Evaluate activities that are critical or are

suspect




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Motivations for Evaluations

Typical motivations for Evaluations include:

• Trends from Customer Audits, Internal Audits and ConformanceAudits• Customer complaints• Increased customer returns• Poor response to quotations• Financial reports• High people turnover• Management vigilance• Loss of market share• Results of surveys• Poor supply chain performance

QUALITY RESOURCE CENTER INC




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The findings of an Evaluation Assessment

• Maturing Developing towards a requiredstandard of performance

• Mature Consistently achieving a requiredstandard of performance andcontinuing to improve

• Fossilized

Rigid, bureaucratic and unresponsiveto the needs of the organization

Inconsistent and wasteful, but

getting better

Benefits the

whole organization

Replaces benefitswith frustrations





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Assess typical stages in a Maturing System

A systematic, process based approach, some reviews and attemptsat improvement, goals are known and performance measured,feedback is used for improvement

5

Processes exist, ownership is known and there is occasionalimprovement, documentation is mostly understood and used, goalsare anecdotal, but, when known are being worked to

4

Processes are defined, generally documented but intermittentlyfollowed, some performance information is being collected

3

Limited systematic approach, some documentation that isintermittently used, reactive responses, limited data oneffectiveness, informal goals

2

No systematic approach, ineffective or no documentation, anecdotalunderstanding of requirements, poor or unpredictable results, nogoals

1

EvidenceStage




Managing for Sustainability

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Some assessments of a Maturing System

• Management expectations are mostly known (policies and goals)

• Goals are not yet consistently realized• There are informal programs to achieve goals• Improvement activities are being worked on, but without urgency• If controls do not exist, they are being developed, but unevenly

• Change is happening and the results are positive, thoughunpredictable• Documentation is becoming a value added tool• Needs and expectations of interested parties are increasingly

being responded to• Supplier relationships are improving





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Typical assessments of a Mature System

Performance goals are planned, balanced with resources andregularly updated; results are consistent with goals, risks arequickly identified and dealt with

Results

Benchmarking against “best in class;” close customerrelationships that result in cooperative planning of futurebusiness

Potential

Processes are controlled; there is evidence of prevention,detection and correction controls; interactions of processesare effective

Control

Improvement process in use, good results and sustainedimprovement trends

Progress

Systematic, process based approach; objectives known; datais available on conformance to requirements ; stable andefficient workforce that is well trained and competent

Stability

EvidenceCriteria





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Some assessments of a Mature System

• Management expectations are known (policies and goals)

• Management policies and goals are traceable throughout theobjectives of each Key Function• Objectives are being consistently met• Controls are in place and are protecting the company from

unexpected Organic Change

• Improvements are coordinated to respond to changes inmanagement’s policies and goals

• Needs and expectations of interested parties are considered andresponded to in a balanced way

• Supplier relationships provide mutual benefits





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Q ,

Typical assessments of a Fossilized System

Actual performance requirements are primarily anecdotal; thesystem driven performance requirements are out of date

Performance

New employees are not aware of the system; a system“team” deals with all inquiries regarding the system; whenproblems arise, the system is not part of the solution

Ignored

People only follow the system as far as is needed to passaudits; there is no concern for improvement to the system

Ineffective

The system is over documented and many of the documentsare not used

Bureaucratic

The system is disconnected from the needs of theorganization and the requirements of customers; success ismeasured by conformance to the system, not theeffectiveness of the system

Inflexible

EvidenceSymptom





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Some assessments of a Fossilized System

• The quality management system is mostly disconnected from theactivities of the operation

• There is an identified group that is known to “own” the system .This group only communicates with the rest of the organization inmatters of failed compliance

• An external audit is the cause of disruption as evidence has to bemade ready

• Management gives no consideration to the system in its strategicplanning activities

• The perception is that the system is bureaucratic . There is a great

deal of documentation, but little evidence that it is of benefit orbeing used, except for conformance purposes





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Sustainability





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Sustainability

Sustainability of an organization:

“Ability of an organization or activity to maintain or develop itsperformance in the long term.”

Sustainability can best be achieved by:o Addressing the requirements of ISO 9001 as improvements to the

existing operation, not a “paint by numbers” rule booko Communicating requirements for change in the language of the

organization, not the Standardo Changing the meaning of “Say what you do and do what you say”

to “set goals and achieve them.”