Management Responsibility

In my previous blog I discussed the Management Review process. In this blog I would like to discuss management responsibility and the opportunities management commitment to ISO-9001:2008 provides a company.
Over time committed management can, and in most instances do, find benefits are achieved when the managers "buy in" to the implementation process. These benefits can include:

• Improved company communications
• Increased sales
• Improved competitive advantage
• Improved operational productivity and efficiency
• Improved employee quality awareness
• Reduced waste
• Improved documentation
• Reduction in Cost of Poor Quality
• Higher perceived quality
• Reduced customer quality audits
• Improved on-time deliveries
• Improved customer satisfaction
• Increased profits

Unfortunately, the benefits are not automatically gained simply because the company becomes certified to any standard, whether the standard is ISO-9001:2008, TS-16949:2009, ISO-14001, or AS-9100. The benefits can only be achieved through the commitment and dedication of executive management, the management team and the employees.

The ISO family of standards has identified eight quality management principles that, if followed, provide the framework for improving organizational performance. These principles are:

1. Customer focus - meet customer requirements and strive to exceed customer expectations.
2. Leadership - establish unity of purpose and direction. Create an internal environment where people can become fully involved in meeting the company objectives.
3. Involvement of the people - full involvement of people at all levels of the company.
4. Process approach - manage activities and related resources as processes.
5. System approach to management - identify, understand and manage interrelated processes as a system.  
6. Continual improvement - continual improvement must be a permanent objective of the company.
7. Factual approach to decision-making - make effective decisions based upon data and information.
8. Mutually beneficial supplier relationships - an equally beneficial relationship enhances the ability to create value.

When executive management makes a conscious decision to embrace and implement these eight management principles, as well as the requirements identified in the Quality Management System technical specifications, the opportunity for success is greatly improved.

Executive management must not only communicate their belief in the system to their employees, they must also show their commitment through their consistent actions in the day to day business activities.Management can define their quality policy, but if the policy statement remains only fancy words and doesn't translate directly into the actual business practices there is no chance for success.

Management must thoroughly understand customer requirements and expectations and the relationship those requirements have, not only with the quality policy,but how they translate into actions.

Management  must:

• define and communicate company, system and process goals and objectives.
• measure and analyze the company system and process performance to the goals and objectives.
• develop and implement specific action plans directed at the improvement of the effectiveness and efficiency of the system, processes and products.
• communicate the results of the company performance to the identified goals and objectives to all employees.
• ensure awareness of quality performance for all employees.

Management responsibility and commitment is the cornerstone in the building of a successful management system. How management reacts, or doesn't react, will either provide an opportunity for success, or a formula for failure.

Business Planning and Management Review

We, at Foster and Associates, Inc., believe that the best management systems are developed by making the standards fit the company, rather than making the company fit the standards. We believe this is the more logical and value added method for implementation and provides the best opportunity for success.According to ISO-9001:2008, "The application of processes within an organization, together with the identification and interactions of these processes, and their management to produce the desired outcome, can be referred to as the process approach".

So, as you make the decision to implement your Quality Management system you must first understand the requirements of the standard(s). Whether you are focused upon ISO-9001:2008, ISO/TS-16949:2009, or AS-9100 you will need to be able to understand and answer the following:

• What clauses in the standard apply to the process?
• What are the specific requirements identified in the clauses?
• How do the clause requirements relate to your current process?
• How can you make the requirements fit your current process?
• What are the requirements that need to be modified in order to not only meet the requirements, but also make good business sense to your operations?

The cornerstone for any truly successful Quality Management System (QMS) is the development of a robust Business Planning and Management Review process. The Business Planning and Management Review process defines the company vision and mission and provides management the opportunity to clearly communicate the company policy, to define the business processes, to communicate the identified goals and objectives for the company and the processes, to define how the effectiveness and efficiency of the processes will be measured, and to develop and instill a continuous / continual improvement process throughout the company.

Let's first identify the specific clauses in the standard that apply to the Business Planning and Management Review process. For our purposes in this blog, we will use the ISO-9001:2008 technical specification). The specific clauses are: 

• 4.1 General requirements (process map, goals/objectives, management reviews)
• 4.2 Documentation requirements (quality policy, quality objectives, procedures, work instructions, necessary records)
• 4.2.2 Quality manual (scope, details of exclusions, procedures, process map)
• 5.1 Management commitment (policy, objectives, management reviews, resource planning)
• 5.3 Quality policy (quality manual, policy statement)
• 5.4.1 Quality objectives (objectives, measurable, actions)
• 5.4.2 Quality management system planning (management reviews)
• 5.5.1 Responsibility and authority (organizational chart, job descriptions)
• 5.5.2 Management representative (organizational chart, job descriptions)
• 5.5.3 Internal communication (posted performance reports)
• 5.6.1 Management review - general (meeting matrix, agenda, review minutes)
• 5.6.2 Review input (agenda, review minutes)
• 5.6.3 Review output (agenda, review minutes)
• 6.1 Provision of resources (business plan, management reviews, quality planning)
• 6.2.1 Human resources - general (job descriptions, reviews, records)
• 6.2.2 Competence, awareness and training (job descriptions, employee reviews, training records, quality planning)
• 6.3 Infrastructure (business plan, quality planning, management review)
• 6.4 Work environment (quality planning, management reviews)
• 8.1 Measurement, analysis and improvement - general (internal audits, management reviews)
• 8.2.1 Customer satisfaction (customer perception,performance to requirements, management reviews)
• 8.2.2 Internal audit (scope, schedule, records, management reviews)
• 8.2.3 Monitoring and measurement of processes (goals and objectives, performance reports, internal audits, Management reviews)
• 8.2.4 Monitoring and measurement of product (customer reports, management reviews)
• 8.4 Analysis of data (internal reports, external reports, management reviews)
• 8.5.1 Continual improvement (quality policy, goals and objectives, internal audits, corrective/preventive actions, management reviews)

So, where do you start? First of all, management must first define the business processes and develop the process map. ( There are many excellent reference books available that will help you complete this task. One of our favorites is "Process Mapping, Process Improvement and Process Management", written by Dan Madison and published by Patton Press, LLC).

 A business process is made up from many sub-processes. Each of these processes will have "inputs" that the process needs to be able to start; the actual process that converts those inputs; and the outputs of the process. The outputs from one process become the inputs to the next process. Pay close attention to the identification of the process inputs and outputs.

 There are four types of processes, they are:

• Customer Oriented Processes (COP) - these are processes with inputs coming from the customer and outputs going back to the customer (design, manufacturing process)
• Management Oriented Processes (MOP) - these are processes exercised by management to manage the business (business planning, management review)
• Support Oriented Processes (SOP) - these are processes not directly adding value, but providing support to other processes (purchasing, maintenance, calibration)
• ISO-9001:2008 Processes - these processes are required by the standard (document control, control of records, internal audit, control of non-conforming product, corrective actions, and preventive actions)

Most companies, regardless of the products and/or services they provide, have generally 5 processes in their business. These processes are:

1. Business Planning - Management Review
2. Sales, Quote and Contract Review
3. Quality Planning
4. Provision, or Manufacturing
5. Measurement and Analysis

The process we will be discussing in this blog, Business Planning and Management Review is a Management Oriented Processes (MOP).

The Business Planning - Management Review process has at its core they Quality Manual . The quality manual sets the philosophy and vision for the company and the management team and serves as the engine that drives the successful implementation and management of the QMS. You can read a thorough explanation of the development of the Quality Manual in our previous blog.

The Business Process Map describes the linkage of the business processes for the company. The map shows how the processes work together in unison in order to meet the requirements of the customers and other interested parties. The management team uses this definition of the flow of the individual processes to define the goals/targets and measure's processes needed to monitor the effectiveness and efficiency of each of the processes that make up the business and lead to success.

Although the standards don't specifically require a documented Management Review processes, we, at Foster and Associates, believe a formal Management Review procedure is necessary to reinforce the business processes and to document managements' commitment and role in the management and continuous improvement of the QMS.

The Management Review procedure defines the process for:

• the identification of the goals and objectives for the company.
• the monitoring and analysis of the QMS effectiveness. 
• the monitoring and analysis of the performance data for effectiveness and efficiency of the business processes.
• the monitoring and analysis of product conformance to requirements.
• the identification of plans for corrective actions, preventive actions and continuous improvement of the Quality Management System, the processes and the products / services of the company.

The Business Planning and Management Review process, when properly defined and effectively implemented, provides the management team with a sound basis for the successful implementation of a Quality Management System that will provide the best opportunity for the success of the organization.

The Quality Manual

In the previous blog we talked about the reasons for implementing a quality management system. Once management decides that they want to implement the management system, there are several basic cornerstones that must be put into place.

As I discussed in my previous blog, management needs to identify their business processes. Management now must identify the business structure (organizational chart and job descriptions). The business process map describes, in brief terms, the individual business processes (i.e. business planning / management review, sales / quote, quality planning, manufacturing / provision, etc.) and their interrelationships. 

The organizational chart describes the reporting structure and authority for the company and the job descriptions describe the responsibilities of the individual positions.  

Management must define, develop and put in place the "quality manual".  But what exactly is a "quality manual"? The ISO-9001:2008 standard stipulates that the quality manual must be a controlled document and the content of the quality manual must include:

• the scope of the quality management system. This describes the range of activities and products of the company that are covered by the quality management system
• the details and justification for any exclusions to the standard (only applicable to clause 7 Product Realization) . Management needs to clearly explain why the exclusion is not applicable to the company.
• reference to the documented procedures required by the ISO-9001;2008 standard (4.2.3, 4.2.4, 8.2.2, 8.3, 8.5.2, 8.5.3) and any additional procedures that the company feels is required. (The company may include the procedures as a part of the quality manual).
• a description of the interaction between the processes. This can be either the Business Process Map we discussed previously, or describe in text how the quality management system meets each of the requirements contained in the standard.

At Foster and Associates, Inc., we believe that an important part of any quality manual is including the statement of the Quality Policy. The Quality Policy is the cornerstone of the quality system and should really describe the philosophical goals that your organization expects to achieve.
   
The quality manual is a clear statement by management that describes the business philosophy of the company. This manual describes what management believes in and what it works to accomplish. So what should the manual look like?

The following contains a sample table of contents and brief description of those contents for a quality manual developed for a small manufacturing company: 

• TITLE PAGE, including revision level and date
• Quality Manual table of contents
• Page 2--------Introduction / history / profile
• Page 3--------Scope
• Page 4--------Policy statement
• Page 5--------Procedures
• Page 6--------Business Process 
• Page 7--------Philosophy
• Page 8--------QMS clause / Process / Procedure Documentation Matrix
• Exhibit A - Business Process Map
• Exhibit B - Organizational Chart
• Exhibit C - Roles and Responsibilities
• Exhibit D - Documents and Records Index
• Exhibit E - Procedure / Work Instruction Index 

INTRODUCTION /HISTORY / PROFILE:
The purpose of the introduction is to familiarize the reader with the company and its history. Describe the approach and philosophy of the company regarding the control of the Quality Management System, the technical competence of the company and ensuring valid results that meet the needs and expectations of the customers, governmental and regulatory requirements.
The manual is intended as a statement, by executive management, of the philosophy underlying the way the company conducts its business. 

SCOPE:
A description of specifically what the company does, including its products and processes.The scope also details the specific standard (ISO-9001:2009, TS-16949:2009, etc.) that the management system is addressing as well as any "exceptions" taken to the requirements. (The only exception acceptable in ISO-9001:2008 is the responsibility for product design [clause 7.3]).

POLICY:
A statement of the formal Quality Policy of the company.

PROCEDURES:
Description of the criteria used to generate formal documents and documentation needed for the company to ensure the effective planning, operation and control of its processes.

• When required by the standard.
• When more than one person is held responsible for the accurate execution of the process.
• When failure to execute the activity in a certain sequence could result in customer dissatisfaction.
• When consistant execution of the activity, or process is considered to be critical to accomplishing the established objectives or the quality policy.
• When safety of a person or the facility could be jeopardized.
• When consistency in training is critical 

There are only six (6) required procedures for ISO-9001:2008 (control of documents, control of records, internal audit, control of non-conforming product, corrective action and preventive action). However, management will have to review all of the processes and develop additional procedures / work instructions to ensure "effective planning, operation and control" of the processes.

BUSINESS PROCESS:
Link to the Business process map as well as a description of the processes.

PHILOSOPHY:
Discussion of the the eight management principles and their application to the company operating philosophy.

A clear description of the eight management principles is contained in the ISO-9004:2009 standard  - Annex B.

CLAUSE / PROCESS / PROCEDURE MATRIX:
A matrix that describes the standard clauses and the applicable process, procedures, and work instructions addressing the specified requirements.

EXHIBITS:
The attachment of any documents that reinforce the quality manual.

These exhibits could include the Quality Policy, Business Process Map, Identification of the Quality Objectives and performance, Organizational chart, Documents and Records Index, etc.

Why implement a Quality Management System?

As a consultant who makes the majoriety of his living implementing ISO-9000, TS-16949, ISO-14001 and AS-9100 Quality Management Systems, I continually get asked by management "what is in it for me?" , "why should I spend money on the "if come?", "What benefits will I get", "Can I charge more money for my products/services?".

I get those questions all of the time and they are very relevant. I'm not here to try and convince you that simply implementing any of the standards will immediately make your company successful. What I will try to show you is what I consider to be a system that provides management with the best opportunity to become successful IF management believes in the value of change and is willing to implement and use the system.

What all of the current standards offer is a basic guideline for the development of a quality management system. In my opinion, the cornerstone of any business system is the absolute belief that a business is made up of many inter-connected and linked processes. These processes, when managed effectively and efficiently, can provide the business with the opportunities to reduce waste and non-value added costs, while providing a basis for continuous improvement within all segments of the business.

Managements role, as defined in ISO-9004 states that through leadership and actions management can create an environment where people are fully involved and in which a quality management system can operate effectively. Management needs:

• to establish and maintain quality policy
• to identify process performance goals and objectives.
• to promote the quality policy and objectives throughout the organization to increase awareness, motivation and involvement.
• to ensure focus on customer requirements.
• to ensure appropriate processes are implemented to ensure customer requirements and company objectives are fulfilled.
• to ensure an effective and efficient Quality Management System is established, implemented and maintained to achieve the identified objectives.
• to ensure availability of resources.
• to decide on actions regarding the quality policy, quality objectives and continuous improvement of the management system.

Management must first establish and communicate the company Quality Policy, in order to provide a common focus for the organization. The Quality Policy provides a framework for the establishment and review of the quality/business objectives.

Management must then define and understand the business processes. This is easily accomplished through the development of the Business Process Map (flowchart). What I have found during my years of consulting in many different companies and industries is that all companies have basically five processes.

1. Business Planning / Management Review
2. Sales / Quote
3. Quality Planning
4. Manufacturing or Provision
5. Measurement and Analysis

Each of these "key" processes have one or more sub-processes that come together to define that particular key process.
Once management has defined the key processes the next logical step is to ask "How do I know if each of the key processes are effective and efficient? What can and should be measured that will provide the appropriate performance data that allows for an accurate analysis and lead to actions to improve the process?
The quality / business objectives that the management identifies needs to be consistent with the Quality Policy and the identified process objectives must be reasonable, measureable and achieveable. According to the standard, "The achievement of the quality objectives can have a positive impact on product quality, operational effectiveness and financial performance and thus on the satisfaction and confidence of interested parties".

Where should management start? As your company moves forward with your planning for your Quality Management System (QMS) development, it is important to become familiar with three clauses contained in the ISO-9000 standard. These clauses are, 4.1 General Requirements,7.5.1 Control of Production and Service Provision and 8.2.3 Monitoring and Measurement of Processes.

Clause 4.1 General requirements describes the establishment of a QMS. The requirements in this clause identify the need to identify the business processes through the development of a business process map which, when done correctly, shows both the sequence and interaction of the processes.

Clause 7.5.1 Control of Production and Service Provision describes the process for implementing controls for the processes. The organization must "plan, carry-out production and service...under controlled conditions". 


Clause 8.2.3 Monitoring and Measurement of Processes requires that the organization must apply suitable methods for monitoring and measuring all of the QMS processes with the goal of demonstrating the ability of the processes to achieve the identified goals.

NEXT - THE QUALITY MANUAL

ISO-9001-2008 Business Processes

ISO-9001:2008 standard defines the minimum requirements for Quality Management Systems implementation. Any company can qualify for certification to this standard. On the other hand, the TS-16949:2009 standard more specifically defines the requirements for automotive related Quality Management Systems. In order to qualify for certification to this standard, the company must provide value-added manufacturing processes for cars, trucks, buses and motorcycles. "Manufacturing" is interpreted as the process of making or fabricating production materials, production or service parts, assemblies and services (plating, painting, welding, heat treating, or other finishing services.

Both standards are "process" based. Simply put, the standard is based upon a business process model that applies the understanding of the identification and interaction of all business processes within the company.

Most, if not all, companies have 4 or 5 major processes. these processes are:

1. Business Planning / Management Review process
2. Sales / Quote process
3. Product / Service Planning process
4. Manufacturing / Provision process (and support processes including maintenance, purchasing, etc)
5. Measurement / Analysis process

The development of a Business Process Map (flow chart) will show the auditor and the management team the inter-relationship and interaction of the business processes. Once these business processes are defined, Executive Management should define specific measures, or goals, that are used to monitor and measure the effectiveness and efficiency of each of the identified business processes and, more importantly, to use the analysis of process performance to develop action plans for the improvement of the processes and company performance. This process is better known as the "PLAN-DO-CHECK-ACT" (PDCA) process.

 

Interpreting and applying the standard in this manner provides a more understandable reason to implement a quality management system that can, and will, provide the company with the best opportunity for improvement.

 The Business Process Map becomes the cornerstone of the company management system. See the Foster Associates Inc. website (http://www.lcfiso.com/) for additional information and training options.

Business Management and Improvement Introduction

Foster and Associates Inc. is a company that provides on site consulting services, on line training through our virtual university, as well as electronic training publications available for purchase and download. These services are directed at ISO-9001, ISO-14001, OHSAS-18001 and TS-16949 Quality Management Systems, as well as other general areas. For additional information and descriptions checkout our web site at http://www.lcfiso.com/.

Our experience has shown that, too often, companies become overwhelmed with the "legal-speak" contained in the standards. Consequently, the management teams over analyze and over-react and implement procedures, work instructions and extreme quantities of useless documentation that only serves to provide the management team and employees with additional confusion and non-value added actions and waste.

Our goal is to provide our clients with a working knowledge and understanding of the intent of standard clauses so that the client management teams can assimilate that knowledge into their own business operating system and processes to improve their effectiveness and efficiency.

We will be using this blog as a vehicle to provide interpretation of specific standard clauses, thought starters for system implementation, and/or simple general discussion topics and updates.