Introduction to Integrated Management Systems REV # 091302-BSI Contents : Section One • Introductions • Overview of Business Systems • Process Mapping • Systems integration • Objectives and Targets • Analyzing Risk Course Objectives : • Provide understanding of integrated systems • Business systems and their application • System Interrelationships • Background to assist participants in building integrated systems Introductions Turn to the person next to you and interview that person for the following: 1. Name 2. Company they work for 3. Current company registration to? 4. Why are they on this course? 5. What are the objectives they wish to achieve by taking this course? 6. Prepare to introduce this person to the group 7. 5 minutes max Course Outline 1. Course presentation is through lecture and workshops 2. Participation is key to learning, questions are encouraged 3. Hours are 8:30 a.m. to 4:30 p.m 4. There are two 15 minute coffee breaks and a one hour lunch 5. Times for each module can be adjusted to maximize learning Business Systems Overview • Business management systems are established and implemented to facilitate control and consistency • Consist of multiple functions/disciplines • Methods of implementation vary Business Systems Overview Design Considerations: • What is required for successful business operation • Market - Deliverables - Support - Profit • Regulatory, shareholder requirements • Process costs and optimization • Personnel requirements • Measurement requirements Impacts of Systems Systems are implemented to manage: • Production & Quality • Health, Safety & Personnel • Finance • Environment • Information Impacts of Systems • Systems control business functions and processes • They are pervasive throughout an organization • International standards are models for system design • Standards -> Design -> Systems -> Control Impacts of Systems Business management systems have several impacts, for example: Positives Negatives Streamline Bureaucracy Identify problems Create problems Establish controls Remove entrepreneurship Establish accountability Major cost area Workshop One Establishing Impacts • Working in assigned groups, review the business scenario in your group and identify quality and environmental impacts • Time: 45 minutes with 15 minute presentation and feedback Standards • What is a business system? • A business system can be based upon a • recognized international standard. • Examples of these standards are: • ISO 9001 • TS 16949 • ISO 14001 • OHSAS 18001 ISO 9001:2000 ISO 14001:1996 ISO 18001:1999 ISO/TS 16949:2002 Standards • A significant misconception of standards is that a company must structure business around the requirement of a standard… this is simply not the case • Especially for integrated systems, create a system reflecting the business, then determine how the standard(s) fit in • The focus of the standards is on business flow of the organization, and to fit the requirements into the organization Focus of Management Systems • Purpose is to assist in defining business processes • Provide framework for performance enhancement • Establish accountability • Define how processes are accomplished • Provide tools for meaningful measurement of performance • Establish boundaries for controlled growth System Documentation To create a business system, documentation is required. Questions to consider: • Documentation requires words on paper? • Have a written instruction for everything you do? • Structure of system to follow reference standard? • Records to demonstrate evidence of every process performed? System Documentation • Documentation needs to reflect actual business flow • Structure and content should be user friendly • Utilize the K.I.S.S. method • Complexity of documentation is dependent on complexity of organization, training levels of personnel etc. • Make use of existing documentation • Watch out for redundancies Typical System Documentation Level 1 Quality (Policy) Manual Level 2 Procedures Job or Work Level 3 instructions External Docs. Level 4 Records Process Flow • A method of defining the business flow of activities within an organization • Also known as mind mapping, flow charting etc. • Can also be used as a procedure • Graphic representation of flow of business generally, or be detailed right down to the representation of a specific activity Process Flow Work Registry AJA Clerk Flowcharting is the receiv es MAF f rom receiv es CF2302 f rom 1 1a customer customer essential first GM rev iews f or correct assignment & specif ications 2 step… required Procedure xxx • Examine the typical Specif ications required ? Yes 3 Engineering workflow No PLE Procedure xxx • Chart it using assembles Job Package 4 Estimating standard symbols GM rev iews Work Package No 5 • Verify the flow • Identify the critical Work Package complete & accurate ? control points Yes 5.2 Job Issue Linking Process Flowcharts to Procedures METHOD STEPS The flowchart is 1 2 3 4 5 6 linked to the SOP to… Indicate the actions OPERATING PROCEDURE taken at each step. METHOD STEP RESOURCES KEY POINTS Q POINTS Identify the resources 1 and people involved. 2 Clearly identify the critical control 3 points… Q Quality S Safety E Environmental Process Flow When flow charting processes, consider the highest level steps first, then break down those steps into sub-processes as required. For example: Communicate Customer Perf orm Present to Requirements Fill order requriements customer to personnel process Each box depicted in the above flowchart can be further broken down into sub-processes. If necessary, procedures or work instructions for each process step can be created to further explain how to perform that step. Process Flow • Once a “model” of the business flow has been constructed, use this model to define the balance of the documented system • It is a useful tool to identify weaknesses or redundancies within processes • Keep flowcharts current Workshop Two Process Mapping • In your respective groups, using the assigned scenario, plan out and create a process flow chart of the described organization • Time: 45 minutes with additional 15 minutes feedback Integration - Why Bother? Customer complaints where root cause is inter-functional mis-communication Internal audits that focus purely on intra- functional issues Increased time and effort being spent serving internal customers Personnel, safety, legal or environmental requirements that are not complied with “Turf wars” due to overlap or gaps Integration - Are We Ready? Maturity required includes: - Direction from Top Management - Acceptance by functional heads such as Quality, Health & Safety, Environment, Information Systems, Finance - Ability to focus on the process first, ownership second - Ability to organize and accomplish cross functional internal audits Integration - Are We Ready? (Cont.) - Consistent framework for setting and reviewing goals across functions Day One Review • Overview of Management systems • Impacts of systems • Focus of Management Systems • Documentation • Process Mapping • Integration - Are we Ready? Business Impacts Consider how management systems -impact business: • Sales • Costs • Products • Customers • Product or Service Design Business Impacts - Sales How is customer information obtained? • In-person • Fax/Phone • Internet How are customer requirements reviewed for: • Accuracy • Production & process impacts • Health & Safety issues • Environmental issues Business Impacts Sales impacts on many functions, for example: • Price - Finance • Delivery Time - Production • Customer Technical Requirements - Quality • End use safety requirements - H & S • Customer recycling requirements - Environment • Government regulations Business Impact/Risk overlap Risks are managed through process control Process control will involve several functions Standards are written to manage risk by functional discipline By definition then, there is overlap Opportunity to optimize system Overlap example - Training of personnel Workshop Three Impacts of Business related issues • In your assigned group, using the assigned scenario, review the impacts/risks present and determine which standard(s) are applicable • Indicated the clause(s) of the appropriate standard in your presentation • Time: 45 minutes plus 20 minutes group feedback Process Impacts Impacts on Products / Services: • Design of creation process impacts product offering • Design of product key to the “ilities” - manufacturability, durability, quality, maintainability, dependability, serviceability • Health & Safety of users and of builders • Life cycle analysis • Disposition at end of life cycle Process Impacts Consider the PDCA cycle: • First, we must “Think” therefore PLAN • Then we DO what we have planned • We must control / CHECK or measure how we have done • Then we ACT accordingly by taking corrective action if required Process Impacts “Standard” PDCA is consistent with APQP Five Phases: 1. Plan and Define Program 2. Product Design and Development Verification 3. Process Design and Development Verification 4. Product and Process Validation 5. Feedback Assessment and Corrective Action Process Impacts Process Impacts The design process affects all key business risks/impacts: • Environment • Quality • Health & safety • Information • Finance When designing a product or service, or the manner in which it is to be made, is critical to the business. Process Impacts Impacts on Product Manufacture: • Procurement of materials • Procurement of qualified personnel • Ensuring safe work practices for employees and stakeholders • Life cycle designed into product • Product disposal at end of life cycle defined Process Impacts Impacts on service provision: When a service is being performed, consider the following impacts: • Pollution as a result of service performed (taxi’s) • Health and safety of service providers (food/beverage servers) • How the service is to be defined • What training is required to perform service • What records are required Process Impacts Life cycle analysis Life cycle analysis includes issues around: • How long is the item expected to last? • What levels of pollution will the life of the product permit? • How will the item be disposed of at the end of the cycle? • What kind of safety factors are built into the cycle estimates Workshop Four Impacts of Process related issues • In your assigned group, using the output from Workshops 1 and 3, look for the processes that are key to generating the risks/impacts • List the processes and the key process areas where mitigation of the risk is most possible. • Time for this workshop is 35 minutes plus 10 minutes for group feedback in plenum Management System Support Having an effective business system means integrating support methods. Examples are: • Performance Review • Complaint Management • Customer satisfaction/perception • Accident/spill/emergency management • Nonconformance management • Regulatory affairs • Documentation and Records Management System Support Examples (Cont.) • Information Technology infrastructure and access • Internal audits • Statistics • Communication • Training and development Management System Support Performance or Management review process includes: • Analysis of business performance - Quality - Environment - People - Finance - Process performance - External issues - Audits - Internal; customer; third party Management System Support Training covers areas such as: • Competence of personnel • Records • Requirements to fill a position • Indoctrination process • Cross training matrix Management System Support Records All systems require records. We have records to demonstrate conformance to specified requirements. Records can consist of: • Nonconformance reports • Corrective actions • Training • Document control • Purchasing • Process records • Sales Management System Support Corrective Action: - Initiated to resolve an issue - Reactive not proactive - Isolate occurrence or “contain” - Identify immediate, mid and long term action - Determine cause - Eliminate cause - Follow up for effectiveness - Monitor Management System Support Preventive Action: - Initiated to avoid a Corrective Action - Proactive to trends, statistics and analysis - Management tool for Continual Improvement - Steps are the same as for Corrective Action Management System Support Documentation: Can be in electronic or paper, but not telepathic Typically includes: • Procedures • Work instructions • Records • Forms • Invoices • Manuals • Drawings Management System Support Internal audits: - provide management with report on health of system - are a tool when the “Numbers” indicate investigation is necessary - provide opportunity for cross functional understanding Management System Support Data Analysis: Used to measure several things: • Performance • Degree of Legal Compliance • Degree of conformance • Sampling plans • Customer satisfaction • Opinion polls Management System Support Communication: - Critical as long as there are humans - Awareness of the critical operating requirements - Discussion of current situation/results - Celebrate victories - Brainstorm defeats Workshop Five Impacts of system related issues • review the outputs from Workshops One, Three and Four. • determine those support activities that will be necessary to deliver • identify the standards and elements that are applicable. • Time: 30 minutes plus 10 minutes group feedback Workshop Six Overall analysis of requirements • Discuss the last three workshops • Look at the standards, the impacts of a business system and the appropriate internal controls • Design a model for an integrated system for the Scenario Company • Choose a spokesperson to present this conclusion to the class • Time: 30 minutes with 10 minutes group feedback Measurable Objectives & Targets What are objectives and targets? • Objectives and targets are the output from strategic planning of the organization • The impact of setting objectives crosses all reference standards and all business functions ? Measurable Objectives & Targets What are objectives and targets? • Objectives and targets are layered - set at relevant functions or levels of an organization • Corporate Objectives and Targets will be linked to those set for individuals of all levels • Objectives and Targets are the way to determine if strategy/ policy is working ? Measurable Objectives & Targets Typical considerations in setting Objectives and Targets: • Financial performance required • Customer demands • Self-assessment results • Benchmarking results • Current product / process information • Future products • Competitor progress • Support process capability • Communication and deployment Measurable Objectives & Targets • When setting objectives and targets, consider that higher level objectives must be supportable by other functional areas • Objectives set for the machine shop must also provide support to objectives set by relevant Managers • Objectives and targets need to be re- assessed at regular intervals to determine continuing suitability, and revised if required Measurable Objectives & Targets Some examples of measurable objectives and targets: • Increase market share x% • Increase productivity (by % or volume) • Reduce scrap to y% • Eliminate lost time accidents • Establish more frequent H&S audits • Reduce atmospheric pollution by 45% • Improve risk analysis procedure • Provide training to staff reducing accidents by x% DAY TWO CONCLUSION International Standards and Business Impacts Processes Support Processes Measurable Targets Workshop 7 Establishing Objectives & Targets • In your assigned group, review the assigned scenario and establish relevant objectives and targets • There is no minimum or maximum number, set what your group feels applies to the scenario • Prepare a presentation of your objectives and targets for group presentation • Time: 30 minutes to prepare and 15 minutes group feedback Workshop 8 Measuring Objectives & Targets • In your assigned group, review the assigned scenario and the objectives and targets that have been set • Prepare a presentation of the measurements you have established for the objectives and targets,and prepare for group presentation • Time: 30 minutes to prepare and 15 minutes group feedback Policy Statements Many standards, and good business practices, require policy statements to be established. Policy statements can appear in many flavors, for example: • Quality policy • Environmental policy • Health & Safety policy • Mission statement • Vision statement Policy Statements Consider One Integrated Statement addressing all requirements Things to consider: • Matching stated requirements in the reference standard • Redundancies • Best fit for the organization • Too many words, not enough meaning Policy Statements • Policy statements need to address - business concerns of the organization - the requirements of the reference standards • Needs to be understandable/relevant at every function and level • Provides a framework to set and review objectives and targets Workshop 9 Setting policy statements • Review the policy statement in the assigned scenario • Determine its appropriateness for the business and the standards • Record and suggestions on improvement and how these would be “sold” • Time: 30 minutes to prepare and 15 minutes group feedback System efficiencies When looking to integrate management systems, one should consider the following: • Elimination of redundancies • Streamlining of requirements to be more efficient • Modeling system after business requirements, not standards • Reduce bureaucracy to a minimum System efficiencies Give thought to: • One form for all occasions • Procedures or work instructions that address specific activities/processes, not requirements of the standard • Minimize the use of text in work instructions • Consider flowcharts, pictures or other medium Analyzing Risk • Business is risk • Successful business is controlled risk risks • Organizations and management need to be aware of risks • There are tools that can be used to perform an analysis of risk and measure or rank risks identified Analyzing Risk Some examples of general risk: • Hazardous chemical spill • Shipping nonconforming product • Release of pollution • Accidental injury • Product failure • Improper service delivery Analyzing Risk Here are some specific examples of identified risks: • Hazardous chemical spill • Tank containment failure • Release of pollution • Stack scrubber failure • Accidental death • Falling from scaffolding Analyzing Risk Here are some specific examples of identified risks: • Accidental dismemberment • Placement of limb into active machine • Product failure • Improper manufacture or testing of product before release to customer • Improper service delivery • Poor training of food server resulting in customer dissatisfaction Analyzing Risk Risks must be considered in both normal and abnormal conditions Failure Mode Effect Analysis is a good tool to use in the design or review of a process Workshop 10 Analyzing Risk • In your group, review the risks generated at Workshop One • Review the work from the other Workshops, in particular, the processes • Prepare a 5 minute presentation of any risks now perceived differently • Use forms provided in your course binder • Time: 30 minutes to prepare and 15 minutes group feedback Measuring Risk There are a number of methods to measure or rank risks. The purpose is to identify the risk, then rank the risk. Rank can be established by a simple matrix. Impact x Controls = Rank Create a numerical ranking system from 1 to 10 for example. Rank the impact of an identified risk, the controls in place for that risk. Multiply the impact by control to establish the rank level. Measuring Risk • Ranking of risks permits management prioritization • Highest risk dealt with first for root cause and mitigation • Depending upon the organization and related industry, risks can range from a few (less than 100) to several thousand • Measurement system permits ranking Workshop 11 Measuring Risk • In your group, review the assigned scenario and rank the risks identified in workshop 10 • Prepare a five-minute presentation of risk ranking for group presentation • Use forms provided in your course binder • Time: 30 minutes to prepare and 15 minutes group feedback DAY THREE CONCLUSION - Objectives and Targets - Policy Statements - Risk assessment - Risk Measurement Feedback form Please complete the feedback form as a tool to help us improve. Thank you for attending this course.