GUIDELINES TO THE IMPLEMENTATION OF A QMS FOR SMEs

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					                       Quality Management Systems Training for SMEs

                                         Leonardo da Vinci Project




                          GUIDELINES FOR THE IMPLEMENTATION OF
                          A QUALITY MANAGEMENT SYSTEM (QMS),
       ACCORDING TO THE ISO 9001:2008 STANDARD, TO SME’S.




CHAPTER 1.   INTRODUCTION ................................................................................................................... 3
1.1. CONTEXT ................................................................................................................................................ 3
    CHAPTER 2.         GENERAL .............................................................................................................................. 4
    2.1.    THE SENSE OF THE WORD “QUALITY” ........................................................................................................ 4
    2.2.    QUALITY MANAGEMENT SYSTEM ............................................................................................................. 5
    2.3.    WHY THE IMPLEMENTATION OF A QUALITY MANAGEMENT SYSTEM? ......................................................... 5
    2.4.    THE ISO 9000:2008 STANDARD ............................................................................................................. 6
    CHAPTER 3.         APPLICATION OF THE STANDARD ISO 9001 IN SMES ................................................... 7
    3.1.    SME ....................................................................................................................................................... 7
    3.2.    IMPLEMENTING THE ISO STANDARD.......................................................................................................... 9
    CHAPTER 4.         THE STANDARD ISO 9001:2008 ....................................................................................... 22
    4.1.    INTRODUCTION ...................................................................................................................................... 22
    4.2.    CHARACTERISTICS AND CONTENTS OF ISO 9001:2008 STANDARD ....................................................... 22
    4.4.    QUALITY MANAGEMENT SYSTEM (CLAUSE 4) ......................................................................................... 22
    4.5.    MANAGEMENT RESPONSIBILITY (CLAUSE 5) ........................................................................................... 33
    4.6.    RESOURCE MANAGEMENT (CLAUSE 6) .................................................................................................. 37
    4.7.    PRODUCT REALISATION (CLAUSE 7) ....................................................................................................... 38
    4.8.    MEASUREMENT, ANALYSIS AND IMPROVEMENT (CLAUSE 8) ................................................................... 47
    4.9.    PERMISSIBLE EXCLUSIONS ...................................................................................................................... 51
    CHAPTER 5.         STEPS TO IMPLEMENT A QMS .......................................................................................... 52
    5.1.    STEPS TO DECIDE .................................................................................................................................... 52
    5.2.    FIRST SELF ASSESSMENT ........................................................................................................................... 53
    5.3.    DETAILED IMPLEMENTATION PLAN ........................................................................................................... 55
    5.4 DEVELOPMENT OF QM HANDBOOK ............................................................................................................. 56
    5.5 DESIGN OR CHECK UP OF PROCESSES ........................................................................................................... 57
    5.6 FINAL IMPLEMENTATION – QMS KICK OFF .................................................................................................... 59
    5.7 INTERNAL AUDIT ........................................................................................................................................... 60
    5.8 EXTERNAL AUDIT ........................................................................................................................................... 62
    5.9 CONTINUAL IMPROVEMENT .......................................................................................................................... 62
    CHAPTER 6.         ADDITIONAL REQUIREMENTS ......................................................................................... 64
    6.1.    MANAGEMENT SYSTEM STANDARDS ....................................................................................................... 64
    6.2.    EUROPEAN DIRECTIVES AND TECHNICAL STANDARDS ............................................................................. 65
    CHAPTER 7.         GLOSSARY ......................................................................................................................... 66
    CHAPTER 8. BIBLIOGRAPHY ........................................................................................................................ 70




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CHAPTER 1. INTRODUCTION

1.1.    Context
During the last decades enterprises made an effort to achieve The
quality as a measure to increase their competitiveness. This quality achievement of
goal was usually achieved by trial and error, costing, to enterprises, quality
a great deal in terms of time and money, not to mention the effect
on clients, in the cases of error. To organise the procedure of
obtaining and maintaining quality, a series of international
standards were created in the form of ISO model. This way the
improvement of quality could be obtained through standard
procedures already tried and tested in many other enterprises. The
whole procedure very often includes re-engineering of the
company and, in every case, training of the personnel. The revision
of the standard in 2008 version imposes more obligations.

Yet SMEs, which represent an important percentage of the total The power of
enterprises power in Europe, have complained that implementing SMEs in Europe
the ISO 9000 was expensive, as it required additional staff and
paperwork. They also complained that its demands were irrelevant
to SMEs operational dimensions.

Companies are facing new challenges due to the more dynamic
economic situation. Markets appear and vanish within short periods of
time and customers show growing expectations about the quality of
delivered goods and services. Responding to these facts, many              The lack of
industrial sectors, principally the automotive industry, have decided to   educational
implement generally accepted quality management tools which lead,          material and
finally, to the establishment of quality management systems (QMS) after    tools for SMEs
e.g. ISO, VDA or QS standards. An undoubted advantage of such a
procedure is not only a support function for the systematic way of
managing quality relevant issues within their own organisation but also
the knowledge that a supplier who fulfils the criteria of such an
accepted QMS – i.e. the organisation is certified to such a standard -
stands for high quality products and services. The supplier selection
process was massively supported by the emerging certification activities
and in some areas it has even become a minimum criterion for it.

Large companies, especially, began to get certified to ISO 9000
standards whereas more and more small and medium sized
enterprises have decided to choose this way within the last few Consideration of
years.                                                          branche specific
                                                                        situations /
Therefore a lot of enterprises require from their suppliers and their Internal and
subcontractors certification at ISO-9001 and application of quality external reasons
                                                                        for implementing
processes, while in certain sectors the certification is imposed by the a QMS
national legislation. Furthermore clients are becoming active
participants in requiring certified products and providers.

Criteria, if for implementing a QMS, can be subdivided mainly into
two different groups: internal aspects e.g. internal quality
improvements like reduction of rework or cost savings and external

                                                                                            3
aspects e.g. lower reclamation rate, better image, differentiation
via long term quality strategy.

Another reason for implementing a QMS is that it can be required
by the customer (but it must not be the only reason!).

Educational programs and educational materials are then
necessary. The majority of them address large enterprises and there
is a lack of educational material and tools specially designed for
small enterprises with practical guidelines that can help on the
implementation of ISO-9000 without bureaucratic procedures.
Moreover, even if the requirements of ISO-9001 are single, their way
of application varies between the enterprises with different
objectives, sectors and methods of operation.

Some professional organizations have already proposed guidelines
to explain how to adapt the general requirements of ISO-9001 to
their own case; but, in general, those tools do not address the
specific needs of small enterprises.


CHAPTER 2. GENERAL

2.1.    The sense of the word “Quality”

The word "Quality", being an abstract concept, can have many              The many
different definitions, such as "essential and distinguishable attribute   different
of someone or something " or "feature defining the individual nature      definitions of
of something"; these are just some of the many definitions of the         word “quality”
entry "Quality" that one can find in the dictionary.

The current concept of “quality” of any product/service implies the
skills to understand the user’s need, and through the precise Quality as value
determination of the requirements, its fulfilment. This acceptation –
underlining “the adequacy to usage” (Quality as value) focuses on
user’s needs.

With the acceptation of Quality as “value”, many definitions of the
word “quality” have been elaborated, and two of these are
particularly important:

    1. “Quality” intended as the features of the products meeting Quality means
       customer needs and determining his satisfaction. In this “higher costs”
       sense, the meaning of quality is oriented to profit. The goal of
       a better quality is to enhance customer satisfaction, and
       finally, to increase the profit. As increasing or improving
       quality involves money investments, we have also an
       increase on costs. In this sense, Quality means “higher costs”.

    2. “Quality” intended as absence of flaws and errors which Quality means
                                                                     “lower costs”
       require repairing activities which usually bring to market
       shares loss, customer discontent and so on. In this sense the
       word “quality” is oriented to costs and better quality means

4
       “lower costs”.                                            The ISO
                                                                 9000:2000
Finally, ISO 9000:2008 defines the word “quality” as: "degree to definition
which a set of inherent characteristics fulfils requirements”.

It must be specified that (explanatory notes in the regulations):
- "the term quality can be used with adjectives such as poor, good
or excellent; while the term “ inherent means existing in something,
especially as a permanent characteristic”.
2.2.   Quality Management System
The “quality management system” is a wide concept and it can be Definition
defined as a systemic set of management procedures used to
monitor, check and improve the organization operative and
financial performances, aiming to offer the best product/service at
lower costs.
The    management      procedures    constituting   the  “quality
management system” include some activity subsets, respectively
indicated as: “Quality assurance”, “Quality control” and “Quality
improvement”.                                                     Quality
 “Quality assurance” (QA) activities aim to guarantee that all assurance
changes in the process are clearly identified and valuated. It also
guarantees that all product/service specifications - necessary to
satisfy both customer and product/service producer’s requirements Quality control
- are clearly fixed.
 “Quality control” (QC) is a process – also known as “quality
statistical control” – which permits to valuate the performance of
the current organization processes, individuating and performing
the actions necessary to eliminate undesired performances. Thanks
to this process QI standards can be fully respected. The activities to Quality
correct irregular products can be or not be included in QC improvement
environment.
“Quality improvement” is a systematic and continuing activity,
which involves all business processes, aiming at high performances.
Anyway, a “quality management system” must be based on
policies aiming to reach high quality goals. Actually, all business
actions reflect the management policy on fields such as finance,
product/service typology, social problems, personnel safety and so
on.
Finally, a “quality management system” must be accompanied by
a good “quality technology system”: technologies able to obtain,
monitor, control and improve the quality of the product/service
itself.


2.3.   Why the implementation of a Quality Management System?
The creation of a quality management system can help the
organization to enhance customer satisfaction as well as of the other
interested parties. Moreover, a well implemented quality management
system provides the business with the structure to activate continual

                                                                                 5
improvement actions.
                                                                             Customer
The increasing of customer satisfaction (CS) - as well as of the other satisfaction and
interested parties involved in production - and the activation of Continual
continual improvement (CI) are strictly linked to each other. Actually, improvement
considering the continuously changing customer needs and
expectations, as well as competition and technical progress, the
continual improvement of products and processes is an essential
condition to remain in the market.

2.4.        The ISO 9000:2008 standard
ISO 9000 is a set of international standards published for the first time The origin of the
in 1987 by Geneva International Organization for Standardization ISO 9000
(ISO). Firms can use these standards to individuate requirements
necessary to maintain an efficient quality management system.
The ISO 9000 standards are the result of an international agreement
of “good management practice”, in order to guarantee
products/services in line with customer quality expectations,
through processes, management and control.
ISO 9000 standards is a set of guidelines and requirements to
implement and maintain a quality management system,
applicable to any kind of public or private organization, regardless
of its activity and size.
The ISO 9000 includes three main documents:
                                                                             The ISO 9000
            ISO  9000:2005,   Quality  management            systems    – series
             Fundamentals and vocabulary.
            ISO   9001:2008,     Quality   management        systems    –
             Requirements.
            ISO 9004:2000- under revision, Quality management
             systems – Guidelines for performance improvements. The current ISO
                                                                             9000 edition
The current ISO 9001:2008 edition being active from February 2009 (2008)
on and the undergoing revision of ISO 9004 introduce minor only
changes to the previous edition. The main ones have to do with:
           Rephrasing to improve consistency between the ISO 9000
            series standards and those of ISO 22000 and ISO 14000.
           Adding the concept of business environment and risk
           Better definition of the control over outsourced processes
           Upgrading statutory and regulatory requirements
           Including the goal of managing the work environment
            needed to achieve conformity to requirements, this meaning
            physical, environmental and other factors
           Definition of personal data as a key example of type of
            customer property that have to be protected.
           Information systems as a key example of the type of support
            services that may impact conformity to product
            requirements, as an example of calibration (verification and

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             configuration))
            Making explicit reference to post delivery activities such as
             warranty    provisions,   maintenance        services    and
             supplementary services such as recycling of final disposal
    CHAPTER 3. APPLICATION OF THE STANDARD ISO 9001 IN SMES
    The aim of this chapter is firstly to introduce briefly the SME Objective of
    phenomenon and its specifics and secondly to outline how these chapter 3
    specifics affect the implementation of quality management
    system in a SME


    3.1.     SME
    Micro, small and medium-sized enterprises (SMEs) are socially and
    economically important, they represent 99 % of all enterprises in
    the EU and provide around 651 million jobs. Besides that, they are
    an essential source for entrepreneurial spirit and innovation.


    Since SMEs play a key role in the economies, the term SME is a
    frequently used one. However, there is not one single definition
    used by all, on the contrary: the criteria for a small and medium-
    sized enterprise can vary not only between different European
    countries, but even within one country, depending for example on
    the field of activity of the enterprise. Selective approach to SMEs
    (different criteria for being considered a SME depending on field of
    activity) can for example be applied as one of criteria for
    obtaining entrepreneurship support in various aid programs.

    3.1.1.   The hidden giants

    As stated in the introduction to this chapter, SMEs play a key role in SMEs – hidden
    our economy. Sometimes they are even called the hidden giants giants
    or the real giants of the European economy, since large enterprises
    form only 1 % of the total number of enterprises. More than that,
    93 % of all enterprises are micro enterprises (0-9 employees).
                                     medium-
                                      sized
                                      0,8%
                           small               large
                           6,0%                0,2%




                                                       micro
                                                       93,0%




    Figure 3.1 European enterprises by size

1   Compare (http://europa.eu.int/comm/enterprise/enterprise_policy/sme_definition/index_en.htm)

                                                                                                   7
    (Source: SMEs in focus. Observatory of European SMEs 2002; EC, 2002)

Two thirds of all jobs (private non-primary sector) are in SMEs, split
up roughly equally between micro enterprises, small and medium
sized. The size-class distribution of employment, however, differs,
between countries. Very important is also, that SMEs create - unlike
large enterprises - a net increase of job opportunities.

The strong position of SMEs, especially micro enterprises can be
considered specific for Europe: an average European enterprise
employs 6 people, while a Japanese 10 and an American 19
people. Therefore SMEs account only for 33 % of employment in
Japan and 46 % in USA whereas in EU for 66 %.2

                     Europe’s private sector jobs are in:                  ISO certification
                         Employment by firm size




When linking the important market position of SMEs in Europe to
the importance of ISO implementation three figures might be
interesting:
     world total of ISO 9000 certificates which shows a constant
       increase,




8
Figure 3.2 Issued ISO 9000 certificates, world total
(Source: http://www.iso.org/iso/survey2007.pdf)

        distribution of issued certificates among world regions,
         which proves the strong emphasis laid on ISO certification in
         European countries,




Figure 3.3 Distribution of issued certificates among world regions (2007)
              (Source: http://www.iso.org/iso/survey2007.pdf)




3.2.     Implementing the ISO standard
3.2.1.   What should ISO (not) be about
Depending on the size of the enterprise, the implemented quality The “sense” of


                                                                              9
management system should not draw up something, that would be QMS
totally different from how the organization conducted its business implementation
until now. Please notice, that all enterprises already have a form of in a SMEs
management system and possibly already fulfill some of the
standard’s requirements, even if they have not, as yet, necessarily
defined and documented how they do it. The aim of the ISO
standard is definitely not to impose a totally new management
system or to force the owner to change existing management
activities.

On the contrary, implementing a quality management system
according to ISO 9000+ should be understood as a strategic mean
to control the business, monitor what is going on and which areas
should be focused on. All requirements of the standard should be
applied with insight and commitment. The quality management
system should, to a maximal extent, implement modes already
existing in the enterprise and in addition proved, known and used
by employees. Only then can the enterprise fully benefit from
implementation of the quality management system – it can
improve internal processes and serve as a tool for excellent market
performance.




10
3.2.2.   Management principles
In an SME as well as in a large enterprise the company management
consists of several mutually dependant factors, such as management
of human resources, supplier - purchaser relationship, financial
management, marketing, production/services management, safety
management, environmental management etc.
The ISO 9001:2008 standard covers in different clauses the whole       The eight
management diversity outlined above. Before implementing the           management
standard even in small and medium-sized enterprises the top            principles of ISO
management should first of all get acquainted with the eight           9001:2008
management principles, the standard builds on, namely:

Principle 1  Customer focus
Principle 2  Leadership
Principle 3  Involvement of people
Principle 4  Process approach
Principle 5  System approach to management
Principle 6  Continual improvement
Principle 7  Factual approach to decision making
Principle 8  Mutually beneficial supplier approach
     Despite the fact, that these eight principles are not explicit
       mentioned in the ISO 9001:2008 standard, they provide a
       framework for implementation of good management
       practice.

The eight principles for quality management outlined above can
be divided into two main management areas:
                                                                       The two main
1. process management - applying process and system principles, management
   implementing tools and attitudes of company’s management areas
   (principle 4 and 5, further 1, 6, 7 and 8),
2. human resources management – implementing tools in order to
   form attitudes systematically, to increase work ability and to
   create an environment supporting effective and efficient
   functioning of human factor (principle 2 and 3, but also 1, 6 and
   7).

While providing management in both these fields, the new ISO
9000:2008 standard stresses evidential care for compliance with
superior laws and standards, related to the main product.




                                                                                    11
                                   CUSTOMER

                                                                   1




                                               4
                                                            4
                                                                            2
                   S                       H
                   U     E             F   U        processes-resources-
                         N         M   I
                   P         S             M        conditions
                         V         A   N                                     2-3
                   P         A             A
                         I         R   A
            8      L         F             N
                         R         K   N            leadership and
                   I         E
                         O         E   C            management
                   E         T             R
                         N         T   E
                   R         Y             E                                    1-8
                         M         I                        commitment
                                           S
                         E         N
                   R         R             O
                         N         G               attitudes
                   E         I             U
                   L     T                 R
                             S                              ability of
                   A                       C                                    1-8
                             K                              managers,
                   T         S             E
                                                            employees
                   I                       S
                   O
                   N
                   S

                                           5




                  CHANGES                                    KNOWLEDGE
                 MANAGEMENT                                 MANAGEMENT


                                   6                    7


          CONTINUAL                                                      USING FACTS
         IMPROVEMENT
                 of                                              information, data, knowledge
    system, processes, resources

Figure 3.5 QM processes according to the eight ISO 9000 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, 8 Mutually
beneficial supplier approach

  12
3.2.3.   ISO in SMEs - some characteristics having impact
Even if there is a single ISO 9001:2008 standard and so is the set of
requirements on quality management system, there are some
differences in the character of SMEs and large enterprises having
influence on the implementation. Some of the differences bring
about an easier start for SMEs, generally they ask for special
attention. Within the group of SMEs micro and small enterprises have
an even more specific position. Therefore, the two groups will be
dealt with separately.

Medium-sized enterprises (50 to 250 employees)
                                                                          The specifics of
When implementing a QMS each member of the company must be
                                                                          medium sized
aware of the importance of this step and must be motivated to
                                                                          enterprises
contribute. Because of their smaller size, it is less difficult for the   related to ISO
quality manager of a medium-sized enterprise to involve everyone          implementation
than it is in large enterprises.

Furthermore, compared to large enterprises medium-sized
enterprises may have a more plain organizational structure, run a
lower number of processes liable to QMS and can manage with
more simple communication tools. This might lead to a significant
reduction of system documentation. On the other hand, the number
of employees and the level of complexity of the enterprise usually
result (different than in micro and small enterprises) in an - at least
partly - documented system of conducting business, so that there is
a certain base to build on when working out the quality
documentation.

Another specific resulting from the company’s character is a usually
emphasized customer focus. Since market potential of medium
sized enterprises is limited compared to the possibilities of large
enterprises or chains, they can be considered rather dependent on
certain customers (big, important, regionally present), but in some
aspects also strong supplier-dependent. Therefore these enterprises
mostly care for good supplier – purchaser relationship.              The specifics of
                                                                  micro and small
Micro and small enterprises (up to 50 employees)                  enterprises
                                                                  related to ISO
The obvious advantage of micro and small enterprises is that they implementation
are quite often family-related businesses with a director at the head,
who usually is the owner as well. Consequently, he/she is directly
motivated to lead the company towards prosperity, to satisfy old
and to attract new customers. The customer focus is in general
additionally strengthened since micro and small enterprises operate
usually in regional markets and are in contact with an often limited
number of customers and suppliers. A consequent care for good
supplier – purchaser relationship is thus a precondition to survive.

The informality of the management brings a further advantage: the
director/owner gives oral indications on who does what and how
and thus gives constant guidance, checks and controls the quality
of the product/service, the others follow the instructions. The small

                                                                                        13
size and informal management make it easier to motivate
everybody within the company for the QMS.

In general, all enterprises have an established way or system of
conducting business. As explained above, in micro and small
enterprises informality is quite effective, however, it is rarely
documented. In connection with lack of documented procedures
and processes the quality documentation usually has to be worked
out from scratch.

 Micro and small enterprises have a very plain organizational
structure and can manage with few, simple communication tools.
This results in a significant reduction of system documentation. On
the other hand, the unavoidable accumulation of functions requires
multi skilled employees together with a well-advised definition of
authorities and responsibilities, not forgetting a focus on
communication, its content and the way of documenting it.

Another difference between micro and small enterprises on one
hand and medium sized enterprises and on the other can consist
(but not necessarily) in the number of management processes,
where     all   management       effectiveness requirements are
consequently applied, including stated measurable indicators
helping to follow the effectiveness trends.




3.2.4.   Realization of ISO requirements and differences between
         SMEs and Large Enterprises
Correspondence table
The requirements of the ISO 9001:2008 standard are defined in             The differences
clauses 4 till 8. In this chapter and in the previous one (3.2.3 ISO in   between SMEs
SMEs - some characteristics having impact) we have outlined some          and large
                                                                          enterprises
differences between SMEs and large enterprises, which can affect
                                                                          related to the
the implementation of the quality management system. The table            ISO requirements
below links these differences together with the requirements of the
standard (clauses 4-8) and gives you an easy to use overview of
those requirements, which may require a particular approach when
implementing the standard in a SME. The correspondence table is
drawn up according to clauses and requirements of the ISO
9001:2008 standard.




14
      Table 3.2 The ISO related differences between SMEs and large enterprises in a nutshell
      ISO 9001:2008 standard – Correspondence table
      Clause                  Large enterprise                         SME                                       Comments

4.        Quality Management System
4.1       General       Quality management system has to be established, documented, implemented,         If an organization will claim or imply
          requirements  maintained and continually improved in accordance with requirements of ISO        conformity to ISO 9001:2008, then it may
                        9001:2000.                                                                        not exclude from its QMS requirements
                                                                                                          that do not meet the criteria stated in
                                                                                                          clause 1.2 Application of the standard.
4.2       Documentatio    Documented statements of quality       Documented statements of quality         Quality policy is the basic unifying
          n requirements policy and quality objectives. Three-   policy and quality objectives            document declaring the needs of the
                          level documentation (quality manual,   Two-level documentation (Quality         enterprise and its customers; it should
                          regulations, work instructions).       manual and work instructions).           include a long-term vision
                          High number of users = high number of Obligatory regulations broadly discussed Quality objectives have to set up concrete
                          copies, partial documentation centres, in the Quality manual                    milestones on the way to fulfill the vision
                          voluminous system documentation,       Low number of users = low number of      Quality manual – by SMEs the most
                          usually electronic version (intranet), copies, one documentation centre.        suitable way to describe the interaction
                          hypertext links, links to related      Form more simple, e.g. Quality manual in between processes of the QMS may be
                          documents, forms etc.                  form of one file folder with all related the graphical one; in some cases process
                          Documents and records have to be       documents including example forms        cards or hyperlinks in electronic
                          controlled.                            used for records etc.                    documents may be advised
                                                                 Documents and records have to be
                                                                 controlled.                              The ISO 9001:2008 edition previews that a
                                                                                                          single document may include the
                                                                                                          requirements for one or more procedures.
5.        Management responsibility
5.1       Management Management usually consists of several Owners as managing directors directly         By SMEs this field is quite often left out. But
          commitment     responsible employees – (managing       control the company. A specific case is  even in their case, the management has
                         director, directors specialists). The   a one-owner-company, where the           to specify its vision and long-term
                         company’s owner may stay outside        management is executed directly by the intentions related to the business subject,
                         QMS (stock corporation).                owner, who does not need a               own optimal product and its presentation
                                                                 “management meeting” to make             on the market. The intention of a SME can
                                                                 strategic decisions.                     be e.g. to become partner of a certain
                                                                                                          client (supplier of an automotive industry
                                                                                                          or electro-engineering subject), in the
                                                                                                          case of commerce or services e.g. to be
                                                                                                          authorized partner (dealer or service
                                                                                                          provider) etc.
                                                                                                          The management shows personal
                                                                                                          involvement and activity while improving

                                                                                                                                                   15
                                                                                                               the QMS and stimulating continual
                                                                                                               improvement through internal message
                                                                                                               about the importance of meeting
                                                                                                               customer’s requirements and requirements
                                                                                                               imposed by related superior laws and
                                                                                                               standards.
5.2   Customer          Usually, information source for the       Information for company’s future             Both managers and employees of SMEs
      focus             company’s orientation is own              orientation mostly won due to                usually are more directly motivated to
                        marketing. Customer’s needs are to be     membership in associations, internet etc.    lead the company towards prosperity and
                        understood as market potential –          Own marketing limited, possibly due to       thus to satisfy old and to attract new
                        having identified it prevents wrong       relative high costs.                         customers.
                        decisions regarding future orientation.
5.3   Quality policy    Basic unifying document declaring the results desired by the enterprise. It should     Even in the case of SMEs, the
                        be appropriate to the purpose of the organization and include a long-term vision.      management has to specify its vision and
                        It should include the commitment to comply with requirements and continually           long-term intentions related to the business
                        improve the QMS. The quality policy provides a framework for establishing and          subject, own optimal product and its
                        reviewing quality objectives.                                                          presentation on the market. The intention
                        All employees should be aware of the declared quality policy of the organization.      of a SME can be e.g. to become partner
                                                                                                               of a certain client (supplier of an
                                                                                                               automotive industry or electro-engineering
                                                                                                               subject), in the case of commerce or
                                                                                                               services e.g. to be authorized partner
                                                                                                               (dealer or service provider) etc.
5.4   Planning          Detailed financial plan and exact         Annual plan in financial indicators, cash-   Planning is an integral part of any
                        calculation of development expenses.      flow depending on development                enterprise management. In the case of
                        Factual production plan                   expenses, main activity often controlled     SMEs, however, some of the plans (e. g.
                                                                  by operative plan.                           investment plan, training plan etc.) might
                        Establishing measurable quality                                                        be understood only as a framework and
                        objectives consistent with quality        Establishing measurable quality
                                                                  objectives consistent with quality policy.   may be controlled operatively according
                        policy.                                                                                to actual cash-flow development.
5.5   Responsibility,   Branched organizational structure,Simple organizational structure, often               Appointing a member of management
      authority,        easier defining of authorities andcumulated functions. When distributing               responsible for the QMS is essential. It has
      communicatio                                        responsibilities and authorities, specifics
                        responsibilities, executive and control                                                to be a strong leader provided with
      n                 functions.                        of the SME and characteristics of                    authority to coordinate the whole system.
                                                          individual managers have to be taken
                        Management representative is usually                                                   While there is usually a new position
                        a member of top management, can   into account.                                        established in large enterprises, in micro
                        be helped in QMS administrative tasks
                                                          Management representative for QMS                    enterprises the task is often taken over by
                        by an employee.                   usually has other cumulated functions.               one of the managing directors or by the
                                                                                                               owner himself.
                        Sophisticated means of            Elementary communication means (e.g.
                        communication (e.g. intranet)     joint management and production
                                                          meetings)
5.6   Management        Complex report on given period as Complex report on given period as input              Management review means a
      review            input for management review.      for management review.                               recapitulation of the whole QMS in regular

16
                       Review during a management                    Documented owner’s standpoint to the          periods (annual, biannual). Unlike other
                       meeting, documented in minutes,               report (by companies, where the               system requirements, applied by SMEs
                       formulated remarks and actions                influence of management meeting               already before the implementation of
                       resulting from the evaluation.                members on the owner is only advisory),       QMS, it is not common in SMEs to execute
                                                                     including specification of actions if         management review in an extent
                       New challenges for Quality objectives                                                       requested by the standard. In the context
                       or continual improvement program.             necessary.
                                                                                                                   of strategic management such a standstill
                                                                     Review of quality objectives.                 and recapitulation is very useful. The
                                                                                                                   standard requires decisions to be made
                                                                                                                   based on facts, not opinions. In the
                                                                                                                   context of management review original
                                                                                                                   intentions, objectives and resulting tasks
                                                                                                                   can be modified.
6.    Resource management
6.1   Provision of  Detailed financial plan and exact                Planned resources respecting the cash-        Even an SME should determine resources
      resources     calculation of development expenses.             flow oscillation in the course of the year.   needed to implement and maintain the
                                                                                                                   QMS and to meet quality objectives and
                                                                                                                   should specify how the resources will be
                                                                                                                   provided. In the case of SME, distribution of
                                                                                                                   resources during the year might be
                                                                                                                   controlled operatively according to
                                                                                                                   cash-flow development.
6.2   Human            Human resources department/section            Cumulated personnel work and training         Good personnel work can be done even in
      resources        with divided personnel and educational        management.                                   an SME. It is necessary to evaluate the
                       activities.                                                                                 performance and reserves of every
                                                                     Map of company’s qualification structure,     employee and to plan the use of it in a
                       Map of company’s qualification                specification of work positions.              broader context, in new fields or at least by
                       structure, specification of work positions,                                                 conserving the actual state. Employees,
                       personal development plans.                                                                 however, have to feel that they are
                       Evaluation of employees through                                                             followed and evaluated and that the
                       interview. Annual training plan.              Annual training plan.                         company counts on them. The most suitable
                                                                                                                   form of applying the requirement is a simple
                       Evaluation of training quality and            Training evaluation.                          evaluation of ability and planning personal
                       effectiveness.                                                                              development of every single employee
                                                                                                                   (regular detecting of training needs, training
                                                                                                                   plans, evaluation). Use of experience and
                                                                                                                   ability of employees is typical for SMEs-
                                                                                                                   service providers, where the quality of the
                                                                                                                   service often depends on experience of
                                                                                                                   single employees.
6.3   Infrastructure   Demanding, large infrastructure.              Rather simple infrastructure.                 SMEs often develop their infrastructure more
                                                                                                                   dynamically than large enterprises.
                       Infrastructure development planning           Infrastructure development realized under     Continual detecting of the means needed
                       based on long-term strategic plans,           conditions of more simple decision making     to ensure conformity of the products
                       making use of different investment            processes (owner makes short-term

                                                                                                                                                          17
                       studies and scenarios.                       decisions based on actual resources).      involves technology, measuring devices,
                                                                    Annual maintenance plan.                   information system, car park,
                       Annual maintenance plan.                                                                communication technologies, work tools for
                                                                                                               employees. It is to be recommended to
                                                                                                               improve the infrastructure development
                                                                                                               plan in relation to quality objectives.
6.4   Work              The organization determines and             The organization determines and            As an SME: do not forget to fulfill
      environment       manages the work environment needed         manages the work environment needed        requirements of related laws and standards,
                        to achieve conformity to product            to achieve conformity to product           as well as obligatory revision of state
                        requirements.                               requirements.                              authorities!
                        Besides control of compliance to
                        obligatory requirements of related laws                                                The ISO9001:2008 edition pays special
                        and standards (according to sector and                                                 attention to the management of the work
                        field of activity) additional surveys are                                              environment needed in order to achieve
                        carried out on the impact of work                                                      conformity to sales requirements.
                        environment on the quality of the
                        product (especially in production
                        companies).
7.    Product realization
7.1   Planning and      Main activity (production) usually          If the production cannot be long-term      Even in an SME it is useful to set
      product           planned in an annual or quarterly           factual planned (company satisfies         requirements for the product.
      realization       detailed factual plan. Planning quality,    direct demand of individual customers),    Consequently, there should be records
                        detecting risks.                            than a planning in e.g. financial          providing evidence that the realization
                                                                    indicators is necessary.                   process and the product meet set
                                                                    Products as well as production processes   requirements.
                       Products as well as production
                       processes have to meet requirements          have to meet requirements defined by
                       defined by laws and superior                 laws and superior standards.
                       standards.
7.2   Customer-        During the decision process regarding        Review of order acceptance has always      Records on order acceptance review
      related          order acceptance all managers                to be documented (at least simplified),    make part of controlled documentation.
      processes        influencing the order have to make           even if the owner decides.
                       their comments. The standpoint has to
                       be documented (recommended -
                       in information system).
                       Negotiations with customer specifying
                       the contract are documented.
7.3   Design and       The company usually disposes of own          Cases appear, that companies ensure        By SMEs the development of the product
      development      capacity for product/processes               development mainly utilizing co-           often happens by the customer, which
                       development.                                 operating experts. This demands proper     can be qualified as not fulfilling of the
                                                                    documentation reflecting requirements      requirement and may be even reason for
                                                                    of clause 7.3. of the standard.            exclusion.


18
7.4    Purchasing       List of suppliers for a limited period     Evaluation of suppliers for a limited         Even by SMEs evaluation of suppliers forms
                        derives by running companies from          period and documenting of the list of         an important input for preventive actions
                        repeated evaluation. Members of            approved suppliers has to be done even        and negotiations with partners. In the
                        production and technical control           if a strong accumulation of information       organization a permanent drive for
                        department should be involved in the       and responsibilities exists.                  evaluation has to be evident.
                        evaluation.                                Acquiring output control results and
                        The company has an own test room,          certificates from the supplier can
                        where input control of purchased           replace the input control tests.
                        material is executed and its release
                        into production approved.
                        It is used to execute customer audits by
                        supplier.
7.5    Production       Production or providing services is        Production or providing services often        If there is no service for own products
       and service      usually operated according to own          carried out according to documentation        provided and there is a co-operation with
       provision        documentation and procedures.              or procedures delivered by the                a service provider assigned instead. This
                        Processes being verified.                  customer. Documentation verified and          co-operation has to be exactly specified
                        All material in production is properly     released before use. Processes verified.      (especially quality requirements).
                        signed, marking enables backward           Procedures for providing service of own
                        tracing of all relevant information.       products doe not always exist.
                        Procedures for providing service of
                        own products exist, service realization
                        documented.
7.6    Control of       In the frame of QMS laws on metrology      If there is no management member              Even if calibration of measuring devices is
       monitoring and   usually count as superior standard.        appointed as responsible for compliance       carried out externally, in the company
       measuring        Member of metrology department             with laws on metrology, than this             there has to be kept documentation that
       devices          participates in management.                responsibility lies automatically on the      meets requirements of clause. 7.6 of the
                        Calibration of measuring devices often     managing director of the company.             standard.
                        provided internally. If the company        Calibration of measuring devices is
                        uses to do calibration of measuring        usually provided by an external
                        devices itself, calibration procedures     competent center.
                        have to be defined.
8.     Measurement, analysis and improvement
8.1.   General       The organization shall plan and               In SMEs the use of analyses and statistical
                     implement processes needed to                 methods is rather restricted. However,
                     demonstrate conformity of the                 also in SMEs there are certain monitoring,
                     product, ensure conformity of the QMS         measurement and improvement outputs
                     and its continually improvement.              and processes such as management
                     Used methods should be defined,               review report (owner’s documented
                     including statistical methods (if             standpoint), records of nonconformity,
                     applied).                                     corrective and preventive actions
                                                                   records etc., which should be analyzed

                                                                                                                                                       19
                                                                  and used for improvement.
8.2     Monitoring and measurement
8.2.1   Customer        Besides top management also               Relevant information on customer’s           Even in SMEs the collected information on
        satisfaction    members of other departments have         satisfaction can usually be collected only   customer’s satisfaction should be
                        the possibility to obtain information on by top management members or by the           documented in written form even in case
                        customer’s satisfaction directly from     owner. Structure of the information          of a strong accumulation of information by
                        customers, e.g. members of the            needed (checklist) and strategy of its       one person.
                        marketing or service department.          acquisition have to be worked out
                        Collected information is processed,       beforehand. Obtained information is
                        selected, and based on evaluation         evaluated, necessary actions defined.
                        necessary actions are defined.
8.2.2   Internal audit  Internal audit plan guarantees that all External auditors can be accepted for          Even if the audit is ensured by external
                        departments and all clauses of the        carrying out internal audits only if -       auditors, the audit procedure has to be
                        standard will be checked up in the        because of a low number of employees         described and documented According to
                        course of current year.                   - own auditors cannot ensure internal        requirements of clause 8.2.2 of the
                        There is a team of own auditors audits without facing conflict of interests.           standard.
                        ensuring the realization of internal Audit plan for one year worked out in
                        audits. Members of this team are advance, compliance with requirements
                        regularly      retrained,    their   work of the standard as well as extent and
                        evaluated.                                content of audits are monitored
                        Summary of through internal audits        thoroughly.
                        acquired information forms an essential Audit findings have to be reflected and if
                        part of the management review             necessary the QMS improved.
                        report.
8.2.3   Monitoring and All management and production activities are, to an adequate extent, monitored          By SMEs the number of processes liable to
        measurement and evaluated. By specific production processes (e.g. welding, surface                     monitoring and measurement will be
        of processes    treatment) may the data, acquired as a result of control, be further used in the       considerably lower than by large
                        system of product monitoring and measuring.                                            enterprises.
8.2.4   Monitoring and Control between individual operations Control between individual operations             Thanks to the controls nonconformities can
        measurement as well as output control is carried out  and sometimes also output control                be detected.
        of product     by professional inspectors, members of carried out by production workers in form
                       independent technical control          of self-test. In that case, workers are extra
                       department. All types of controls are  trained for control activity and based on
                       specified in controlling and testing   training they are entrusted with control.
                       procedures.                            Evidence of conformity/authorization of
                       Control documents archived as quality release should be documented.
                       records.
8.3     Control of     Nonconforming (half-finished) product must be separated and protected from              Even by SMEs, monitoring and analysis of
        nonconformin (even unintended) use, assessed and handled in one of the by the standard                 nonconformities is one of the inputs to be
        g product      accepted ways.                                                                          considered for decision on a
                                                                                                               corrective/preventive action.
8.4     Analysis of     Adequate analyses are a non-excludable instrument for decision making and              The standard requires decisions to be

20
        data          management.                                                                         made based on facts, not opinions.
                                                                                                          Monitoring of processes/products and
                                                                                                          analysis of acquired data is thus
                                                                                                          unavoidable even by SMEs (in appropriate
                                                                                                          extent).
8.5     Improvement   The company usually has a separate        Annual quality objectives include usually Overview of actions undertaken to
                      document to deal with improvement,        also minor concrete tasks ensuring        improve the QMS forms a part of the
                      the Continual improvement program. It development of the enterprise. Thanks to complex report on given period (being
                      expands on declared quality               a frequent actualization and completion input for management review).
                      objectives specifying minor important     in the course of the year an up-to-date
                      tasks.                                    state and effectiveness is guaranteed.
8.5.2   Corrective    The corrective action control system guarantees in both, a large enterprise as well Every corrective action has to be
        action        as a SME, that suggestions for preventing insufficiencies will be evaluated, a      proportional to consequences of
                      procedure for a corrective action will be established and executed and result of    nonconformity stated.
                      the action controlled.
8.5.3   Preventive    The preventive action control system guarantees in both, a large enterprise as      Every preventive action has to be
        action        well as a SME, that suggestions for preventing insufficiencies will be evaluated, a proportional to consequences of possible
                      procedure for a preventive action will be established and executed and result of nonconformity.
                      the action controlled.




                                                                                                                                            21
CHAPTER 4. THE STANDARD ISO 9001:2008

4.1.       Introduction
The objective of the chapter 4 of these guidelines is to present the
                                                                      Objective of
requirements as stated in ISO 9001:2008 international standard, in an the chapter 4
easy to understand way and to give examples of their fulfilment.

A new requirement of the 2008 version standard is the Outsourced
documentation of the control methods of potential outsourced processes
processes of the company (TC 176, ISO 9000 Introduction and
Support Package: Guidance on "Outsourced processes"). This
element refers only to outsourced processes that may affect product
conformity with specific requirements. For example, if an apparel
industry outsources the clothes’ sewing or processing, the control
methods over the external supplier must be documented, as well as
their results.
                                                                Structure of
Chapters 4.2 presents the main characteristics of ISO 9001:2008 the chapter 4
standard that differentiates it from the version ISO 9001:2000

Chapters 4.4-4.8 include the respective clauses 4-8 of the standard
and their interpretation. In this way it is easy for the beginner as well
as for the advanced reader to study this guidelines in relation to the
standard, so as to understand it better and fulfil the requirements.
4.2.       Characteristics and contents of ISO 9001:2008 standard
ISO 9001:2008 is a quality management system international
                                                                           Introduction
standard, issued by ISO. It was first issued in 1987, based on the British to ISO
standard BS 5750. It was first time revised in 1994 (series ISO 9001:2008
9000:1994), second time in 2000 (series ISO 9000:2000) and the last
revision is that of 2008.
                                                                            Main
This new version contains no new requirements. It contains only a few       characteristic
changes and clarifications in “Notes”. The points of clarification focus    s of the
on outsourcing, documentation, management representative,                   current
employee competence, design verification and validation, process            version of ISO
monitoring, control of nonconforming product and corrective and             9000
preventive action.
4.3.       Quality Management System (clause 4)




This chapter follows the structure and content of ISO 9001:2008 standard
in order to facilitate its interpretation. When appropriate, there are
citations of the ISO 9000:2000 and ISO 9001:2008 standards and
applications of standard requirements in practice.

          Words or sentences marked with apostrophe and italic

22
           (“italic”) are direct citations from ISO 9000:2000 and ISO
           9001:2000 standards.

          Reference of each chapter to the ISO 9001:2000 standard is
           presented after titles (e.g. clause 4.1).

          Documented procedures and records required by ISO
           9001:2000 are marked with a picture of book.



4.3.1. General Requirements (clause 4.1)




          “The organization shall establish, document, implement and
          maintain a quality management system and continually improve its
          effectiveness in accordance with the requirements of this
          International Standard.”
                                                                                              Management
´Establish, document, implement and maintain` should not be system
interpreted as separate words. Instead, it is expected to see a
functioning management system to direct and control an
organization with regard to quality, e.g. encouraging organizations
to analyse customer requirements and defining the processes that
contribute to the achievement of a product3.

The focus should be on continually improving the system’s ability to
produce conforming4 products in an effective and efficient manner.
´Improvement ´ refers to the actions taken to enhance the features
and characteristics of products and/or to increase the effectiveness
and efficiency of processes. The term ´continual ´recognises that
improvements may be made in a step-like manner and not
necessarily as a smooth, joined-together flowing process.

The only part that ISO 9001:2008 standard requires to be documented
concerns here the chapter 4.4.2. Documentation Requirements.
Otherwise organizations can by themselves determine the necessary
level of documentation. Also, it is completely within their rights to
manipulate order of the standard to suit own needs, e.g. by
rearranging the standard’s clauses into a more practical sequences.
Although documentation requirement concerns only one chapter,
our recommendation is to document also the processes (discussed
below), because by documenting them many of the standard


3 Product: result of a process i.e. result of a set of interrelated or interacting activities which transforms
inputs into outputs (process: set of interrelated or interacting activities which transforms inputs into
outputs)
4 Conformity: fulfilment of a requirement. Requirement: need or expectation that is stated, generally

implied or obligatory. Nonconformity: non-fulfilment of a requirement.

                                                                                                                 23
requirements will be rather easily met, such as control methods,
which as a separate matter are otherwise difficult to prove to the
auditor.

ISO 9001:2008 states that the top management in an organization
shall ensure the planning of the Quality Management System,
including following six (a–f) clauses:

            a) Identify the processes and their application:
                Identification of processes means that all essential activities that are
                 needed to produce the products or supply the services (or both)
                 should be identified, including management activities, provision of
                 resources and measurement. Processes are discussed in detail in
                 chapter 4.7.

             Identification     of processes and their application can be
                  documented (e.g. process map), but also an obvious knowledge
                  base shared by all practitioners might suffice. Although
                  documentation is not specifically required, it is recommended since
                  it is an illustrative and useful communication tool about
                  organization’s mission.

            b) Determine the sequence and interaction of processes:
                This is a follow-up to a) above. A useful and demonstrative tool
                 showing sequence of processes and linkages between them is a Process map
                 process map. Since it presents all essential activities, it actually
                 clarifies the whole meaning of an organization, a reason for its
                 existence (mission). Usually a process map is a one-page illustration
                 showing the sequence and interaction of top-level processes and
                 including indicators for lower level processes and additional
                 information.

                Process map is not a requirement of ISO 9001:2008, and sometimes a
                 text-only description might be more suitable in some organizations.
                 Example of a process map is presented in the figure below. The map
                 is an artificial example of the process map in a construction


                                Management                      Information              Measurement
                                                               management                of processes



                                                                        -
                                                    Order entryProduction Shipment
                                                              -
                         CORE PROCESSES




                                                                                                        CUSTOMER
 CUSTOMER




                                                    Technical support an Maintenance



                                                      Design and Development




                                          Finance               ADP                  Cleaning
                                                                                     andSecurity



                Figure 4.1 Process map of a construction company
                (artificial)




24
    company:



   In this process map there are three core processes which serve the
    external customers and bring money to the company (the outputs
    of core processes are those that a customer buys from the
    company; that is why the customer is presented in the map). At the
    top there are three boxes including management, information Process flow
    management and measurement of processes. There are activities chart
    applied to all processes in the company e.g. where management
    includes strategic decision, quality policy, management reviews etc.
    Below the core processes there are supporting activities – finance,
    ADP and cleaning and securing – to support the performance of
    core processes. When seeing this one page map, it easily presents
    the purpose of the company i.e. what products and services it sells
    to customers and what activities and resources are needed to
    produce them and to support them.

 In addition to a process map, many organization use second-level
    models displaying one box of the process map in a more detailed
    way. The most popular model is a process flow chart (see figure 6 as
    an example of a process flow chart). They identify inputs, resources,
    process owner, control methods, outputs, records and other
    necessary information concerning the process. The third-level
    models are usually too detailed to be displayed in a model, and thus
    they are usually defined in work instructions.




                                                                               25
               Name of the process: O rder entry-Production-Shipment
               Owner: General manager/ production manager
               Objectives: To process orders from order entry to a finished
               product in less than five days


                              IN      - Customers order
                                      - Drawings etc.


                            Review
                      -Do we have enough                           Packaging
                       or raw material?
                        -Are we able to
                          produce in                               Transport
                             time?                               arrangements



                                                                   Paperwork        Statistical
               Order entry to computenzed system
               -Instructions and drawings to
                                                                                    tools (e.g. 7
               production                                                           quality tools)
               -Acknowledgement to customer
                                                             Shipment to customer

                    Production or take out                            END
                        from inventory


               NO

                         Inspection



                            OK


         Figure 4.2 Artificial example of process flow chart
     
          According to Oxebridge Quality Resources, Inc. (2003) graphical
           process models provide a number of benefits, including:
           -    providing employees with an understanding of how the
                processes they perform affect subsequent processes,
                departments and employees
           -    providing a means for employees to understand what their
                internal customers (the subsequent processes shown on the
                diagrams) need from them
           -    providing a quick and easy “snapshot” of a process that can link
                to subsequent, and more detailed, instructions or documents
           -    providing a single place to summarize all important aspects of a
                process, including its objectives and owners.

     c) Determine criteria and methods needed to ensure that both
        the operation and control of processes are effective:

     This involves a set of policies, procedures, requirements and
     methods, that are needed to ensure a smooth operation of
     processes. Usually they are self-evident matters such as previews if
     all necessary information is included, procedures completed and

26
  parameters met, and other practical things to be checked out
  about activity in question.

  This clause addresses the use of statistical tools in the control of
  processes. The tools and methodology of Statistical Process
  Control (SPC) and Six Sigma can be too difficult for small
  enterprises, but some of them e.g. histogram, scatter diagram,
  fishbone chart and control chart, which all belong to Seven
  Quality Tools, are rather easy-to-use tools. The use of statistical
  tools is recommended by ISO 9001:2008, but they are not
  compulsory.




 To summarize data from a process           To study and identify the possible
 that has been collected over time,         relationship between the changes
 and graphically present its frequency      observed in two different sets of
 distribution in bar form (Brassard &       variables (Brassard & Ritter 1994).
 Ritter 1994).




To identify, explore, and graphically       To monitor, control, and improve
display, in increasing detail, all of the   process performance over time by
possible causes related to a problem or     studying variation and its source
condition to discover its root causes       (Brassard & Ritter 1994).
(Brassard & Ritter 1994).
 Figure 4.3 Some of the 7 quality tools
  d) Ensure the availability of resources and information necessary
     to support the operation and monitoring of processes:

  Resources include human resources, infrastructure and work
  environment. They are discussed in chapter 4.6.

  e) Monitor, measure and analyse processes:
     Usually monitoring and measuring are done as an integral part
      of the operation. It means that the performance of processes
      should be evaluated and rated somehow, in order to analyze
      whether they perform well and produce expected results.
      Many times the terms inspection and test are used
      synonymously with monitoring and measurement.
     Example of a metric in order processing-production-shipment
      process (a process starting from order entry, then proceeding
      to production, shipment to the customer and finally ending to


                                                                                  27
        the point when customer receives the delivery) is the number
        of shipments delivered in time. Its sub-processes, e.g.
        production, might have their own metrics such as raw material
        consumption and machining time. Some of the metrics equal
        to quality objectives, which are discussed in chapter 4.4.2.

     f) Implement actions necessary to achieve planned results and
        continual improvement of processes:

This is a claim that the processes must perform as indicated in clauses
a)–e) and continually improve their ability to do so. It is up to every
organisation whether it chooses to document these clauses or not.
4.3.2. Documentation Requirements (clause 4.2)




ISO 9000:2008 defines document as “information and its supporting Document
medium5”. It can be a “record6, specification7, procedure
document, drawing, report or standard”.

Documentation shall include:

     a) Statements      of    quality    policy    and     quality
        objectives:

        Quality policy: “Overall intentions and direction of an Quality policy
        organization related to quality as formally expressed by top
        management.”

There is no specific description of the structure and the contents of
quality policy, but there are some principles to follow: Firstly, it is the
uppermost document to address the commitment of top
management to continually improve system’s ability to comply with
requirements (incl. description of what is meant by continual
improvement). Furthermore, it has to be aligned with any other
policy and aims of the organization, be communicated, understood
and found meaningful, and be used as a framework for setting
various objectives. It is important to show dedication to improve
competence and empower personnel, and to meet statutory and
regulatory requirements and interests of stakeholders.

Usually quality policy is a one page statement signed by the top
manager. It doesn’t need to be contained in the quality manual, nor

5 Medium: paper, magnetic, electronic or optical computer disc, photograph or master sample, or a
combination thereof.
6 Record: document stating results achieved or providing evidence of activities performed
7 Specification: document stating requirements, e.g. procedure document, process specification and

test specification, product specification, performance specification and drawing

28
to be signed. Since quality policy is a formal part of the QMS, it is
usually included to the manual and signed by top management to
show evidence of its endorsement.

       Quality objectives: “Something sought, or aimed for,
       related to quality...Top management shall ensure that quality
       objectives, including those needed to meet requirements for
       product, are established at relevant functions and levels
       within the organization. The quality objectives shall be Quality
       measurable and consistent with the quality policy.”           objectives

Quality objectives are realistic objectives converted from the quality
policy and focused on all critical activities in the organization. It is
advisable to link objectives to quality policy, because it makes the
policy more understandable and concrete, and it is easier for
personnel to see what is their contribution to achieve objectives and
finally, how the objectives support intentions of quality policy. Of
course, not all the objectives and associated metrics have a visible
link to quality policy, but at least they align with the general
direction.

According to ISO 9001:2008, the objectives shall be measurable,
which usually means a comparison with some fixed unit of a known
size and capacity. An example of converting objectives and metrics
from the quality policy is presented below. Not all objectives are
measurable, and for them there should be some other measuring
system to suit particular purposes of the organization.            Quality
                                                                           manual

    b) A quality manual

A quality manual is a must, it must exist. It can be a printed or
electronic document, but it can vary in detail and format to suit best
the purpose of an organization. Quality manual specifies the Quality
Management System of an organization and proves that all ISO
9001:2008 requirements are met.

If some requirements cannot be applied due to the nature of an
organization and its product, they can be excluded. However, the
exclusions are limited to requirements within clause 7 (chapter 4.7
here). Such exclusions shall not affect the organization’s ability, or
responsibility, to provide product that meets customer and
applicable regulatory requirements. The fact that a specific process
(e.g. manufacturing, design & development) is outsourced is not a
justification for the exclusion. Instead, the organization must be able
to demonstrate that it has sufficient control to ensure such processes.
Possible exclusions can be for example
-   Design and development; where the organization has no
    responsibility for the design and development of the products it
    provides.

-   Identification and traceability; applicable where there is no

                                                                                    29
     specific   traceability    requirement   for   the
     organization’s products.

-    Customer property; where an organization doesn’t use customer
     property in its product or product realization processes. However,
     if the customer provides a proprietary design for the product, it
                                                                        Documented
     cannot be excluded.
                                                                        procedures
                                                                        (mandatory)
-    Control of monitoring and measuring devices; where the
     organization doesn’t need monitoring or measuring devices to
     provide evidence of conformity of its product (e.g. in
     service organizations).

     c) Documented procedures required by ISO 9000

The mandatory documented procedures include

-    control of documents; There shall be a documented procedure in
     the quality manual about how to approve and update
     documents, how to store and protect them (e.g. back up of files,
     safe deposits for documents, retention time), how to control and
     update external documents like industry standards and customer
     drawings and how to prevent unintended use of obsolete
     documents. At some point it is advisable to name an authorized
     person to carry out these activities.

-    control of quality records; The same procedure as above,
     applying to records presented in section e).

-    internal audit; Documented procedure about how to conduct
     internal auditing: how often, what activities and areas of the
     system to include, who will report etc. See chapter 4.8 for more
     information.

-    control of nonconforming product; Documented procedure
     about how to control nonconforming product. See chapter 4.8
     for more information.                                       Other
                                                                        documents
-    corrective action; Documented procedure about how to review
     nonconformities, determine their causes, implement action
     needed, document results and review corrective action taken.
     See chapter 4.8 for more information.

-    preventive action; Documented procedure to detect root causes
     for nonconformities in order to prevent nonconformities to occur
     in the first place. See chapter 4.8 for more information.

     d) Documents needed to ensure the effective
        planning, operation and control of processes


There are several requirements of ISO 9001:2000 where an
organization could add value to its Quality Management System and
demonstrate conformity by the preparation of other documents,


30
even though the standard does not specifically require them.
Examples may be:
         -   process maps, process models/flow charts
         -   organization charts
         -   specifications
         -   work and/or test instructions                        Mandatory
                                                                  records
         -   documents containing internal communications
         -   production schedules
         -   approved supplier lists
         -   test and inspection plans
         -   quality plans. (ISO/TC 176/SC 2: 4).

These documents are not mandatory, but by using many of the
standard requirements will be quite easily met. They act as a
documented proof to auditors about meeting the requirements, at
the same time communicating them effectively to own employees.

   e) records required by ISO 9000

These are the records specifically required by ISO 9001:2008.
Examples of each record are presented too.




                                                                              31
Table 4.1    Records required by ISO 9001:2008


Clause      Record required

5.6.1       Records from management reviews

            Example: Table of minutes, memo or equivalent document presenting
            the results and actions made in a management review.

6.2.2 (e)   Records of education, training skills and experience

            Example: An Excel-table including information of employees´ education
            and work history, training during current employment, specific skills etc.
            => All in one database; easier to predict future training needs.
            Alternative records are copies of curriculum vitae, certificates and
            attendance sheets from training.

7.1 (d)     Evidence that the realization processes and resulting product fulfil
            requirements

            Example: Usually these are normal delivery documents, such as work
            orders or equivalent documents.

7.2.2       Results of the review of requirements related to the product and actions
            arising from the review

            Example: The record of the review can be e.g. a signature on a quotation
            or an order-entry into a computerized system. The idea is to check if all
            customer requirements can be met by checking e.g. raw material
            availability and delivery time.

7.3.2       Design and development (inputs for R & D, review and verification of
            results against the input requirements, validation prior to delivery or
            implementation)

            Example: A memo, drawing or equivalent document to present all
            needed information, including product parameters, possible
            amendments, accomplished results and authorized validation of the
            product prior to delivery or implementation. The use of planning tools or
            organization’s own models of conducting design and development is
            advisable.

7.4.1       Results of supplier evaluations and any necessary actions arising from the
            evaluations

            Example: This can be discussed during internal auditing and be reported
            in the table of minutes.

7.5.2 (d)   Demonstration of the validation of processes where the resulting output
            cannot be verified by subsequent monitoring or measurement

            Example: A document showing acceptance of tolerances and
            parameters.

7.5.3       Record of the identification of the product, where traceability is a
            requirement

            Example: Usually a work order includes information for traceability.

7.5.4       Reports on customer property that is lost, damaged or otherwise found
            to be unsuitable for use. ISO 9001:2008 previews that customer data are
            also considered as customer property and have to be protected.

            Example: The use of internal complaint form.



32
    7.6 a)     Records on calibration and verification (basis for calibration or verification of
               measuring equipment where no international or national measurement
               standards exist; results)

               Example: Memo of calibration.

    8.2.2      Internal audit results and follow-up actions

               Example: Documented audit report.

    8.2.4      Indication of the person(s) authorizing release of product

               Example: Usually stated on a work order.

    8.3        Nature of the product nonconformities and any subsequent actions
               taken, including concessions obtained

               Example: The use of internal complaint form.

    8.5.2      Results of corrective action

               Example: Nonconformities are documented using an internal complaint
               form or a written complaint sent by the customer. Nonconformities are
               discussed and corrective actions composed (useful tools: fishbone,
               brainstorming). Results are documented on table of minutes and
               relevant instructions and information distributed to personnel.

    8.5.3      Results of preventive action

               Example: The use of different methods (such as Failure Mode and Effect
               Analysis, FMEA) to detect root causes i.e. factors that can, at some point
               in the future, cause conformities such as customer complaints or
               deficiencies in products.


4.4.         Management Responsibility (clause 5)




4.4.1. Management Commitment (clause 5.1)




             “Top management8 shall provide evidence of its
             commitment to the development and implementation
             of the quality management system and continually
             improving its effectiveness by

8


                                                                                                   33
      a) communicating to the organization the importance of
         meeting customer as well as statutory and regulatory
         requirements,
      b) establishing the quality policy,
      c) ensuring that quality objectives are established,
      d) conducting management reviews, and
      e) ensuring the availability of resources.”

All the above mentioned 5 ways (a–e) are mandatory options for the
top management to prove its consistent support to the
development, implementation and continual improvement of the
Quality Management System. Options b–e are discussed as own
subsequent chapters. Option a) is discussed in the next chapter and
chapter 4.7.2. In addition to customer requirements, the
management should also ensure that all statutory and regulatory
requirements are identified, communicated in the organization and
updated for the latest version. Statutory and regulatory requirements
can be in written or electronic form, since many of the requirements
are available within public databases on the internet.

4.4.2. Customer Focus (clause 5.2)




     “Top   management      shall   ensure that    customer
     requirements are determined and are met with the aim of
     enhancing customer satisfaction.”

This sentence is quite superfluous, because its requirements are
discussed in several references in the standard. For example, during
the management reviews customer requirements and priorities and
process performance can be discussed and necessary actions
taken.

The sentence itself emphasizes the obligation that top management
takes an active and leading role in ensuring all of the customer
requirements. Many times though this is achieved in normal checking
and other practical procedures accompanied with good customer
and internal communications. It is something that every organization
should know: what are those properties in our products and
operations (e.g. product properties, maintenance availability, means
of delivery, quick response time) that the customer appreciates the
most? By writing these down in the quality manual many of the

34
standard requirements will be met.

4.4.3. Quality Policy (clause 5.3)




Quality policy is the premier document to address the commitment
of top management to continually improve system’s ability to
comply with requirements. It is strongly emphasized in the standard
that quality policy must be issued by the top management. Quality
policy was earlier discussed in detail in chapter 4.4.2. a).

4.4.4. Planning (clause 5.4)




Planning includes the establishment of quality objectives and
planning of the Quality Management System, both being
responsibilities of top management. The establishment of quality
objectives was earlier discussed in chapter 4.4.2 a). Likewise, the
planning of QMS was discussed in chapter 4.4.1 a)–f).

When there are changes to QMS (e.g. because of corrective and
preventive actions or because of adaptations to specific market,
customer preferences or to statutory/regulatory requirements), their
effect on present procedures and conflicts with the system has to be
considered.


4.4.5. Responsibility, Authority and Communication (clause 5.5)




       “Top management shall ensure that responsibilities and


                                                                       35
      authorities are defined and communicated within the
      organization.”

Each person in charge of some critical activity must have a precise
conception of their assignments. Typically the responsibilities and
authorities appear as part of several documents, such as assignment
contracts, organisational charts and process maps. When
responsibilities and authorities are not documented, they have to be
communicated otherwise, for example during classroom training.
                                                                          Management
ISO 9001:2008 also requires that top management has to appoint a representative
management representative to look after QMS affairs and to report
about them to the top management. Usually the representative
organizes internal audits, reports on performance to management,
monitors customer complaints and effects of corrective and
preventive actions etc. It is intended that the representative is a
regular member of the management team. His authority and
responsibility has to be defined and communicated as any other
assignment.

Internal communication within the organization must be effective to
ensure, that correct information is transmitted from one function,
process or individual to another.

4.4.6. Management Review (clause 5.6)




      “Top management shall review the organization’s
      quality management system, at planned intervals, to
      ensure its continuing suitability, adequacy and
      effectiveness. This review shall include assessing
      opportunities for improvement and the need for
      changes to the quality management system, including
      the quality policy and quality objectives.”

The idea of the reviews is that the top management review of the
performance of the system at certain intervals laid out beforehand.
There is no maximum interval specified in the standard, but a
common practice is to have them once per year or more frequently
if needed.

The idea of the reviews is to analyse the information of audit findings
(including corrective and preventive actions), customer complaints,
process capabilities, performance indicators, product conformance,
improvement activities, needs for a change and any other relevant

36
issues in order to see where we are now and how we have operated,
and where we want to go. A common practice is that the
management representative collects the information from relevant
persons and forwards the report for a management review. Decisions
from previous management reviews should also be included, which
could be a separate page attached to a minutes of the review.

The results of the review can lead to updates of QMS, policies and
objectives, actions to increase customer satisfaction or overall
effectiveness, allocation of necessary resources and to some other
actions needed to improve the performance of QMS.

The ISO 9001:2008 standard specifically requires a documented
record from management reviews.

The format of the record is informal, it can be e.g. a
conventional minutes of meeting.

The way of conducting reviews is up to an organisation to decide:
they can be dedicated reviews or combined with any other relevant
management activity.
4.5.   Resource Management (clause 6)




The standard ISO 9001:2008 requires that the organization should
identify the resources needed to support and improve the quality
systems processes, and to achieve customer satisfaction. Resources
include human resources, infrastructure and work environment.

Concerning human resources, the standard requires that before
organizations assign personnel to an activity they will first have to define
a minimum competence requirement for the activity in terms of
education, training, skills and experience. This may be handled by e.g.
job descriptions, although specific documentation requirement doesn’t
exist. Furthermore, the standard requires that if there are competence
gaps, the organization has to provide training or take other actions to fill
the gap. It is stated in the standard that the personnel has to be aware
of the relevance and importance of their activities and how they
contribute to the achievement of quality objectives. High priority is
given to knowing the customer needs. Training and meetings are some
possible ways to ensure this awareness. The effectiveness of actions
taken has to be evaluated somehow, e.g. by monitoring the process
performance.

           There is one documentation requirement concerning
           human resources management: the organization has to

                                                                               37
maintain appropriate records of the individual’s education, training,
skills and experience. Some examples of records are curriculum vitae,
copies of certificates and attendance sheets from training.
Alternatively, some organizations may choose to fill in a separate form
for each employee, including their education, work and training history
and extension studies during current employment.

Concerning infrastructure, the organization has to identify facility needs,
provide needed facilities and maintain them, and perform these
actions on two levels: as a part of top management’s consideration
and on a individual contract basis. The ISO 9000:2008 standard defines
infrastructure as a “system of facilities, equipment and services needed
for the operation of an organization”. Infrastructure includes, as
applicable, buildings, workspace and associated utilities, process
equipment (hardware and software) and supporting services such as
transport and communication.

Correspondingly, the same standard defines work environment as a
“set of conditions under which work is performed” (conditions include
physical, social, psychological and environmental factors; physical
conditions including factors such as temperature, humidity, vibration, air
quality, lighting and cleanliness). The organization has to determine
what effect the human and physical factors have on quality and
ensure that the right conditions exist.

4.6.   Product Realisation (clause 7)




This chapter of product realisation includes planning of product
realization, customer-related processes, design and development,
purchasing, production and service provision, and control of monitoring
and measuring devices (chapters 4.7.1–4.7.6). Usually all these activities
are part of the processes, i.e. jobs and activities within an organization
with an effort to produce something for the internal or external
customers, and therefore, will be naturally handled when identifying the
processes. When the standard presents them separately, they seem a
little bit illogical.                                                      Typical QMS
                                                                              processes
In order to better understand product realization and the Quality
Management Systems as a whole, we present here the typical
processes that constitute the QMS. In figure 7 there are four typical
process groups: 1) management processes including strategic
decisions, determination of quality policy and quality objectives and
other management tasks, 2) product realization processes which
describe the sector which the organization is in, including the
activities that are needed to produce the products and services to
internal and external customers, 3) processes of resource
management including determination and allocation of human

38
resources, infrastructure and work environment, and 4)
measurement, analysis and improvement processes which ensure
that the product and QMS meet the requirements and the system is
continually improved.


                                        Management processes
                         - establishing the quality policy and quality objectives
                                  - conducting management reviews
                            - communicating customer, statutory and other
                                 requirements within the organization
                              - ensuring the availability of resources, etc


    Resource management                                                   Measurement, analysis and
                                                                           improvement processes
    Determination and allocation of
                                                                         - to demonstrate conformity
    - human resources                                                      of the product and QMS
                                                QMS
    - infrastructure                                                      - to continually improve the
                                              processes                       effectiveness of QMS
    - work environment



                                     Product realization processes
                                   - planning of product realization
                                      - customer-related processes
                                        - design and development
                         - purchasing, and production and service provision
                            - control of monitoring and measuring devices


Figure 4.4 Typical QMS Processes

Management processes are specifically required by ISO 9001:2008
standard, all used by the top management and applied to the entire
company. Resource management is put in separate in the figure, but
it can also be understood to be part of management processes,
since ensuring the resources is one of the duties of top management.

Product realization processes are different for every company,
although some processes generally exist in any company: for
production operations they typically involve activities like order entry,
purchasing and production, and for service companies service
provision e.g. customer greeting and events coordination. Note that
this chapter is the only part where exclusions can be made. This
refers to ISO 9001:2008 clause: “Where any requirement(s)...cannot
be applied due to the nature of an organization and its product, this
can be considered for exclusion...unless such exclusions do not
affect the organization’s ability, or responsibility, to provide product
that meets customer and applicable regulatory requirements”.
Sometimes an organization might decide to exclude design and
development activities or outsourced processes, if they are not an
integral part of organization’s core business and do not affect
product conformity. For example some raw material can be so
critical that its purchase from suppliers and delivery at a right time is
essential to their own production and delivery processes and thus, it
should be controlled and included to the QMS.
   Measurement, analysis and improvement processes include
    activities such as control and inspection during production,

                                                                                                         39
     criteria of nonconforming product and metrics to measure
     process performance (e.g. raw material consumption, amount of
     customer complaints, in-time deliveries). These activities are
     typically done as a part of processes, so in this respect they are
     more like the tools and methods rather than processes. They are
     used as tools to improve process performance and assure their
     smooth operations.

4.7. Planning of Product Realization (clause 7.1)




    Planning of product realization means that the organization
                                                                             Right
     should plan and develop processes for the realization of the            operations,
     product. To clarify this, it means that the organization should         documents,
     prove that it has the correct operations, documents and                 controls,
     resources in order to produce the required product, starting with       inspections and
     the enquiry process and leading through to the delivery process.        resources
     In its simplest form the proof of this is nothing more than the
     processes of the QMS. When at least the most important and
     critical processes and procedures (e.g. quality plan, project) are
     documented in written or graphically (e.g. process flow chart),
     they easily prove to the auditor both the existence of product
     realization plans and many control and acceptance criteria
     required by the standard.
    The outset for planning product realization are quality objectives,
     including customer and statutory requirements. They determine
     what the product should be. Next step is to ensure that all
     activities (i.e. processes), documents and resources needed for a
     product realization are available. This is particularly relevant when
     a new product is to be introduced. Furthermore, the standard
     requires that there are adequate acceptance methods and
     criteria on both the product and the processes.
    There is one documentation requirement here: identification of
     what records are to be generated by the processes and required
     to provide evidence of product conformance. Usually these are
     normal delivery documents, such as work order or an equivalent
     document (which will be naturally presented when describing the
     performance of processes).




40
4.7.1. Customer-related Processes (clause 7.2)




Concerning the requirements related to the product, the ISO
9001:2008 standard states that “the organization shall determine
-   requirements specified by the customer, including                  the
    requirements for delivery and post-delivery activities
-   requirements not stated by the customer but necessary for
    specified or intended use, where known,
-   statutory and regulatory requirements related to the product, and
-   any additional requirements determined by the organization.”

The first clause means that the organization has to know what customer        Customer
requirements in terms of product characteristics and delivery and post-       needs –
delivery activities such as after-sales service and technical support, it     recognized and
should comply with. Usually these requirements are mentioned in               silent needs
purchasing document. Equally important is to identify hidden and silent
needs of the customer, the needs that even the customer itself is not
conscious of. By deeply analyzing customer satisfaction questionnaires
some of these needs can be detected, but it requires much more than
just summarizing the findings – a deep speculation and retrieving of
ground reasons and root causes is needed. Other means to get insight
of customer requirements are interviewing them, participating in joint
development projects with customers, etc.

The second clause includes the requirements that are not known by the
customer but are necessary for the intended use of the product.
Examples of these might be some regulatory rules and standards.

The third clause of statutory and regulatory requirements is quite
unambiguous: statutory and regulatory requirements have to be
addressed during the design, manufacture, delivery and servicing of
the product. The information needed should be available to every
relevant person in the organization.

The last clause of additional requirements refers to the product
properties which are developed as a response to the customer’s
unstated expectations. These are the expectations that are hidden and
not mentioned by the customer, but based on the idea of the
organization of what the customer appreciates.

The ISO 9001:2008 further requires that the review of requirements
related to the product should be made before committing to supply
the product. This review should involve all relevant activities affected by

                                                                                         41
an order, for example before quotation and upon receipt of a contract
or order. For example when receiving an order, the raw material
availability, delivery time, possible amendments compared to previous
quotation and other things have to be checked in order to meet the
defined requirements. The standard specifically requires that there
should be a documented record of the review, which can be a
signature on a quotation or an order-entry into a computerized system.

Customer-related processes also include customer communication,
which has to provide the customer with correct product information
(using e.g. brochures and datasheets), and effective handling of
enquiries, orders, customer complaints and other feedback.

All the requirements of this clause 4.7.2 are naturally included in the
normal order handling process. Again, we recommend here the
documentation of the process to prove its existence.


4.7.2. Design and Development (clause 7.3)




The ISO 9001:2008 standard states that “the organization shall A systematic
determine                                                      and identified
                                                                     process of
-    the design and development stages,
                                                                     design and
-    the review, verification and validation that are appropriate to development
     each design and development stage, and
-    the responsibilities and authorities for design and development”.

           Following records are imposed by the standard in order to
           ensure that design and development activities are carried
out systematically, including, that all relevant information is available
all the time and it is reviewed regularly:

-    Records of inputs relating to product requirements; including
     functional and performance requirements, statutory and
     regulatory requirements, information on previous similar designs
     when applicable, and other essential requirements. Example: a
     technical drawing accompanied with all necessary details.

-    Records of the review of design and development; the idea is to
     check design outputs (drawings, specifications, calculation etc)
     against the specified inputs, assess how good the design is,
     identify any problems and to propose necessary actions.
     Example. Authorized signature on a drawing after review.

-    Records of verification; Verification means that there’s objective
     evidence that specified requirements have been fulfilled.


42
    Example: authorized signature on a drawing.

-   Records of validation; Validation confirms that the actual product
    performs as it should under specified conditions. Validation should
    be completed, when applicable, prior to the delivery or
    implementation of the product. Example: prototypes.

-   Records of changes in design and development; the changes
    should be reviewed, verified, validated and approved before
    implementation. Example: authorized signature on a drawing.

When the design and development activities are rather simple, it is
convenient to combine for example review and verification into a
single activity. In small organizations the responsibility and authority of
design and development very often rest with only a few people,
perhaps only with the owner. Also, many time the new ideas for
design and development come from the customer, either from the
final end-user or from a subcontractor.

When design and development is a central part of organization’s
business, it is advisable to document it as a graphical process. This
helps to establish a more logical and systematic way to produce
new products or applications.

4.7.3. Purchasing (clause 7.4)




According to ISO 9001:2008, “the organization shall ensure that
purchased product conforms to specified purchase requirements.
The type and extent of control applied to the supplier and the
purchased product shall be dependent upon the effect of the
purchased product on subsequent product realization or the final
product”.
                                                                              Control of
All the purchased products and services are not critical to the purchased
achievement of quality of the final product and therefore may not items
require same control as some other more critical item. Sometimes it is
enough to check the quantities and possible transit damages of the
dispatch, but when the purchased item is more critical, its inspection
at supplier’s premises prior to the delivery might be appropriate.
Other ways to control the outsourced processes are by carrying out
periodic audits of the supplier, by close monitoring customer
satisfaction or by providing a full specification of the process
parameters that have to be met (ISO/TC 176/SC 2: Guidance on
“Outsourced processes”).                                               Evaluation
                                                                              and approval
The standard requires that the organization should evaluate and of suppliers
                                                                                           43
select suppliers in order to ensure that suppliers meet the
requirements. The criteria for selection and evaluation have to exist.
One criterion can be a good historical performance of the supplier in
the past or the existence of certified quality management system by
the supplier. Evaluation can be done by reviewing the records of
historical performance, visiting suppliers´ premises, evaluating
product samples or conducting a survey (a written questionnaire with
a few critical issues sent to suppliers). The suppliers have to be re-
evaluated in order to ensure that they are constantly able to meet
the requirements.

           According to the standard, there should be records of the
          results of evaluations and any necessary actions, like
records of historical performance of the suppliers, a list of approved
suppliers, etc.

Successful purchasing calls for a clear definition of the purchased
item (product characteristics, quantity, required delivery date,
possible testing or inspection, etc). If there are any requirements for
review, approval or other qualifications, they should be stated
clearly.

Verification of purchased product means that the products are
inspected or otherwise verified in order to ensure that they meet
specified purchase requirements. The standard does not say that all
incoming goods must be inspected. Instead, the organization can
freely decide methods of verification. Sometimes it can be a review
of purchase documents against delivery note or at the other end, an
extensive inspection of the goods before their dispatch. Person
responsible for purchases should possess relevant knowledge and
skills to make a complaint to supplier when necessary, since this is the
way to improve both their own and the supplier’s operation.


4.7.4. Production and Service Provision (clause 7.5)




    The ISO 9001:2008 standard states that “the organization shall
     plan and carry out production and service provision under
     controlled conditions”.
    This is a standard requirement to make sure that production and
     servicing processes are effective and that the focus is on the
     prevention of nonconformities rather than on inspection and testing
                                                                          Effective
     to detect them. Controlled conditions include, when applicable, that processes
     there is adequate product information available (specifications,
     drawings, work orders etc), suitable equipment and preventive


44
    maintenance are used, products and processes are monitored and
    measured with applicable devices, and that there are suitable
    methods and procedures for a product release and service delivery.
    These requirements may sound artificial, since in practice many of
                                                                        Prevention of
    them are already in use – order processing surely has adequate
                                                                        non-
    documentation, suitable production equipment, exact product conformities
    parameters to meet the qualification, and specific procedures to be
    done before the dispatch or service delivery. The language of
    standard sounds artificial, but it refers to practical everyday
    procedures that have to be effective. Great emphasis is on
    preventive actions: on preventive maintenance to ensure that
    machines and equipment are working, on preventive identification of
    root causes that might emerge in a form of nonconformities, errors,
    lack of information, customer complaints etc.
   If there are special processes where the resulting output cannot
    be verified by monitoring and measuring and where deficiencies
    become apparent only after the product is in use or service has
    been delivered, it has to be proved that these processes as
    themselves are qualified along with the personnel. This is called a
    validation of processes. Examples of these special processes are
    food preparation and air traffic control services.
   Referring to the previous chapter, there should be records
    verifying that the special processes are qualified and able to
    produce planned outputs. Example: a document showing
    acceptance of tolerances and parameters or a memo of
    calibration.


   Concerning the product identification and traceability, the ISO
    9001:2008 standard states that “where appropriate, the
    organization shall identify the product by suitable means
    throughout product realization”. Identification means that when
    the products cannot be identified inherently, they should be
    marked, labelled and located in a way that connects the
    product to a particular batch, work order, raw material and any
    other source of origin, and shows the status of the product (e.g.
    tested, inspected or not).
   If traceability is specifically required for example by the customer,
    the organization shall control and record the unique identification
    of the product. Example: Usually this information is recorded on a
    work order. Sometimes even a work number suffices to track
    each process step.


   Furthermore, the ISO 9001:2008 states that “the organization shall
    identify, verify, protect and safeguard customer property
    provided for use or incorporation into the product”. Customer
    property is any material or supplies provided by the customer to
    the organization, e.g. material and components, tooling,
    packaging material and drawings.
   “If any customer property is lost, damaged or otherwise found to


                                                                                        45
     be unsuitable for use, this shall be reported to the
     customer and records maintained.” Example: an
     internal complaint form.


    Generally, the organization should preserve the products,
     materials and components from receipt through processing to
     delivery in a way that damages and deterioration won’t occur.
     Preservation includes identification, handling, packaging, storage
     and protection. Storage and handling are especially important
     for time and moisture sensitive material (e.g. foodstuffs),
     components that can deteriorate because of electrostatic
     discharge and for other equivalent material.
4.7.5. Control of Monitoring and Measuring Devices (clause 7.6)




This clause of monitoring and measuring devices concerns the fact
that the organization should, when necessary, measure the product
and monitor process performance with applicable devices in order
to be convinced that the product will meet all its requirements. In
order to understand this better, in practice monitoring and
measuring usually means inspection and test during relevant points
e.g. during production.

Monitoring and measuring device can be a “measuring instrument,
software, measurement standard, reference material or auxiliary
apparatus or combination thereof necessary to realize a
measurement process” (ISO 9000:2008).

When it is necessary to ensure valid results, measuring equipment
should be calibrated or otherwise verified, “against measurement
standards traceable to international or national measurement
standards; where no such standards exist, the basis used for
calibration or verification shall be recorded (ISO 9001:2008)”.

There should be records of calibration and verification
results.

Example: The organization may wish to keep a list of devices to be
calibrated at certain time intervals. This can be a simple Excel-table.
Results of each calibration can be attached to the list.




46
4.8.   Measurement, Analysis and Improvement (clause 8)




This clause includes four main chapters: monitoring and
measurement, control of nonconforming product, analysis of data
and continual improvement.

Monitoring and measurement

The clause of monitoring and measurement requires that the A system to
organization has to show that it has established a system which provide
                                                                         information
produces information of 1) customer satisfaction, 2) internal audits, 3)
process performance and 4) product conformance, in order “to
demonstrate conformity of the product, to ensure conformity of the
quality management system, and to continually improve the
effectiveness of the quality management system”. The idea is to
prove that there is systematic way to monitor processes and
products (e.g. by inspection and test), analyse customer-, product-
and process-related information, and based on this information take
relevant improvement actions. When the standard puts it as a
requirement it might sound complicated and difficult, but in practice
they are usually normal information flows, inspection and checking
against tolerances during the production, and other so called self-
evident back-up things in everyday operations. When processes are
documented, it proves the existence of all relevant requirements.

The standard emphasizes the meaning of customer satisfaction. The
ISO 9001:2008 standard states: “As one of the measurements of the
performance of the quality management system, the organization
shall monitor information relating to customer perception as to
whether the organization has met customer requirements.” It is
essential that everybody in the organization know what is meant by
customer satisfaction and dissatisfaction. Information should be
gathered on both. The ways to get feedback from the customers are
e.g. visits to customers´ premises or vice versa, direct communication
with them, complaint handling, customer satisfaction questionnaires
and news in the media.

The ISO 9001:2008 standard requires that “the organization shall
conduct internal audits at planned intervals...” Internal audit is a
systematic evaluation performed within an organization to ensure
that the organization employs the principles of standard
requirements and the processes perform according to standard and
the organization’s own requirements. Auditing should be done at
planned intervals, but at least annually during twelve months and
covering all the units of the organization.

                                                                                       47
At first, the management and/or management representative has to
plan an audit programme to decide what activities and areas of the
system are the most critical ones and therefore to be audited at that
time. The activities and areas of quality management systems where
problems, nonconformities and changes have been more frequent
are subject to be included. Also, the findings of previous audits
should be considered if they reveal the areas of nonconformities.
During the auditing all deficiencies should be identified. In a
following page there’s an example of a simple audit list including
areas to be audited and their time schedule (Table 1). In this
example, the matters that are checked and have no deficiencies
are marked with a cross. If deficiencies are noticed they are written
down under the list. The idea is to check matters in any month during
one year.

Table 4.2. Audit list (abridged and artificial version)

Area / activity to be audited               Jan   Feb     Marc   April   May   June
                                                           h

Acceptance criteria for the most
important suppliers are defined and in
use. There is a record of approved
suppliers.

The performance of suppliers is monitored
                                             X
and evaluated regularly. Feedback is
given to suppliers.

Purchasing and sales orders include all
                                             X
relevant information and there is no
possibility for false interpretation.

Methods to check incoming goods are
                                                                  X
defined and in use.

There are predefined areas to be used
                                                           X
for the storage of goods.

Condition of goods in storage is
                                                           X
evaluated at relevant intervals. To
prevent the damage and deterioration a
proper storage is applied.

Means to identify products, parts,
                                                           X
components, raw material etc is used
(e.g. marking with a stamp, a part
number on a work order).

When traceability is required, all the
                                                   X
material and parts used can be identified
from a written document.

The criteria for nonconforming products
                                                   X
exist and are applied.

          The ISO 9001:2008 standard requires a documented
          procedure for internal audits: “The responsibilities and
requirements for planning and conducting audits, and for reporting
results and maintaining records shall be defined in a documented

48
procedure”. Documented procedure can be mentioned in a quality
manual, defining the scope, frequency, methods of auditing and
records (such as list presented here) to be generated.

The organization should have at least two internal auditors since the
one performing audit should not audit his own work. Usually auditors are
organization’s own employees but when necessary, they can be
outside consultants too. In a small organization where there are only
few employees, the one auditor usually is the owner and another is
some manager or person with required knowledge of an audited
matter. The auditors report the results of auditing to the management
who is responsible to ensure that corrective actions are taken without
undue delay to eliminate detected nonconformities and their causes.
There should be some evidence that corrective actions are taken and
they are effective.

The ISO 9001:2008 standard clause of monitoring and measurement of
processes, “the organization shall apply suitable methods for monitoring
and, where applicable, measurement of the quality management
system processes”, means that once the organization has determined
suitable methods it should implement them. This clause is actually a
restatement for what has been mentioned earlier about monitoring
and measuring processes.

Similarly, the clause of monitoring and measurement of product, “the
organization shall monitor and measure the characteristics of the
product to verify that product requirements have been met”, is a
restatement to implement the methods. Methods can be e.g.
inspection and test by the person performing the task, or taking of
testing samples at certain time intervals. Furthermore, “evidence of
conformity with the acceptance criteria shall be maintained. Records
shall indicate the person(s) authorizing release of product”. In practice
this requirement is met as a consequence of normal checking and
inspection procedures and using relevant documents. For example
concerning the production process, if the product has no deficiencies it
proceeds to the next stage e.g. to packaging and further to shipment.
Examples of the records that indicate acceptance criteria and
authorized persons usually are work orders or records in operations
management programme. They also track the order to the correct raw
material, components, machines and employees.

Control of nonconforming product

The ISO 9001:2008 standard states: “The organization shall ensure that
product which does not conform to product requirements is
identified and controlled to prevent its unintended use or delivery...”

           “...The controls and related responsibilities and authorities
      for dealing with nonconforming product shall be defined in a
documented procedure…Records of the nature of nonconformities
and any subsequent actions taken, including concessions obtained,
shall be maintained.”


                                                                            49
When nonconforming product is corrected, the standard requires
that it should be subject to re-verification by a relevant authority or,
where applicable, by the customer.

Analysis of data
                                                                           Continual
This clause concerns the organization’s requirement to determine, improvement
collect and analyse appropriate data relating to customer
satisfaction, product conformity, characteristics and trends of
processes and products including opportunities for preventive
action, and suppliers, “to demonstrate the suitability and
effectiveness of the quality management system and to evaluate
where continual improvement of the effectiveness of the quality
management system can be made”.

Improvement

This clause is, by and large, a restatement of the above: “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”.

In order to simplify this circle of continual improvement it can be
described as follows: Quality policy and quality objectives (derived
from the quality policy) steer the organization towards the targets, as
they tell the employees where to aim at and what kind of
performance is needed from everyone in order to reach the targets.
Audits are conducted to find out whether processes perform
according to the principles of standard and targets set by the
organization. They also address the possible opportunities for
improvements. If any deficiencies are noticed, they are handled
during management reviews along with any other relevant
information relating to customers, suppliers, own products and
processes etc. As a result, corrective and preventive actions are
taken for the improvement. Naturally, improvement actions are
implemented when there is a need for them, not only as a result of
audits and management reviews. It is essential to empower and
commit personnel to make improvement actions in relation to
everyday operations.

The ISO 9001:2008 standard puts a great emphasis on the elimination
of root causes. It is not enough to solve the symptom of the problem,
but the root cause of it in order to prevent it recurring. Typical root
causes are lack of information and training.

The ISO 9000:2008 standard explains, that “corrective action is taken
to prevent recurrence whereas preventive action is taken to prevent
occurrence”. In other words, preventive actions try to eliminate the
root cause of the problem in order to prevent its occurrence in the
       first place. When concerning corrective action, the problem
            has already happened and actions are taken to prevent


50
its recurrence again in the future. It has to be noted that corrective
and preventive actions do not have to be implemented for every
nonconforming situations, but a cost-value consideration has to be
made to decide whether actions are worth for implementation or
not.

The standard requires that there should be a documented
procedure both to corrective action and preventive action,
including
          -   reviewing of nonconformities             (not    concerning
              preventive action)
          -   determining the causes of nonconformities
          -   evaluating the need          for   action       to   prevent
              recurrence/occurrence
          -   determining and implementing action needed
          -   records of the results of action taken
          -   reviewing corrective/preventive action taken.
4.9.   Permissible Exclusions
Permissible exclusions were discussed in chapter 4.7 Product
realization. To make a restatement, such exclusions shall not affect
the organization’s ability, or responsibility, to provide product that
meets customer and applicable regulatory requirements. The fact
that a specific process (e.g. manufacturing, design & development)
is outsourced is not a justification for the exclusion. Instead, the
organization must be able to demonstrate that it has sufficient
control to ensure such processes. In chapter 4.4.2 b) there were some
examples of possible exclusions.




                                                                             51
CHAPTER 5. STEPS TO IMPLEMENT A QMS

5.1.   Steps to decide
Every decision making process in a company is accompanied by a           Some
more or less detailed research of data or at least discussion of         preparation
experience    and    personal    opinion     of     business leaders.    work is
Implementation of a quality management system, which could be            necessary
quite a challenging task especially for smaller sized companies, also
needs a certain amount of preparation and planning.


5.1.1. Decision to implement a QMS
If a company wants to decide if it should implement a QMS it has to      Definition of
take a lot of different facts into consideration, which could be         quality manager
worked out in an internal management meeting. Main players in this       / First information
meeting are the general manager who has to decide from a more            to the
strategic viewpoint, and the existing quality representative (quality    management
manager) who should be aware of more QMS details (necessary              level
resources, costs, etc.) and its business impact. The marketing/sales
manager or a technical officer may support the decision making
process by daily business experience.

Some companies start their own research but most of the time the
decision is made after a deep discussion of the topic with a
chances and risk analysis, which is strongly connected with the later
first planning of resources (5.1.3). In addition to that, a person who
will take the responsibility for the next steps has to be named – of
course the quality manager (QM) is the best-qualified person. If
there is no quality manager available who has the necessary
knowledge about this topic, it might be a worthwhile investment to
send the management representative to an external training on
QMS. Quality managers should be able to build and improve the
management system but also bring in as well an excellent level of
social competence.

Once the decision is made by the top management as another
early step the whole management level should be informed and
committed to the QMS because full management support is a
crucial factor for a successful implementation process. Lack of
information about what a QMS stands for and which changes will
occur might create misunderstandings and restrictions against the
implementation process. The top management has the task to
create a positive awareness for this new quality initiative by
providing the necessary information and participative leadership.

Another important decision the management has to take is the level
of outsourcing during the implementation process, which means the
scope of consultant involvement.




52
5.2.        First self assessment
The first self assessment or horizontal assessment (some or all aspects                 Check lists /
of the ISO standard) has the goal to figure out which actual level of                   Strenghts and
QMS maturity the organisation has and where the fields of highest                       weaknesses
potentials are as every organisation that is seeking certification is                   analysis / Force
required to:                                                                            field analysis

           Formalize the way things are done
           Demonstrate assurance that things are done in the right way
           Monitor the effectiveness of what is done and
           Improve

 For this reason using some tools could be very helpful. Beside some
 software products which are provided by many different
 companies and are designed to help identifying “unknown land in
 the ISO world”, check lists, strengths-weaknesses analysis and
 forced field analysis are often used tools for the first assessment.
 Normally the first self-assessment is a mixture of analysis and
 workshops, respectively in small companies one single assessment
 workshop. The output of all these methods and tools is to measure
 and assess the actual state of the organisation against the
 elements of the ISO standard.

 Checklists are the most frequent tools, which are used in this phase
 and can easily be found in ISO literature. In long lists there are
 detailed questions about every single element of the ISO but for
 smaller sized companies a certain amount of simplification work is
 often necessary because in this case the organisational structures
 and documentations are less complex. The best way to conduct
 checklists is an individual interview with key persons of the
 company.

Chapter 5:
Management
responsibility        Question:                      Yes   No Remarks

5.1.1                 Does a quality policy exist?   X

5.1.2                 Do management reviews                X   There is no systematic
                      exist and do they include                customer satisfaction
                      all essential aspects?                   analysis

5.1.3                 …?                                   X   ……


Figure 5.1 Example of a first assessment checklist.


 In the workshop itself the concentrated results should be presented
 and discussed. One of the most common supportive tools is the so
 called strengths and weaknesses analysis, whereby the areas of
 high ISO maturity are highlighted against the areas of extraordinary
 low maturity in a kind of balance sheet.


                                                                                                      53
Input                                                                                       Output
 Definition of ISO elements                                       Level of maturity
                                                                 Level of maturity
                                                                   Level of maturity         Visualization of
     In columns.                                                                              strengths and
                                    Elements of ISO
                                 Elements ofISO
                                    Elements of ISO      Weak
                                                          Weak
                                                          Weak        Average
                                                                       Average
                                                                       Average    Strong
                                                                                   Strong
                                                                                   Strong     weaknesses.
  Assessment of maturity
     levels of the elements.                                                                 Definition of
                                       Processes
                                      Processes
                                       Processes
 Identification of critical                                                                  improvement actions.
     elements (low level).             Continual
                                Continual Improvement
                                Continual Improvement
                                     Improvement
                                       Supplier
                                 Supplier Development
                                 Supplier Development
                                 Supplier Development
                                     Development
                                         ……..
                                         ……


                                         ……
                                         ……


                                         ……
                                         ……


                                         ……
                                         ……



 Figure 5.2 Example of a strengths and weaknesses analysis

 Beside this comparison of the organisational state in relation to ISO
 elements, human aspects and the organisational change process
 should be taken into consideration. A very simple method to do this
 is the so called force field analysis (FFA). The underlying model of
 the FFA states that during a change process there will always be
 enforcing and constraining forces in an organisation such as the
 mind set of specific employees (e.g. members of works council),
 experience with former changes, motivational aspects, incentive
 systems, etc. As well as in the strength and weaknesses analysis
 both kinds of forces are listed and discussed. As the major result
 enforcing aspects should be supported by actions and
 constraining aspects should be weakened or eliminated.

     Input                                                                                  Output
      The goal has to be defined                                                            Visualization of project
       (e.g. efficient                                                                        forces
                                              Which forces are effecting the goal?
                                              Which forces are effecting the goal?
       implementation process).
                                                                                             Determination of
      Identification of                                                                      improvement activities
       reinforcing and
       constraining forces
       (brainstorming)

      Results in form of a balance                Reinforcing         Constraining
       sheet                                         aspects             aspects


      Support reinforcing aspects
       and eliminate constraining
       aspects




 Figure 5.3 Force Field Analysis

 With the collected, discussed and committed knowledge of the
 actual ISO maturity and change aspects, a more detailed
 implementation plan can be developed.




54
5.3.           Detailed implementation plan
The implementation plan is strongly interrelated with all afore mentioned                               Project
contents and draws a general picture of what should be done and                                         organisation /
when it should be done until the certification audit has been successfully                              Goal description
passed and encompasses the system building phase, the training                                          / Early planning
phase, the improvement phase and the audit phase of the                                                 of trainings /
implementation project.                                                                                 Definition of
                                                                                                        quality policy
Between each of these phases milestones should be defined which are
in most cases points for top management reports or workshops. For
example the milestone after the system building phase could be a
completed QM handbook plus ready designed and described
processes. After the training phase all learning and training activities
should be completed whereas the milestone for the improvement
phase could be a successfully passed internal audit with a timetable for
the elimination of minor and major nonconformities. And finally the audit
phase could be completed by the certification of the company
whereas the last phase (improvement) shouldn’t find an end at all.
           Phase 1                              Phase 2                               Phase 3



               Self Assessment                         System Building                    Improvement
Start                                                                           01/ 04
                                          10/ 03
09/ 03                                 Completed                             Completed
                                          first                                system
               Data analysis              self    Generation of Q M            draft  ….
               Strenghts -            assessment   Handbook
                weaknesses                           Identification of Processes
               Force field analysis                 Definition of
               …                                     Documentation
                                                     Design of records
                                                     Management Commitment
                                                      and responsibilities
                                                     ….



 Figure 5.4 Example of an implementation plan with milestones (no details are
shown in this graph)

Besides phases and milestones the project organisation should be
clearly defined. Even in small companies it doesn’t make sense that
one single person is in charge of every activity during the whole
implementation project. For this reason it is common to create a multi
layer project organisation. This means that different employees of
various departments are responsible for smaller tasks; the quality
manger or the external consultant does the coordination and the main
decisions and directives are given by a steering group which consists of
top management members. As mentioned above, the steering group
is only active in milestone workshops or if there are exceptional
decisions to make.

All subprojects and tasks have to have at least a very short form of goal
description:
              What is to be done (if necessary in form of a detailed


                                                                                                                     55
         description)?
        Until when should it be done (check the correlation with the
         master plan)?
        Who should do it?
        Which resources     are   available   (staff,   money   and
         infrastructure)?

One of the core elements of systems engineering – a widely used
philosophical approach on how to build a QMS – states that it is
crucial to establish a model or system from the top perspective and
on this basis continue step by step towards more detailed levels. This
“low to high detail” dogma is as applicable in the implementation
plan: start with the master plan (phases) and develop top down
until the most detailed level is reached. Feedback and results are
reported bottom up and are collected and condensed until the
top level (steering group meeting) is reached. Only under these
conditions can a permanent flow of information be guaranteed.

Of course many software solutions are available to support these
planning issues (e.g. MS Project) but for small enterprises, in
particular, where the knowledge of project management tools is
often not very well established it sometimes makes more sense to
sketch the plan simply on a flip chart and pin it on a wall.

The earlier training activities can be done the better for the QMS
because the more employees that are aware of the new system
and are involved in the implementation process, the easier the
information will flow. Especially in the first phases as it may be
necessary to train selected groups of employees in the basics of ISO
standards and in the tools they will have to use during the following
phases (process orientation, documentation of quality relevant
issues, etc.). Training and quality education of employees is one of
the most important and regarding the duration of the
corresponding activities, one of the most underestimated aspects.

One of the first steps in the implementation plan is the discussion
and definition of the quality policy and quality objectives wherein
the top management draws a picture of strategic quality issues. As
a rule the quality policy describes how the company is aiming at
permanent improvement via the QMS, the importance of quality for
every single member of the organisation and the relationship with
customers and suppliers. Of course it has to be aligned with the
company’s general strategy, it should be known and understood by
all employees and should be much more than only a lip-service by
the company’s leaders.


5.4 Development of QM Handbook
The Din ISO 9000:ff, also known as process-oriented standard, Structure of
requires a process-oriented composition within the company but documen-tation
also of the QM system. The standards demand the development / Customer

56
and the introduction of a documented quality system, which can benefit
consist of different elements. One of these elements is the QM
handbook, where the structure of the documentation is set down;
usually the content is oriented to the original structure of the DIN ISO
9001:2000 (guidelines on creating the handbook ISO/DIS 100 13
"Guidelines for developing handbooks") using in most cases the
following chapters.
      Quality Management System
      Management Responsibility
      Resource Management
      Product Realization Requirements
      Remedial  Requirements-Measurement,            Analyses     and
       Improvement

In addition, it must contain, or refer to, the instructions on procedure
that are an integral part of the QM system. By the figure of the
process architecture of the company using a systemic process
model, varying levels are visualised. These levels correspond with the
different documents within the QM system. Typical examples are: in
level 1 - statements of the quality policy and quality objectives, in
level 2 - process instructions, introduction on procedures (describing
responsibilities, purviews, and relationships with the staff and stating
how different activities must be performed), in level 3 - work
instructions (descriptions of activities related to the workplace) and
other quality relevant documents.




Figure 5.5 QM Handbook Hierarchies

From the customer's view, the QM handbook offers the possibility to
verify the supplier has adhered to the specifications and guidelines
of the customer and is making every effort to fulfil the quality
requirements. So the QM handbook documents the operative
installation and further development of the whole Quality
Management System.


5.5 Design or check up of processes

                                                                           57
Processes are the core element of the “new” (2008) revision of the           SIPOC method /
ISO 9000 standard (available from the 1st January 2004). In almost           Process map /
every element there can be found one or more statements how                  Levels of
processes should be monitored, measured and improved whereas a               processes /
closer description of the way that processes should be identified is         Performance
not provided.                                                                indicators

First of all it is necessary to define what is understood by processes. In
general a process is a logical and sequential flow of activities which
are repeatable and fulfil the following criteria:

        Clear starting point and end (process boarders)

        Well defined input factors (material, information, human
         resources, etc.) and a clear output (result)

        Suppliers and customers

A tool, which encompasses theses elements, is the so called SIPOC
method. SIPOC stands for Supplier – Input – Process – Output –
Customer and helps to identify the main aspects of processes. As
the first step the process is sketched as a black box (top down
procedure) and the starting point and the end are determined.
Then continue to develop on the right side of the process and
proceed with the output and the customers. A critical point is the
correct identification of customer’s needs and later the continuous
improvement in fulfilling these needs. As a last step the input is
specified and the suppliers are named. It is important to understand
that suppliers are not only external companies but also internal
departments or processes (internal supplier-customer relationships).

As mentioned in the preceding chapter, in most companies
processes are seen in different levels. The highest level of process
visualisation is called a process map and shows the interaction
between the main processes of the organisation. In these process
maps, there can be found, as a rule, three different types of
processes:

        Core or key processes: these are value adding processes
         where the start is normally defined by a certain customer
         need and the end is the delivered good or service – this
         means core processes are so called customer-to- customer
         processes.

        Support processes: core processes are normally not able to
         work properly without a certain amount of support. For
         example: a production process needs the support of a
         maintenance process – customers are not willing to pay for
         the maintenance, but it is necessary for a continuous
         performance of the value adding process.

        Management processes: these processes are mainly
         planning, steering and development activities, like strategic

58
         planning or controlling. Again, customers do not pay for them
         but they are necessary for the long term survival of the
         company

Normally, the definition of a specific process map is the first step in
this project phase: main processes are identified, interactions are
visualised and process owners are named. The latter is one of the
most important functions in a process oriented organisation. Process
owners (PRO’s) are responsible for the detailed definition and
sufficient resource supply of the process. In addition to that, they
have to care for the right measurement tools (performance
indicators) and continual improvement.


              Management processes
              Management processes                          Support processes
                                                            Support processes
                      MP1: Strategic
                       MP1: Strategic                   SP1:
                                                     SP1:         SP2:
                                                                   SP2:    RP3: Human
                                                                          RP3: Human
                       Contolling                 Maintenance Procurement Resources




                                        Key processes


 Customers              KP1:
                        KP1:                   KP2:
                                                 KP2:                   KP3 KP3:
                                                                                        Customers
             Research and Development
             Research and Development          Production
                                            Production                  : Marketing
                                                                      Marketing




Figure 5.7: Example of a process map

Once this process map is sketched and approved by top
management every process has to be defined in more detail by
process owners until in level two or three a clear structure is
achieved which can be displayed in a flow chart. In these flow
charts step after step of the processes are defined and adjusted
together with some additional information:
        Responsibilities
        Corresponding documents and records
        Interfaces with other processes
        Flow of information

A process owner also to find the right performance indicators
because the ISO standard demands monitoring and improvement of
processes. Most of the time output indicators (customer satisfaction,
productivity, yield, etc.) are defined but in many cases input or process
indicators could be of great help (e.g. cost, time, quality).

Of course this detailed definition of processes needs to be coordinated
by the quality manager or/and the external experts. At the end of this
phase the company has a well defined process map or model where
different levels lead to detailed descriptions of procedures which have
to be linked to the QM handbook as described in the preceding
chapter.


5.6 Final implementation – QMS kick off

                                                                                                    59
Now, as the formal aspects of the QMS are established the official
release of the system should be the next step. Management and the
management representative have to ensure that every process and
procedure, which is followed together with every document and
form, which is used in the organisation has to be part of the QMS
from now on. On the one hand the new tools have to be provided
by the system and on the other hand the users have to have the
capability to work with them. Normally employees are informed
about the system in advance but now they have to be trained in
procedures and tool handling in quality relevant areas, which could
be an extensive task especially in larger companies.

5.7 Internal Audit
Internal Audits – also known as First Party Audits - are normally used      First party audit /
before the first official certification and in addition during two          Preparation and
following independent audits. The organisation should conduct               behaviour /
internal audits at planned intervals to determine two different             Audit report
characteristics of the quality system. Firstly it should prove the
conformity to the planned arrangements, to the requirements of the
international standard and to – their own – quality management
system requirements and secondly the effective implementation and
maintenance.

The flow of the internal Audit consists of three major steps and is
defined in a documented procedure:

        Prearrangement, information and scheduling: all involved
         persons should be informed on time when and how long they
         should be prepared for the internal audit.

        Controlling QM documents: these documents could be QM
         handbook, process descriptions, quality reports, procedures,
         working instructions, etc. An experienced auditor will
         recognize the critical areas and elements and will focus his
         interview on these fields.

        Internal audit: (introduction, analysing and testing, variation
         description, final report, and documentation) most internal
         auditors use a predefined checklist which is the output of the
         preceding document controlling phase for interviews and
         make additional site inspections. Audit checklists ensure that
         nothing is missed, highlight critical areas and provide a record
         of the acceptable and unacceptable evidences. All
         unacceptable evidences must be recorded in detail for future
         tracing and for non compliance reporting. Every action during
         the audit should follow the circle: ask – look – check – record.

An audit program should be planned, taking into consideration the
status and importance of the different processes running in the
company. The criteria for the audit, scopes, frequencies and methods
should be defined. Especially in smaller companies the management

60
representative is also the auditor. This person is responsible for the audit,
should be objective and impartial, the only restriction is to audit the
own work. To sum up, there are 8 major points which describe the
behaviour of an internal auditor during the auditing process:
      Act goal oriented
      Determinate employee motivation
      Define your minimum standards of acceptance
      Consider benefit and work relationship
      Count only facts and no assumptions
      If a nonconformity is found do not criticise, look for the reasons,
       record all details, try to assess if the nonconformity is a single
       case of if it is “normal”
      Understand yourself as a partner of the auditees
      Communicate honestly (explanations, open ended questions,
       good listening)

As a result an audit report with all nonconformities is generated and
presented to the management. Such a report should include:
      Scope and target of the audit
      Date and signature of auditor
      Members of the audit team
      Referring documents (ISO 9000:2008, QM handbook, etc.)
      Detected Nonconformities
      Assessment of ISO standard conformance
      Capability of QMS achieving the defined quality objectives

The management who are responsible for the organisation being
audited should ensure that identified problems (corrective and
preventive improvement activities) are solved without delay. The
objective is to detect and eliminate the reasons for nonconformities
and their causes. Following activities should include the verification
of these actions and the reporting and documentation of the results.

Only when the results of the internal audit shows a high
conformance to the ISO 9000 standards should a company apply
for an external audit, which is the next logical step. If many major
nonconformities are detected during the internal audit, the
company should really think about postponing the external audit
and work on the elimination of nonconformities. This is particularly so
when problems emerge among employees and new/further training
is required which often costs more time than fixing documentation
or system problems.



                                                                                61
5.8 External audit
External audits, certification audits or third party audits are the
highlights of all ISO 9000:2008 implementation processes. Many
problems and surprises could be avoided with a professional choice
and management of the certification process because a lot of
companies underestimate the importance of this part.
5.8.1.   Certification Body
When choosing a certification body to carry out ISO 9000:2008 Choosing a
certification, there are some aspects an organization needs to take certifcation
into account. The first point is that an organization can implement body
ISO without seeking certification, but many reasons speak for an
independent audit: for example if it is a contractual or regulatory
requirement, if it is a market requirement or to meet customer
preferences or if the management thinks it will motivate staff by
setting a clear goal for the development of the management
system.

If the decision has been made to apply for a certificate some
criteria for the choice of the certification body should be taken into
account:

        It has to be clarified whether or not the certification body has
         been accredited and, if so, by whom. Accreditation means
         that a certification body has been officially approved as
         competent to carry out certification in specified business
         sectors by a national accreditation body.

        The cheapest certification body might prove to be the most
         costly if its auditing is below standard, or if its certificate is not
         recognized by the company’s customers.

        It should be evaluated whether the certification body has
         auditors with experience in the organisation’s business sector.

Maybe most of all “harmony” between auditor and auditee should
be taken into consideration because both sides have to cooperate
for a long period of time.
5.9 Continual improvement
Continual Improvement is one of the cornerstones of the ISO 9000                  Management
standard and can be found in almost every single element. Every                   review / Process
company selects its own approach on how to achieve this target                    management /
because “the right way” of improvement actions is determined by                   Continuous
several factors like speed of change, knowledge level of                          improvement
employees, application of tools, number of hierarchies and                        process
leadership style. Independent from this, the ISO 9000 standard
demands that every single individual has to know the quality goals
and how he or she may contribute to them. For this reason continual
improvement has to be established on every level of processes and
in every element of the QM handbook whereby three main levels of
improvement can be subdivided:


62
      Top management improvement: this organisational level
       has to take care that the framework for a QMS in working
       order (effectiveness and efficiency) is permanently
       improved, products fulfil customer requirements and use
       mainly the instrument of management reviews which is
       described in the ISO 9000 standard (audit results, customer
       feedback, Process performance, product conformity,
       preventive and corrective actions, recommendations for
       improvement, etc.).

      Process owner improvement: as already mentioned,
       process owners have to take care of the optimum
       performance of their processes and have to monitor,
       measure and improve them continuously. The main
       instrument is the use of process oriented performance
       indicators.

      Employee improvement: every employee is responsible for
       producing the best possible quality (zero waste and zero
       defects) and for this reason continuous improvement
       process (CIP) activities like proposal systems or quality
       circles are established.

Many companies face the problem that after a successful
certification audit everybody returns to normal business where
continual improvement actions are reduced to a minimum. As
mentioned above, the ISO standard demands permanent
activities for continual improvement, which should animate
companies to keep up their efforts for high customer satisfaction
and efficient internal processes. It can easily be seen that both
elements are definitely success factors of almost every company.
Companies which use the QMS as their improvement driver
develop success oriented QMS structures; in contrast to that so
called “certification QMS” fulfil the minimum requirements but do
not boost their company towards a quality leader on the markets.

As a lesson learned many companies use internal audits (system
audits, process audits, etc.) as a regular tool and discuss the
results in the form of corrective and preventive improvement
actions standardised in several management meetings.
Companies that have achieved such an integrated improvement
where the QMS is the main instrument for standardisation,
measurement and improvement have reached one of the
highest levels in QM.




                                                                     63
CHAPTER 6. ADDITIONAL REQUIREMENTS
As stated in chapter 4.2 of the present guidelines, ISO 9001 does not
only consider customer requirements but also regulatory and legal
requirement. In this framework sometimes a company in order to
obtain an ISO 9001 certification must meet other requirements as
well. These other requirements can be other management systems
standards, European directives, technical standards or national laws,
presidential degrees and directives.
6.1.     Management system standards
ISO 14001: Environmental management system belongs to the ISO                 ISO 14001:
14000 series of international standards on environmental                      Environmental
management. ISO 14001 is the standard that specifies the                      management
requirements for the certification of an organisation that has                system
implemented an environmental management system.

ISO 14001 is meant to develop a systematic management approach
to the environmental concerns of an organization. The goal of this
approach is continual improvement in environmental management.

Requirements of ISO 14001 standard described in chapter 4 of the
standard are categorised in:
    General requirements
    Environmental policy
    Planning
    Implementation and operation
    Checking and corrective actions
    Management review
EMAS: Eco Management and Audit Scheme is a voluntary standard                 EMAS: Eco
designed by European Commission and intended to be used by both               Management
private and public organisations throughout European Union and                and Audit
European Economic Area. Since 2001 EMAS has integrated ISO 14001              Scheme
as the environmental standard required by EMAS.

EMAS aims at organisations that want to evaluate, report and
improve their environmental performance.


HACCP: Hazardous analysis of Critical Control Points is a standard           HACCP:
applying in the food industry. It aims at eliminating risks for health and   Hazardous
hygiene related to all stages of the food industry: supplies,                analysis of
manufacturing, storage and distribution.                                     Critical Control
                                                                             Points
HACCP involves seven principles:
    Analyse hazards.
    Identify critical control points.
    Establish preventive measures with critical limits for each control
     point.
    Establish procedures to monitor the critical control points.
    Establish corrective actions to be taken when monitoring shows
     that a critical limit has not been met

64
   Establish procedures to verify that the system is working properly
   Establish effective record keeping to document the HACCP
    system.
Although an American system, HACCP has been adapted by many
European organisations and in some countries it is legally required.

HACCP applies to all companies that produce, store and distribute
food products.



OHSAS 18001 Health and Safety Management System is intended to           OHSAS 18001:
help an organisation to control occupational health and safety risks.    Health and
OHSAS 18001 was created by a number of the worlds leading                Safety
                                                                         Management
national standards bodies, certification bodies, and specialist
                                                                         System
consultancies.
OHSAS 18001 has been developed to be compatible with the ISO
9001 and ISO 14001 management systems standards, in order to
facilitate the integration of quality, environmental and occupational
health and safety management systems by organizations, should
they wish to do so.
OHSAS 18001 can be applied to all types of companies and
organisations The OHSAS specification gives requirements for an
occupational health and safety management system, to enable an
organisation to control its risks and improve its performance. It does
not state specific occupational health and safety performance
criteria, nor does it give detailed specifications for the design of a
management system.

6.2.    European Directives and Technical Standards
European Directives and technical standards regulate European            www.newappr
companies, products, processes and services. The new approach            oach.org
standardisation in the European internal market is a recent initiative
that aims at bringing together the expertise of European Standards
Organisation with that of the European Commission and EFTA. All
directives and standards can be found In a single web site at
www.newapproach.org. This is a first step in promoting awareness of
the role that standards can play in developing the single European
market.

European Directives and the associated standards regulate a
number of different types of companies. For example we can refer to
companies that produce, sell or use medical devices, construction
materials, personal protective equipment, pressure equipment, toys,
etc. Information on mandatory directives and standards can be
found in the New Approach web site, National Organisations of
Standardisation, Certification Authorities, Chambers of Commerce
and in the relevant Ministries.




                                                                                   65
CHAPTER 7. GLOSSARY

A
 audit: 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: set of rules, objectives and/or principles used
  as a reference for inspection actions (such as policies,
  procedures, requirements, etc.).
 audit program: set of audits planned for a specific time
  frame and directed towards a specific purpose.
 auditor: person with the competence to conduct an audit.
 availability: capability to realize a function in a specified
  time.

C
 capability: ability of an organization, process or system to
  realize a product that will fulfil the customer and other
  interested parties’ requirements.
 characteristic: distinctive feature.
 competence: ability to apply knowledge and skills.
 concession: permission to release or use a product that does
  not conform to specified requirements.
 conformity: fulfilment of a requirement.
 continual improvement: recurring activity to obtain better
  results with harder objectives.
 control and inspection: set of operations required to evaluate
  nonconformity through observations and measurements.
 corrective action: action to correct a detected
  nonconformity, eliminating the causes which generated it.
 correction: action to eliminate a detected nonconformity
  (such as rework or repair).
 customer: organization or person that receives a product.

D
 defect: non-fulfilment of a requirement related to an intended
  use (generally “deduced” by the customer according to the
  information communicated by the supplier), or specified by the
  customer. The distinction between the concepts nonconformity
  and defect is important as it has legal connotations particularly
  those associated with product liability issues.
 dependability: collective term used to describe the
  organization availability and its influencing factors.
 design and development: set of processes that transform
  requirements into the specifications of a product, process or
  system.
 development: see Design.

66
 deviation permit: permission to depart from the originally
  specified requirements of a product prior to realization.
 document: supporting medium stating information.
E
 effectiveness: extent to which planned activities are
  achieved.
 efficiency: relationship between the result achieved and the
  resources used.

I
 information: meaningful data.
 infrastructure: system of facilities and equipment needed for
  the operation of an organization.
 inspection: see Control and inspection.
 interested party: person or group having an interest in the
  performance or success of an organization.

M
 management: coordinate activities to direct and control an
  organization and/or part of it.
 measurement: activity to measure a quantity.
 measurement control system: system necessary to achieve
  metrological confirmation and control of measurement
  processes.
 measurement equipment: tools needed to operate the
  measurement process.
 measurement process: set of operations to determine the
  value of a quantity.
 metrological characteristic: distinguishing feature of
  measurement equipment.
 metrological confirmation: set of operations required to
  ensure that measurement equipment conforms to the
  requirements for its intended use.
 metrological    function:    function for   defining  and
  implementing the measurement control system.

N
 nonconformity: non-fulfilment of a requirement.

O
 objective evidence: date supporting the existence or verity
  of something.
 organization: group of people and facilities with an
  arrangement of responsibility, authorities and relationships.
 organizational structure: arrangement of responsibilities,
  authorities and relationships between people in an

                                                                  67
     organization.

P
 preventive action: action to correct a potential
  nonconformity, eliminating the causes which generated it.
 procedures: specified way to carry out an activity or a
  process.
 process: set of interrelated activities which transforms inputs
  into outputs, producing added value.
 product: the result of a process.
 project: process consisting of a set of activities with start and
  finish dates undertaken to achieve an objective conforming
  to specific requirements, including time, cost and resources.

Q
 quality: degree to which a set of inherent characteristics
  fulfils customer requirements and of the other interested
  parties.
 quality assurance: set of correlated activities, part of the
  quality management system, capable to guarantee the
  observance of the requirements.
 quality characteristic: inherent characteristic of a product,
  process or system related to a requirement.
 quality control: set of related operations part of quality
  management, required to monitor results to quality and
  control requirement fulfilment.
 quality improvement: part of quality management focused
  on increasing the capability of the organization itself.
 quality management: coordinated activities to direct and
  control an organization with regard to quality.
 quality management system: management system to direct
  and control an organization with regard to quality.
 quality manual: complex document describing the whole
  quality management system of an organization.
 quality objective: objective related to quality.
 quality plan: document specifying which procedures and
  associated resources shall be applied to a specific process,
  product or project.
 quality planning: part of quality management focused on
  setting quality objectives and process definition.
 quality policy: overall objectives of an organization related
  to quality, as formally expressed by top management.

R
 record: document stating results achieved or providing
  evidence of activities performed (for example, a control).
 release: permission to proceed to the next stage of a

68
    process.
   repair: action on a nonconforming product to make it
    acceptable for the intended use. Unlike reworking, repairing
    can involve specific parts of a product.
   requirement: need or expectation that is stated, generally
    implied or obligatory.
   review: activity undertaken to determine the suitability,
    adequacy and effectiveness of the subject matter to
    achieve established objectives.
   rework: action on a nonconforming product to make it
    conform to the requirements.
S
 scrap: action on a nonconforming product to preclude its
  originally intended use, such as destruction, recycling, etc.
 specification: document stating requirements.
 supplier: person or organization that provides a product.
 system: set of interrelated elements.

T
 top management: leaders - a person or a group of people -
  managing an organization who establish objectives and try
  to achieve them.
 traceability: ability to trace history, application or location of
  that which is under consideration.

V
 validation: confirmation, through the provision of objective
  evidence, that the requirements for a specific intended use
  or application have been fulfilled.
 verification: confirmation, through the provision of objective
  evidence, that the specified requirements have been
  fulfilled.

W
 work environment: set of interacting variables             which
  constitute the contest where people work.




                                                                       69
     CHAPTER 8. BIBLIOGRAPHY
     Standards
         ISO 9001:2008
         ISO 9001:2000
         ISO 9000:1994

     Literature

     Joseph M. Juran. Juran’s Quality Handbook – 5th ed. Mac Grew Hill

     Brassard, Michael & Diane Ritter (1994). The Memory JoggerTM II. A Pocket
     Guide of Tools for Continuous Improvement & Effective Planning. First
     Edition. Salem, the United Sates of America: GOAL/QPC.

     European Committee for Standardization CEN (2000). Quality
     management systems – Fundamentals and vocabulary (ISO 9000:2000).
     Management Centre: rue de Stassart, 36 B-1050 Brussels.

     European Committee for Standardization CEN (2000). Quality
     management systems – Requirements (ISO 9001:2000). Management
     Centre: rue de Stassart, 36 B-1050 Brussels.

     ISO´s Technical Committee ISO/TC 176/SC 2 (2001). ISO 9000 Introduction
     and Support Package: Guidance on the Documentation Requirements
     of ISO 9001:2000. Available at: http://www.bsi.org.uk/iso-tc176-sc2.

     Paris, Christopher (2003). The Complete Guide to Understanding &
     Implementing ISO 9001´s Process Management Requirements. Part Two:
     Defining & Mapping Your Company´s Processes. Available at:
     http://www.oxebridge.com/news.asp?ID=157

     Secretariat of ISO/TC 176/SC 2 (2003): (Draft) ISO 9000 Introduction and
     Support Package: Guidance on “Outsourced processes”. Available at:
     http://www.bsi.org.uk/iso-tc176-sc2

     Web references
     http://europa.eu.int/comm/enterprise/enterprise_policy/analysis/doc/execsum_
     2002_en.pdf
     http://europa.eu.int/comm/enterprise/enterprise_policy/sme_definition/inde
     x_en.htm
     http://europa.eu.int/comm/enterprise     (SMEs in focus. Observatory of
     European SMEs 2002, European Communities, 2002)
     http://www.iso.ch/iso/en/iso9000-14000/pdf/survey12thcycle.pdf
     http://www.eiso.cz
     http://www.iso.cz




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