If you’ve ever held a child’s toy or operated a power tool, you’re probably familiar with ISO certifications. They apply to everything from industrial and household products and services to environmental regulations and much more. ISO also applies to management, particularly an essential structure for any company: The Quality Management System.
This is the first of a 2-part article. Here we will briefly discuss the highlights of the ISO 9001 Quality Management System. Next month, we will follow up with examples of how Lean Principles help make the entire process more efficient and effective.
Before we delve in the Quality Management System, here’s a little background on ISO standards.
ISO is the International Organization for Standardization, and they’re the world’s largest developer of international standards. As their website states, “ISO-International Standards ensure that products and services are safe, reliable and of good quality.” Their video explains in more depth.
According the LaManna Alliance’s quality guru, Ed Klaczak of EJK Consulting Solutions, Inc, one of the most important standards for businesses is the ISO 9001, which provides the standard for a Quality Management System (QMS).
“The QMS is the glue to the entire business operation,” Klaczak said. “It covers every facet of your organization, from sales to product development to operations. ”
Why is instituting an effective QMS so important? Two main reasons:
1. For the good of your organization. Using a Quality Management System ensures that you have a quality-based approach to your entire operation.
As ISO states, “For business, (ISO Standards) are strategic tools that reduce costs by minimizing waste and errors and increasing productivity.”
ISO 9001 outlines ‘best-practices’ for an organization. The standard tells you “WHAT” is important.
Your organization needs to determine “HOW” best to implement the ISO requirements for your business. This can be relatively simple for a smaller, or start-up operation, but complex for a multi-site, international corporation. Lean Operations tools and techniques can help your organization implement systems/processes as efficiently as possible.
2. As an entry to new markets. Many Europe and Asia firms will not do business with your company (as their supplier) unless you have an ISO 9001 certification. With this certification, you can also gain access to additional customers.
It can be a marketing tool even for customers that don’t require an IS0 9001 certification from their suppliers. The certification still serves as proof that you’re a quality-driven organization. self-disciplining, continually improving, driving down costs, etc. When push comes to shove, that may be a deciding factor in their purchasing decision.
Now let’s take a closer look at what constitutes a QMS.
The Eight Principles of a Quality Management System
These principles are the macro-level ideals that define your QMS. As you read through them, you’ll understand why this is such an all-encompassing approach to quality.
After each principle, you’ll see examples of the types of questions that ISO requires you to address within your QMS and prove (you’re walking the walk) during a certification audit.
1. Customer Satisfaction: How are you defining customer satisfaction? What metrics are you using? Are critical performance indicators improving?
2. Leadership: How well is your leadership team defined? How do they operate – is it hands-on firefighting, or do they take a results-oriented approach using a balanced scorecard?
3. Involvement of People: Is the organization autocratic, or does it take a bottom-up approach and involve its people in innovating and improving?
4. Process Approach: How well are the company’s processes defined? Do written procedures (Work Instructions) clearly reflect the process? Are they current? What’s the process to amend them, etc?
5. Systems Approach: What is the organizational structure, and how efficient is it at improving systems?
6. Continual Improvement: What is the company doing to improve? How does it react to metrics and solve problems? Does the Management Team fully support CI initiatives with adequate resources and tools?
7. Factual Approach to Decision-Making and Problem Solving: How does the company solve problems? Is it organized and structured, or is it ad hoc?
8. Mutually Beneficial Supplier Relationships: How good are the suppliers for the company? Remember, you’re only as strong as your weakest link. In the same respect, your product quality is only as good as your worst supplier.
Auditing the Quality Management System (QMS)
Similar to Quality Assurance (QA) gates at the end of the production line prior to shipment, a QMS audit tests the effectiveness of your operational systems, processes and procedures.
There are 2 types of Quality Management Systems audits. Internal audits are done by internal employees (self-correcting) and are a critical ‘feedback’ component of any Continuous Improvement process.
External audits are independent and contractually administered by a 3rd party registrar. This is the basis that ISO certifications are granted, if your company is compliant (no major nonconformities observed).
Management Review of the QMS
More important than the audit is what the organization does with the findings. The audit provides the feedback. If the audit finds an issue, that means an “escaping defect” occurred. There are numerous Quality Improvement tools to help facilitate the correction of the defect(s).
In addition, there should be a scheduled, recurring review by the Management Team to guarantee that improvements are put in place and that they are proving to be effective.
No QMS is ‘perfect,’ but a healthy organization constantly works to improve itself.
Remember, an internal audit provides ‘up-close’ feedback and an external audit provides ‘an outsiders opinion.’ Use this feedback to get better…in everything you do!
The Elements of the ISO 9001
The ISO 9001 details numerous requirements (elements) that an organization must meet to be in compliance with the standards. (Recall this is the “WHAT” you have to do, not the “HOW.”) There are four ISO 9001 sections that apply to each organization. You can download snapshots of those images by clicking here.
I’ve provided an excerpt of part of those requirements below:
This is a sample of section 4, which details general requirements of the QMS. Section 4.2.3 looks at the Control of Documents. It asks how does a company maintain its documentation? How does it keep things current?
Ed Klaczak pointed out that when we refer to “documentation,” we’re not talking about a dusty, outdated, standard operating procedures manual that sits on the shelf. “That’s of no value to anyone,” he said.
Documentation today might take the form of a computer terminal, where work instructions for a job are listed whenever a new order is processed. The instructions might serve as effective training for newcomers to a job, but they also help keep skilled workers updated on recent changes to the work instructions (so they don’t keep building it the “old way”).
“A quality-driven company might have a system that shows pictures identifying a critical step in the process or even video on how a sequence of steps needs to be completed. Anything that guides the worker from not creating a defect” Klaczak explains. Where feasible, manual processes can be semi-automated or fully-automated, it further eliminates the potential for a defect(s) to occur.
Show You The Money
This is all great, but how does ISO 9001 look in action, and more importantly, how can it translate into money for your bottom line? In our post next month, we’ll provide you with both answers.
Subscribe to my blog so you’ll get the post, along with my other weekly posts on strategies built for the bottom line.
Photo by: tnarik.