10/30/2012

Getting the Most Out of Your QMS

Presented by:

Mike Micklewright
QualityQuest, Inc. 847-401-0442 mike@mikemick.com

Agenda
ISO 9001 as a Business Management System Process Focus Lean Quality Management System Best Use of a Registrar Management Review Putting Your Internal Audit System on Steroids Root Cause Analysis Drive Out Fear!

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ISO 9001 as a Business Management System

Get rid of references to quality, where possible, and insert business
Quality management system Quality policy Quality objectives Quality procedures Quality planning

ISO 9001 as a Business Management System

Why?
Referencing quality is a great disservice
Many employees view ISO 9001 as a quality thing, handled by the quality department

Continual improvement, to drive up gross profits and gross margins, is everyone's job

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ISO 9001 as a Business Management System

Quality and customer satisfaction are directly linked to reduction of cost and time, which is directly linked to achieving business and financial goals.

ISO 9001 as a Business Management System

From the income statement
Net sales - cost of goods sold = gross profit

Buried within COGS are:

Rework Inspection Scrap Wasteful activities (i.e. the eight wastes) Excess or premium freight

A good business (quality) management system, including lean techniques, will decrease COGS

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ISO 9001 as a Business Management System

A good BMS will include value-added processes
Strategic development and SWOT Sales & marketing R&D Financial (SOX) Six Sigma Lean (i.e. value stream mapping, 5S) Safety and environmental

ISO 9001 as a Business Management System

True Process Orientation
Process Owners Internal Customers and Metrics

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Continual Improvement of the Quality Management System

Management Responsibility

Customer
Resource Management

Quality Policy & Objectives

Customer
Measurement, Analysis, Improvement

Satisfaction

Inputs
Requirements

Outputs
Product Realization

Product

Process Approach
0.2 Process Approach, ISO 9001 For an organization to function effectively, it has to identify and manage numerous linked activities. An activity using resources, and managed in order to enable the transformation of inputs into outputs, is considered as a process. Often the output from one process directly forms the input into the next.

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Process Approach
True processes cut across departmental boundaries and silos Procedures, written as processes, document the flow of information, patients, test results, reports, and instruments across departments It starts with the Quality Manual

Lean and ISO 9001 Principles

A common disease that afflicts management and government administrations the world over is the impression that our problems are different. They are different, to be sure, but the principles that will help to improve quality of product and service are universal in nature. Deming 3:130

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EIGHT QUALITY MANAGEMENT PRINCIPLES

1. 2. 3. 4. 5. 6. 7. 8. Customer focus Leadership Involvement of people Process approach* System approach to management Continual improvement* Factual approach to decision making Mutually beneficial supplier relationships*

EIGHT QUALITY MANAGEMENT PRINCIPLES

ISO 9001 is supposed to be based on these principles. In reality, it is not. A company can get the most out of its QMS by incorporating true practices that support these principles! Lets assess how well the standard truly supports the principles go back Lets also discuss, in a little more detail, those principles in bold

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Principles First
PRINCIPLES 1ST CULTURE AND PRACTICES 2ND TOOLS 3RD

Principles First
An organization should not copy tools, like lean and Six Sigma, or minimalistic requirements of standards, like ISO 9001 It should determine its own principles, embrace them, and build its own practices and culture around them Sources: ISO 9001/9004, Deming, the Toyota Way, Shingo Prize, Your Own

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Principles First
Be flexible in style, but unwavering like a rock, in principle. Thomas Jefferson

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Process Approach
It promotes process analysis and the ability to make your processes lean It provides the current value stream and the ability to develop a future value stream (identification of waste) It shows the weaknesses and complexities of your processes

Process Approach
It promotes continual improvement But it can only do this
If you believe in it and support it If you lead the effort If you ensure execution and accountability

The alternative: A piece of paper hanging on the wall And, should continual improvement be enough?

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Kaizen - Continuous Improvement

Continuous vs. continual (improvement) They should not be used interchangeably! - There is a difference - Both are important!

Kaizen - Continuous Improvement

Continuous means extending uninterruptedly in time (i.e. a continuous procession of cars) It is more synonymous with the term single piece flow as opposed to doing things in batches Continuous improvement involves the little improvements that take place every day, by many people, throughout the company

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Kaizen - Continuous Improvement

Continual implies recurrence at regular or frequent intervals (i.e. dancing requires continual practice) It is more synonymous with batch processing It is more project oriented

Kaizen - Continuous Improvement

Both are of value Is a kaizen event an example of continuous or continual improvement? The challenge for a company is to evolve itself into an organization that is involved in continuous improvement, with many people involved on a day to day basis This is where true benefits are achieved

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Kaizen - Continuous Improvement

Continuous improvement is also about minimizing variation in:
Product quality Workload Orders to the production floor

Kaizen - Continuous Improvement

Continuous improvement, or little improvements made everyday, by everybody, is encouraged through:
Leader standard work Visual management Daily accountability meetings Leadership via gemba walks

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Mutually Beneficial Supplier Relationships

Supplier relationships should be long-term and based on
Loyalty Trust Joint problem prevention Joint problem solving Collaborative innovation Process orientation Reduction of inventory and pull systems between locations Knowledge sharing

Mutually Beneficial Supplier Relationships

Sourcing decisions
Should not be based on price tag alone Should have quality elements throughout the sourcing model Should be based on a sourcing model that attempts to take into account all unknowable costs Example hyperlink needed

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Mutually Beneficial Supplier Relationships

Dr. Deming said
But he that would run his company on visible figures alone will in time have neither company nor figures. Actually, the most important figures that one needs for management are unknown or unknowable, but successful management must take account of them. He should know before he starts (process and quality improvement) that he will be able to quantify a trivial part of the gain.

Lean QMS
Many quality system authors make their QMS fat
Cant see the big picture (FOREST) through the words (TREES) Dont think and/or write sequentially or they write like the standard Would rather write philosophy than actions Think they know it all, and want to prove it

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Lean QMS
Many quality system authors make their QMS fat
Use ISO as a scapegoat for getting others to do what they want to have done rather than what adds value Over-interpret the standards documentation requirements Believe repeating requirements is a good thing

Lean QMS

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Lean QMS
The most important points:
NEVER REPEAT ANY REQUIREMENT, SPECIFICATION, PROCEDURE, OR INSTRUCTION!! Use references and links

Lean QMS Problems with a fat QMS:

Overly lengthy Complex Redundant Not user friendly o Tedious o Confusing Anti-lean Not reviewed thoroughly Inaccurate

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Lean QMS
What is meant by improving the effectiveness of the QMS?
Largest? Most detailed? Or, achieving planned results?

Your QMS should be supporting your planned results, not hindering them If it is hindering results, it is not the standards fault, it is your systems fault

Lean QMS
One Company
Reduced the number of procedures from 58 to 28 Reduced the size of their quality manual to a two page quality manual

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Lean QMS
Another company had 1100 documents and has since reduced this to less than 250 documents. They still have a long way to go. One quick assessment showed that they had four documents covering the same topic

Lean QMS
Another company had
- a 75 page quality manual (five sites, a combo of ISO 9001, ISO/TS, ISO 14001) - 27 pages of turtle diagrams - a 22-page Six Sigma manual

They reduced it to five pages.

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Lean QMS
5S RELATIONSHIP (part of lean)
Sort Set in order Shine Standardize Sustain

How does this apply to documentation systems?

Lean QMS

Clearly SORT used documents from unused documents Clearly SORT read sections of documents from those that are not read

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Lean QMS
ASK: Does anyone really read each section of the document? Does it really affect the quality of the product, service or process? Is it redundant? Can I just refer to another document? Am I really reviewing this document or am I just signing it? Is this just mumbo-jumbo that really doesnt tell anyone to do anything?

Best Use of a Registrar

Many registrars abide by 7.2.1b of ISO 9001, _______________________________ They determine that what you want is:
An ISO 9001 certificate As few non-conformities as possible

This is what they give you

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Best Use of a Registrar

Why do they assume this?
This is what companies/organizations state verbally or non-verbally

Unless told otherwise, they will continue to assume this

Best Use of a Registrar

We act as BAD CHILDREN and The registrar acts as a BAD PARENT

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Best Use of a Registrar

Do you follow 7.4.2 of ISO 9001 and state your requirements for what you want from your registrar? Do you just sign the registrars contract? What does the organization really want? Has this been verbalized internally or documented contractually?

Management Review
To review the effectiveness of your management review process, simply review the effectiveness of:
Meeting internal objectives and goals Customer satisfaction Execution of the internal audit system Execution of the corrective/preventive action system

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Management Review
Measures to determine corrective & preventive action effectiveness
% of CAPAs resulting in a procedural change % of CAPAs completed on-time % of CAPAs that are preventive # of repeated CAPAs % (#) of CAPAs from certain sources
Customer issues Audits Internal issues Suppliers

# Of CAPAs initiated by top management

Management Review
How is effectiveness of the management review process measured? Are corrective and preventive actions initiated from the meeting? Is it dreaded or anticipated? Is the frequency sufficient? Is the review done all in one meeting? In a batch? Is the review redundant with other meetings?

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Management Review
Build your management system so that it is most user-friendly and effective for your people, not your registrar!

Putting Your Internal Audit System on Steroids

8.2.2 of ISO 9001:2008 states that internal audits must be conducted to determine whether the QMS:
Conforms to planned arrangements, (ISO, and QMS) requirements established by the organization, and Is effectively implemented and maintained

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Putting Your Internal Audit System on Steroids

Compliance is easy . . . how do you analyze for effectiveness, though? Isnt this a little subjective vs. objective?

Not necessarily . . . an auditor can find out what is deemed to be effective in the eyes of the customer & top management.

Putting Your Internal Audit System on Steroids

Sources of effectiveness determination:
Customer complaints Customer surveys Documented objectives Business plan Shareholders and financial reports Newsletters Benchmarks

The auditor must compare these desires to actual results to determine effectiveness objectively

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Putting Your Internal Audit System on Steroids

A key source of preventive actions: Waste
Defects Overproduction Waiting Not using employees minds/skills Transportation Inventory Motion Excess processing

Putting Your Internal Audit System on Steroids

Tell your internal auditors to be tough Incentivize auditors to:
Record real CAs and PAs Accept only sound corrective actions that eliminatecauses Do not accept blaming people (or machines, instruments, or designs) as the root cause Constantly focus on determining effectiveness of the processes being audited

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Putting Your Internal Audit System on Steroids

Institute peer and professional auditor evaluations that stress significant auditor criteria (or use ISO 19011):
Persistence Honesty Balance of big picture/detail Written skills Verbal skills Assertiveness Constructive Organization Participative-ness

Putting Your Internal Audit System on Steroids

Teach your internal auditors To audit for effectiveness!! Value stream mapping Value vs. non-value added To eliminate waste Root cause analysis (auditees also!!) Mistake-proofing 5s ISO 9004 and ISO 19011

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Root Cause Analysis

Each grievance represents a chance to correct a flawed process, educate a customer, and strengthen loyalty Organizations with an effective complaint handling process can
Charge a premium Increase loyalty Therefore, increase profitability and job security

What is meant by effective?

Root Cause Analysis

If your employer was a week late in paying you, what would you accept as an answer?
Accounting screwed up, well make it up to you in the next check We had a temp filling in for Joe who is on vacation; Joes back now Were still working the bugs out of the new software, but were gettin there We ran out of checks we now have a new supply

Whats wrong with these statements?....

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Root Cause Analysis

What is your confidence that your check will never be late again? What is your confidence that accounting will not make another mistake when Joe goes on vacation or gets sick when another software upgrade is initiated?

Root Cause Analysis

Now, lets say that your employer is a week late in paying you, AGAIN, two months later, for the same reason
What does this say about the effectiveness of the initial response? Could this affect your work ethic? Could this affect your loyalty? How do you feel? What questions do you now want answered to re-establish your confidence?

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Root Cause Analysis

These are typical root causes that are given customers
Which leads to ineffective corrective actions
Which leads to repeat problems Which leads to lack of customer loyalty Which leads to lost business and decreased profits Which could lead to lost jobs

We expect our customers to accept these, yet WE DONT We expect our customers to remain loyal, yet WE ARENT

Root Cause Analysis

Effective corrective actions result from good root causes!! Good root causes do not blame:
People (human error)
Theres one exception do you dare guess?

Equipment, instruments, hardware, and/or software

Good root causes do blame

The system
Policies Processes and procedures (the way we do things)

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Root Cause Analysis

Risk management personnel should
Focus more on managing risk preventively Initiate preventive actions Understand and promote mistake-proofing

Root Cause Analysis

A customer who complains and is satisfied with the corrective action is:
30% more loyal than one who did not complain 50% more loyal than one who complained and is dissatisfied with the corrective action

Effective corrective actions are as important as soliciting complaints

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Root Cause Analysis

Effective RCA is the key to effective corrective and preventive actions!!! It is the key to an effective QMS or lean effort Asking why? 5x Asking why? is a skill Necessary to resolve systemic issues, of which most are Use RCA for good things too!!

Drive Out Fear!

To achieve positive financial results, to toughen up auditors, to encourage effective root cause analysis, to increase the number of CAPAs, management must:

DRIVE OUT FEAR!

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Drive Out Fear!

Dr. W. Edwards Demings 8th of 14 Points Out of the Crisis INSTITUTE AN ANTI-FEAR POLICY!

Drive Out Fear!

Solicit complaints! Incentivize employees to record complaints! Eliminate practices that encourage hiding problems Resolve the problem the first time Offer a clear believable explanation Provide more authority to frontline employees Proactively educate customers to reduce customer-caused problems

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Drive Out Fear!

What does this also mean?
Embrace & encourage nonconformities & opportunities for improvement written by auditors
Ensure employees know that it is OK

Do not hide potential or actual nonconformities Be careful of how you congratulate the organization if there are few or no nonconformities discovered

Drive Out Fear!

Determine what practices that your organization has in place that drives in fear and get rid of them What practices encourage people to hide problems? A company that hides problems will not improve! What are some of those practices?

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Summary
Use ISO 9001 as a BMS (not just a QMS) Truly focus and structure on process Develop a lean QMS Use your registrar to drive improvement Ensure effective management reviews Put your internal quality audit system on steroids Encourage effective root cause analysis Drive out fear!

To learn more
About Mike and QualityQuest: 847-401-0442 mike@mikemick.com www.mikemick.com
Services: Business and Lean Training and Consulting since 1994. Helping organizations to establish long-lasting cultures of continuous improvement. Provider of Dr. Deming keynote presentations.

About ASQ and the topic: http://asq.org/knowledge-center/

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