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What Is the Real Deadline for Transition to TS 16949:2002?

Three More Key Challenges of Transition to TS 16949:2002

By Chad Kymal and Dave Watkins
Publishers Note: This article has been reprinted with permission from THE INFORMED OUTLOOK Newsletter, September 2002 issue. f your organization is a supplier to one or more of the Big Three, what is the real deadline for transitioning from QS-9000 to ISO Technical Specification (TS) 16949:2002? And what if you supply to other automotive original equipment manufacturers (OEMs) that have required registration to QS-9000 or another sector-specific quality management system (QMS) requirements catalog that is to be replaced by ISO/TS 16949? What is the real deadline for transitioning your organization to ISO/ TS 16949:2002, Quality management systemsParticular requirements for the application of ISO 9001:2000 for automotive production and relevant service part organizations? As has already been reported, DaimlerChrysler announced in late July 2002 that its Tier 1 suppliers worldwide are required to transition from QS-9000 to ISO/TS 16949:2002 by July 1, 2004, while the Big Three released a joint letter in early August 2002 officially stating that the TS will replace QS-9000 on December 14, 2006 (see DaimlerChrysler Sets July 2004 Tier 1 Mandate, THE OUTLOOK, August 2002). The other OEMs in Europe and some in the Asia-Pacific Rim region are likely to issue ISO/TS 16949 deadlines closer than the paramount 2006 deadline for transitioning from QS-9000. However, our organization maintains that the realistic deadline should be December 15, 2003. That is the date when ISO 9001/2/3:1994 become obsolete as far as accredited registration is concerned, so automotive suppliers that wish to retain their ISO 9001/2registered status (keeping in mind that ISO 9002 will no longer be an option) must treat December 2003 as the real deadline. Otherwise, organizations that want to maintain an ISO 9001 registration and a QS-9000 registration would have to go through two auditsone for ISO 9001:2000 and one for QS-9000 conformity. In practical terms, implementing ISO 9001:2000 on top of QS-9000 so as to satisfy nonautomotive and automotive customers does not make sense for several reasons. First, organizations would find many duplicate and contradictory requirements. For example, management review is specified in both

ISO 9001:2000 and QS-9000/ISO 9001:1994, and organizations would have to comply with two sets of duplicate requirements. Also, organizations may find that quality planning, which is covered by Subclause 4.2.3 in QS-9000/ISO 9001:1994 and Clause 5.4, Planning, are almost contradictory, with one focusing on product planning and the other focusing on business planning. Ultimately, it is possible to reconcile QS-9000 with ISO 9001:2000 and create a single QMS that satisfies the requirements of both, but it is easier said than done. Second, it is not practical or productive to transition twice. It would prove much easier for a QS-9000-registered supplier to revise its QS-9000conforming QMS to satisfy the requirements of ISO/TS 16949:2002 and upgrade its QS-9000 registration to it. The supplier would thereby achieve simultaneous conformity with ISO 9001:2000, which is contained verbatim in the second edition of the TS. The other option is to maintain QS9000-based procedures and implement changes to satisfy ISO 9001:2000 only to have to transition again within 2-4 years to ISO/TS 16949 when QS-9000 becomes obsolete. Therefore, December 15, 2003, is for all practical purposes the de facto deadline for organizations that want to maintain their ISO 9001 status and meet automotive OEM contractual requirements, since it would be confusing and difficult to meet the QS-9000

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2 THE INFORMED Outlook

and ISO 9001:2000 requirements and then have to revamp the QMS once again soon thereafter. Our organization suggests that suppliers that cannot complete the ISO/ TS 16949:2002 transition by December 15, 2003, should continue with QS9000 registration beyond the ISO 9001:2000 deadline but not upgrade their QMSs solely to conform with ISO 9001:2000. Instead, they should let any separate ISO 9001/2 registration status lapse while they focus on implementing an ISO/TS 16949:2002-conforming QMS and moving directly to TS registration at some point in 2004. True, the extended use of ISO 9001:1994s quality system requirements in QS-9000 does appear to give additional time to suppliers that find the task of transitioning to ISO/TS 16949:2002 challenging. However, as future OEM requirements have begun to take shape, making that transition is taking on increasing importance as we continue our series examining what we have identified as 15 key challenges for automotive suppliers that plan to transition their QMSs from the third edition of QS-9000 to the second edition of the TS. We have already explored 6 of those challenges in two previous entries in this series as indicated in Table 1 on the next page, which summarizes the 15 challenges. In this entries in the series, we will explore Clause 5.2, Customer Focus, 7.0, Product Realization, and Subclause 8.2.2, Internal Audit, to help you understand and effectively meet each of the 15 key challenges. process of assisting several hundred organizations worldwide in their implementations of ISO/TS 16949:2002. In most of these organizations, customer expectations are taken as an implementation afterthought rather than the first place to start. Customer expectations influence and impact on an organizations strategy (including the objectives and business plan), which is then implemented by processes that carry the strategy out. If the strategy correctly drives the organization and its processes are effective, the organization will meet customer expectations. Thus, there is a chain reaction between customer expectations, strategic objectives, the business plan and processes designed to meet the objectives of an organization. Figure 1 below shows how customer requirements, which are addressed in Clause 5.2 in ISO/TS 16949:2002/ISO 9001:2000, are connected to other elements and activities of the QBMS that are addressed elsewhere in ISO/TS 16949:2002. If an organization understands that its management system must start with customer requirements, it will

Reprint: September 2002

be able to implement a QBMS that meets all the requirements of ISO/TS 16949 because it flows naturally from how a business operates, that makes sense to the employees using the system because it flows the way processes occur in a business and that is easy to implement because it is understandable and seen as having value by everyone from top management to the sales reps to the production line workers. When determining which customer expectations are to be met, the implementation team will need to decide whether it is only going to look at customers alone or to take an ISO 9004:2000 or Baldridge view of interested parties. ISO 9000:2000, Quality management systemsFundamentals and vocabulary, defines an interested party in 3.3.7 as a person or group having an interest in the performance or success of an organization. Thus, an organization could consider some or all interested parties as customers with expectations to be met. As the number of expectations grows or varies, what would they impact? Figure 1 should lead you to understand that your

Figure 1. Links Between Customer Requirements and Processes

5.2, Customer Focus

This is the requirement of ISO 9001:2000, to which ISO/TS 16949:2002 provides no additions, where most implementers need to start when designing what we refer to as their Quality/Business Management Systems (QBMSs). Our organization is in the Reprinted with permission from THE INFORMED OUTLOOK September 2002 issues Contact us TODAY for a FREE sample issue and a SPECIAL subscription offer (code OMNEX-0209)!

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Volume 7, Number 9
organization has to set objectives around expectations and then design processes that can deliver these expectations. The implementation team will look at the need to consider the expectations of interested parties in designing processes as additional work, but some interested parties (e.g., community, employees, suppliers) may play a key part in the organizations success. In some cases, these parties may be as important a part as the end customer. If parties other than customers have the

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Table 1. The 15 Key ISO/TS 16949:2002 Transition Challenges for QS-9000-Registered Organizations
Clause/Subclause Influenced by Challenges Requirements for process map (or equivalent), process management, customer-oriented processes, support processes and process characteristics Decision on customers vs. interested parties. Need for process to gather needs and expectations of customer/interested parties 4.1, Quality Management ISO 9001:2000 SystemGeneral Requirements* 5.2, Management Responsibility Customer Focus ISO 9001:2000

5.4.1, PlanningQuality ISO 9001:2000 & Deployed Objectives addressing customer Objectives TS 16949:1999 expectations 5.5.3, Internal Communication 5.6, Management Review 6.1, Resource ManagementProvision of Resources 6.2, Human Resources (particularly 6.2.2.3 and 6.2.2.4) 7, Product Realization 7.1.4, Change Control 7.3, Design and Development* 7.4, Purchasing* ISO 9001:2000 Creation of internal communication processes suitable to organization

ISO 9001:2000 & Revision of previous management review TS 16949:1999 process. TS adds additional items to be reviewed ISO 9001:2000 Establishment of a resource allocation process

ISO 9001:2000 & Provision of job competency, on-the-job TS 16949:1999 training and employee motivation and empowerment ISO 9001:2000 New (actually Fords Q1 2002) New Documents for effective control of all processes in process map Minor change for most suppliers Inclusion of design and development of processes, not just product (note required development and use of FMEAs) Inclusion of service suppliers in coverage and use of supplier monitoring indicators. ISO 9001:2000 registration of suppliers Customer rating for quality and delivery insufficient; monitoring of customer perceptions of quality. Importance of customer satisfactionsupplemental requirements, including delivered part quality and schedule performance to IATF Manufacturing process and product audits and audits based on COPS and process approach

New

8.2.1, Monitoring and ISO 9001:2000 MeasurementCustomer Satisfaction

8.2.2, Internal Audit

TS 16949:1999

8.2.3, Monitoring and ISO 9001:2000 & Process studies on manufacturing processes. Measurement of Processes TS 16949:1999 Measurement of all processes in process map 8.4, Analysis of Data ISO 9001:2000 Increased scope from QS-9000
*Clauses/Subclauses examined in the third article in series (November 2001). Clauses/Subclauses examined in the fifth article in series (July 2002).

potential to influence an organizations success or even existence, the implementation team should include the expectations of interested parties in developing the QMS for the organizations own selfinterest and survival. Our organization has developed a template that relates customer expectations to organizational processes, strategic objectives and process control methods. This table can be used to align customer expectations with an organizations QBMS activities, and we recommend that our clients adapt this table to their operations and include it as part of their Quality Manuals. Table 2 on the next page provides an excerpt of what this table would look like if completed for a hypothetical organization. Some in the automotive sector have noted that QS-9000 already mentions customer expectations in Subclause 4.1.4, Business Plan, where it states, Methods to determine current and future customer expectations shall be in place. However, this requirement is buried in the overall requirements. We know of no supplier that implemented or audited for customer expectations in conforming to QS-9000. So, where in ISO/TS 16949:2002 is there a requirement regarding customer expectations? Furthermore, where does it ask for objectives to be aligned to expectations and for processes to be aligned to strategy? If you study Clause 5.2, Customer Focus, what it really is saying is, Your organization needs to understand and be capable of satisfying customer requirements. Indeed, throughout ISO/TS 16949:2002/ISO 9001:2000 are requirements that the organization meet customer requirements. ISO 9000:2000 defines requirement in 3.1.2 as a need or expectation that is stated, generally implied or obligatory. Thus, 5.2 requires your organization to understand and be capable of satisfying customer needs and expectations. If you then look at Subclause 5.4.1, Quality Objectives, you will find that the TS adds to ISO 9001:2000 a NOTE that states, Quality objectives should address customer expectations and be achievable within a defined time period.
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4 THE INFORMED Outlook

So, there is an explicit intent in ISO/TS 16949:2002 that expectations and objectives be aligned. Furthermore, Subclause 5.4.2, Quality Management System Planning, requires top management to ensure that a) the planning of the [QMS] is carried out in order to meet the requirements given in 4.1, as well as the quality objectives,. The planning then needs not only to address how the objectives are going to be met, but to ensure that processes in the process map are implemented. To understand the linkage between 5.2 and Section 7, Product Realization (processes in the organization planned in Clause 4.1, Quality Management SystemGeneral Requirements, and 5.4.2), you need only to study the QMS process model. Customer requirements are an input into an organizations processes (i.e., product realization and support processes), which translate these inputs into product (which is an output). There is thereby a linkage between what customers want as determined per 5.2, the objectives set by the organization per 5.4.1 and the processes performed per Section 7. The only way organizations can ensure that they are capable of satisfying requirements is to translate a customer requirement into a process requirement for the organization. This expectation needs to be translated to a process measurable, as shown in Table 2, and then measured and improved as required by Clause 4.1d), e) and f ). that specify processes that run the range of an organizations production cycle (i.e., from 7.1, Planning of Production Realization, to 7.6, Control of Monitoring and Measuring Devices), it also includes all the processes in the process map as required by Clause 4.1. Indeed, earlier versions of Table 1 in this series labeled this challenge as 7.0 because it is almost as if a separate clause existed here on process mapping. Although the TS does not require the use of process maps or flows, the only practical way to ensure that all processes that are needed are included in the QMS is through the use of process mapping and process flows. And process mapping will be most critical to effectively meeting the requirements of Section 7. Indeed, we believe process mapping and process flows are the biggest differences between QS-9000 and ISO/TS 16949:2002. In QS-9000, organizations were only required to implement procedures that met all the requirements specified in the shalls and shoulds. In ISO/TS 16949:2002, the organization needs to identify the processes needed [and] determine the sequence and interaction of these processes (4.1a and b). And the processes need to fulfill all the requirements of the customer, as discussed above. Processes that start with a customer input and result in an output that goes back to the customer are known as Customer Oriented Processes or COPs, as described in More Challenges of QS-9000 to TS 16949:2002 Transition (THE OUTLOOK, July 2002). An organization must have processes that fulfill the shalls of ISO/TS 16949:2002. For example, it needs processes for management review (5.6) and control of measuring and monitoring devices (7.6) as well as product

Reprint: September 2002

realization processes (e.g., research and development, support processes such as hiring and customer-oriented processes such as warranty). In other words, the implementation team needs to carefully study what processes are required by the organization to fulfill organizational needs as well as the needs of customers/ interested parties. When it comes to documentation, ISO 9001:2000 requires less, with only six procedures specified as needing to be documented, although most organizations will maintain much of the documentation they had before if they found it necessary to ensure processes are conducted consistently and effectively or found it value-adding to their operations. These reasons will in fact be one and the same in many instances. Unlike ISO 9001:2000 but like QS-9000, ISO/ TS 16949:2002 requires all the processes required to fulfill organizational and customer/interested party needs to be documented. Note that you will not find the need to document some of these processes in the requirements contained in the TS, but the International Automotive Task Force (IATF), which drafted ISO/TS 16949:2002, has conveyed this requirement in the content of mandatory training courses for registrars and their auditors and in ISO/TS 16949:2002 rollout meetings. The training requires auditors to analyze the following process characteristics for each process: 1. A process owner exists 2. The process is defined 3. The process is documented 4. Process linkages are established 5. The process is monitored and improved 6. Records are maintained. The best way to satisfy 1, 2 and 4 above and thereby satisfy trained audi-

7.0, Product Realization (Organizational Processes)

The product realization processes and support processes in Section 7 need to deliver the product to the customer. Section 7 includes not only six clauses

Table 2. Customer Expectations Alignment With Organizational Activities

Activity Manufacturing and Logistics Manufacturing and Logistics Key Processes/ COPs Order processing in production Manufacturing process Customer Expectation Short cycle time On-time delivery (OTD) Measurable Cycle-time % OTD Target Specification Control/ Monitoring Reference Method 20 days 100% Monthly operations review Weekly operations meeting

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Volume 7, Number 9
tors is to use process flows, which are discussed in the fourth entry in this series (see What QS-9000 Registered Suppliers Need to Prepare For, THE OUTLOOK, April 2002). 8.2.2 and does so to the expectations of the OEMs that subscribe to the TS. Those OEMs, which are members of the IATF, have issued comments on registrar auditing based to a large degree on their observations of registrar audits of automotive suppliers for conformity with ISO/TS 16949:2002 during an IATF pilot registration program in

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8.2.2, Internal Audit

With internal auditing, the biggest difference between QS-9000 and ISO/ TS 16949:2002 is that QS-9000 does not specify system or process audits. Clause 4.17 of QS-9000 only requires internal audits to be performed (in accordance with Appendix B, Code of Practice for Quality System Certification Bodies/Registrars) that cover all the elements of QS-9000. ISO/TS 16949:2002 is more specific and requires system and product audits on top of process (elemental) audits. The internal system audits need to evaluate the processes in the organization, including COPs and their support processes. The product audits in ISO/TS 16949:2002 must verify conformance to product dimensionsrequirements in the manufacturing processeswhile the process audits need to assess the manufacturing processes for conformity with defined procedures and customer specifications. Subclause 8.2.2 of ISO 9001:2000 is an important requirement that can drive QBMS improvement and has already been the topic of much coverage in THE OUTLOOK and will continue to be covered in detail in future issues. Where do automotive suppliers need to look to see what is actually expected of internal auditors, the internal audits they conduct and the reports and results from those audits? Experience has shown that third-party registrar/auditor requirements tend to flow down into the organizations being audited, thereby impacting on internal audits. While internal audits should be conducted to verify the QMS conforms to ISO/TS 16949:2002 and is meeting customer and organizational needs and expectations and to identify opportunities for continual improvement of the system and processes, registrar auditors will be examining your organizations internal audit program to ensure it meets the requirements of Subclause
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February 2002. What the IATF had to say about the registrar audits it witnessed, where there were problems and need for improvement in auditing practices and what the key differences with ISO/TS 16949:2002 were is worth examining and keeping in mind as you begin to evaluate and revise your internal audit program.

Summation of IATF Comments on Registrar Auditing and Gaps Found in Pilot

Auditing ISO/TS 16949:2002 Key Approach Differences as Viewed by the IATF: Process Approach to Audit Customer Oriented Processes. These processes start with customer requirements and then end with output. The input and output need to be checked against each other to see if the output satisfies the input. The IATF wants all the COPs identified in the organization. The IATF wants the process to have a clear line of sight from the customer to the organization. The Audit Plan should have key processes instead of just elements. The Plan needs to identify the key processes Performance Linked to common metrics for the organization and its suppliers (per 8.2.1.1, Customer SatisfactionSupplemental, and 7.4.3.2, Supplier Monitoring) OversightAdherence to the ISO/TS 16949:2002 registration scheme rules and common global oversight body process An organization needs to throw away the checklist and use its procedure to do the internal audit. Use the checklist to make sure your organization is thorough but not as the definitive list of what the QMS must do to conform with the TS The IATF stressed the problem of remote locations not being able to get certificates and to identify which sites are production or manufacturing To obtain ISO/TS 16949:2002 certificates of registration, sites must be automotive production and service parts suppliers Each OEM will have a link to its web site where the customer-specific requirements documents can be obtained. Gaps Found During Pilot ISO/TS 16949:2002 Registrar Audits: Control Plans were poor and not followed Customer specifics ignored Registration scheme rules not followed Internal auditor training was poor Records not linked to procedure On-the-job training not addressed Unreported changes (production part approval process or PPAP) Management never audited Interface between site and remote location not followed PPAP does not meet requirements GRR (gage repeatability and reproducibility) performed by calibration technicians and not production operators Written findings did not have three elementsrequirement, objective evidence and nature of NC (nonconformance)
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6 THE INFORMED Outlook

The sidebar on the previous page presents a summation of IATF comments at an April 2002 ISO/TS 16949:2002 Rollout Meeting on key differences in how auditing is to be done with ISO/TS 16949:2002. The sidebar also provides a summary of the gaps the IATF identified while observing pilot registration assessments of automotive suppliers to ISO/TS 16949:2002 in February 2002. The next 3 key challenges of making the transition from QS-9000 to ISO/TS 16949:2002 will be covered in the next article in this series. We hope that our insights on these 3 challenges will help your organization prepare to make its transition smoothly, efficiently and effectively. Remember that layering ISO 9001:2000 over QS-9000 as a stopgap measure is not recommended, since it will only delay the inevitable and add more work to your overall double transition from ISO 9001/ 2:1994 and QS-9000 to ISO/TS 16949:2002/ISO 9001:2000. Organizations are encouraged to study and understand ISO/TS 16949:2002s requirements and to plan their transitions to focus on the key changes from QS-9000s requirements. Time is running out for all organizations, especially larger ones that will face a greater challenge by virtue of the size and complexity of the processes managed by their QMSs, which need to become QBMSs. As pointed out above, the true deadline for organizations that want to maintain their ISO 9001 registration standing is December 15, 2003, which is a good mental deadline for all automotive suppliers. ### Chad Kymal is Chief Executive Officer of Omnex, Inc., an international consulting, training and software organization specializing in business quality improvement methodologies. Omnex has worked with hundreds of organizations to meet the requirements of ISO 9001/2/3, QS9000 and ISO/TS 16949 worldwide and to obtain registration. He assists organizations worldwide in his capacity as a

Reprint: September 2002

consultant and trainer and also serves as a Lead Auditor for AQSR, an accredited registrar that is qualified to conduct ISO/ TS 16949:2002 assessments. Mr. Kymal served in the past two years on the Malcolm Baldrige National Quality Award Board of Examiners, has a BSME from General Motors Institute and has an MS in Industrial Operations Engineering and an MBA from the University of Michigan. He is also author of Auditing ISO 9001:2000, published by Paton Press (www.patonpress.com) and is currently working on a book on ISO/TS 16949:2002. Mr. Kymal can be contacted by e-mail (ckymal@omnex.com). David Watkins is President of Omnex, Inc., and is a senior trainer/consultant. He has a wide range of international experience focused on enhancing the ability of organizations to create value for their customers and stockholders and integrating QMSs and other management systems to enhance performance. Mr. Watkins can be contacted by e-mail (dwatkins@omecconsultants.com).

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