ISO 9000:2000

Paper One

Significant Changes

Notes on ISO 9004

Quality Management Systems

Guidelines for Performance Improvement

Introduction

As the new ISO 9000 standard draws near to publication companies are likely to become increasingly interested in how the proposed changes are likely to affect them. In order to assist companies determine the likely impact Statius has developed a series of three papers.

The objective of this paper is to:

• Highlight the major changes in the thinking applied to the standard.

This paper offers no explanation of the changes, it merely teases out the significant differences between the existing standard and the current draft.
The other two papers support this paper and offers explanations and ideas as to how organisations might go about implementing the proposed changes, the papers are:

• Practical suggestions for implementation
• Suggested procedures and their suggested content

The notes are not meant to be an exhaustive explanation of the draft standard, should this be required it would be better to read the actual standard or the guidance notes themselves.

Layout

The layout of this paper takes the numbering systems from the draft BS EN ISO 9004:2000 standard. All the headings and numbering sequences from the standard have been reproduced, however in some instances these headings have no further notes beneath them, where this is the case the changes between the existing standard and the current draft are deemed to be non existent or inconsequential.

General Comments

0.1

The focus of this international standard is for improving the processes of an organisation in order to enhance performance.

0.2

This international standard encourages a process approach.

4.1

The management of the organisation should closely monitor the movement towards performance improvements

4.3

There are now eight quality management principles:

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

5.1.1

Top management should establish policies and strategic objectives consistent with the purpose of the organisation.
Top management should consider both continual improvement and radical change.
It is useful to define the process owner.

5.2.1

To meet the needs and expectations of interested parties organisations should consider:

• Maintenance of a balanced response to the needs and expectations of interested parties
• Translations of those needs into requirements
• Communication of those needs
• Improvement of all processes to create value

To define customers and end user needs an organisation should:

• Identify its customers, including potential customers
• Determine key product characteristics for customers and end users
• Identify and assess competition in the market
• Identify opportunities, weakness and future competitive advantage

The organisation should identify its peoples needs and expectations for recognition, work satisfaction, competencies and development of knowledge.

5.2.3  Statutory & Regulatory Requirements

Management should ensure that the organisation has knowledge of the statutory and regulatory requirements that apply to its products, processes and activities.

5.3   Quality policy

Top management should consider:

• The expected levels of customer satisfaction
• The needs of other interested parties
• Opportunities and needs for continual improvement
• Resources needed, and
• Contribution of suppliers and partners

An effectively formulated and communicated quality policy should:

• Be consistent with the organisations future
• Make objectives understood throughout the organisation
• Demonstrate top management commitment to quality and the adequate resources for its achievement
• Promote the commitment to quality and at all levels of the organisation, with clear leadership by top management, and
• Address continual improvement and customer satisfaction

5.4  Planning

5.4.1   The organisations objectives should be established during the planning system. They should be consistent with the quality policy and objectives.

When establishing these objectives, management should consider the current and future needs of the organisation and the markets served.

5.4.2  Primary inputs to quality planning include

• Needs and expectations of the customer
• Performance of the products
• Performance of the QMS processes
• Lessons learnt from previous experience
• Opportunities for improvement
• Risk assessment and mitigation

5.5  Administration

To develop the QMS the management should address:

• Strategic objectives

5.5.3

The goal of the appointment (quality management rep) is to enhance effective and efficient operation of the QMS

5.5  Communication

Management should define and implement processes for the communication of quality requirements , objectives and accomplishments.

5.6   Management review

Inputs to management review should include:

• Results from audits
• Measurement of satisfaction of the needs and expectations of interested parties
• Performance of processes
• Analysis of product conformance
• Status of corrective and preventive actions
• Status of action items from previous reviews, and
• Changes in original assumptions (new technologies, research, quality concepts, financial, social, environmental conditions and relevant statutory and regulatory changes)

Additional inputs to consider:

• Status and results of improvement activities
• Results of self assessment
• Customer satisfaction measurements
• Market place evaluation, including performance of competitors
• Results of benchmarking
• Performance of suppliers
• Opportunities for improvement
• Status of partnership initiatives
• Financial effects of quality related activities
• Impacts of statutory & regulatory changes

5.6.3   Management review should be set in the context of the organisations strategic planning cycle.

6.2   People

6.2.1  Involvement of people

In order to achieve its objectives and to stimulate innovation an organisation should encourage the involvement of its people through.

• Identifying the competence needs for each process activity
• Selection, ongoing training and career planning
• Establishing individual and team objectives, measuring performance and evaluating results
• Facilitating involvement in objective setting and decision making
• Encouraging recognition and reward
• Facilitating open two way communications
• Encouraging innovation
• Ensuring effective teamwork
• Using IT to facilitate communications of suggestions and opinions
• Using measurements of people satisfaction to facilitate improvement
• Investigate the reasons why people are leaving the organisation

6.2.2  Competence

The organisations should identify the competence needed for each activity that affects its performance, should assess the competence of its people to perform the activities, and develop plans to close any gaps.

6.2.2.2  Training

Enhancement of competence via training, education and learning involves:

• Knowledge of markets and customer needs and expectations
• Relevant statutory and regulatory requirements

To increase the awareness and involvement of people, the training should cover:

• The vision of the organisation
• The organisations impact on society

Training plans should include:

• Training objectives
• Training programmes and methodologies
• Training resources needed
• Identification of necessary support
• Evaluation of training in terms of enhanced competence of people
• Measurement of the effectiveness of training and the impact on the organisation

6.3  Infrastructure

Infrastructure provides the foundation for operations.
Infrastructure includes: plant, workspace, hardware, software, tools, equipment, support services, communications, transport and facilities. consider the environmental issues associated with infrastructure such as conservation, pollution, waste and recycling.

6.4  Work environment

Examples of human factors affecting work environment include:

• Creative work methodologies
• Opportunities for greater involvement to realise the potential of all people
• Safety rules and guidance
• Ergonomics
• Physical factors include:
  • Heat
  • Noise
  • Light
  • Hygiene
  • Humidity
  • Cleanliness
  • Vibration
  • Pollution
  • Air flow

6.5  Information

Information is a fundamental resource for the continual development of an organisations knowledge base. Information is also essential for making factual decisions. The organisation should:

• Identify its information needs
• Identify internal and external sources of information
• Provide timely access to adequate information
• Use information to meet strategies and objectives

6.8  Finance

Resource management should include activities for determining the needs for, and sources of, financial resources The control of finances should include activities for comparing actual against plan and taking necessary action. The financial reporting of activities relating to the performance of the quality system and product quality should be used in management reviews.

7.0  Product realisation (the process the company requires)

This section of the standard is critical and should be read and understood by all

7.1.1  Introduction

The introduction includes the following definitions:

• Quality requirements: how an activity is to be performed
• Quality objectives: measurements of process output or achievement the organisation should undertake an analysis of how processes operate.

7.2  Processes related to interested parties

The organisation should define and implement and maintain processes to ensure adequate understanding of the needs and expectations of interested parties.

7.3  Design and/or development

Remains pretty much the same as was, further background detail is however provided.

7.4  Purchasing

Remains pretty much the same as was, further background detail is however provided.
The organisation should define the needs for records of purchased product verification, supplier communication and response to non conformities.

7.5  Production and service operations

The organisation should identify requirements for operations that realise products or deliver services in order to ensure compliance with specifications and satisfy the needs and expectations of interested parties. The organisation should review its:

• Ability to comply with contractual requirements
• Training and competence of people
• Communication
• Problem prevention
• Relevant statutory and regulatory requirements

Further considerations could include:

• Capacity planning
• Logistic
• Intended use
• Post realisation activities
• Preservation
• Training required
• Product flow and yield
• Automation
• Electronic monitoring

8.0  Measurement, Analysis and improvement

This section of the standard is a radically departure from the non conformance analysis previously envisaged and should be read and understood in detail.

8.1.1   Introduction

An organisation should provide for the measurement and evaluation of its product, the capability of processes, customer satisfaction and items required by other interested parties at appropriate intervals. This includes the recording, collecting, analysing and communication of relevant data needed to monitor and improve the organisations performance.
Measurements should be evaluated in terms of added value provided to the organisation, and should be deployed only where benefit can be identified.
Issues to be considered:
Measurement, analysis and improvement should be used to establish appropriate priorities for the organisation. Benchmarking should be employed as an improvement tool.
Self assessment should be considered on a periodic basis to assess organisational performance and to define improvement opportunities

8.2.1  Measurement and monitoring of system performance
General

The organisation should identify methodologies needed for the identification of areas of improvement in the overall efficiency and effectiveness of the quality management system
Examples include:

• Customer satisfaction measurement
• Internal audits
• Financial measure
• Self assessment methodologies

8.2.1.2  Measurement and monitoring of customer satisfaction

The organisations should recognise that there are many sources of customer related information and should establish processes to gather, analyse and deploy this information. These sources include:

• Feedback on all aspects of the product
• Customer requirements and contract information
• Market needs
• Service delivery data
• Information relating to competition.

The organisation should plan and establish processes for implementing appropriate marketing activities to obtain the "voice of the customer"
The organisation should specify the methodology to be used and the frequency of gathering and analysis the data for review.

Examples of sources of information on customer satisfaction include:

• Customer complaints
• Direct communication with customers
• Questionnaires and surveys
• Focus groups
• Reports from consumer organisations
• Reports in various media
• Sector studies

8.2.1.3  Internal audit

Examples for consideration by internal auditing include:

• Existence of adequate documentation
• Effective implementation of processes
• Identification of non-conformance
• Documentation of results
• Competence of people
• Opportunities for improvement
• Capability of processes
• Use of statistical techniques
• Use of information technology
• Analysis of quality cost data
• Assigned responsibilities and authorities
• Performance results and expectations
• Adequacy and accuracy of performance measurement
• Improvement activities
• Relationships with interested parties

In addition to documenting non-conformities, internal auditing could also indicate areas for improvement (with recommendations) and outstanding performance.

8.2.1.4  Financial approaches

The methodology for linking financial considerations with quality management system should be evaluated and established to be able to communicate results throughout the organisation in financial terms.
Examples of approaches are:

• Prevention, appraisal and failure cost analysis
• Cost of conformance and non-conformance
• Life cycle approaches

Information provided from the above should be provided from management review

8.2.1.5   Self assessment

Organisations should consider establishing and implementing a self-assessment process. The range and depth of the assessment should be planned in relation to the organisation objectives and priorities. One methodology is described in annex A of the ISO 9004 standard.
Self-assessment methodology should not be considered as an alternative to internal or external quality auditing.

8.2.2   Measurement and monitoring of processes

The organisation should identify measurement methodologies and performance measurements to evaluate process performance. Examples of process measures include:

• Accuracy
• Timeliness
• Dependability
• Reaction time of processes
• Reaction time to requests
• Cycle time or thruput
• Effectiveness and efficiency of people
• Utilisation of technologies
• Cost reduction

8.2.3  Measurement and monitoring of product

The organisation should establish and specify the measurement requirements (including acceptance criteria) of its products.
The organisation should consider:

• The conformance to specified required of its products, and those required by suppliers
• The location point of each measurement point in its sequence
• Characteristics to be measured at each point, the documentation and acceptance criteria to be used
• Equipment and tools required
• Customer established points for witness or verification
• Inspections or testing that are required to be witnessed or performed by statutory or regulatory authorities

8.2.4  Measurement and monitoring of satisfaction of interested parties

8.2.4.2   People in the organisation

The organisation should:

• Gather the opinion of its people regarding the manner in which the organisation satisfies their needs and expectations
• Assess individual and collective performances and their contribution to the organisational results

8.2.4.3   Owners

The organisations should:

• Assess its capacity to attain the defined goals
• Measure financial performance
• Measure the impact of external factors on results
• Identify the value contributed by the actions taken

8.2.4.5  Society

The organisation should:

• Define appropriate measurements relative to is objectives, for interaction with society
• Periodically assess the efficiency of its actions and the perceptions of the results by relevant parts of society

8.3  Control of non-conformance

The organisation may also need to consider recording information on those non-conformances, which are corrected during the normal course of work. Such data can provide valuable information for process improvement.

8.4  Analysis of data for improvement

Information and data from all parts of the organisation should be integrated and analysed to evaluate the overall performance of the organisation

8.5  Improvement

8.5.1  General

The organisations should continually seek to improve its processes, rather than to wait for a problem to reveal opportunities for improvement.
The organisation should have a process in place to identify and manage improvement projects.

8.5.4  Process for improvement

The organisation should define and implement a methodology for process improvement that can be applied to all processes and activities.

Such a methodology can become a tool for improving internal effectiveness and efficiency as well as improving the satisfaction of customers and other interested parties.

The organisation should undertake small step improvement activities integral to the routine operations in order to maintain continual improvement through the involvement of people. Improvement should also be planned for breakthrough projects to achieve specific objectives.

A process improvement methodology is described in annex B of the ISO 9004 standard.