The Process Approach Revisited

1. The Process Approach Revisited ASQ Dinner Meeting Rochester Section November 8, 2006 Speaker: Zachary Pivarnik For the benefit of business and people

2. Common pitfalls to implementing the process approach SUMMARY 1 Process Definition 2 Process Objectives 3 Internal Audit Process 4 Customer Satisfaction

3. 1 > PROCESS DEFINITION

4. 1 PROCESS DEFINITION • Common Pitfalls of Implementation: • Definition of processes is not understood • Sequence and interaction not described • Quality Manuals not organization specific

5. 1 PROCESS DEFINITION • Solutions to address the common pitfalls of implementation: • Use ISO 9000-2000 definitions, categorize process using COP’s, SOP’s and Mop’s • Define sequence and interaction using an octopus diagram, process map with interaction grid or planetary diagram • Develop and write the Quality Manual based on the organizations process, not the clauses of the standard

6. 1 PROCESS DEFINITION 6

7. 1 PROCESS DEFINITION

8. Customer • Customer • Customer • Customer Bid / Tender Market Analysis – Customer requirements Post sales / Customer feedback Order / Request Organization and all support and management processes • Customer Warranty / Service Product / Process Design • Customer • Product / Process Verification / Validation Payment Receipt Product Production • Customer Delivery • Customer • Customer • Customer 1 CUSTOMER ORIENTED PROCESSES Processes that begin with a customer requirements, specification, expectation or implied contract (Input) and end with a fulfillment of the requirement and/or expectation being met (output) • Market Analysis/ Customer Requirements • Bid/Tender • Order/Request • Product and Process Design • Product and Process Verification/Validation • Product Production • Delivery • Payment • Warranty/Service • Post Sales/Customer Feedback

9. 1 SUPPORT ORIENTED PROCESSES Any process whose input, output and transformation activities are established and maintained by an organization in order to comply with requirements or specifications and/or meet organizational needs in supporting COPS • Document Control • Records Control • Control of Inspection and Test Equipment • Training • Human resources • IT • Purchasing • Maintenance • Servicing

10. 1 MANAGEMENT ORIENTED PROCESS Those processes necessary to comply with requirements of the standard and/or determined by the needs of an organization with respect to the role of top management • Management review • Corrective/Preventive action • Internal Audit • Quality Planning • Resource management • Communication

11. Contract Review Process Design Product Design MFG Delivery Service HR X Purchasing X X X Doc/Rec X X X X X X C/A – P/A X X X IT X X X X Mgmt Rev X X X Resources X X X X X X 1 PROCESS DEFINITION Process Map with interaction grid Product Design Process Design Contract Review MFG Shipping Service Product Realization Processes Support & Management Processes

12. 1 PROCESS DEFINITION Planetary Diagram Development Shelf Solution S7 S5 Customer Consultation Plant QCD S6 S8 S2 S9 Customer needs S3 S10 C1 Research S4 Delivery of parts + invoicing S11 S1 S12 Offer C2 Series Life C1 Offer Support Processes ACME Passenger Car Division Modification Request Customer order C3 Management Of modifications C1 Development S1 S3 S4 S6 Delivery poduct/procesmodified I.S validation; Process qualification C4 Dealing with external complaints S9 C1 Increase of rhythm Process qualification S11 S12 Customer Complaint Corrective Action Plan with efficiency demonstrated + transversal of actions Confirmation of qualification project assessment asasasassessment S1 S3 S6 S9 S10 S12

13. 1 PROCESS DEFINITION • Quality Manual Table of Contents • Scope of Operation • Quality Policy • Justification of Exclusions • Process Flow Diagram • Description of Processes (Procedural Reference) • Process Measurements • Resource Management & Review Strategies • ISO 9001 Applicability Matrix

14. 2 > PROCESS OBJECTIVES

15. 2 PROCESS OBJECTIVES Common Pitfall of Implementation: Process Objectives not Linked to Organizational Objectives The simple solution to this common pitfall is to clearly align the Quality Policy topics to the Organizational objectives and then link each process objective, include all COP’s, SOP’s & MOP’s

16. 2 PROCESS OBJECTIVES Top Management Top Management Effective planning and communication Resource management Process Owners Operators

17. 2 ORGANIZATIONAL & PROCESS GOALS In order to achieve any improvement in OTD you must first collect and analyze appropriate data in order to understand the primary causes of late deliveries and establish realistic improvement goals. Metrics, improvement objectives, plans and resource needs will then be identified and communicated throughout the organization. By engaging the entire organization in this process and using the PDCA cycle you will ultimately achieve your OTD goals and increased customer satisfaction and organizational efficiency.

18. 2 ORGANIZATIONAL & PROCESS GOALS • Quality Policy – Defect free product, on time to the customer at a reasonable price and continually improving all processes in accordance with the ISO 9001-2000 standard. • Organizational objective – 98% on time to customer promise date • Process objectives established to meet organizational goal • Order review processes – all orders processed within 2 days of receipt • Warehouse process – 100% compliance with FIFO, 18 inventory turns • Maintenance Process – 97% uptime, no past due scheduled items • Purchasing process – 95% of tier 1 suppliers on time and within window • Production Scheduling – all shop routers completed within 1 day of receipt and all orders scheduled to be completed 2 days prior to required ship date • Progress towards objectives will be posted monthly and discussed at the quarterly management review meeting in addition to the bi-weekly production meeting. • A negative trend occurring in 3 consecutive months towards the objective will require a corrective action.

19. 3 > Internal Audit Process

20. 3 INTERNAL AUDIT PROCESS • Common Pitfalls of Implementation: • Auditing procedures not processes • Process audit methodology not utilized • Process audit techniques not used • Audits scheduled based on clauses

21. 3 INTERNAL AUDIT PROCESS • Solutions to address the common pitfalls of implementation: • Understand the differences between procedures and processes • Train internal auditors on methodology • Use Process “Turtles” to record audit results • Schedule audits based on the processes

22. Procedures are driven by completion of a task are implemented are steps completed by different people in different departments with different objectives are discontinuous focus on satisfying the rules define the sequence of steps to execute a task may be used to process information exist – they are static Processes are driven by achievement of a desired result are operated stages are completed by different people within the organization flow to a conclusion focus on satisfying interested parties transform inputs into outputs through the use of resources information is processed through the use of a procedure behave – they are dynamic 3 COMPARISON OF 1994 WITH 2000 APPROACH

23. 3 PROCESS AUDIT METHODOLOGY Methodology for the Auditor • Understand the core processes of the organization (COP’s) • Identify these processes in respect of their categories (MOP’s & SOP’s) • Audit these processes through the Process Analysis Technique (performance measures)

24. 3 PROCESS AUDIT METHODOLOGY • All Processes have 6 characteristics that need to be verified: • Process has an owner • Process is defined • Process is documented (if necessary), and understood • Process linkages are established • Process is monitored and measurable • Process has records maintained. • Processes have four questions (related to risk): • With what? (materials / equipment) • With who? (qualifications, skills, training, experience, etc) • With what key criteria? (measurement, assessment) • How? (methods and techniques)

25. 3 PROCESS TURTLE 4. With What (Materials/Equipment) 5. With Who? (Comp./Skills/Training) 3. Inputs • 1. Process 2. Outputs 7. How Effective? (Measurable Objective) 6. How? (Methods/Procedures/Techniques)

26. 3 PROCESS TURTLE - BID / TENDER PROCESS • 4. With What • (Materials/Equipment) • Costing Models • Contract templates • EDI / Software interface • Office Equipment • 5. With Who? • (Comp./Skills/Training) • Sales people, Estimators, Financial analysts, Engineers etc. • Training & competence • 1. Bid/Tender Process • Clearly identify client needs (stated & implied) • Feasibility of meeting needs • Bid / No Bid decision • Prepare cost study • 2. Outputs • Submit Bid / Refusal letter • Records • 3. Inputs • RFQ (Request for Quote) • Regulatory requirements check • CSR – Customer Specific Requirements • 7. How Effective? • (Measurable Objective) • Hit rates • Response times / turnaround • Accuracy • 6. How? • (Methods/Procedures/Techniques) • Forms • Interaction with purchasing/ engineering & manufacturing

27. 3 PROCESS AUDIT SCHEDULE

28. 4 > CUSTOMER SATISFACTION

29. 4 CUSTOMER SATISFACTION • Common Pitfalls of Implementation: • Customer Satisfaction not focused on end users • Methods and techniques not measurable • Results not communicated throughout the organization

30. 4 CUSTOMER SATISFACTION • Solutions to address the common pitfalls of implementation: • It is the user of the product or service that the standard is addressing, not internal customers • If it is not measurable, can not demonstrate improvement • Everyone in the organization should know if the customer is being satisfied, results should be communicated

31. 4 CUSTOMER SATISFACTION • Customer Satisfaction is determined by the organisation measuring its customers perception as to whether they have satisfied their customers’ requirements – and may be somewhat subjective or ‘qualitative’ as much as ‘quantitative’. • Customer complaints are a common indicator of low customer satisfaction but their absence does not necessarily imply high customer satisfaction. • Simply capturing customer complaints and product returns will only gauge ‘dis-satisfaction’ – which does not fully meet the intent of the clause and will not satisfy these requirements. • The organizations management should analyse the implications of the absence or existence of customer complaints.

32. 4 CUSTOMER SATISFACTION • The organization should identify sources of customer and end-user information, available in written and verbal forms, from internal and external sources and analyze this data for trends, negative and positive. Examples of customer-related information include • customer and user surveys, • feedback on aspects of product, • customer requirements and contract information, • market needs, • service delivery data, and • information relating to competition. • customer disruptions including field returns • special status customer notification related to quality or deliver issues

33. 4 CUSTOMER SATISFACTION • Examples of sources of information on customer satisfaction include communicating directly with customers e.g. • questionnaires and surveys, • subcontracted collection and analysis of data, • focus groups, • Customer meetings, interviews • reports from consumer organizations, • reports in various media, • sector and industry studies, • delivered part quality performance, • customer returns and • delivery schedule performance

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