Volume 7 · Issue 12 · December 2002
Contents
The ISO 9001:2000 PSI IDEAS Q&A: Question 7
The ISO 9001:2000 Product Support Initiative (PSI) was developed
in 2001 by the US Technical Advisory Group (TAG) to ISO Technical
Committee 176 to assist US organizations in understanding
ISO 9001:2000, implementing quality management systems (QMSs)
and continually improving those systems. As part of the PSI,
the IDEAS (Information, Discussion, Examples, Analysis and
Sources) program is designed to provide help to organizations
during implementation.
Under the leadership of Jeanne Ketola, CEO of Pathway Consulting,
Inc., and an active participant of the US TAG, IDEAS has launched
a question and answer process aimed at providing a variety
of perspectives on requirements of ISO 9001:2000 and the challenges
they present to organizations using the standard. Each question
is distributed by THE OUTLOOK’s Senior Editor
to experts from the user community, the standards field and
the registrar sector who have volunteered to provide their
perspectives in answer to a given question. In addition, Jeanne
Ketola and Morgan Hall, who is the US representative to the
international ISO 9001:2000 interpretations project, have
the opportunity to comment on the question and answers given.
The answers are compiled and edited to ensure consistency
of language usage but not necessarily of content, are published
monthly in THE OUTLOOK and are posted to a page on
the US Standards Group web site (http://standardsgroup.asq.org)
dedicated to the PSI soon thereafter. It is important to note
that these answers do not represent interpretations, sanctioned
or otherwise, by ISO/TC 176 or the US TAG, and are only the
experts’ perspectives of ISO 9001:2000 based on the question
and their experience and understanding.
Below is the seventh question in the series and answers from
three experts.
Question 7
The roles and responsibilities of top management are more
clearly spelled out in ISO 9001:2000. Indeed, Clause 5.1,
Management Commitment, specifies that one of the ways top
management "shall provide evidence of its commitment
to the development and implementation" of the QMS is
by "continually improving its effectiveness by d) conducting
management reviews,…." Clause 5.6, Management
Review, defines minimum inputs and outputs of these reviews.
However, in practical terms, what is meant by demonstrating
management commitment? What is involved in conducting an
effective Management Review? Besides ensuring that management
is conducting Management Review, how will a registrar auditor
evaluate the QMS for evidence of management commitment and
effective Management Review?
Answer From User Expert…
Joe Green, Vice President and Management Representative,
KVF Quad Corp.
To demonstrate anything indicates "action". To
have Top Management "provide evidence of its commitment"
is more elusive. After all, no activity in an organization
should be done just to "provide evidence", so every
action should be done to meet the needs of the organization
and the customer—and, it is hoped, will thereby demonstrate
that commitment. For this and other reasons, the ability to
"provide evidence" will remain somewhat subjective.
In my organization, a 50-person metal finishing company that
decided to obtain registration to ISO 9002:1994 in the mid-1990s
even though no customer was requiring it, demonstration of
management’s commitment to the QMS is much easier to
find than documentation. One of the maturing disciplines of
voluntary adoption of ISO 9001/2 is the awareness of the need
for "providing evidence" (documentation). ISO 9001:2000
has provided significant improvement for our organization,
not just the QMS, because our demonstration of management
commitment under ISO 9002 had been poorly documented.
Subclause 4.1.1, Management Responsibility—Quality Policy,
of ISO 9001:1994 states that "management with executive
responsibility shall define and document its policy for quality,
including…its commitment to quality", but not necessarily
to "provide evidence of its commitment to the development
and implementation" of the QMS. The change with ISO 9001:2000
means that lip service in the wording of the Quality Policy
is not enough documentation and evidence that Top Management
is committed to the QMS.
However, in the early days of our ISO 9002:1994 implementation,
our Quality Policy may well have been the only "documented"
evidence of Top Management’s commitment. Recognizing
the "actions" of a committed company owner, and
the generation of visible, auditable evidence, has actually
been simplified for our company by the requirements of ISO
9001:2000. At the suggestion of Jeanne Ketola, KVF Quad adopted
a rather extensive "template" format for our management
reviews, our weekly operation reviews, management’s monthly
meetings with the entire KVF work force and our management
of quality goals and objectives (Ketola made her suggestion
at the ASQ ISO 9000 Conference in March 1999).
Through the use of templates, "planning" and "documenting"
activity have given us the benefits of SPDCA (Standardize,
Plan, Do, Check, Act). The very creation of company-specific
templates (procedures, documents, agendas, records) provides
numerous pieces of visible evidence of top management commitment.
As for assuring that Management Review is conducted in an
effective manner, it is easier for me to describe than explain
it based on some of the lessons learned concerning how KVF
conducted Management Reviews prior to ISO 9001:2000. As the
Management Representative since ISO 9002 was first implemented,
I can provide my firsthand evaluation of the Management Reviews
under the old system:
- Four reviews per year were too frequent and added little
or no value.
- Review content was scattered and inconsistent from review
to review.
- Formal review meetings were marginally (if at all) effective.
- Input to Management Review meetings was not delivered
to Senior Managers or Top Management prior to the formal
meetings.
- Outputs from reviews were poorly documented (my notes
were feast or famine).
- Outputs from past reviews were not held accountable in
subsequent reviews.
It only became apparent to us with our company’s QMS
maturity and the clarity of review inputs and outputs as defined
in Subclauses 5.6.2 and 5.6.3 of ISO 9001:2000 that the purpose
of Management Review is for Top Management to set the direction
for future action relating to the QMS while providing accountability
for actions taken. Prior to 1998, when we first looked at
a draft version of ISO 9001:2000 and began to revise our system,
Management Reviews were conducted because they were a requirement
of ISO 9001/2:1994.
Four reviews per year required a good quantity of "smoke-filled"
inputs just to ensure that both Top Management and our auditors
had something to look at. The result might be quoted as, "Yep,
they conduct management reviews, periodically, and include
results of audits and other stuff. Outputs? Not much to write
home about here, Ma." Maturity brought us to realize
that two reviews per year using the template approach and
the specific requirements of ISO 9001:2000 was sufficient.
Indeed, because review meetings were less frequent and thus
more focused on real review of the system, management viewed
them as less burdensome and more value-added. Providing detailed
data to management in written and simple graphic formats,
well in advance of requiring a response or having a meeting,
also has served to enhance the entire process.
Top Management (my boss), the Plant Manager, the Production
Manager and the Sales Manager are all provided with the Management
Review "input" (a presentation binder containing
12-18 pages of information and reports) several weeks prior
to the planned review "output" date. To give you
a sense of the content included in our Management Review "input",
the table of contents from the June 2002 Management Review
is provided in Figure 1 on the previous page.
Each manager is invited (not required) to comment in writing
to our President prior to the actual review date. If managers
were required to respond in writing, the potential for useless
input (just for the sake of input) would be counterproductive.
Although the Production and Sales Managers have not commented
in written form since this method was first deployed, there
is confidential dialog between the President and his management
team. None of the managers have questioned, challenged or
altered any of the data or recommendations found in the Management
Review document.
This option informs in all directions, improves input accuracy
and enhances awareness of the input among the managers.
Top Management reads and digests the input and sometimes
requests additional information prior to responding to the
review document. On or before the Management Review meeting
date, the President drafts a paragraph format letter (dated,
signed and typically 2 pages) that provides his written comments,
concurrence, requests, changes, authorizations and approval
of needed resources. That draft forms the basis for the review
and the "working draft" of review outputs. It is
also evidence of the review process and the outcomes.
Although KVF is not registered to ISO 14001 or any other
environmental management system standard, integration of environmental
concerns, goals and objectives—as well as safety and
health data—into the template-driven review process becomes
a matter of choice, with incredible ease and subsequent effectiveness.
After all, we have management focused on our organization’s
overall processes and programs and thus have the opportunity
to take advantage of planned actions.
I could list every implemented aspect of our QMS as evidence
of Top Management’s commitment, and they are in truth
what the registrar auditors will look at in seeking evidence
of management commitment. However, I would like to step out
of that box and suggest another view that satisfies my
need for evidence of the required commitment and might
just exceed our customer’s expectations.
Actions speak louder than words—or documents—and
the fact is that the President of KVF is a:
- Member of his church council and the Sunday School Superintendent
- Elected "Alderman" for the City of Moline
- Member of the board of directors for a community benevolent
group
- Member of the board of directors for our manufacturing
association
- Member and Past President of our niche industry association,
the Mass Finishing Job Shops Association (MFJSA)
- Active on the fund-raising committee for the YMCA (a board
member, also)
- Active in Rotary
- Encourages KVF rank and file to do likewise.
If you asked me how the list above demonstrates his commitment
to KVF and our QMS, I would simply repeat his own words:
If it were not for the people, the system and the organizational
devotion to my policy, there would be little time to do
what I choose to do outside the fence line of KVF Quad Corporation.
—Mike Crotty, President
How’s that for out of the box! ISO 9001:2000 does not
require this level of commitment, but it benefits the organization,
the customer, the employee and the surrounding community.
Answer From Registrar Expert…
Joseph Heinz, Business Development Manager,
German American Registrar for Management Systems, Inc. (DQS)
When it comes to demonstrating management commitment to the
QMS and its continual improvement, this is usually a more
difficult area to audit than appears on the surface. When
it comes to making a practical judgment call and collecting
objective evidence that proves a nonconformity exists, what
is required by Clause 5.1 is not as clearly defined as by
Subclause 5.6.1, Management Review—General, where records
of Management Reviews will be maintained and form an auditable
record of activities.
Clause 5.1, Management Responsibility—General Guidance,
in ISO 9004:2000, Quality management systems—Guidelines
for performance improvements, gives some excellent examples
of what your organization could do to demonstrate management
commitment to the QMS and its continual improvement. Although
ISO 9004 is a set of guidelines for implementing a QMS that
goes beyond the baseline requirements of ISO 9001, an auditor
may expect to find evidence of some of these examples. For
example, auditors might look for evidence that Top Management
might be doing one or more of the following:
- Be the leader in establishing a vision for the organization
- Communicate the organizational direction regarding quality
and the QMS (through memos, charts, newsletters, etc.)
- Take on improvement projects (at the top management level)
- Create an environment that encourages employee involvement
and development.
These are just a few actions of Top Management that would
demonstrate that commitment and they may appear to be nebulous
and vague to audit. In truth, to audit for conformity with
the requirements of Clause 5.1 by seeking evidence of these
types of actions, an auditor will need to use all of her/his
senses, in particular "gut" instincts about what
she/he observes and how well what is observed provides evidence
of effective management commitment. Based on my experience
so far, many companies will provide the auditors with evidence
of their conformity with this requirement just by conducting
the walkthrough at the beginning of the audit.
For example, Clause 5.1 requires Top Management to provide
evidence of its commitment by "(a) communicating to the
organization the importance of meeting customer as well as
statutory and regulatory requirements,…." An auditor
will observe what is posted in the lunch room (are there notices
about health and safety requirements for food handling?),
what financial measurements are being collected and reviewed
(is the organization able to purchase supplies and hire competent
personnel to meet customer specifications?), what critical
process parameters/metrics are driving improvements and who/what
the drivers are. All these are examples of communication by
Top Management and also objective evidence that Top Management
is allowing resources to perform these QMS-related processes
and to take suitable measurements relative to the quality
objectives established.
As an auditor, it always concerns me when data in various
areas of an organization I am auditing is, for instance, old
or posted only in front of the Quality Control Department.
Another example where an auditor may find objective evidence
that management is not committed is when, in discussing the
quality objectives with personnel, the auditor sees that there
is a lack of direction based on how personnel discuss the
QMS or objectives or the personnel do not understand why measurements
are being collected and how they relate to the Quality Policy
or mission.
With ISO 9001:2000, conducting an effective audit of Management
Review is rather simple. When examining the review minutes,
does the auditor find that there are action items generated
from the Management Review, with responsibility and authority
delegated so as to change, enhance and/or meet necessary system
goals? This is a central question an auditor will seek to
answer when it comes to Management Review and what Clause
5.6 requires. Subclause 5.6.1 of ISO 9004:2000 encourages
Top Management to develop management reviews so that they
go "beyond verification of the effectiveness and efficiency
of the quality management system into a process that extends
to the whole organization," although this is well beyond
what the auditor will be seeking evidence of.
For Top Management, this may appear daunting at first, but
performance measures can start with the basics of supplier
evaluations, process/product nonconformities and customer
satisfaction (quality objectives). Over time, these can of
themselves lead the organization to set objectives and take
measurements of cycle-time reductions, inventory turns and
even EBITs, ROIs (returns on investment), ROAs and/or other
financial data analysis. These are management-driven steps
that can add value to your company and can be audited by your
registrar’s auditors. In turn, by having such measurements
included in the scope of Management Review and subject to
auditing for objective evidence of conformity with ISO 9001:2000,
the auditor will be encouraging your organization to use these
metrics by recording in the audit reports that these opportunities
for improvement are deemed suitable and effective.
A common mistake made by auditors is in being too focused
on reporting on the QMS in "Cost of Quality" issues
and language rather than speaking in terms and using nomenclature
that is recognizable to the financial heads of a business,
who are a part of Top Management. The core purpose of the
Management Review (and the source of evidence sought by auditors)
is to ensure that there is a process for identifying improvement
opportunities and for applying muscle to areas that are weak
(either through breakthrough realizations or by meeting and
exceeding quality goals and objectives). Auditors need to
answer the question: How is the Quality Policy reflected in
the decisions and action plans derived from the Management
Review agenda items?
Every organization comes to the table with certain skills
and various levels of management commitment. Working for a
registrar, a discussion we have is what to do about an organization
where the President is never at a Management Review, but he/she
has directed for all the proper amounts of resources and training
to be provided to have the operations run profitably and successfully
and to have the business function as a smooth operation. This
can become a subjective take on the matter, but auditors sometimes
have to work to find the positives and to identify nonconformities,
which may represent opportunities for the QMS to add value
where an organization may be struggling.
Answer From Standards Expert…
Kathy Roberts, President of Sunrise Consulting, Inc.,
an active member of the US TAG to ISO/TC 176 and
Vice Chair of the ANSI Z1 Executive Committee
In order to have an effective QMS, an organization’s
Top Management must demonstrate commitment. The key word is
"demonstrate". Not just talk the talk, but actually
walk the talk. In other words, the organization’s employees
need to hear and see this commitment from the top management
team in the form of actions. Many organizations have management
teams that establish mission and vision statements, quality
policies and quality objectives, but they fail to actually
execute these statements. When this happens, personnel are
often left frustrated and have little understanding of the
organization’s focus or values. They see the written
words that are typically posted all over the organization
but don’t see them effectively implemented.
Top Management can demonstrate its commitment in a variety
of ways. First, the management team can hold periodic "all
employee" meetings to put them face-to-face with the
workforce. During these meetings, a member of Top Management
can communicate current information about the business in
terms of customers and their requirements, products, financials,
etc. The main intent is to have an exchange of information
between employees and management. By doing this, the organization
also meets the intent of Subclause 5.5.3, Internal Communication.
Secondly, by documenting and communicating the Quality Policy
and ensuring that measurable objectives have been established,
Top Management is demonstrating its commitment.
Finally, another way Top Management can demonstrate its commitment
to the QMS’s effectiveness is by conducting "action-oriented"
Management Reviews. That is, Top Management reviews information
(i.e., data collected as review inputs per Subclause 5.6.2),
analyzes it and subsequently makes decisions and takes action
based on the analysis of this data. Management Review meetings
should be an "information sharing" event, not just
an "information presenting" exercise. When the management
team simply presents information from each area of the business,
without any lively discussion, a valuable opportunity to identify
areas for improvement is missed. Consequently, the organization’s
personnel are left to wonder what goes on behind those closed
doors, because little to no action is taken on the problems
they are seeing every day.
When ISO 9001:2000 was being drafted, the intent was that
there will be a review of the QMS "at planned intervals",
but it was never intended that this review must take place
in a separate meeting or without consideration of other business
objectives. To make the Management Review even more effective,
I suggest that you merge the QMS Management Review meeting
with other business meetings that take place. In other words,
conduct a comprehensive "business review" that includes
the key performance metrics of the organization, which typically
include sales and financial data. By handling the reviews
in this way, the top management team is actively participating
in the review of the QMS in conjunction with the other areas
of the business. This approach enables the QMS to be seen
as the business management system, rather than the "Quality
Department’s" responsibility, as is the case in
some organizations.
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