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Volume 8 · Issue 4 · June 2002

Contents

QS-9000 Interpretations and Supplier Development Q&A
IASG Interpretations Detail QS-9000 Phase-Out Process

On May 28, 2002, the International Automotive Sector Group (IASG) issued several new IASG Sanctioned QS-9000 Interpretations that become effective July 1, 2002.

The new entries do not represent so much new Interpretations of the third edition’s requirements as supplemental information regarding how QS-9000:1998 is to be conformed with today and in the years leading up to its phase-out on December 14, 2006. The complete set of IASG Interpretations is reprinted in the supplement accompanying the June issue of THE OUTLOOK, with the new Interpretations dated (7/1/02).

Two key changes defined as a result of the new interpretations are:

  1. Ford Motor Company’s customer-specific requirements in Section II of QS-9000:1998 have been in effect amended to defer to Q1 2002 in some areas.
  2. The process for the phase-out of QS-9000:1998 certificates of registration has been formally defined and described.

In addition, the DaimlerChrysler/Ford Motor Company/General Motors Supplier Quality Requirements Task Force (SQRTF) has developed a document that addresses the implications surrounding Interpretation C9, which became effective July 1, 2001. This report examines the new Interpretations issued by the IASG and the SQRTF document.

It is important to note that the 2006 date is when QS-9000:1998 will no longer be a registration option and that making the transition to ISO Technical Specification (TS) 16949:2002, Quality management systems—Particular requirements for the application of ISO 9001:2000 for automotive production and relevant service part organizations, sooner would be a smart business decision for many suppliers.

New Interpretations
The two additions contained in the latest version of the IASG Interpretations represent to a certain degree "housekeeping" by the SQRTF following developments since the last version became effective July 1, 2001. The first addition—Interpretation C10, Ford Motor Company Specific Requirements—relates to changes in Ford’s supplier requirements with the introduction of Q1 2002, which became effective February 1, 2002.

The second addition, Interpretation R8, spells out what registrars will need to do regarding QS-9000 certificates so that they will remain in effect after the ISO 9001:1994 content in QS-9000:1998 becomes "obsolete" on December 15, 2003.

C10 states requirements that are intended specifically for Ford suppliers that hold Q1 2002 status. It actually serves two purposes:

  1. Affirms Q1 2002’s requirement that production suppliers to Ford’s operations in Europe and North America be registered to QS-9000 or ISO/TS 16949 by a qualified third-party registrar by February 1, 2002. The third edition of QS-9000 states that all Ford suppliers, except those serving Ford’s Australian operations, are not required to be registered to QS-9000, since Ford held that self-declared conformity was acceptable in light of the need for its suppliers to hold Q1 status. C10 basically reverses the QS-9000 registation position Ford stated when the third edition was released and Q1 did not require registration. Ford did begin to require QS-9000 registration of new suppliers and of suppliers that lost their Q1 status and wanted to regain it, but those already holding Q1 status could self-assess. Now that Q1 has been revised to require QS-9000 or ISO/TS 16949 registration of all suppliers, the Ford statement in QS-9000 needed to be updated. Ford retains the right to waive the registration requirement for specific suppliers.
  2. Establishes the Quality Operating System (QOS) performance metrics required by Q1 2002, which are to be covered annually in a supplier’s Manufacturing Site Assessments, as the metrics to be used to satisfy QS-9000:1998 as well as Q1. In addition, C10 authorizes a Tier 1 supplier to Ford to use the Q1 2002 Manufacturing Site Assessment to conduct second-party audits of subcontractor development per Interpretation C9. A Tier 1 is still required to obtain a letter of authorization for its second-party audits from Ford, although this is available on the Ford web site in an area accessible by suppliers holding Q1 status.

The more far-reaching addition is R8, which directs QS-9000-qualified registrars on how QS-9000:1998 certificates of registration are to be handled in 2003. It is at the end of 2003 that ISO 9001/2:1994 will technically cease to exist for registration purposes, even though they will remain a part of QS-9000:1998 for now.

The SQRTF has indicated that it has gained agreement from ISO to permit the continued use of the 20 clauses that make up Section 4 of ISO 9001:1994 in QS-9000:1998, which will not be revised. But the agreement lasts only until December 14, 2006, at which time any registrations to QS-9000:1998 will cease to be recognized.

As reported in April, the extended period for ISO 9001/2:1994 use as part of a QS-9000:1998 registration was arranged to permit the efficient and value-added transition of QS-9000-registered organizations to ISO/TS 16949:2002 or its successor. There are more than 22,000 certificates of registration to QS-9000:1998 worldwide, or approximately 5% of worldwide registrations to ISO 9001/2, and possibly a large number of secondary registrations to ISO 9001/2 among suppliers to these QS-9000 registrants.

It was not verified at press time, but one reason for a new interpretation discussing the procedures to be followed for QS-9000:1998 certificates may be a certain amount of misinformation in the marketplace. Apparently, a few registrars have incorrectly informed their QS-9000-registered clients that they would need to undergo a transition audit to ISO 9001:2000 to maintain their QS-9000:1998 registrations.

[THE OUTLOOK is directly aware of two instances. One involved a subscriber who reported to THE OUTLOOK that his registrar’s auditors said his company would need to upgrade its certificate to ISO 9001:2000 by December 15, 2002, to maintain its QS-9000 registration. In the other, an attendee at an ASQ Annual Quality Congress session on May 22, 2002, asked the presenter if his company needed to upgrade its QS-9000 registration to ISO 9001:2000 by December 2003, since his company was also told by its registrar that it needed to make the transition. In the first instance, THE OUTLOOK contacted the registrar, which confirmed that its client’s QS-9000:1998 certificate would remain in effect based on ISO 9001:1994 conformance after the ISO 9001:2000 transition deadline.]

This misinformation might be the result of auditor interpretations of the guidelines set up by the International Accreditation Forum (IAF) for the transition to ISO 9001:2000. The IAF’s statements might be read to mean that, if a certificate of registration is for ISO 9001/2:1994 but includes verified compliance to QS-9000, it would need to be upgraded to ISO 9001:2000, even though the organization is actually registered to QS-9000, which includes ISO 9001/2:1994 conformance. The problem is thus with the certificate if the organization only wants to maintain QS-9000:1998, and not ISO 9001:2000, registration.

While transitioning now to ISO 9001:2000 directly or through ISO/TS 16949:2002 could have significant benefits to an automotive supplier as a result of an improved QMS, QS-9000-registered organizations should be aware of what Interpretation R8 details, since it will prevent any errant auditors from misadvising them.

Interpretation R8 specifies the wording to be used on any new or renewed QS-9000:1998 certificates issued after July 1, 2002, which makes clear that the registration is to QS-9000:1998 with conformance to the requirements of either ISO 9001:1994 or ISO 9002:1994.

The implication is that the organization is in conformance with ISO 9001/2:1994 by virtue of its registration to QS-9000:1998 but is not actually registered to ISO 9001/2:1994, certificates for which will cease to be recognized after December 15, 2003. In fact, any QS-9000:1998 registration certificate with an expiration date beyond December 15, 2003, must be replaced by the end of the transition period to reflect the new wording. R8 also prohibits the issuance of QS-9000:1998 certificates having an expiration date after December 14, 2006. Further, a single certificate cannot be issued to register an organization as being in conformance with both QS-9000:1998 and ISO 9001:2000.

Although not a change from the last edition of the Sanctioned Interpretations, individuals and organizations with questions can submit their queries to an e-mail address (Info@QS-9000.org). This e-mail address is not actually provided in the Sanctioned Interpretations, which refers instead to a web site address (www.QS-9000.org) where a link to the e-mail address is found. The web site also permits the user to download both the latest IASG Sanctioned QS-9000 Interpretations and the document containing additional information on 4.6.2.1 and Subcontractor Development.

Questions and Answers on Subcontractor Development
As reported in the summer of 2001, Interpretation C9 was issued to clarify the meaning of "the goal of subcontractor compliance" as far as 4.6.2.1, Evaluation of Subcontractors—Subcontractor Development, of QS-9000:1998 was concerned. However, there was some uncertainty as to what subcontractors were covered by C9, which requires subcontractors to be registered to ISO 9001/2 or subject to customer-approved second-party audits.

There were also questions about what procedures were to be followed to ensure that second-party audits for ISO 9001/2 conformance of subcontractors were acceptable to all original equipment manufacturers (OEMs) that require QS-9000 or ISO/TS 16949 registration.

The SQRTF document, which includes six questions and their answers, helps to define the subtier suppliers C9 covers and explains how second-party audits need to be conducted and recorded. Drafted by SQRTF members Hank Gryn of DaimlerChrysler, Russ Hopkins of Ford and Joe Bransky of GM, this informational update concerning 4.6.2.1 of QS-9000:1998 and Interpretation C9 boils down to the following key issues:

  1. The subcontractors to which 4.6.2.1 and C9 apply are organizations that supply production and service parts or materials (plus providers of heat treating, painting, plating or other finishing services) directly to an organization required to be registered to QS-9000 by an OEM or any other customer. Thus, if a major Tier 1 supplier requires its suppliers (Tier 2s) to be registered to QS-9000, then the direct suppliers to those Tier 2s are considered subcontractors subject to the ISO 9001/2 registration or second-party assessment requirements of C9. In other words, if a customer requires its suppliers to be QS-9000-registered, then the suppliers to those QS-9000-registered organizations are subject to 4.6.2.1 and C9.
  2. An organization that is required to be registered to QS-9000 has two options for demonstrating "development" of its suppliers per 4.6.2.1 and C9. The first option is to require those suppliers to obtain ISO 9001/2 registration by December 31, 2002 (and transition to ISO 9001:2000 by December 15, 2003). The second option is to conduct OEM customer-approved second-party assessments of those suppliers for conformance with Section I of QS-9000. Assessments to ISO/TS 16949 are accepted by all of the Big Three, while Ford also accepts subcontractor assessments per a Q1 2002 Manufacturing Site Assessment.
  3. The SQRTF has established a set of "OEM-Approved Second-Party Requirements", which is reprinted below. Any Tier 1 supplier that wants to conduct second-party audits of its suppliers rather than subject them to a registration mandate can do so, but only after meeting the SQRTF criteria and obtaining a written approval of its second-party audit process from each OEM that requires QS-9000 registration to which the organization supplies. Further, registrars are expected to examine the documentation from the second-party audits during QS-9000 surveillance audits of Tier 1s. Among the documentation to be maintained in a supplier’s files are records of the customer approvals of the second-party audit process and the audit reports, including the audit reviews and results.
  4. There are exceptions. First, if a subcontractor is a distributor for parts manufacturers and does not add manufacturing value to the parts or other materials, neither the distributor nor the parts manufacturers are required to be registered to ISO 9001/2 or subject to second-party assessments. Second, subcontractors that supply insignificant parts having a small impact on the supplier’s or OEM’s product can be exempted by the supplier from certain requirements of QS-9000, including those covered by 4.6.2.1 and C9. A simpler QMS is still recommended even for small subcontractors, but there is an acceptance that it is difficult to get large organizations that supply low volumes of parts to register to ISO 9001/2 or accept second-party audits. But the supplier must document why QMS assessment is being waived for a given subcontractor.

Second-Party Customer Approval Guidelines
The following is the second-party customer approval criteria and authorization jointly agreed by DaimlerChrysler, Ford and General Motors, titled "DaimlerChrysler, Ford Motor Company and General Motors Corporation Second Party Recognition for Compliance to QS-9000, 3rd Edition, 4.6.2.1, and Sanctioned Interpretation C9".

OEM-approved second-party requirements:

  1. The second party must be QS-9000 registered.
  2. The second party cannot be on QS-9000 Probation.
  3. The second party must utilize a qualified Lead Auditor, or qualified Internal Auditor with evidence of their successful completion of training, such as AIAG "Internal Auditing for QS-9000", or evidence of a minimum of five internal QS-9000 audits under the supervision of a qualified Lead Auditor.
  4. The second party must audit annually each qualifying subcontractor for whom it has performed the second-party service, and maintain records of these audits.
  5. The duration of these audits must conform to the full application of the Audit Day Requirements table of Appendix H in QS-9000, Third Edition.
  6. Any of the QS-9000-accredited Registrars (Certification Bodies) may be utilized as an OEM-approved second party.

The Future for Automotive Suppliers
The latest indications are that the Big Three are still regularly reviewing their present third-party registration requirements and considering if there would be any benefit to accelerating the transition to ISO/TS 16949:2002 for all or any subgroup of suppliers. There also have been a few unconfirmed reports that some OEMs are contemplating or have begun to conduct second-party audits of some suppliers on top of requiring third-party registration. Q1 2002 does give Ford the option to send its Supplier Technical Assistance site engineers to a supplier’s facilities to conduct a second-party audit of its conformance to Q1, despite establishing a QS-9000 third-party audit requirement.

THE OUTLOOK views the latest IASG Interpretations as an indication that the SQRTF plans for now to give suppliers until 2006 to upgrade their QMSs to TS 16949:2002. This clearly allows those suppliers that want or need to conform with ISO 9001:2000 or the TS soon to do so, but without requiring all 22,000 suppliers to rush the process.

The procedures have now been established for the phase-out of QS-9000:1998 while the registration scheme for TS 16949:2002 is fairly complete. In addition, supplier development options for QS-9000 have been clearly spelled out that would make transitioning to TS 16949:2002’s supplier development requirements a fairly straightforward exercise in this area that is critical to supply chain performance.

As has been stated in previous articles, deciding whether or not to transition from QS-9000:1998 to TS 16949:2002 remains a business decision that each automotive supplier must make based on what best serves the needs and abilities of the supplier, including the need to satisfy the customer. THE OUTLOOK will continue to provide guidance and information on TS 16949:2002 and recommended approaches to making the transition from QS-9000 for those ready to make the change.

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