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Internal & External Factors

Clause 4 of the new standard requires that an organization must determine what issues and requirements will impact planning and quality. To establish the context means to define the external and internal factors and must consider when and how they affect quality.

The internal context may include:

• Your products and services
• Organizational structure and accountability
• Regulations and / or legal requirements
• The policies and strategies used to achieve the organization’s goals
• Assets – both human capital and traditional hard assets
• Information systems
• The relationships and communication methods used to disseminate the organization’s values to stakeholders, suppliers, and partners
• Method and scope of the organization’s contractual obligations and relationships with the QMS

The external context may include:

• Government regulations and changes in the law
• Economic shifts in the organization’s market
• The organization’s competition
• Events that may affect corporate image
• Changes in technology

Typically, all this information is in the heads of your organization’s Leadership Team, but it was never put on paper; the best way to gather it is by organizing some brainstorming. Understanding and integrating all this information can be very valuable and demonstrate where you stand as an organization.

So, what are the next steps?

1. Determine the internal/external factors that are relevant to the company’s purpose, goals, and the QMS.
2. Define the interested parties and their needs and expectations.
3. Based on the relevant contextual issues and the needs of relevant parties, in conjunction with the company’s products and services, establish the scope of the QMS and document it. If something in ISO 9001 doesn’t apply to the business, document the justification to exclude it.
4. Set up a process to monitor all the information pertaining to these factors as a regular agenda item in your Management Review process.

Remember, although you have until 2018 to changeover and become certified/recertified to the new standard, now is the time to start the transition in order to minimize disruption to the business as much as possible. And if you are considering pursuing ISO 13485 for medical or AS9100 for Aerospace, there is significant crossover and using someone highly experienced in all three will assure the changes to your QMS will translate seamlessly with all three.

Contact me for my free ISO 9001:2015 Readiness Checklist and perform a quick self-assessment to gage your preparedness for the new standard. Then call to see how I can help.

920-841-3478

Steve@TheRightApproachConsulting.com

 

Making the Simple Complex

With each iteration of ISO 9001, the powers that be seem bent on developing one requirement using verbiage that makes a simple concept complicated to understand. For the 2015 version of ISO 9001, Context of the Organization is it. They can certainly take a cue from my friend Tom Peters when, while explaining a new management concept in his typically simple terms, he told the CEO of a Fortune 500 Company “I just don’t know how to make this any more complicated for you!”

The “Organization’s Context” is defined as “the combination of internal and external factors and conditions that can have an effect on an organization’s approach to its products, services, investments and interested Parties.”

Wow, see what I mean! This really applies to the development of your organization’s Quality Management System (QMS), and if you are already certified to ISO 9001:2008 you have most likely done this analysis informally during strategic planning using SWOT Analysis, Market Research, Competitive Landscape Benchmarking and other tools. The difference is that now this activity must be documented and reviewed regularly; with my suggestion being via your current Management Review process.

The “Interested Parties” are defined as those that effect your QMS. Conversely, management need not consider entities that do not have an effect on the QMS, although this should be a very short list, because as I preach to my clients, the “Q” can functionally be removed from QMS as it is actually a Management System for the entirety of the business.

Because the textbook definition of “Context” talks about how something can be influenced by its surrounding circumstances and facts, it does make sense to apply this to your QMS. Since the implementation of a QMS is a strategic decision, there are certain factors that influence how the organization operates in their business environment. These “factors” that make up the “context” are divided into two categories: Internal and External.

Next week in Part 2 I will show you “Where to Start” and discuss what types of influences should be included in both the Internal and External context analysis.

Contact me for my free ISO 9001:2015 Readiness Checklist and perform a quick self-assessment to gage your preparedness for the new standard. Then call to see how I can help.

920-841-3478

Steve@TheRightApproachConsulting.com

 

The goal of root cause analysis (RCA) is to find out what really happened, why it happened, and how to prevent it from happening again. Chasing symptoms instead of digging deep to find root cause will almost certainly guarantee that the problem will repeat. Peeling back the onion, layer-by-layer, can be a long and tedious process, but it will be very difficult to attack the heavy-hitters by analyzing the symptoms and not the source.

Although RCA is initially a reactive mechanism, it can become a tool for developing prevention strategies if used properly. Whatever methodology of RCA is used, the system must:

• Be interdisciplinary team-based
• Include those most familiar with the situation
• Dig deep at each level of cause & effect
• Employ the 5 Whys
• Be a process that identifies needed system changes
• Be unbiased

While there may be the occasional Nero Wolfe in a company (or for my younger readers, a Gil Grissom), advanced RCA skills are generally a learned behavior. The first investment should be in advanced problem-solving training for (at a minimum) all management and quality personnel on the tools we have discussed here recently that are part of the Quality Toolbox. I like to make the analogy to one of my favorite television programs, Crime Scene Investigation (the Grissom reference).

I think a quality professional is like a CSI, and the defect is the crime scene. As illustrated in the adjacent figure, during each episode the point is reiterated that the evidence will lead to the origin of the crime. The same is true with root cause analysis; where you find one you will always find the other if you dig deep enough.

 

Plan-Do-Check-Act Cycle (PDCA): This is more of a quality methodology that employs a four-step model, which seeks continuous improvement by combining constant evaluation of management policy and procedures with statistical analysis. The PDCA model was developed by Dr. Walter A. Shewhart and was later refined by the good doctor’s most famous student; W. Edwards Deming. PDCA can be used in a variety of situations, for example, when beginning improvement projects, developing a new or improved process, product or service, defining a repetitive work process, performing root cause analysis, or implementing any change.

The process-based quality management systems prescribed by ISO are also based on the Plan-Do-Check-Act model, and this methodology can apply to any industry in both manufacturing and service business sectors.

• Plan: Identifying a goal or purpose, formulating a theory, defining success metrics and putting a plan into action
• Do: Action or implementation of the plan
• Check: Outcomes are monitored to test the validity of the plan for signs of progress and success, or problems and areas for improvement
• Act: Closes the cycle, integrating the learning generated by the entire process, which can be used to adjust the goal, change methods or even reformulate a new theory altogether

 

These four PDCA steps are repeated over and over as part of a never-ending cycle of continuous improvement.

 

Pareto Analysis: Around the turn of the 20th century, Italian economist Vilfredo Pareto made a couple of observations that led him to develop a principle that continues to be a powerful problem-solving tool today. He observed that around 20% of the Italian population owned approximately 80% of Italy’s wealth. He later observed that about 20% of the pea pods in his garden produced roughly 80% of his pea crop each year. This correlation led Pareto to postulate that, in most things, a small number of causes are responsible for a large percentage of the effect. In the late 1930’s, quality guru Dr. Joseph M. Juran recognized this principle as the Vital Few and Trivial Many Rule, which was later generalized into Pareto’s Principle or the 80/20 Rule.

Pareto analysis allows management by data instead of emotion; and as with most things, data-based decision-making will yield the highest return on investment. The first step is to categorize the problems by type or defect code. Next, generate a simple histogram, which ranks the defects in descending order of magnitude. Then, using the data set in the histogram, graphically portray the data set in a simple bar chart format. Finally, add a trend line showing the accumulated relationship of the defects to the whole, to visually identify what defects make up roughly 80% of the total dollars. The attached Figure illustrates what a Pareto Diagram might look like in a typical metal fabrication process. The strategy behind Pareto Analysis is to identify the areas with the highest improvement potential while minimizing the number of improvement initiatives. What this means in simple terms is getting the biggest bang (improvement) for the buck (effort).

Referring again to the Figure, the improvement team would easily determine that their efforts should be focused on eliminating the two defects labeled “Scratches” & “Paint”. Once improvement has been attained on these “80/20” areas, the reporting cycle is run again. The “new 80/20” problem areas are identified, and the team now focuses on eliminating these. The beauty of this system is that, with each iteration, the order of magnitude continuously declines so that the next 80% of the dollars represent a much lower amount of waste dollars, which is the essence of continuous improvement.