Quality Management Principles for ISO 9000

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ISO 9000 essentials• This section concisely describes the essential features of the ISO

9000 family. • The ISO 9000 family of standards represents an international

consensus on good quality management practices. It consists of standards and guidelines relating to quality management systems and related supporting standards.

• ISO 9001:2008 is the standard that provides a set of standardized requirements for a quality management system, regardless of what the user organization does, its size, or whether it is in the private, or public sector. It is the only standard in the family against which organizations can be certified – although certification is not a compulsory requirement of the standard.

• The other standards in the family cover specific aspects such as fundamentals and vocabulary, performance improvements, documentation, training, and financial and economic aspects.

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The ISO 9000 family – core standards

A Quality System versus a Management System

• The management system of a company should be determined strategically and must meet the company’s business objectives.

• The ISO standards and guides can be used to accomplish strategic business objectives, to create a quality management system that fits the business, integrates company-wide operations, and makes profit.

• The benefits of such as system are beginning to be documented as improved worker productivity, increased process efficiency, reduced errors, time saved, access to real time information, data for making decisions, positive customer surveys and empowered workers. *

FIG1.3B.ppt

A Quality System is a Management System

Adapted from: Ludwig-Becker, M., Electronics Quality Management Handbook, McGraw-Hill, 1997, p.18

ISO 9000-2000 Invokes Quality Management Principles(QMP)

– Highlights of the ISO 9000-2000 are:• Customer focus, leadership, involvement of people, process approach,

systematic approach to management, continual improvement, factual approach to decision making, and mutually beneficially supplier relations.

• The ISO 9001:2008 standard provides a tried and tested framework for taking a systematic approach to managing the organization's processes so that they consistently turn out product that satisfies customers' expectations

Quality Management Principles: Definition

• The definition of Quality Management Principles is:– A comprehensive and fundamental set of rules or beliefs for leading and

operating an organization aimed at continually improving performance over the long term by focusing on customers while addressing the needs of all stakeholders

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• the eight quality management principles on which the quality management system standards of the ISO 9000:2000 and ISO 9000:2008 series are based. These principles can be used by senior management as a framework to guide their organizations towards improved performance.

• The ISO 9001:2008 lays down what requirements your quality system must meet, but does not dictate how they should be met in any particular organization. This leaves great scope and flexibility for implementation in different business sectors and business cultures, as well as in different national cultures.

What are the Eight (8) Quality Management Principles?

1. A Customer Focused Organization2. Leadership3. Involvement of People4. Process Approach5. Systematic Approach to Management6. Continual Improvement7. Factual Approach to Decision-Making8. Mutually Beneficial Supplier Relationships *1

Principle 1: Customer Focus/Satisfaction

Principle 1: Customer focus Organizations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations.

Key benefits: •Increased revenue and market share obtained through flexible and fast responses to market opportunities.

•Increased effectiveness in the use of the organization's resources to enhance customer satisfaction.

•Improved customer loyalty leading to repeat business.

Principle 1: Customer Focused OrganizationsOrganizations depend on customers and must understand, strive to meet and

exceed customer expectations. *1

• Two facets: Customer focused organizations, which should result in customer satisfaction is a number one objective– World Class Companies (Motorola/Hewlitt Packard (HP)/Texas

Instruments (TI) anticipate customer requirements/needs– Baldrige category : “Customer Focus and Satisfaction” is one

whole area• Long term customers a plus for business

– Profits come from upgrades, services, new products that people believe in; Customer Satisfaction is only the first step in building long term loyal customers; the need is to focus on retention and loyalty

– Use Quality Function Deployment (QFD)

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• Applying the principle of customer focus typically leads to:

• Researching and understanding customer needs and expectations.

• Ensuring that the objectives of the organization are linked to customer needs and expectations.

• Communicating customer needs and expectations throughout the organization.

• Measuring customer satisfaction and acting on the results. • Systematically managing customer relationships. • Ensuring a balanced approach between satisfying customers

and other interested parties (such as owners, employees, suppliers, financiers, local communities and society as a whole).

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Principle 2: Leadership • Leaders establish unity of purpose and direction of the

organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization's objectives.

• Key benefits:• People will understand and be motivated towards the

organization's goals and objectives. • Activities are evaluated, aligned and implemented in a

unified way. • Miscommunication between levels of an organization will

be minimized

Principle 2: LeadershipLeaders establish unity and purpose for the internal environment of the

organization.*1

• Leaders must be people that– Have the ability to think in time spans of years instead of months – Visualize life in 5 years--what do you want it to be– Stresses corporate “big picture”

• Leaders– Develop a participative climate

• Partnerships• Make others responsible• Employee participation

– “Walk what you talk”– “Say what you mean, mean what you say”

*1 ISO 9004-2000, p.5

Vision Led Value Driven Leadership

Principle 2: Leadership

• Leadership skills must be cultivated – Encourage innovation and change

• No fear of failure, sponsor change – 3M has scientists spend 15% of time on

new ideas– Provides corporate funding

• Create a secure environment– Compromise between Japanese concept

of lifetime employment and the American tendency to “fire at will”

– Creates greater work efficiency

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• Applying the principle of leadership typically leads to:

• Considering the needs of all interested parties including customers, owners, employees, suppliers, financiers, local communities and society as a whole.

• Establishing a clear vision of the organization's future. • Setting challenging goals and targets. • Creating and sustaining shared values, fairness and ethical

role models at all levels of the organization. • Establishing trust and eliminating fear. • Providing people with the required resources, training and

freedom to act with responsibility and accountability. • Inspiring, encouraging and recognizing people's

contributions.

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Principle 3: Involvement of people

• People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization's benefit.

• Key benefits: • Motivated, committed and involved people within the

organization. • Innovation and creativity in furthering the organization's

objectives. • People being accountable for their own performance. • People eager to participate in and contribute to continual

improvement.

Principle 3: People Involvement People at all levels are the essence of the organization and their full involvement

enables their abilities to be used for the organization’s benefits. *1

• Worker empower comes from the ability of employees to make a difference in the process they manage.• Workers need tools to analyze, organize, understand and use large amounts of data to make important decisions that impact the bottom line

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Motivation

• Maslow’s Hierarchy of Needs• Herzberg’s Two-Factor Theory

• Achieving a motivated task-force

(Know thyself, Know your employees, Establish a positive attitude, share the goals, Monitor progress, Develop interesting work, Communicate effectively, Celebrate success.

Principle 3: Applying the principle of involvement of people typically leads to :

• People understanding the importance of their contribution and role in the organization.

• People identifying constraints to their performance. • People accepting ownership of problems and their

responsibility for solving them. • People evaluating their performance against their personal

goals and objectives. • People actively seeking opportunities to enhance their

competence, knowledge and experience. • People freely sharing knowledge and experience. • People openly discussing problems and issues.

Principle 3: People Involvement

• Empowerment** – Responsibility is delegated, not authority– Three facets to empowment (each depends on the other two)

• Wisdom to know what to do and when to do it• The will to do what needs to be done and• The wherewithal to do it: : The empowment cube

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Empowerment

• To invest people with authority –to tap the potential in every worker (avoid the wastage of unrealized capacity)

• People have the ability, confidence and commitment to take the responsibility and ownership to improve the process, and initiate the necessary steps to satisfy customer requirements within well-defined boundaries in order to achieve organizational goals.

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Conditions for empowerment

• Everyone must understand the need for change

• The system needs to change to the new paradigm

• The organization must enable its employees to work in Teams.

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Principle 4: Process approach • A desired result is achieved more efficiently

when activities and related resources are managed as a process.

• Key benefits:• Lower costs and shorter cycle times through

effective use of resources.

• Improved, consistent and predictable results.

• Focused and prioritized improvement opportunities

Principle 4: Process ApproachA desired result is achieved more efficiently when related resources and activities

are managed as a process. *1

• Everything done is involved in a process– Meets needs and requirements of internal and external customers– Must have clear responsibility for each process– Measure process, measure inputs, and outputs

Principle 4: Process Approach

– Total quality management (TQM) is cornerstone of process

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• Applying the principle of process approach typically leads to:

• Systematically defining the activities necessary to obtain a desired result.

• Establishing clear responsibility and accountability for managing key activities.

• Analyzing and measuring of the capability of key activities.

• Identifying the interfaces of key activities within and between the functions of the organization.

• Focusing on the factors such as resources, methods, and materials that will improve key activities of the organization.

• Evaluating risks, consequences and impacts of activities on customers, suppliers and other interested parties.

Principle 4: Process Approach

• Processes should satisfy customer’s needs– If they don’t; they are NOT good processes

• Process improvement focuses on implementing the best methods for translating valid operational requirements into finished products and services

• Processes are defined by flow charts • Identify key processes and related goals

– Define key cross functional business processes– Form teams and develop charters– Develop measurements– Manage the Process

• process maintenance, improvement, team improvement

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Continuous Process Improvement

• Process refers to business and production activities of an Organization.

• Processes for improvement- eg. Design & Manufacturing, Marketing, Stores & Purchase, etc.

• Inputs of the Process- Manpower, materials, money,data,etc.

• Outputs- Products, Services, data etc. Outputs need performance measures – main outcome being customer satisfaction. (feedback is used to improve the process)

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Continuous Process Improvement

•

INPUTMaterialsMoneyData,etc.

PROCESSPeople

EquipmentMethod

EnvironmentMaterialsProcedures

OUTPUTInformationDataProduct

Service,etc.

CONDITIONS

O/P

FEEDBACK

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Principle 5: System approach to management

• Identifying, understanding and managing interrelated processes as a system contributes to the organization's effectiveness and efficiency in achieving its objectives.

• Key benefits: • Integration and alignment of the processes that will best

achieve the desired results. • Ability to focus effort on the key processes. • Providing confidence to interested parties as to the

consistency, effectiveness and efficiency of the organization.

Principle 5: Systematic Approach to ManagementIdentifying, understanding, and managing a system of interrelated processes for a given objective contributes to the effectiveness and efficiency of the organization.

• Management:– A series of interrelated processes – A system is defined by identifying all interrelated processes and

their interdependences– A system is managed as system of interrelated processes

• Integrated Master Plan (IMP); Integrated Master Schedule (IMS)

– A system is improved by continuous measuring and evaluating– An effective system provides confidence in organization’s

capability to meet customer requirements

Principle 5: Systematic Approach to ManagementThe Business Process

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• Applying the principle of system approach to management typically leads to:

• Structuring a system to achieve the organization's objectives in the most effective and efficient way.

• Understanding the interdependencies between the processes of the system.

• Structured approaches that harmonize and integrate processes.

• Providing a better understanding of the roles and responsibilities necessary for achieving common objectives and thereby reducing cross-functional barriers.

• Understanding organizational capabilities and establishing resource constraints prior to action.

• Targeting and defining how specific activities within a system should operate.

• Continually improving the system through measurement and evaluation

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Principle 6: Continual improvement

• Continual improvement of the organization's overall performance should be a permanent objective of the organization.

• Key benefits: • Performance advantage through improved organizational

capabilities. • Alignment of improvement activities at all levels to an

organization's strategic intent. • Flexibility to react quickly to opportunities

Principle 6: Continual/Continuous ImprovementContinuous/continual improvement is the permanent object of an organization

that wishes to stay in business. *1

• Performance improvement: 3 flavors• Strategic planning--customer needs• Operational planning--translates strategy into operational and financial requirements• Process improvement focuses on best methods for operational requirements into finished

product/services • Demings:Plan/Do/Act/Study(check)

– P- Plan activities– D- Implement the Plan– C- Study (Check) the result– A- Improve the process

Principle 6: Continual/Continuous Improvement

• Phases of continuous process improvement • Awareness, Resistance, Expansion, Integration and finally regeneration, or

continuous improvement• Strategies for Implementation

– 1. Commitment– 2. Training– 3. Targeting and Deployment– 4. Resources– 5. Measurements– 6. Management Structure– 7. Systems Alignment– 8. Communication and Information

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• Applying the principle of continual improvement typically leads to:

• Employing a consistent organization-wide approach to continual improvement of the organization's performance.

• Providing people with training in the methods and tools of continual improvement.

• Making continual improvement of products, processes and systems an objective for every individual in the organization.

• Establishing goals to guide, and measures to track, continual improvement.

• Recognizing and acknowledging improvements

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Principle 7: Factual approach to decision making

• Effective decisions are based on the analysis of data and information

• Key benefits: • Informed decisions. • An increased ability to demonstrate the effectiveness of

past decisions through reference to factual records. • Increased ability to review, challenge and change opinions

and decisions.

Principle 7: Factual Approach to Decision-MakingEffective decisions and actions are based on the logical and intuitive analysis of

data and information.*1

• “Can’t manage what you can’t measure” • “In God we trust, all others bring data”• Programs that produce employee involvement

– Statistical Process Control (SPC)--more than for manufacturing• Now used in all soft processes

– Motorola’s Six Sigma program is a SPC program, that produces a goal for all the employees to aim at and rally around

• Must measure all processes, especially business processes– This is where the money can be saved and customer satisfaction

heightened

• Measurement must be automatic: built into the process

Principle 7: Factual Approach to Decision-Making

Principle 7: Factual Approach to Decision-Making Measuring Business Processes

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Applying the principle of factual approach to decision making typically leads to:

Ensuring that data and information are sufficiently accurate and reliable.

Making data accessible to those who need it.

Analyzing data and information using valid methods.

Making decisions and taking action based on factual analysis, balanced with experience and intuition

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Principle 8: Mutually beneficial supplier relationships

• An organization and its suppliers are interdependent and a mutually beneficial relationship enhances the ability of both to create value

• Key benefits: • Increased ability to create value for both parties. • Flexibility and speed of joint responses to changing market

or customer needs and expectations. • Optimization of costs and resources.

Principle 8: Mutually Beneficial Supplier Relationships Mutually beneficial relationships between the organization and its suppliers

enhance the ability of the organization to create value.

• A Win Win Philosophy!!!! • Supplier Partnership is the new buzzword

• Part of a new way of doing business• TQM is making the difference • Fewer suppliers/longer term suppliers, specialization, cost• Cross functional teams including suppliers• Best Value = Customer satisfaction• Involved in Service sector as well

– Involve suppliers in product development• On Site, strategic planning, input on product plans

– Electronic purchase orders and automated systems

Principle 8: Mutually Beneficial Supplier Relationships

• Supplier Chain Management– Measures cycle time

• Cuts transportation costs 5-12%• Inventory costs 10-40%• Schedule changes 15-65%

– Cuts out stovepipes; allows more benchmarking**

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• Applying the principles of mutually beneficial supplier relationships typically leads to:

• Establishing relationships that balance short-term gains with long-term considerations.

• Pooling of expertise and resources with partners. • Identifying and selecting key suppliers. • Clear and open communication. • Sharing information and future plans. • Establishing joint development and improvement

activities. • Inspiring, encouraging and recognizing

improvements and achievements by suppliers.

Summary

• Implementing the Eight Principles is not easy• Takes a good leader• Takes vision/perseverance• An infrastructure must be established• Communication needs to be done • Much planning should start immediately• Goes along well with ISO 9000 implementation• See attached Self Assessment for QMP Implementation

Self Assessment for Quality Management Principles (QMP), page 1

Self Assessment for Quality Management Principles (QMP), page 2

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Implementing and maintaining a QMS based on ISO 9001 standard

• The implementation process is important in achieving the full benefits of the quality management system (QMS). Most new users will obtain measurable payback early in the process.

• For a successful implementation of your QMS, these seven steps are recommended :• 1.    Fully engage top management to

– Define why you want to implement ISO 9001 – Define your mission, vision, and values in your organization – Define your organization’s stakeholders : customers, suppliers, stockholders,

employees, society, etc. – Define your quality policy, and – Define and align organizational objectives and related product/service quality

objectives.• 2.    Identify key processes and the interactions needed to meet quality objectives • 3.    Implement and manage the QMS and its processes (using process management

techniques)

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• 4.    Build your ISO 9001-based QMS – Identify ISO 9001 requirements – Map these requirements with your implemented QMS, where applicable – Make a gap analysis: identify where in your existing system the

requirements are fulfilled, and where they are not – Include in your QMS processes the activities, procedures and controls

needed • 5.    Implement the system, train company staff and verify

effective operation of your processes • 6.    Manage your QMS

– Focus on customer satisfaction – Monitor and measure the operation of your QMS – Strive for continual improvement – Consider implementing business excellence models in the company

operations

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Process model of the ISO 9000 family of standards

• The following diagram depicts the relationships of the standards in the ISO 9000 family and where they may be applied when implementing your quality management system.

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Example

• A large chemical processing company was required by its major customers to gain certification to ISO 9001 and to be environmentally friendly. To address these issues, the company leadership planned a comprehensive management strategy linking their QMS and an environmental management system (EMS). A thorough review of their business processes indicated that all elements of ISO 9001 were applicable to their quality management system and the Annex in ISO 9001 provided the information needed to effectively link it to the ISO 14001 EMS standard. The company used ISO/TR 10013 to guide the development of the required documentation in its various production divisions, ISO 10015 for guidance in the preparation of training plans for their employees and ISO 19011 for auditing both the QMS and EMS. Management achieved additional benefits and continual improvements using ISO 9000 and ISO 9004.

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Example

• A computer software developer serving a niche market recognized that as their user base expanded they would be faced with issues concerning product management including new product development and configuration control. Changes to base products, user hardware and regulatory requirements were compounding customer service issues. The company used ISO/IEC 90003 (QMS for software) when developing new software and incorporating new features in existing product lines. ISO 9004 provided the guidance they needed to establish documented procedures to implement change control and software improvement. ISO 10006 and ISO 10007 provided additional assistance as they managed the project and prepared procedures for configuration management. They later acquired another software developer and were able to use their QMS to guide the integration of the acquisition into their own structure very quickly with a minimum of disruption to customers.