The Nuts & Bolts of ISO 9001

Copyright © 2012 BSI. All rights reserved.1

Copyright © 2012 BSI. All rights reserved.

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11/14/2014

Nuts and Bolts of ISO 9001

Jeff Witte, Vice President Business Solutions BSI


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11/14/2014


Quality Management - ISO 9001

11/14/2014


What is ISO 9001?

• ISO 9001 is the world’s most established management system framework.

• Currently, nearly a million organizations in 170 countries have implemented, certified and more importantly recognized the benefits of ISO 9001.

• It sets the standard not just for Quality Management Systems, but management systems in general.

• ISO 9001 is helping all kinds of organizations to meet their strategic objectives and succeed through improved customer satisfaction and staff motivation.


What is ISO 9001?

• A common sense, management system that focuses on consistency, reliability, and improving the way an organization operates

• Specifically, it focuses upon organizational processes, the customer, and improvement

• ISO 9001 PROVIDES A FRAMEWORK FOR THE ORGANIZATION TO OPERATE WITHIN NOT HOW TO OPERATE.


ISO 9000 family of standards

• ISO 9000:2005 – Quality Management Systems-Fundamentals & Vocabulary

• ISO 9001:2008 - Quality Management Systems–Requirements

• ISO 9004:2000 – Quality Management Systems- Guidelines for Performance Improvement

.


Copyright © 2012 BSI. All rights reserved.

Who is ISO 9001 for?

11/14/2014


Who is it for?

• Any organization in any sector who wishes to formalize the way in which their organization operates

• Any organization who is looking to improve the way in which it is managed.

• No organization is too large or too small to reap the benefits of ISO 9001

• The best returns on investment come from companies prepared to implement it throughout their organization rather than particular sites, departments and divisions.


Why introduce ISO 9001?

11/14/2014


Why introduce ISO 9001?

• There needs to be a structure as to how an organization operates.

• Customers are the most important stakeholder to an organization.

• An organization needs to know and understand what their customers’ needs are not only now but in the future so that they can plan for the future to meet customers’ needs.

• ISO 9001 will enable an organization to introduce a structure through the use of processes and knowing the needs of their customers.


What does certification to ISO 9001 mean?

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What does certification to ISO 9001 mean?

• Certification involves an independent third party such as BSI assessing an implemented Quality Management System

• The certification body will assess conformity to the ISO 9001 standard

• This involves visiting the organization and assessing the relevant systems and processes

• Maintaining certification will also involve periodic reassessments


Why do I need certification?

11/14/2014


Why do I need certification?

• Demonstration to customers that the organization has a commitment to quality

• Regular assessments ensure the organization continually uses, monitors, and improves their processes

• Certification can improve business performance, reduce uncertainty, and increase market opportunities

• Can increase profitability


ISO 9001 and SMEs

• Can help you reduce your costs by removing inefficiencies and streamline your processes

• It can also help to focus your limited resources on meeting your strategic and customer objectives

• Give you peace of mind that you are managing the increasing legislative and social demands on your business

• ISO 9001 only requires that you have six procedures, any other documentation is up to you which can be electronic if you wish

• ISO 9001 is not about drowning in irrelevant manuals; keep it simple, a one page flow chart can sometimes be enough

• A good starting point for any SME is to measure what it actually costs to run the business

• Compares this to the cost when you have implemented it to measure your return on investment (ROI)

• As a small or medium organization the question you need to ask yourselves is, can you afford not to implement ISO 9001?


ISO 9001: Evolution

1979

BS 5750:1979

ISO adopts BS 5750 as the basis for ISO standard

ISO 9001:1994 – Minor updates only

ISO 9001:1987

1987 1994

ISO 9001:2000 – Major update to introduce process approach

ISO 9001:2008 – Minor updates only

2000 2008 2015

ISO 9001:2015 – Major update


What are the benefits to ISO 9001

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Benefits of Certifying to ISO 9001

• Strategic

Having a management system that uses the ISO 9001 concepts means that there can be the right controls in place to deal with the level of risks to the organization

• Managerial

The management of the processes that ISO 9001 requires means that management have a much clearer view as to how their organisation operates

• Marketing

Having ISO 9001 registration enables an organization to show to their current and future customers that they are committed to ensuring they meet their requirements


Benefits of Certifying to ISO 9001

•FinancialProvided an organization knows where it has started from re costs of running the organization, it can show that savings can be made due to increased efficiency and effectiveness of their management systems

•OperationalHaving a management system in place will help all the people in the organization to identify with their responsibilities and what their role is in the organization. All people should be involved in the mapping of their processes so that they own their part of the overall processes and ultimately their contribution to the final product and service to the customer

•CustomerThe overriding concept behind the ISO 9000 series of standards is meeting customers’ requirements. This is achieved by having a clear understanding of the customers’ needs and having processes and competent people to deliver the products/services


What are the Drivers for ISO 9001?

11/14/2014


Drivers for ISO 9001

• Provides international, expert consensus on state-of-the-art practices for quality management

• Helps to provide a common language for dealing with customers and suppliers worldwide in B2B

• Can improve efficiency and effectiveness

• Provides a model for continual improvement

• Provides a model for satisfying customers and other interested parties

• Can help to build quality into products and services from design onwards.

• Helps to sustain business

• Helps with the qualification of suppliers for global supply chains

• Provides support for regulations


Why Management Systems Are Important ?

People Processes ResourcesManagement system

CUSTOMER REQUIREMENTS

BUSINESS OBJECTIVES

STANDARD AND REGULATORY

Customer satisfaction

The way you do things

Improved performance

Improved staff motivation

Inputs

Outputs


Plan, Do, Check, Act

11/14/2014


The ISO 9001 Standard

The requirements of ISO 9001 do not tell you “how” to run your business …

… THAT’S UP TO YOU

The requirements describe “what” needs to be achieved


Management System

Management

System

Customer

Satisfaction

Detailed

Strategic

Customer

Requirements

Detailed

Management

Plan

Plan

Resource

DoDo

Realize

Product /

Service

Act Improve

Check

Measure

Analyze

Improve


Model based on Plan, Do, Check, Act

•Plan – This is covered by the QMS, management responsibility, and resource management

•Do – This is covered by “product realization” where following the planning instructions are received from customers, and customer services are provided

•Check – Before, during, and after the product realization process, measurements are taken of the processes, the products and services supplied, customer satisfaction, the management system through internal audits, and any nonconformities raised

•Act - The improvement activities are continually improving the quality system or change policies and processes to ensure that the organization is kept in line with customer requirements and satisfaction.


What Does a Properly Implemented System Look Like?

• Goals and objectives are set early

• Proper project management is in place

• Plans are developed and reviewed

• Reasonable timelines are established

• Progress is measured against time and money

• Implementation teams possess the right skills for the job

• The system is able to adapt and overcome


What Does a Poorly Implemented System Look Like?

• Not aligned with organizational objectives

• Built by one person or department

• Implementation occurred in less than four months

• Excessively documented


Conformity Assessment

• Initial certification audit

Stage 1

Stage 2

• Surveillance audit

• Recertification


Nonconformity Definition

In ISO 17021, a nonconformity is defined as:

1. failure to fulfill one or more requirements of the management system standard, or

2. a situation that raises significant doubt about the ability of the client's management system to achieve its intended outputs

In ISO 9000, a nonconformity is defined as a:

1. Non-fulfillment of a requirement (3.6.2)


Nonconformity – Minor

• Failure to comply with a requirement which (based on judgement and experience) is not likely to result in management system failure

• Single observed lapse or isolated incident

•Minimal risk of nonconforming product or service

• Examples:

• A two month lapse in the audit program

• A training record not available


Nonconformity – Major

• Absence or total breakdown of a system to meet a requirement

• A number of minors related to the same clause or requirement

• A nonconformity that experience and judgment indicate will likely result in management system failure or significantly reduce its ability to assure controlled processes and products


Nonconformity – Major

Examples:

• No documented procedure for a required process/activity

• Document changes routinely made without authorization

• No awareness program for the management system

• No future planned internal audits

• Insufficient scope

• Numerous minor nonconformities found


Opportunity for Improvement

•Any finding not classified as a nonconformance

•Any negative finding of a potential nonconformity will be classified as an OFI

•There may be OFIs that are not potential nonconformities.


ISO 9001 - Minor Nonconformities

32%

20%20%

16%

12%

Top 5 Minor non-conformities by clause

7.6

4.2.4

5.6

4.2.3

6.3

Total Minor nonconformities: 18,082Sample data: Jan 1, 2009 – June 30, 2009


ISO 9001 - Clause 7.6

• Control of monitoring and measuring equipment

• The organization shall determine the monitoring and measurement to be undertaken and the monitoring and measuring equipment needed to provide evidence of conformity of product to determine requirements

• The organization shall establish processes to ensure that monitoring and measurements can be carried out and are carried out in a manner that is consistent with monitoring and measurement requirements


ISO 9001 – Clause 4.2.3 and 4.2.4

• Control of documents

• Documents required by the quality management system shall be controlled…

• A documented procedure shall be established to define the controls needed

• Approve documents for adequacy prior to issue

• Review and update as necessary and re-approve documents


ISO 9001 – Clause 4.2.3 and 4.2.4

• A documented procedure shall be established to define the controls needed

• Ensure that changes and the current revision status of documents are identified

• Relevant versions of applicable documents are available at point of use

• Documents remain legible and readily identifiable

• Documents of external origin determined by the organization to be necessary for the planning and operation of the quality management system are identified and their distribution controlled

• To prevent the unintended use of obsolete documents and to apply suitable identification to them if they are retained for any purpose


ISO 9001 – Clause 4.2.3 and 4.2.4

• Records established to provide evidence of conformity to requirements and of the effective operation of the quality management system shall be controlled

• The organization shall establish a documented procedure to define the controls needed for the identification, storage, protection, retrieval, retention, and disposal of records

• Records shall remain legible, readily identifiable and retrievable


ISO 9001 – Clause 5.6

• Management Review

• Top management shall review the organization’s quality management system, at planned intervals, to ensure its continuing suitability, adequacy, and effectiveness.

• This review shall include assessing opportunities for improvement and the need for changes to the quality management system, including the quality policy and quality objectives



• Infrastructure

• The organization shall determine, provide and maintain the infrastructure needed to achieve conformity to product requirements, infrastructure includes, as applicable

• Buildings, workspace and associated utilities

• Process equipment (both hardware and software), and

• Supporting service (such as transport, communications or information systems)


ISO 9001 – Major nonconformities by clause


8.2.2 Internal Audit

Conduct internal audits at planned intervals to determine if QMS:

• Conforms to:

Planned arrangements (see 7.1)

ISO 9001 requirements

Organization requirements

• Is effectively implemented

• Is maintained



• Plan the audit program taking into consideration:

• Status and importance of processes and areas

• Results of previous audits

• Define audit criteria, scope, frequency, and methods

• Select auditors and conduct audits to ensure:

• Objectivity

• Impartiality

• Ensure auditors do not audit their own work



•Prepare a documented procedure to address responsibilities and requirements for:

• Planning audits and conducting audits

• Recording results and maintaining records

•Ensure actions taken without undue delay (management responsible for audited area)

•Verify actions taken and report the results (also refer to clause 8.5.2)

Note: Reference ISO 19011:2002 for guidance


8.5.2 Corrective Action

•Take action to eliminate cause of nonconformities to prevent their recurrence

•Take action appropriate to the effects of problem

•Define requirements in documentedprocedure to:

• Review nonconformities (including complaints)

•Determine the causes of nonconformities

• Evaluate need for actions to prevent recurrence

•Determine and implement corrective action

• Record results and review action taken



• General Requirements

• The organization shall establish, document, implement and maintain a quality management system and continually improve its effectiveness in accordance with the requirements of this international standard

• Determine the processes

• Determine the sequence and interaction of these processes

• Determine criteria and methods needed to ensure that both operation and monitoring of these processes\availability of resources and information

• Monitor, measure where applicable, and analyse these processes

• Implement actions necessary to achieve planned results


Impact on the P & L

11/14/2014


Common misconceptions

1.ISO 9001 delivers little value

2.ISO 9001 costs a lot to implement


Period Expenses

Implementation

• Training

• Labor related to implementation

Post Registration

• Ongoing costs

for registration

X<1% revenues

$3K/year to $500K/yr


Increased Quality = Reduced Cost of Quality

• 64% saw a reduction in the defect rate after ISO 9000 registration

• 56% saw reduction in the cost of quality (scrap, reworks, inspection, etc.)

ISO 9000 Survey (1999, McGraw-Hill)


Increased Quality = Reduced Cost of Quality

Company 1

Defects for a product:

•74,964 PPM before registration

•3,850 after registration

Company 2

Right first time batch production:

•Increased from c.85% - c.100% after registration

Company 3

Customer complaints:

•At one site, 6,000,000 units supplied, not one customer complaint


Proven Benefits

*2011 BSI review of stock prices over a 10 year period, comparing ISO 9001 certified companies with a benchmark index.**2011 ASQ research. BSI Benefit Survey 2011 † BSI Customer Satisfaction Survey


How Does Performance of Companies with ISO 9001 Compare to Those Without?

• ISO adopters had far lower organizational death rates than matched firms within their industries.

• Sales and employment grew substantially more rapidly post certification at ISO 9001 adopting firms than at matched firms.

• Total payroll and (to a lesser extent) annual earnings per employee grew substantially more rapidly post certification at ISO 9001 adopting firms than at matched firms.

• ISO 9001 adopters already had slightly lower than average injury costs at the time of adoption

• Non adopters are 7 times as likely to go out of business than ISO 9001 adopters

Levine, David I., and Michael W. Toffel. Quality Management and Job Quality: How the ISO 9001 Standard for Quality Management Systems Affects Employees and Employers. Working Paper no. 09-018. Boston: Harvard Business School, 2010.

Print.


ISO 9001:2015 Revision

11/14/2014


Main changes

11/14/2014

• Use of the High Level Structure (HLS)

• More compatible with services

• Fewer prescriptive requirements

• Changes to key terms and definitions

• Organizational context must be understood

• ‘Relevant interested parties’ now added

• Scope now a requirement in its own right, dealing with requirements that

may not be applicable.

• No requirement for a ‘Quality Manual’


Main changes cont.

11/14/2014

• Enhanced leadership requirements

• Policy and objectives are in line with the strategic direction of the

organization

• Management system to be within the organization’s existing processes

• Customer Focus now requires TM to ensure risks and opportunities that

can affect products and services are addressed

• No requirement for a management representative, but TM responsible for ensuring roles, responsibilities and authorities and assigned for the MS

• Risk has been introduced to replace preventive action

• Process now require objectives where relevant

• Objectives expanded to include: who, what, when, etc.

• Planning of changes requirement new


Strategic changes to date

•Enhanced emphasis on risk-based thinking

• Increased emphasis on achieving value for the organization and its customers

• Increase flexibility on the creation and use of documentation

11/14/2014


Main changes cont.

11/14/2014

• Risk:

effect of uncertainty on an expected result

• Note 1: An effect is a deviation from the expected – positive or negative

• Note 2: Uncertainty is the state, even partial, of efficiency of information related to, understanding or knowledge of, an event, its consequence, or likelihood

• Note 3: Risk is often characterized by reference to potential events (ISO Guide 73, 3.5.1.3) and consequences (ISO Guide 73, 3.6.1.3), or a combination of these

• Note 4: Risk is often expressed in terms of a combination of the consequences of an event (including changes in circumstances) and the associated likelihood (ISO Guide 73, 3.6.1.1) of occurrence


Main changes cont.

11/14/2014

• Monitoring and measurement resources (Calibration)

• Explicit reference to organizational knowledge management

• Awareness requirement new

• Internal and external communications now a requirement

• Documented Information. No mandatory requirements, it’s up to you! Enhanced requirements

• Design and development are now more general and may include service design

• Outsourcing is now included in external provision (aka purchasing)

• Release of products and services now part of operational controls

• Non-conforming processes, outputs, and product and services.


Main changes cont.

11/14/2014

• New structure and requirements for monitoring and measurement

• Internal audit to take into account quality objectives, customer feedback and changes to the system when planning audits

• Management review to take into consideration:

• strategic direction of the organization

• external and internal issues

• effectiveness of action re risk and opportunities

• Improvement and continual improvement:

• Improving processes to prevent nonconformities

• Improving products and services to meet known and predicted requirements

• Nonconformity and corrective action

• Recur and occur

• Nonconforming goods and services vs nonconformity


Steps to Certification

11/14/2014


Steps to certification

Make contact

Work with assessment team

Consider relevant training

Assessment & review

Certification and beyond


11/14/2014

BSI Group America Inc.

Jeff Witte – [email protected]

Main Office Telephone: 888-429-6178 - USA

Email: [email protected]

Links: http://www.bsiamerica.com

mailto:[email protected]

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