September 2006

Q:  Our Registrar (ISO 9001) just got through with a surveillance audit where we got a major nonconformance in our internal audits.  I don’t get it.  My quality manager said she has a schedule to make sure she audits all the requirements at least once a year, and we’ve been sticking to it even though we’ve been growing so much that we’re busting at the seams right now.  Doesn’t the fact that we are growing mean we must be doing something right?  Apparently not, because our auditor said we aren’t getting any ‘value’ out of our audits.  What value do I get from doing all these internal audits?  It costs me money to do them every month, but we do them anyway because the standard says we have to and then that still isn’t good enough to make him happy.  Now, I guess we could lose our certificate over this, and it’s going to cost me even more money because he wants to come back and re-audit us once we find a way to get more value out of our internal audits! Honestly, sometimes I don’t think these auditors live in the real world at all.

A:  As far as an answer to your question (“What value do I get…”), I think you and your auditor sound like you’re pretty much on the same page:  you both seem to think you *don’t* get much value out of your audits.  So I’d be hard pressed to tell the both of you that you’re wrong – especially when I have yet to see your processes first-hand in your plant.

So instead of trying to scrape some semblance of value out of what you’re currently doing for audits, I might suggest that you rather focus on, ‘How do I get *more* value out of our internal audits?’  Look at it another way:  how do you get your internal audits to help you achieve your goals.

From your complaint, you appear to be somewhat focused on controlling costs … you mentioned the cost of doing your internal audits and of the revisit from your registrar auditor, for example.  While the importance of focusing on cost-controls may seem absurdly obvious, keep in mind that different companies have different goals and objectives depending on the personality of their owner / management and their specific needs at a particular time.  In fact, being too focused on controlling costs is sometimes counterproductive to organizations.

In your instance, for example, you indicated your company is ‘bursting at the seams’; I would think it would be more appropriate for you, right now, to be focused on things like sales, making sure you can ship on-time, capacity, etc.  Cost controls should always be a consideration, but right now it might be more appropriate to prioritize them to an ancillary, or supportive, role.

For the sake of organization, let’s clarify the conclusions we’ve drawn so far:

-         you need to get more value out of your internal audits

-         your internal audits have a cost associated to them

-         let’s say that value = quality / cost

-         so, you can increase value by reducing cost or increasing quality

We’ve already established that you probably have a pretty good control on the ‘cost’ aspect of that equation, so let’s ask what is the ‘quality’ you hope to achieve from your internal audits?  Quality is the ability of a product or service to fulfill requirements.  That leads us to ask, What are your requirements, or objectives, for your internal audit process?  Do you have any?

Minimally, you’ve established some direction for your audits by indicating that you want to maintain your certification (compliance with ISO 9001).  So that would be an objective of your internal audit activities.  Now, do you have any other objectives established for the program?

Your plant is ‘bursting at the seams’.  Most people like to be that busy, but don’t like the stress that goes along with the ‘bursting’ part of it.  The Titanic burst at the seams when the pressure got too great for it, and that was not a good thing.  More than one company has ‘gone under’ from having too much business and not being able to handle it all:  that’s a very dangerous position to be in from a competitive standpoint.

So, provided you agree with the logic so far, I would advise that one of your objectives should be to find a way to handle your increased business in a more efficient and effective way; you don’t want to turn down business, but you have to relieve the pressure somehow.  What if your objectives for your internal audits included finding ways to relieve / reduce the current pressure levels in your operations?  What if your internal audits objectives included finding ways to operate more efficiently and effectively?

For starters, plan on taking the same resources you currently apply to doing your internal audits – you said your plant does them every month – and reapply them in other directions.  Contrary to what you appear to have been told, the ISO 9001 standard does *not* require that you audit every ‘requirement’ at least once a year; nor does it require that you do internal audits monthly.  In fact, until you define fully effective and appropriate objectives for your internal audit program, I would suggest you eliminate all funding for implementing internal audits.  This will have no impact on the value of your internal audits since you don’t see any now, anyway; and it will allow you to intermediately reapply those resources into operations, reducing pressure on operations and consequently adding value to the plant, overall.

Next, establish clear quality objectives for your internal audit program.  You may or may not want to be directly involved in the strategy and even tactical planning of the program; minimally, you will want your QA Manager to report to you how she intends to meet those objectives before applying resources to implementation … similar to seeing drawings for a building before you commit to construction.

You didn’t tell me your business in your email, so I can’t give you general ideas on how you might go about setting those objectives based on your industry.  What’s more, I would really need to see your operations in order to be able to make recommendations appropriate to your plant’s specific needs.  However, let me give you a variety of general industry ideas for internal audit objectives that increase the quality of those audits:

-         ensure the scheduling process is working effectively, especially if you’re business is ‘bursting at the seams’:  have the audits check for on-time delivery performance > on-time production-start > rates / cycle times maintained > make sure maintenance requirements are not hindering production > make sure internal rejects are not limiting production capacity

-         analyze value-stream, i.e. ‘value-stream mapping’:  can process steps be 1) eliminated 2) automated 3) combined / integrated

-         molding processes – are parts produced with flash?  is flash an ‘inherent’ part of the process, or the result of poor tool/equipment condition > maintenance improvements needed? is it possible to design tooling / processes to eliminate flash or ease manufacturability (i.e. undercuts, snap-off by hand v. secondary machine process)

-         stamping processes – do you have to pull dies to repair / sharpen them in the middle of a run?  is it possible to design tooling to be more robust (i.e. broken punches)?  are there ways to predict tool failure and PM during scheduled down-time / before they get put in the press?

-         springs – are rates maintained?  do operators have rate objectives established, and are systems established to report / record performance to rate objectives?  do you have means (not necessarily monetary) to incense operators to meet or exceed rate objectives, i.e. continually improve?  is efficiency (i.e. productivity / poor quality) tracked in addition to productivity, alone?  are operators held accountable for performance?

-         can you eliminate final inspection if operators perform their jobs effectively?

-         assembly – do materials / components arrive on-time a) to the cell b) to receiving?  do operators have to sort / rework components, reducing productivity?  is Purchasing aware of / involved in resolving production issues?

Those are a few examples.  Again, I would strongly encourage you to invite me in to review your processes and help you establish value-adding objectives for your product realization and support processes, including your internal audit program.

I wasn’t there during your audit, but I would imagine your auditor saw that you can get more value from your internal audits than you’re currently getting.  Internal audits are a form of communication – a way of communicating performance and needs from processes to you (owner / top management), and vice versa.  If your internal audits are based on meeting requirements of a Standard written to be generally applicable to industry overall, then they very likely are not providing as much value to your plant’s *specific* needs as they could be.  Your auditor may well have been pointing out a way for you to make more money, and he may want to follow-up to ensure that happens.

In general, you need to determine the goal/vision you want for your business; then you need to establish objectives necessary to achieve that goal/vision.  Measure performance to the objectives as well as to the goal/vision; if you’re meeting objectives but falling down in your progress toward the goal/vision, you need to establish new and/or different objectives.  Then use your internal audits to verify that the tactical actions – those defined by the strategies implemented to complete the objectives - are being implemented on a consistent basis.  That will give you much more value from your internal audit program, which should make both your auditor and you more satisfied.

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To invite David Marsh into your plant to help your business achieve its goals, please call 815-728-1710 or email dmarsh@bcsbydm.com to schedule an appointment.