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Our newsletters provide guidance on ISO 9001,
AS9100, ISO 13485, ISO/TS 16949, TL 9000, ISO
14001,
ISO 27001, ISO 20000, and related ISO
standards, as well as, Six Sigma.
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know.
Process Framework
The TickIT 1Q2010 issue contains an article,
Let's Get Serious about Business Processes
and Implementing Real Improvement. The
article refers to what it calls, "an
excellent generic business process framework"
published by Price Waterhouse Coopers -
Global Best Practices.
The process classification is the primary
framework that PWC - GBP uses to organize its
best practice tools and information, in
essence, the table of contents for a process
knowledge base.
It contains 13 business processes that apply
to almost any business. The first seven are
operating processes that companies follow to
develop and move products to the market. The
last six processes are management and support
processes that make it possible for the
company to operate effectively.
Operating Processes
1. Understand markets and customers
2. Develop vision and strategy
3. Design products and services
4. Market and sell
5. Produce and deliver products and services,
or
6. Produce and deliver for service-oriented
organizations
7. Invoice and service customers
Management Processes
8. Develop and manage human resources
9. Manage information resources and
technology
10. Manage financial and physical resources
11. Manage environmental, health, and safety
issues
12. Manage external relationships
13. Manage improvement and change
I have repeated the Manage Improvement and
Change process below as an example. You can
see the full process classification
"framework" at the Global
Best Practices web site. To see lower
level detail and process maps, you must be a
subscriber to their service.
13.0 MANAGE IMPROVEMENT AND CHANGE
The process of ensuring that necessary
changes in the work environment and business
processes are well-understood and supported
by solid transition plans.
13.1 Measure organizational
performance
The process of implementing measurement
systems to engineer genuine and lasting
change in the workplace.
13.1.1 Create measurement systems
The process of determining which key
objectives, outcome measures, and activity
measures will best measure performance
success or failure.
13.1.2 Measure product and service quality
The process of monitoring the quality of
products and services to identify problems
and improvement needs.
13.1.3 Measure costs
The process of monitoring the cost of
products and services to identify greater
cost efficiencies without affecting quality.
13.1.4 Measure productivity
The process of monitoring time-on-task and
output to identify problems and improvement
needs.
13.2 Conduct quality assessments
The process of assessing quality in the
context of continuous quality improvement
once a company defines its quality
imperatives and develops specific goals for
reaching them.
13.2.1 Conduct quality assessments based on
external criteria
The process of assessing quality according to
the demands and expectations of external
stakeholders such as customers and
shareholders.
13.2.2 Conduct quality assessments based on
internal criteria
The process of assessing quality according to
the demands of internal stakeholders such as
employees and suppliers.
13.3 Benchmark performance
The process of comparing a company's
processes and performance in a specific area
to that of others with a goal to improve
operations by identifying best practices.
13.3.1 Develop benchmarking capabilities
The process of developing a system for
ongoing benchmarking, both internal and
external, that will produce ongoing insight
into best practices and process improvement.
13.3.2 Conduct process benchmarking
The process of comparing a specific business
process performance to that of others, either
internal or external, to identify where
improvement is needed and how to achieve it.
13.3.3 Conduct competitive benchmarking
The process of benchmarking a company's
processes and performance in a specific area
to that of main competitors to identify
competitive strength and improvement needs.
13.4 Apply best practices
The process of identifying and adopting the
optimum way to perform a business process in
order to lower costs, reduce time-on-task,
and increase quality.
13.4.1 Implement continuous process
improvement
The process of creating a workplace
environment and systems dedicated to
continuous process improvement by advocating
efficiencies in cost, quality, and time.
13.4.2 Reengineer business processes and
systems
The process of changing how business
processes and systems are managed in order to
achieve greater efficiencies in cost,
quality, and time.
13.5 Manage process performance
The process of managing and improving process
performance by identifying and aligning key
stakeholder needs and developing and
sustaining a disciplined approach that
defines the process and performance targets
in clear terms.
13.6 Manage organizational knowledge
The process of collecting, organizing,
structuring, and disseminating timely and
accurate information to accomplish business
objectives and achieve competitive advantage.
13.6.1 Create knowledge-sharing systems
The process of creating systems of people,
processes, and technology to capture and
share both tangible and intangible knowledge
and information companywide.
13.6.2 Monitor knowledge-sharing activity
The process of capturing quantitative and
qualitative information on knowledge sharing
activities to ensure knowledge management
objectives are met.
Manufacturing in 2010
According to an article by Bob Parker in
Industry Week's Management Metrics
newsletter, 2010 will be a year of recovery
for manufacturers. However, business models
will be fundamentally and permanently
changed. What emerges will be an intelligent
economy where markets adjust quickly.
Parker is Group VP of Research for IDC
Manufacturing Insights. Each year they put
together their top ten predictions for the
worldwide manufacturing industry. Their 2010
predictions:
Prediction #1: Companies will transform
business models to better meet the needs of
increasingly demanding customers in both
developed and emerging markets.
Prediction #2: IT organizations will
look for
cost structures that are more variable as
they assist in making technology a focal
point of business strategies.
Prediction #3: Manufacturing companies
will
begin the process of fundamentally rethinking
their supply chain structures, evolving from
a fixed-cost-driven supply network to a
variable-cost-driven value network.
Prediction #4: 'Dynamic Optimization'
dominates capability investment to support
redefining the supply chain.
Prediction #5: Manufacturers will look to
better align innovation with business
strategy.
Prediction #6: Manufacturing companies
will
become more mature in their use of enterprise
product lifecycle management (PLM)
applications.
Prediction #7: Manufacturing companies
will
see factory assets as part of a fulfillment
capabilities network.
Prediction #8: Firms will create
intelligent
fulfillment capabilities networks.
Prediction #9: Smart services and the need
for persistent assets create the inflection
point for radio-frequency identification
(RFID, sensors, and machine-to-machine (M2M)
communication.
Prediction #10: Armed with metrics,
manufacturers move from sustainability
reporting to intelligence.
The ISO 9001 Auditing Practices Group (APG)
recently published a paper on Audit Trails.
The author, David John Seer, said the failure to carry out a
process audit following an audit trail is the
single most important reason why audits are
not effective.
What is an Audit Trail?
In the absence of a definition from ISO
9000:2005 or ISO 19011:2002, the author used
a dictionary definition for 'audit' and
'trail' and developed this audit trail
definition:
A systematic approach to collecting
evidence based on specific samples, that the
output of a series of inter-related processes
meets expected outcomes.
But what does this mean in practice?
The paper states that although applied by
some auditors, the use of an audit trail is
by no means universally accepted. It is the
failure to ensure all audits employ process
audits following an audit trail that
undermines their credibility. Auditors should
understand the path of the process that they
are auditing and perform the audit
accordingly, ensuring that the requirements
of the process are being met.
Audit Trail Examples
As an example, the author refers to when
auditors visit the shop floor. This trip
enables the auditor to see what is taking
place and to identify the specific order
numbers of jobs that are going through at
that time. From this information, it is easy
to identify in the sales department the
agreed specification for that product or
service and select relevant samples. This
means the process can be checked to ensure
that what takes place is controlled and will
meet the required specification. From here,
the audit trail is picked up and followed.
As another example, the author uses the audit
of a purchasing activity. You need to
identify what material or equipment has been
purchased for your sample order. It is always
important to understand what drives the
process. In this case, it is normally the
requisition, which defines what is wanted.
The paper states that if you do not
understand the specification, then you cannot
check if the process being followed meets the
requirements of the requisition.
what does the requisition require?
does it comply with the agreed
specification?
how is the decision to purchase made?
how is the specification decided? Is it
adequate?
who decides what is required and do they
have the authority?
who chooses the supplier and by what
criteria?
what is the process for bid evaluation?
how is the specification advised to the
supplier?
are national or international standards
used?
what controls the process?
are there any special packing delivery
requirements?
These are just some of the issues that need
to be addressed, many of which relate to the
clauses of ISO 9001.
Correct Audit Samples
The paper continues by saying the starting
point for the audit is to use the chosen
samples and identify the process path and the
controls that were applied. It is vital that
the samples are linked and come from the same
trail. Too frequently, audit samples are
taken at different stages of the process and
are not related or linked to the initial
sample chosen, which means that an auditor is
unable to verify that the process is working.
He will only be able to check if that
particular document is filled in correctly.
Procedures, forms, checklists, and so on, all
ensure that a process is managed and
controlled effectively. It is essential that
auditors take the time to understand what is
required from the process they are auditing.
It is impossible for an auditor to carry out
an effective audit of an organization if the
auditor does not take the time to understand
the specification of its product or service,
including legal requirements. It is this
professional approach to auditing that allows
the auditor to identify any weaknesses in the
process and decide if an organization is
capable of meeting the specified
requirements.
Whittington Observations
In addition to the points made by the paper,
I'd like to add that some audit trails may be
short. The trail for a process may extend
only to an internal supplier process (to
check on provided inputs) or to an internal
customer process (to check on delivered
outputs).
An auditor will usually need to travel
outside the defined scope of a process audit
to fully judge the effectiveness of that
process. The audit trails will help you see
how well the process communicated its
requirements to the supplier processes and
how well the process is meeting the
requirements of its customer processes.
You are not required to follow every trail
that presents itself during an audit. You may
decide to ignore a trail if there are more
important items to be sampled on the main
path. Or, you may make note of the audit
trail for later use in the audit or a later
audit. Or, you may pass it on to another
auditor on the team. Or, the trail may need
to be followed immediately to assess process
conformity and judge effectiveness.
Just make sure you don't get lost on an audit
trail and fail to return back to the main
path to complete the audit and satisfy the
audit objectives. To see the APG Group papers
on auditing, go to this web
site.
SW Documentation
The effective use of software can be greatly
boosted by well-designed and user-friendly
documentation.
ISO 26513:2009, Systems and Software
Engineering: Requirements for Testers and
Reviewers of User Documentation, defines the
process through which user documentation
products are tested. This new standard will
help to ensure that software users are
provided with consistent, complete, accurate,
and usable documentation.
The standard provides the minimum
requirements for the testing and reviewing of
user documentation. It applies to printed
user manuals, online help, tutorials, and
user reference documentation. The standard
only deals with the evaluation of
documentation, not the evaluation of the
software supported by the documentation.
The standard was developed to assist those
who test and review software user
documentation during the software life cycle
process. The standard will also be useful for
information designers or architects involved
in planning the structure and format of the
documentation set, as well as, usability
specialists and business analysts who
identify tasks the intended users are
expected to perform with the software.
Documentation evaluations are conducted
throughout a document's development,
production, and maintenance. These
evaluations include methods such as:
Documentation review
System testing
Usability testing
Accessibility testing
Localization and customization testing
The standard also contains informative
checklists for use at each phase of the
verifying process that will allow testers and
reviewers to highlight any defects or
nonconformities.
ISO 26513 is the second of a new series of
standards for software user documentation
especially developed for those involved in
the documentation design and development process:
ISO 26514: 2008, Systems and Software
Engineering: Requirements for Designers and
Developers of User Documentation, is already
available.
ISO 26511, Systems and Software
Engineering: Requirements for Managers of
User Documentation, and,
ISO 26512, Systems and Software
Engineering: Requirements for Acquirers and
Suppliers of User Documentation, are being
developed.
For a more complete description of ISO 26513,
and to order the standard if interested, see
this ANSI
Standards Store web page.
ISO 9001 Value Study
A Harvard Business School working paper
reports the results of the first large-scale
study to examine the organizational benefits
of adopting ISO 9001. It turns out these
organizations are more likely to stay in
business and to experience faster sales
growth than those that do not pursue
certification.
The HBR paper, titled "Quality Management
and Job Quality: How the ISO 9001 Standard
for Quality Management Systems Affects
Employees and Employers" was written by
David Levine and Michael Toffel. Their study
will be published later this year in
Management Science.
Their conclusion summarizes a number of
benefits. ISO 9001 adopters had far lower
organizational death rates than matched firms
within their industries. Sales and employment
grew substantially more rapidly
post-certification at firms with ISO 9001
than at matched firms. Total payroll and (to
a lesser extent) annual earnings per employee
grew substantially more rapidly
post-certification at firms that adopted ISO
9001 than at matched firms.
Some benefits of ISO 9001 adoption were much
more pronounced in smaller firms than in
larger firms. And, adopters were more likely
to report no injuries for workers'
compensation in the years following adoption.
Their finding that ISO 9001 certification
does benefit employers bolsters prior
research on the standard. They felt their
results were particularly credible because
they analyzed a larger sample of ISO 9001
certifications than almost any previous
study, had performance data at the workplace
level, measured performance using third-party
(rather than self-reported) data, used a
panel dataset that enabled them to measure
performance over time, and developed
carefully matched sets of non-adopters. Plus,
their results regarding the benefits of ISO
9001 certification on employment, payroll,
and average annual earnings are new.
Critics of ISO 9001 who express concerns that
benefits to employers derive largely from the
deskilling and routinization of tasks,
hypothesize that employer gains consequently
come at the expense of employees' earnings.
However, their results showed total payroll
rose faster than employment, which implies an
increase in average annual earnings and
therefore do not provide evidence of
deskilling.
Non-experimental data cannot definitively
attribute the better outcomes experienced by
ISO 9001 adopters relative to matched
controls to adoption, as opposed to
unobserved advantages that might account for
both ISO adoption and better outcomes.
However, the strength and consistency of
their findings led them to decide ISO 9001
adoption was more beneficial than they had
anticipated.
For managers, the lessons are that the
process of ISO 9001 certification appears to
be valuable to most adopters. The authors
cannot be sure how broadly these lessons
apply to non-adopters, but the considerable
benefits of adoption (e.g., roughly 10%
increases in sales) suggest that far more
employers could benefit from ISO 9001
adoption than currently do. Their results
further suggested that smaller enterprises
are particularly likely to benefit from
adoption.
The substantial improvement in outcomes
post-ISO 9001 adoption also has lessons for
organizational scholars. Some academics have
characterized quality programs such as ISO
9001 as management fads, unlikely to benefit
employers or employees. Fashion might well
play a role in the adoption of many
management practices, but the authors say the
results indicate that ISO 9001 appears to
deliver value for many organizational
stakeholders.
To see the full 46 page working paper, go to
this web
site and click on the download button.
Whittington & Associates provides training, consulting and auditing services for
management systems based on
ISO 9001, ISO/TS16949, ISO/TS 29001, TL 9000, AS9100, ASS9110, AS9120, ISO 13485,
ISO 27001, ISO 20000, and ISO 14001.
