TECHNICAL PAPER

TP05PUB77
Implementation of Effective Quality Management Systems in Small Companies
author(s)
DAN TOTOIU
B&J Tool and Die Placentia, California

abstract
This paper will emphasize the importance of process approach and suggest how this approach can benefit small companies that are looking for implementation of quality management systems (QMS), compliant to international standards and/or technical specifications such as ISO 9001:2000, ISO/TS 16949 and AS 9100. Key elements of implementation and the steps required to be taken to build a strong organization, using limited resources, will also be presented.

conference
WESTEC 2005 April 4-7, 2005 Los Angeles, California

terms
Quality Management Systems Process Approach

2005

Society of Manufacturing Engineers One SME Drive P Box 930 .O. Dearborn, MI 48121 Phone (313) 271-1500 www.sme.org

SME TECHNICAL PAPERS This Technical Paper may not be reproduced in whole or in part in any form without the express written permission of the Society of Manufacturing Engineers. By publishing this paper, SME neither endorses any product, service or information discussed herein, nor offers any technical advice. SME specifically disclaims any warranty of reliability or safety of any of the information contained herein.

Implementation of Effective Quality Management Systems in Small Companies Author: Dan Totoiu March, 2005 Introduction This paper will emphasize the importance of process approach and suggest how this approach can benefit small companies that are looking for implementation of Quality Management Systems (QMS), compliant to international standards and/or technical specifications such as ISO 9001:2000, ISO/TS 16949 and AS 9100. Key elements of implementation and the steps required to be taken in order to build a strong organization, using limited resources, will also be presented. Terminology Certain terms are going to be used in this paper; their definitions are listed bellow. QMS - a system of clearly defined organizational structures, processes, responsibilities and resources used to assure quality [1]; Process - a series of actions or operations conducing to an end [2]; Process - an activity using resources and managed to enable the transformation of inputs into outputs [3]; Interaction - mutual or reciprocal action or influence[2]; Action - a thing done, the accomplishment of a thing usually over a period of time[2]; Flexibility - the ability of a system to adapt, with minimum cost, to a significant variation in input. Due to the importance of the term process, two definitions are listed. They both show that the process must have an output; in other words, an end. Also, the presence of word action is to be emphasized as the basis of any process, and it is critical for the process approach as presented in this paper. Only a process-based approach can lead to the simplification and effectiveness of QMS. Why the implementation of QMS can be ineffective There are so many reasons that can prevent a QMS to be implemented and function effectively. Some of them are: Too complex, therefore difficult to implement; Too much documentation; Too much change required in a short time; Too much confusion due to unclear procedures; Too many resources required; Too many meetings and too few or no actions. Many problems can be avoided by a thorough analysis of processes existent in the organization and their linkages. One key of effective implementation of QMS is the way

an organization defines its processes and their interactions. The tool to achieve this is the Process Approach as recommended by standards such as ISO 9001:2000 or ISO/TS 16949.

What is Process Approach? The application of a system of processes within an organization, together with identification and interactions of these processes, and their management, can be referred as process approach. This offers control over the linkage between the individual processes within the system of processes, as well as over their combination and interaction. [3] A process is defined as an activity using resources and managed in order to enable the transformation of inputs into outputs [3]. The transformation must follow a set of rules described in procedures. Their coordination and optimization fall under process owner responsibility. In any organization there is a process or set of processes that represents the core of the business. This process, that can be a manufacturing process or a service process, can be called Main Process (MP). Main Process is the heart of the business, and it reacts to changes with more or less induced stress. It allows the organization to develop, to be more energetic, or it can constitute the main limitation. Therefore, Main Process needs to be well shaped, closely controlled and more importantly, stress free (as much as possible). Within the organization, a multitude of other processes support Main Process. They interact and participate together in achieving organizations goal, which is to make profit. More profit will be generated by getting more business from new or existing customers. Only satisfied customers will bring more business to an organization. An effective quality management system is meant to increase customer satisfaction and consequently, the profit of any company. Processes such as Corrective Actions, Monitor and Measurement of Product/Processes, and Management Review are required to be implemented by an organization that is looking for compliance to ISO 9001 standards. The ISO requirements refer to Main Process as well as to all supporting processes. In order to connect Main Process to all other processes properly and efficiently, Main Process and must be defined, approached, and improved accordingly to the standard. The methodology known as PDCA is recommended by ISO and it can be applied to all processes. PDCA stands for: Plan: establish the objectives and sub-processes necessary to deliver required results; Do: Implement the process; Check: Monitor and measure processes against requirements; Act: Take corrective actions to improve process performance. After processes have been identified, their interaction must be designed. Interaction of Processes The output for a process must be input for the next process in their logical sequence.

Most sequences are linear. There are also processes that are part of two or more linear sequences, and they constitute the processes we have to focus on more in the design phase of interaction of processes. The more linear sequences of processes exist in the system, the more efficient the system. An example of processes and their interactions (at the minimum) that include Main Process is in Figure 1. An example of a Main Process of a Manufacturing Company (Job Shop) is shown in Figure 2. An important step in effective implementation of ISO 9001 compliant QMS is to set up supporting processes that are near to Main Process and most critical for meeting customer requirements. The first group must be formed from processes such as Monitoring and Measuring of Product, Monitoring and Measuring of Processes and Corrective Action, Figure 3. This is similar to Six Sigmas proven solving technique, DMAIC, or Define-Measure-Analyze-Implement-Control. While the lean manufacturing tools are being applied to MP and its linear sequences, Six Sigma techniques are focused on problems identified in the organization and in generating corrective actions. A good reason to start the implementation with sequences as shown in Figure 3 is the fact that non-conformities are detected and corrected in-house; therefore, they become invisible to customer. Trying to implement too many processes at once can generate a lot of confusion. For instance, starting the implementation with processes such as Preventive Actions and Management Review, before addressing processes shown in Figure 3, can be detrimental to the effectiveness of implementation itself. Processes that are shared by two or more linear sequences, such as quality planning, should be closely analyzed. Let these type of processes be called connecting processes (they connect two or more linear sequences together). In small companies, the multidisciplinary team required by ISO/TS 16949 to oversee quality-planning process (Figure 4) may be also the Material Review Board that decides over disposition of discrepant material and plans corrective actions (Figure 3). Actually quality planning, which is understood more like Project Management, can be connected to critical processes for the organization. Quality Planning process can be compared to Management Review at a tactical level. By combining linear sequences through connecting processes, the flowchart that depicts the Interaction of Processes may become complicated. A good rule is to reduce the number of links and connecting processes; this can be achieved by avoiding crosslinkage of processes. For instance, link between Monitoring and Measuring of Processes and Design/Change of Manufacturing Processes is not a good option. Follow the following linear sequence instead: Analyze Data, Plan Corrective Action, present it to Quality Planning, implement it and control it. While the flowcharting of the product realization process is simpler because of linearity of sequences, more difficulties are encountered at the management processes level. Some companies can design their interaction of processes as shown in Figure 5.[4] In this example, the 26 links to management review can be grouped as follows: 6 inputs, 4 outputs, 7 possible inputs, 9 possible outputs. The problem is how to write down an effective and realistic procedure that describes all these links and the actions related to them. A complicated network of processes and too many links cause the QMS to be inefficient, and companies are reluctant to implement

these systems. In Figure 6, there is another example of the same process, but this time that is how the process has been defined in other company QMS documentation [5] using inputs and outputs; yet the interconnection to other processes is not defined. The question is where all theses 10 inputs come from, and where the 3 outputs go. Using tools we have presented before such reducing number of cross-links and connecting processes we have obtained a flow chart that has 7 inputs, 5 outputs and shows linkages and sequences (Figure 7). As a remark, Management Review is one of the most interconnected processes. Reading and understanding standards requirements, focusing on generating action in the system, identifying the owners of processes are elements that play an important role in achieving a simple and usable graphical description of QMS. A clear flowchart of interaction of processes can be used by process owners to better define the processes they own, see their interactions and act accordingly to designed links. In order to increase the effectiveness of QMS, a good flowchart of processes can be used as an input to: Generate a list of all processes, showing their inputs, outputs and assigned procedures; Create clear job requirements for process owners; Establish a control plan and measure performance of processes in the organization; Optimize the allocation of resources. Flexibility of Main Processes One important thing that must not be forgotten is the Main Process. Almost all supporting processes can be implemented in a majority of companies, yet the main process makes the company unique, and this is the money-making process. Therefore, this is the most important element that makes the company competitive. In todays world, small companies must respond to small orders quickly, to change rapidly from one state of manufacturing system to another, with minimum change in its processes and consequently with less costs. The ability of system to change effectively is called flexibility of systems. Flexibility gives the organization the opportunity to handle many small orders similarly with one large volume order. It is known that high volume orders are going more and more out of the USA. In the opinion of the author, the only way to compete with companies from China, Mexico and other low cost labor countries is to make American companies more flexible. How do you make them flexible? By identifying geometrical and process similarities of their products. Process similarities may become more important than similarities in shape. For instance, two products with similar shape (Figure 8) require two different manufacturing processes due to equipment, cutting tools, etc. The two plates shown in Figure 9 are different in shape, yet they can be machined on the same CNC machine. These two very simple examples emphasize that an organization that knows its processes well can define a group of products whose main manufacturing processes are similar and to which the system can accommodate effectively. Also, it can determine the

manufacturing processes that can be added to the system in order to increase the flexibility of the organization. Knowing the capabilities and limitations of Main Process, supporting processes such as Bids and Quotations can be redesigned and improved. So many times, lured by opportunity to get more business, ones accepts orders that induce so much change in Main Process (or rely on outsourced processes) that the entire system reacts unexpectedly or cannot be controlled. In conclusion, QMS is fundamental in order for a company to succeed in todays market. An organized system with well-established processes and their interactions that supports a flexible main process is the premise of a successful company. =========================== Bibliograpy [1] ASQ, Glossary of Terms, www.asq.org/info/glossary/q.html [2] Merriam-Webster Online Dictionary, http://www.m-w.com/dictionary.htm [3] ISO 9001:2000(E), Third Edition, 2000-12-15 [4] Mark Kaganov, A Process Interaction Matrix, Oct. 2004, Quality Progress [5] Quality Manual, B&J Tool and Die, Sect. 4.1, Rev. A (obsolete) Other sources: Chad Kymal, The ISO/TS 16949 Implementation Guide, Paton Press LLC, 2004; ISO/TC 176/SC 2/N 544 R2 ISO 9000 Introduction and Support Package: Guidance on the Concept and Use of the Process Approach for management systems;
CUSTOMER

Resources

Packaging, Labeling (Warehouse Supervisor)

Order Processing (Office Manager)

Inventory, Shipping (Office Manager)

Main Process (MP Owner)

Job Ordering (Office Manager) CUSTOMER

Figure 1

SUPPLIER (Purchasing Manager) Verification of Job Setup (Production Supervisor) Receiving Inspection-Raw Material (QA Manager) Setup Approval (QA Manager) Storage, Inventory (Office Manager)

In-Process Inspection and SPC (QA Manager)

Outsourced Processes (QA Manager)

Receiving Inspection (QA Manager) Production Run (Production Manager)

Job Order
Job Setup (Setup Technician)

Figure 2

Packaging, Labeling (Warehouse Supervisor)

CUSTOMER

Order Processing (Office Manager)

Quality Planning (Vice-President)

Job Order (Office Manager)

Corrective Actions (QA Manager)

Implement

Analysis of Data (QA Manager)

Analyze

Monitoring / Meas. of Processes (QA Manager)

Main Process (MP Owner)

Control
Monitoring / Meas. of Product (QA Manager)

Define, Measure

Figure 3 6

CUSTOMER

Design of Product (Eng. Manager)

Bids, Quotations and Contracts (President)

Manufacturing of New Product (Eng. Manager)

Quality Planning (Vice President)

Process/Product Validation (QA Manager)

Design of Mfg. Processes (Vice-President)

CUSTOMER

Figure 4

Corrective Actions

Communication

Management Review
Record Management Product Release

Resource Management

Internal Audits

Information Technology

Product Design

Validation

Product Delivery

Order Processing

Verification

Market Analysis

Figure 5 7

Follow-up actions from previous management reviews Results of internal and external audits, Customer feedback and complaints Cost of poor quality Process performance and product conformity data Field-failure reports Status of preventive and corrective actions Changes that could affect the quality system Customer satisfaction Awareness and training programs Quality policy and quality objectives

Revised quality policy New quality objectives

Management Review

Actions to change/improve the quality management system, quality performance, and products (including assignment of resources)

Figure 6

CUSTOMER

Customer Feedback and Complaints (Office Mgr.) B

Market Analysis (Sales Manager)

Internal Quality Audits (QA Manager)

A Quality MS Planning (President)

Corrective, Preventive Actions (QA Manager) Analysis of Data (QA Manager)

Management Review (President)

Continual Improvement (President)

Monitoring of QMS (QA Manager)

Provision of Resources (President)

Figure 7 8

Figure 8

Figure 9