Driving
Process
Excellence
Enterprise Audit
Management
Process driven combining
audits on quality and
environmental manage...
Presented by :
Danang Widoyoko
IATF Auditor No.: 3UK-07-01-285
IRCA Lead Auditor No.: 1185731
2003 until Present join with...
A walk through the final frontier : topics cover

                             Re-think about
                            ...
Re-think about Quality Audit :
 Auditing and being audited
                                 Copyright 2008© dw
“If we change the way we think about quality, we will imagine
that it is not about following procedures, inspection, rules...
Stake holder’s
                 comments during
                  audit process :
                     Frequently
        ...
Next Door
Stories of
Quality Audit :
Untold stories of quality audit
that shown looks like
no added value given
by quality...
Why it
                                     doesn’t
                                     work very
                       ...
Lack of objectives and resources
Lost objectives of the
quality audit
Quality audits, both
internal and external
should be...
Poor Preparation

Poor Qualification
•    Competence building
    takes not more than
    simple training
•   Knowledge sy...
Poor Preparation

Comfort Zone
They will be known better than 3rd. party
auditors. For them mostly left
unchecked for thei...
Broken Close Loops

Comfort Zone
They will be known better than 3rd.
party auditors. For them mostly left
unchecked for th...
Back to the future

SHIFT TO THE NEXT GEAR


                         Copyright 2008© dw
• The quality audit
• Process Approach
• Compliance against PDCA Approach

GENERATE ADDED VALUE BY
QUALITY AUDIT
         ...
“Systematic, independent and documented
                                                     process for obtaining audit e...
An audit does not only provide
                                                   information to determine
               ...
Role of auditor :
                                          • Catalyst
                                          • Reporte...
•Identify business objectives
•Identify high risk processes
•Flowchart processes
•Identify process measures
•Evaluate proc...
An advantage of the process approach is
                                     the ongoing control that it provides over the...
•Efficiency
                               •Effectiveness
                               •Cost reduction
                 ...
Compliance against PDCA Approach
EFFECTIVENESS & EFFICIENT
                                   Copyright 2008© dw
EFFECTIVENESS AND EFFICIENT
IMPROVEMENT AND EFFECTIVENESS
There are many examples and requirements in ISO 9001:2000 that r...
EFFECTIVENESS AND EFFICIENT
Measuring QMS effectiveness
and improvements
Effectiveness : Planned result achieved for custo...
Analysis of Data
   Organizational
     Objectives
Customer requirements


Statutory & regulatory
    requirements


     ...
Analysis of Data
   Organizational                                  Organizational
     Objectives                        ...
Effectiveness of the QMS
                      100                            100



Organizational                       ...
Effectiveness of the QMS
                    100                              100



Organizational                       ...
Effectiveness of the QMS
                       100                               100



Organizational                   ...
Improvement in the QMS

Organizational                                               Organizational
  Objectives          ...
Improvement in the QMS

Organizational                                                Organizational
  Objectives         ...
Management Review
                      100                     100
Organizational                                        ...
EFFECTIVENESS AND EFFICIENT
ISO 9004:2000 & The consistent pair
Top management should therefore define methods for measure...
The Effectiveness of the
Organization
After analyzing the data and reaching a conclusion on the
effectiveness of the QMS, ...
Effectiveness of the Organization
          100                        100



 QMS                                        ...
Business Improvement in the
              Organization

Organizational                                                    ...
Analysis of Data
                     100                   100
  Organizational                                      Orga...
Conforming      Zone 3             Zone 4
        Maturity of “QMS”
  Non Conforming




                                 ...
VISION

                Planning                    Re-align




               ENGINEER            Audit    RESPOND
     ...
Visibility                                Collaboration

                                           • Auditors team
 • Aud...
Process Owner                                Operations Team         Customer
       Internal         Management          ...
Standards Driven                            Compliance
Full-Cycle Audit
Management
                                       ...
Process Adherence

                    Process Performance

                    Quality of Decisions

                    ...
Conclusion
The effectiveness of the quality management
system in meeting both quality and/or business
objectives is likely...
“Another challenge is to make sure we don’t cross the line between helping
management and our role as the independent, obj...
“The more that audit can be viewed as adding value beyond traditional
compliance and operational auditing, the further the...
“When I was brought on board, my initial challenge was to find out from all the senior
executives what kept them up at nig...
“We need empowerment, not only in terms of responsibility, but also in terms of the
human resources assigned to the differ...
I would like to say a lot of thanks following all
valuable discussion and brain-stroming and
supporting during preparation...
REFERENCE List
ISO 9001 Auditing Practices Group Guidance on: How to add value during the audit process, Date:    14 Octob...
Thank
you
See u
next
time
 Copyright 2008© dw



                      Copyright 2008© dw
Presentasi Danang W
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Presentasi Danang W

  1. 1. Driving Process Excellence Enterprise Audit Management Process driven combining audits on quality and environmental management systems ISO 19011 supports new approaches in auditing This presentation has made for International Assessor/Auditor Conference Indonesia, November 2008 Copyright 2008© dw
  2. 2. Presented by : Danang Widoyoko IATF Auditor No.: 3UK-07-01-285 IRCA Lead Auditor No.: 1185731 2003 until Present join with SGS Indonesia 1995-2003 : Astra Daihatsu Motor Engine Plant QA Mgr Black Belt Engineering 1992-1995 : IPTN Stress Analysis Copyright 2008© dw
  3. 3. A walk through the final frontier : topics cover Re-think about Quality Audit Next door Stories Shift to the next gear Copyright 2008© dw Copyright 2008© dw
  4. 4. Re-think about Quality Audit : Auditing and being audited Copyright 2008© dw
  5. 5. “If we change the way we think about quality, we will imagine that it is not about following procedures, inspection, rules and regulations. It is about establishing the needs and expectations of those we choose to serve, setting goals for satisfying these needs, devising a system of processes to fulfil these goals, measuring performance and continually improving capability to satisfy the needs of all interested parties.” Customer value proposition Strategic Planning Function Mission & Vision Resources, Customer Budget, action needs plan Operation/Delivery Strategic result & Regulation business strategic Input-process-output Image Strategic initiaves Relationship Copyright 2008© dw
  6. 6. Stake holder’s comments during audit process : Frequently confirmed satisfy But the main Stake holder’s idea of the system : show the money…! PDCA audits are an excellent way to determine whether investments in processes are actually performing as expected . Copyright 2008© dw
  7. 7. Next Door Stories of Quality Audit : Untold stories of quality audit that shown looks like no added value given by quality audit Copyright 2008© dw
  8. 8. Why it doesn’t work very well.? • Lack of objectives and resources • Poor Preparation • Broken Close-loop Copyright 2008© dw
  9. 9. Lack of objectives and resources Lost objectives of the quality audit Quality audits, both internal and external should be cited as part of the organization preventive action program. They are part meant to detect problems early. Identified non conformances typically should trigger an investigation. Audits should be also cited as part of the organization to seen any opportunities to enhance their system Worse Resources for big result Quality audits, both internal and external should be planned with appropriate objectives to deliver best result for the organization performance
  10. 10. Poor Preparation Poor Qualification • Competence building takes not more than simple training • Knowledge system and process as vital things not defined properly • Monkey sees monkey does • Poor mentoring and tutor including continues improvement plan • Checklist mentality Poor Audit Plan • Not base on Risk, and actual process performance • Un-wise resources regular plan • Wrong selection team, ever see new comers going to production line..?
  11. 11. Poor Preparation Comfort Zone They will be known better than 3rd. party auditors. For them mostly left unchecked for their comfort zone. An auditor that is totally unfamiliar with (for example) product design process- according to poor qualification above- might shy away from performing thorough investigation, allowing, this way, for ineffective processes to go unchallenged. Side Jobs The planning also not consider according to the complexity of the process, covering of the process etc. Meanwhile the activities only confirm as side jobs. You can imagine how the audit would be execute.
  12. 12. Broken Close Loops Comfort Zone They will be known better than 3rd. party auditors. For them mostly left unchecked for their comfort zone. An auditor that is totally unfamiliar with (for example) product design process-according to poor qualification above-might shy away from performing thorough investigation, allowing, this way, for ineffective processes to go unchallenged. Side Jobs The planning also not consider according to the complexity of the process, covering of the process etc. Meanwhile the activities only confirm as side jobs. You can imagine how the audit would be execute.
  13. 13. Back to the future SHIFT TO THE NEXT GEAR Copyright 2008© dw
  14. 14. • The quality audit • Process Approach • Compliance against PDCA Approach GENERATE ADDED VALUE BY QUALITY AUDIT Copyright 2008© dw
  15. 15. “Systematic, independent and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which audit criteria are fulfilled.” Audit criteria is a “set of policies, procedures, or other requirements against which collected audit evidence is compared.” Audit evidence consists of “records, statements of fact or other information, relevant to the audit and which are verified.” “Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.”[i] [i] “About Internal Auditing,” IIA Web Site, 2000. THE QUALITY AUDIT Copyright 2008© dw
  16. 16. An audit does not only provide information to determine conformity, but also information that can be used to direct an organization and improve its activities. This added value of auditing – compared to control or inspection activities – is, amongst others, related to the in-depth type of investigations and analysis and the search into the causes of any shortcomings or non-conformities that form the basis of all audits Systematic, independent, and documented process for obtaining audit evidence and evaluating it objectively to determine the extent to which the audit criteria are fulfilled.i] [i] “ISO 19011:2002 THE QUALITY AUDIT Copyright 2008© dw
  17. 17. Role of auditor : • Catalyst • Reporter • Improvement Agent • Innovator • Motivator • Interface between linkage An organization will need to: •Identify what competencies are required • Identify which personnel already are competent • Decide what additional competencies are required. • Decide how these are to be obtained • Train, hire or reassign personnel • review competence of personnel Auditing 'competence' and 'effectiveness of actions taken' THE QUALITY AUDIT Copyright 2008© dw
  18. 18. •Identify business objectives •Identify high risk processes •Flowchart processes •Identify process measures •Evaluate process performance against measures •Recommend improvements Improvement base on actual process PROCESS APPROACH Copyright 2008© dw
  19. 19. An advantage of the process approach is the ongoing control that it provides over the linkage between the individual processes within the system of processes, as well as over their combination and interaction. When used within a quality management system, such an approach emphasizes the importance of • understanding and meeting requirements, • the need to consider processes in terms of added value, • obtaining results of process performance and effectiveness, and • continual improvement of processes based on objective measurement. Improvement base on actual process PROCESS APPROACH Copyright 2008© dw
  20. 20. •Efficiency •Effectiveness •Cost reduction •Waste elimination •Risk management •Controls Value Added Audit Objectives PROCESS APPROACH Copyright 2008© dw
  21. 21. Compliance against PDCA Approach EFFECTIVENESS & EFFICIENT Copyright 2008© dw
  22. 22. EFFECTIVENESS AND EFFICIENT IMPROVEMENT AND EFFECTIVENESS There are many examples and requirements in ISO 9001:2000 that require the organization to address the effectiveness of its quality management system. Further requirements specify the need for continual improvements to the quality management system – not just sporadic quality campaigns. • Extent to which planned activities are realized and planned results achieved. - ISO 9000:2000 3.2.14 • ISO 9001 specifies requirements for a quality management system that can be used for internal application by organizations, or for certification, or for contractual purposes. It focuses on the effectiveness of the quality management system in meeting customer requirements - ISO 9001: 2000 0.3 • Top Management shall ensure that the quality policy includes a commitment to comply with requirements and continually improve the effectiveness of the quality management system. - ISO 9001: 2000 5.3 • The organization shall continually improve the effectiveness of the quality management system through the use of the quality policy, quality objectives, audit results, analysis of data, corrective and preventive actions and management review. - ISO 9001: 2000 8.5 Copyright 2008© dw
  23. 23. EFFECTIVENESS AND EFFICIENT Measuring QMS effectiveness and improvements Effectiveness : Planned result achieved for customer satisfaction driven Efficiency : Result achieved against resources used Copyright 2008© dw
  24. 24. Analysis of Data Organizational Objectives Customer requirements Statutory & regulatory requirements Examples of Defect rate and objectives set by the customer returns Organization QMS controls Purchasing Copyright 2008© dw
  25. 25. Analysis of Data Organizational Organizational Objectives Results Customer requirements Customer satisfaction Statutory & regulatory requirements Statutory & regulatory compliance Examples of results Quality system metrics Defect rate and recorded by the customer returns Organization Inspection and test QMS controls Supplier performance Purchasing Copyright 2008© dw
  26. 26. Effectiveness of the QMS 100 100 Organizational Organizational Objectives Results 0 0 The gap measures the lack of effectiveness of the quality management system. The narrower the gap, the more effective the QMS. Things are looking good! Copyright 2008© dw
  27. 27. Effectiveness of the QMS 100 100 Organizational Organizational Objectives Results 0 0 The gap measures the lack of effectiveness of the quality management system. Management should get a wake up warning! Copyright 2008© dw
  28. 28. Effectiveness of the QMS 100 100 Organizational Organizational Objectives Results 0 0 The gap measures the lack of effectiveness of the quality management system. The Organization is in trouble! Copyright 2008© dw
  29. 29. Improvement in the QMS Organizational Organizational Objectives Results Improvement in the QMS % 100 75 50 25 0 Improvement can also be measured Copyright 2008© dw
  30. 30. Improvement in the QMS Organizational Organizational Objectives Results Improvement What actions are taken when Initiatives gaps are identified? Customer Focus Corrective Action In this example, the organization These actions may identified three key areas for cause the organization improvement. to revise its objectives. Procurement Copyright 2008© dw
  31. 31. Management Review 100 100 Organizational Organizational Objectives Results 0 0 Improvement Initiatives The improvement processes Customer Focus are also evaluated during Management management review meetings Review and appropriate action taken. Corrective Action Which may cause the organization to Procurement again revise its objectives. Copyright 2008© dw
  32. 32. EFFECTIVENESS AND EFFICIENT ISO 9004:2000 & The consistent pair Top management should therefore define methods for measurement of the organization's performance in order to determine whether planned objectives have been achieved. Methods include • financial measurement, • measurement of process performance throughout the organization, • external measurement, such as benchmarking and third-party evaluation, • assessment of the perceptions of customers and other interested parties of performance of products provided, measurement of other success factors identified by management. • assessment of the satisfaction of customers, people in the organization and other interested parties, - ISO 9004:2000 5.1.1 Copyright 2008© dw
  33. 33. The Effectiveness of the Organization After analyzing the data and reaching a conclusion on the effectiveness of the QMS, the same process is then used to determine if the quality management system has had an effect on the Organization’s business and/or financial results. Copyright 2008© dw
  34. 34. Effectiveness of the Organization 100 100 QMS Organizational Results Business Results 0 0 The gap now measures the lack of business effectiveness of the organization. The narrower the gap, the more effective the organization. Copyright 2008© dw
  35. 35. Business Improvement in the Organization Organizational Organizational Objectives Results Improvement in the organization % 100 75 50 25 0 And again, the improvements in the organization can be measured and managed. Copyright 2008© dw
  36. 36. Analysis of Data 100 100 Organizational Organizational Objectives Results 0 0 QMS Results Improvement Initiatives Business The Sydney Model is cyclical and Results can be used as often as required by an Organization. Management Review Continual Copyright 2008© dw Improvement
  37. 37. Conforming Zone 3 Zone 4 Maturity of “QMS” Non Conforming Zone 1 Zone 2 Maturity of “quality culture” Low High “Value-added” quality management systems with Value-added auditing MEET THE CUSTOMER Copyright 2008© dw
  38. 38. VISION Planning Re-align ENGINEER Audit RESPOND Cycle Analysis Data Gathering OPERATE “Value-added” quality management systems Value-added auditing Compliance against PDCA Approach MEET THE CUSTOMER Copyright 2008© dw
  39. 39. Visibility Collaboration • Auditors team • Audit observations • Operations Team • Prioritized Risks • External Auditors • Internal Controls • Best Practices • Process performance • Knowledgebase • Cost of Audit • Dashboard • Attention Areas • Documents Attachment Control Leverage Audit Data • Audit Schedule • Cost Leaders • Process Improvements • Time Leaders • Compliance Efforts • Unified View of Risks • Team Accountability • Compliance Breach Alerts • Metrics Collection • Business Impact • Task Milestones • Initiatives • Competitive Benefits “Value-added” quality management systems Value-added auditing MEET THE CUSTOMER Copyright 2008© dw
  40. 40. Process Owner Operations Team Customer Internal Management External Auditor Auditor + Multi-Location Audit Multi-LOB Audit Audit Data Multiple Audit Compliance Integration Standards Templates “Value-added” quality management systems Value-added auditing Meet the customer Copyright 2008© dw
  41. 41. Standards Driven Compliance Full-Cycle Audit Management Assurance Automation Common tools and + process, integrated with other Audit Data Risk Sources Mitigation Dynamic link + between customer compliance needs and Lower costs Best practices Open standards Documents Business Benefits Meet the customer Copyright 2008© dw
  42. 42. Process Adherence Process Performance Quality of Decisions Audit Cost Audit Time Reporting Gaps Business Benefits Meet the customer Copyright 2008© dw
  43. 43. Conclusion The effectiveness of the quality management system in meeting both quality and/or business objectives is likely to be the key attribute that ensures the on-going support and resource allocation to maintain the ISO 9001:2000 quality management system within the corporate environment. Copyright 2008© dw
  44. 44. “Another challenge is to make sure we don’t cross the line between helping management and our role as the independent, objective audit function,” he says. “This is a constant challenge, because the more management perceives us as adding value, the more they call on us to participate in the process. When that involves decision making, we must be careful to maintain our independence and objectivity.” “Finally, as a global company, we have to be sensitive and aware that we are not living in one culture, but a multicultural world. What is good for the United States is not always good for the rest of the world, from both a business and an audit perspective.” Chet Watson, general auditor, and Angie Chin, GM’s Audit Leadership Board executive for Business Risk Management, Sarbanes-Oxley 404 Support and Special Investigation Copyright 2008© dw
  45. 45. “The more that audit can be viewed as adding value beyond traditional compliance and operational auditing, the further the function will get.” “My goal is significant reduction of total hours by leveraging existing documentation and automation, increasing control awareness and improving training of control ownership,” “We want to be free to expand the work IA is doing in traditional audit areas. So far, we are well on our way to achieving our goal.” Rob Gould, director of internal audit, Harley-Davidson Copyright 2008© dw
  46. 46. “When I was brought on board, my initial challenge was to find out from all the senior executives what kept them up at night. We still try to stay on top of business and process risk to make sure we are addressing the high-risk and high-payback opportunities.” “One thing I’ve learned is that I am here to make the business better - by collaborating and listening, we can provide better service and meet the needs of management.” Phil Bertram, director of internal audit, Komatsu Copyright 2008© dw
  47. 47. “We need empowerment, not only in terms of responsibility, but also in terms of the human resources assigned to the different offices, where these professionals will be autonomous as they perform different types of audits.” “All of this is based on one concept - and that is, in order to create a good auditor, a company must spend a great deal of money, both in formal development and in on- the-job training. Our goal is to keep talented people within the Fiat Group so that we can recover our investment of resources.” – Mauro Di Gennaro, chief audit executive and compliance officer, Fiat. Copyright 2008© dw
  48. 48. I would like to say a lot of thanks following all valuable discussion and brain-stroming and supporting during preparation of this seminar and paper to : • Mr. Santoso Catur Yugo, Head of Astra Daihatsu Motor Casting Plant • Mr. Budi Agung P., Director Secretary Astra Daihatsu Motor • Management of PT Asmo Indonesia : Mr. Okumura (Director), Mr. Satrio S. (GM) and Mr. Joko Isworo (Management Representative) • Mr. Nyoman – Management representative GS Battery Indonesia – and his staff : Mr. Ricky • Management of PT Hamaden Indonesia : Mr. Denny Thamrin (Management Representative), Mr. Tri Harjanto (GM). • Management of PT Denso Indonesia : Mr. Supriatna (Management Representative), Eko Widodo (QA) • Mr. Sugeng – QA : PT Suzuki Indomobil International • Mr. Muh. Sadewo Head of Inti Pantja Press Indonesia and executive director of Fuji technica Indonesia. • All my colleagues at SGS Indonesia All picture copy right confirmed by sxc.hu; Flickr.com Reference presentation copy right confirmed by slideshare, ASQ, www.theiia.org/Quality Copyright 2008© dw
  49. 49. REFERENCE List ISO 9001 Auditing Practices Group Guidance on: How to add value during the audit process, Date: 14 October 2004, International Organization for Standardization and International Accreditation Forum ISO 9001 Auditing Practices Group Guidance on: The role and value of the audit checklist , Date: 14 October 2004, International Organization for Standardization and International Accreditation Forum Mills., Charles A., Quality Audit, A Management Evaluation Tool, © 1989 by Mc-Graw-Hill Inc. ISO/TS 16949, IATF Auditor Training- 2007 Risk based assessment applied to QA GLP audits - Alain Piton Galderma R&D, Sophia-Antipolis, France RISK MANAGEMENT IN THE SUPPLY CHAIN, April 5, 2005 Los Angeles Convention Center Los Angeles, CA, Copyright © 2005 –QPE –800.COMPETE Palmes., Paul C-Process Driven Comprehensive Auditing A New Way to Conduct ISO 9001:2000 Internal Audits, American Society for Quality, Quality Press, Milwaukee 53203 © 2005 by American Society for Quality Hortensius., Dick, ISO develops unique standard for auditing ISO 9000 and ISO 14000 systems, NEN,P.O. Box 5059, NL- 2600 GB Delft, Netherlands. Dick Hortensius and Annemarie de Jong, Co-secretaries of the ISO Joint Working Group on Auditing, Netherlands Standardization Institute, NENCombining audits on quality and environmental management systems Mills., Charles A., Quality Audit, A Management Evaluation Tool, © 1989 by Mc-Graw-Hill Inc. Copyright 2008© dw
  50. 50. Thank you See u next time Copyright 2008© dw Copyright 2008© dw
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