Managing Effective Quality Audits

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The ISO 9001 standard is increasingly being adopted by many organizations world-wide. Whether you are conducting an internal quality audit in your organization or preparing for an external audit, it is important that the auditing process is thorough, systematic and effective. This powerpoint presentation will help you to:

1. Conduct a step by step internal quality audit to the ISO 9001:2008 standard;
2. Prepare you for an external audit; and
3. Conduct a supplier audit.

You may also adopt or adapt the materials to define your organization's very own internal audit SOP.

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Managing Effective Quality Audits

  1. 1. © Operational Excellence Consulting. All rights reserved. © Operational Excellence Consulting. All rights reserved. Managing Effective Quality Audits
  2. 2. 4© Operational Excellence Consulting. All rights reserved. Program Outline 1. Principles of management system auditing 2. Conducting effective internal quality audit to ISO 9001:2008 3. Preparing for external audits 4. Conducting supplier audits This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  3. 3. 7© Operational Excellence Consulting. All rights reserved. What Are Audits Used For? • Looking at the overall process • Auditing conformity • Auditing effectiveness • Approving Suppliers / Subcontractors • Assessing for Certification • Investigating problems • Way of improving Principles of Management System Auditing This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  4. 4. 10© Operational Excellence Consulting. All rights reserved. Important Terms and Definitions • Audit Criteria – Set of policies, procedures or requirements used as a reference against which audit evidence is compared • Audit Evidence – Records, statements of fact or other information, which are relevant to the audit criteria and verifiable Principles of Management System Auditing This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  5. 5. 13© Operational Excellence Consulting. All rights reserved. Important Terms and Definitions • Audit Plan – description of the activities and arrangements for an audit • Auditee – organization being audited • Audit client – organization or person requesting an audit • Competence – demonstrated personal attributes and demonstrated ability to apply knowledge and skills Principles of Management System Auditing This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  6. 6. 16© Operational Excellence Consulting. All rights reserved. Executing the Internal Audit • Maintain control of the audit • Control audit time • Speak and ascertain from right people • Be professional • Be objective – look at the facts • Observe everything • Avoid hear-say • Be nosey, but polite Principles of Management System Auditing This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  7. 7. 19© Operational Excellence Consulting. All rights reserved. Recording Observations • Persons interviewed • Location or area observed • Documents examined • Records verified • ISO clauses involved • Process stage involved • Compliances/Non- compliances • Reference of non- compliance • Notes on non- conformances should be: Simple Crisp Neatly worded • Record aspect to be followed up in next assessment Principles of Management System Auditing This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  8. 8. 22© Operational Excellence Consulting. All rights reserved. Report to Management • Reports should be thorough and specific • Must be reviewed by management to be effective Principles of Management System Auditing This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  9. 9. 25© Operational Excellence Consulting. All rights reserved. Five Principles of Auditing 1. Ethical Conduct : the foundation of professionalism Trust Integrity Confidentiality Discretion • These are essential to auditing Principles of Management System Auditing This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  10. 10. 28© Operational Excellence Consulting. All rights reserved. Five Principles of Auditing 4. Independence : the basis for impartiality of the audit and objectivity of the audit conclusions Auditors are independent of the activity being audited and are free from bias and conflict of interest Auditors maintain an objective state of mind throughout the audit process to ensure that the audit findings and conclusions will be based only on objective evidence Principles of Management System Auditing This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  11. 11. 31© Operational Excellence Consulting. All rights reserved. Contents • Managing the audit program • Planning the audit • Conducting the audit • Reporting the audit findings • Post-audit activities This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  12. 12. 34© Operational Excellence Consulting. All rights reserved. Tips on Gaining Management Support to the Audit Program • Communicate the cost of audit observations • Explain the regulatory effects of nonconforming processes • Educate by stating or restating management’s role in the audit program • Distribute audit reports to management • Have a member of management participate in an audit Managing the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  13. 13. 37© Operational Excellence Consulting. All rights reserved. 4. Monitoring and Reviewing the Audit Program • Monitoring and reviewing the program • Identifying needs for corrective / preventive action • Identifying opportunities for improvement Managing the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  14. 14. 40© Operational Excellence Consulting. All rights reserved. Planning and Preparation • Audit Planning • Communicating the Audit Plan • Selection of Auditors • Preparing for Audit • Pre-audit Information Planning the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  15. 15. 43© Operational Excellence Consulting. All rights reserved. Audit Planning • Schedule The audit schedule is a document that gives details of the area, process and department to be audited during the scheduled audit. It also specifies dates of audit, names of auditor and corresponding auditee area, process or department. Planning the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  16. 16. 46© Operational Excellence Consulting. All rights reserved. Auditing Techniques • Upstream Starting with the final process and working backwards to the beginning • Downstream Starting with the first process and following the flow • Horizontal Across similar processes • Mixed Combination of Up/Down stream and horizontal Planning the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  17. 17. 49© Operational Excellence Consulting. All rights reserved. Selection of Auditors • Based on educational qualification, industrial experience, in-house / outside trainings and technical knowledge of the individual • People within the organization who have been trained to conduct audits • Important precaution to be taken is to ensure that people do not audit their own area • Auditors must treat audit as a fact finding exercise and so should do a professional job Planning the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  18. 18. 52© Operational Excellence Consulting. All rights reserved. Preparing the Checklist of Questions • Check which elements of the Standard apply to the area to be audited • Check key requirements in the document • Check for any problems which normally are known to occur in the process to be audited • If necessary, ask other people for advice • Refer to other previous audit checklists/reports • Sequence questions in a logical way and also to permit Plan-Do-Check-Act approach to auditing Planning the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  19. 19. 55© Operational Excellence Consulting. All rights reserved. Pre-audit Information • Activities performed by auditee • Site master file • Quality Manual • Review the layouts • Understand the process flow • Previous nonconformity reports for verification of effectiveness of corrective actions Planning the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  20. 20. 58© Operational Excellence Consulting. All rights reserved. The Opening Meeting • This is your first point of face-to-face contact with auditee • Be punctual or you risk losing your credibility • Each side introduces the attendees Each auditor introduces him/her self • Try to remember names for use during the audit – People like to have their names remembered • Re-confirm the agenda. Modify or change if agreed by both the sides • Site / departmental presentation. Make notes of important information. Conducting the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  21. 21. 61© Operational Excellence Consulting. All rights reserved. The Site / Area Tour • A very critical part of audit • Respect dress codes of the areas to be visited • Do not be afraid to ask to visit controlled areas • Allow one auditor to speak at a time • Talk to workers during site tour • Ensure that you understand the answers If not ask the same question again Ask for clarification if required Conducting the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  22. 22. 64© Operational Excellence Consulting. All rights reserved. Audit Proper • Compare and evaluate practice against the documented QMS (Conforming? At variance?) • Use checklists to guide you in completing the audit • Define nonconformity where lapses of the practice against QMS documentation might be found • Record objective evidence(s) of the NC • Confirm with the auditee the presence of NC • Point out observation(s) and area(s) for improvement Conducting the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  23. 23. 67© Operational Excellence Consulting. All rights reserved. Audit Using PDCA Approach 3. Are key activities and methods for achieving objectives identified, documented and controlled? Are plans, procedures, formula, etc. documented? Are process and operating criteria defined? Are responsibilities and authorities defined? Conducting the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  24. 24. 70© Operational Excellence Consulting. All rights reserved. How to Handle Difficult Auditees • Take a communication class on verbal and non- verbal skills • Get training on dealing with difficult people • Understand cultural differences • Explain to the auditee the benefit or requirement to the company • Ask open-ended questions from checklist • Stop an audit during difficult situations with auditees Conducting the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  25. 25. 73© Operational Excellence Consulting. All rights reserved. The Audit Reporting Cycle • Discuss and agree on findings • Record findings • Hold closing meeting • Issue audit report • Update records • Agree to undertake follow-up audit, if needed • Carry out and record results of Follow-up Audit Reporting Internal Audit Findings This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  26. 26. 76© Operational Excellence Consulting. All rights reserved. 2 Types of Nonconformities • Failure to meet one requirement of a sub-clause (e.g. 4.2.3c) • Single observed lapse in implementing one requirement of company QMS procedures • No preventive or corrective actions were taken Minor Findings (Category 2) Reporting Internal Audit Findings This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  27. 27. 79© Operational Excellence Consulting. All rights reserved. The Closing Meeting • Respond to questions openly at end of the audit • Be prepared to change your wordings or even observations based upon facts presented by auditee(s) • Report the overall conclusions and recommendations • Invite comments from auditees • Resolve any inquiries or concerns • Obtain consensus from auditees on nonconformity reports • Establish date of submission to auditor of corrective action • Reiterate confidentiality Reporting Internal Audit Findings This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  28. 28. 82© Operational Excellence Consulting. All rights reserved. Reporting Audits • How do we write an audit report? Include positive points as well as deficiencies (negative findings and observations) identified Management must have a balanced overview of conditions within the plant; therefore, provide them information on areas of strength (best practices) and areas requiring improvement Post Audit Activities This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  29. 29. 85© Operational Excellence Consulting. All rights reserved. What Happens Next? • For the concluded audit: Agree on the corrective actions Agree on-site follow-up audit, if necessary Compile the audit report and submit to Top Management • Review the Audit Program • Improve the Audit Program • Prepare for the next audit Post Audit Activities This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  30. 30. © Operational Excellence Consulting. All rights reserved. How to Prepare for an External Audit 3 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  31. 31. 91© Operational Excellence Consulting. All rights reserved. Define the Organization to be Audited • Define the organization or function or product line to be audited Organizations may have numerous smaller component entities, which are often separate legal entities (i.e., subsidiaries) Determine which of these entities to include in the audit For example, an insurance company may have several different subsidiary components that each perform a function for the whole organization, with one of the units providing the accounting functions for all the other unitsThis document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  32. 32. 94© Operational Excellence Consulting. All rights reserved. Review Applicable Laws & Regulations • Review laws and regulations applicable to the entity and the type of audit • Publicly traded companies must have audits and submit them to the Securities and exchange commission. They must also comply with the Sarbanes Oxley Act (SOX) • Government entities must comply with applicable Office of Management and Budget (OMB) Circulars if they receive federal financial assistance • There are many other laws and regulations that may be applicable depending on the type of entity and the type of audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  33. 33. 97© Operational Excellence Consulting. All rights reserved. Prior to the External Audit • Review training documentation and computer software manuals, ensuring current information is available. Shred outdated versions. • Remove old paperwork from operational areas or file all documentation. Computer printouts, empty cartons and unfiled paperwork can clutter working areas, making the business look inefficient and disorganized. Old documentation also invites scrutiny; so unless the paperwork is a necessary part of your business, shred it.This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  34. 34. 100© Operational Excellence Consulting. All rights reserved. Prior to the External Audit • Designate an audit guide(s) for your organization to coordinate the audit activities between the external auditor and the auditees • Designate an alternate in case the audit guide is not available This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  35. 35. 103© Operational Excellence Consulting. All rights reserved. During the Audit Fieldwork • The department audit guide should: Keep the audit focused Facilitate the audit Keep in constant communication with the auditor Resolve audit issues as soon as they are brought to the department's attention Keep all parties informed on the progress of the audit Keep the Management Representative informed on the progress of an external audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  36. 36. 106© Operational Excellence Consulting. All rights reserved. Interacting with Auditors – Don’ts for Auditees • Assume auditors are familiar with your organization’s quality or financial control system • Challenge auditors • Show more competence in the standard being audited • Argue internally • Express unfairness • Ask for solution • Fix non-conformities on the spot This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  37. 37. © Operational Excellence Consulting. All rights reserved. How to Conduct a Supplier Audit 4 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  38. 38. 112© Operational Excellence Consulting. All rights reserved. Objectives of Supplier Quality Audit • Review the supplier’s management philosophies and practices • Review supplier’s total quality system • Address specific issues needing corrective action or to review technical and service capabilities of a supplier • Means to understand supplier capabilities and to drive supplier improvements as neededThis document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  39. 39. 115© Operational Excellence Consulting. All rights reserved. Key Steps for Conducting a Supplier Quality Audit 1. Supplier audit planning and preparation 2. On-site supplier audit 3. Post audit activity This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  40. 40. 118© Operational Excellence Consulting. All rights reserved. 1. Supplier Audit Planning & Preparation • Preparation At this stage, the supplier information already received, shall be reviewed by the Process Audit Team in preparation for the Process Audit. The supplier shall prepare for the Process Audit by planning to: Have an area free from interruptions where copies of Process audit documentation (e.g. Quality Control Manual, organizational charts, quality control policies, procedures, etc.) can be reviewed by the Process Audit team. Have available, for the duration of the Process Audit the supplier's quality representative and other appropriate personnel as required. Have the Chief Executive Officer for the manufacturing operation available for the pre-Process Audit and post Process Audit meetings. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  41. 41. 121© Operational Excellence Consulting. All rights reserved. 1. Supplier Audit Planning & Preparation • Pre-audit Meeting/Visit/Discussion (continued) Should the pre-Process Audit meeting/visit/discussion reveal that the system described by the supplier is not adequate to meet requirements, further activity may be postponed until such concerns are resolved to the satisfaction of the assessor and where applicable, the supplier. (Company specific) questions should be addressed during the pre-Process Audit visit/discussion. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  42. 42. 124© Operational Excellence Consulting. All rights reserved. 2. On-site Supplier Audit • Process audit activity The Process Audit team may is divide up into interview groups, to interview and observe elements of the supplier's process audit. This activity shall consist of a detailed review of documented policies, manuals and procedures with the supplier's representatives, assessing all operations (i.e. development, engineering, manufacturing, testing, inspection, storing, etc.) to stated procedures. During the actual Process Audit, a planned sequence of events is utilized in order to insure that all quality assurance activities are reviewed, analyzed and evaluated in accordance with the Process Audit plan. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  43. 43. 127© Operational Excellence Consulting. All rights reserved. 2. On-site Supplier Audit • Post process audit meeting The Process Audit team shall meet with the supplier at the end of the Process Audit activity and present the results. Should corrective action activity be required, time frames for response shall be established and agreed upon. The findings of the Process Audit team shall be provided to supplier management at the end of this activity. Supplier management should sign-off on findings.This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  44. 44. 130© Operational Excellence Consulting. All rights reserved. 3. Post Audit Activity • Supplier management review and corrective action Suppliers should respond to this report with a written corrective action plan within 30 days of receiving the report. A Process Audit activity is not considered complete until, the supplier has not only identified the most effective practical solutions to his process audit deficiencies, but also identified the methods for implementing these solutions. The supplier is responsible initiating corrective action necessary to correct all findings. This includes containment, determination of the root cause, remedial corrective action and long term action to prevent recurrence. The supplier should determine the extent to which the problem has affected past performance and what would be required to correct these problems This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  45. 45. 133© Operational Excellence Consulting. All rights reserved. 3. Post Audit Activity • Follow up process audit A Follow-up Process Audit may be conducted to verify the effectiveness and adequacy of the corrective actions that can not be verified via phone conversation or written documentation. The follow-up Process Audit may not require a full Process Audit team be present and is possible to be conducted in one day by concentrating purely on the CAR topics. A degree of caution has to be applied when rescoring the sections after a Follow-up Process Audit. It should be scored in such a way that previous sections which had failed should now score a maximum of 90% only. Otherwise there is a danger that a Follow-up Audit could generate a 100% score as only the corrective action items have been reviewed. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  46. 46. © Operational Excellence Consulting. All rights reserved. End of Presentation To view the full list of training presentations, please visit us at: Operational Excellence Consulting http://www.oeconsulting.com.sg This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  47. 47. 139© Operational Excellence Consulting. All rights reserved. Review of Audit Requirements 8.2.2 Internal Audit (ISO 9001:2008) • The organization shall conduct internal audits at planned intervals to determine whether the QMS: a. Conforms to planned arrangements to the requirements of the standard, and the QMS requirements established by the organization, and b. Is effectively implemented and maintained Planning the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  48. 48. 142© Operational Excellence Consulting. All rights reserved. Review of Audit Requirements 8.2.2 Internal Audit (ISO 9001:2008) • The management responsible for the area being audited shall ensure that any necessary corrections and corrective actions are taken without undue delay to eliminate detected nonconformities and their causes • Follow-up activities shall include verification of the actions taken and the reporting of verification results Planning the Internal Audit This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  49. 49. 145© Operational Excellence Consulting. All rights reserved. ISO 9001:2008 Clauses (Continued) 5.0 Management Responsibility (Continued) 5.3 Quality Policy 5.4 Planning 5.4.1 Quality Objectives 5.4.2 Quality Management System Planning 5.5 Responsibility , Authority and Communication 5.5.1 Responsibility and Authority 5.5.2 Management Representative 5.5.3 Internal Communication 5.6 Management Review 5.6.1 General 5.6.2 Review Input 5.6.3 Review Output This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  50. 50. 148© Operational Excellence Consulting. All rights reserved. ISO 9001:2008 Clauses (Continued) 7.0 Product Realization (Continued) 7.5 Production and Service Provision 7.5.1 Control of Production d Service Provision 7.5.2 Validation of processes for production and Service Provision 7.5.3 Identification and Traceability 7.5.4 p y Customer Property 7.5.5 Preservation of Product 7.6 Control of monitoring and measuring Equipment This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  51. 51. 151© Operational Excellence Consulting. All rights reserved. Areas of Supplier Quality Audit • As an auditor, you should leave a supplier quality audit with a greater understanding of at least the following items: Quality methodologies Lot determinations Tools Improvements Team empowerment Sampling arrangements Inspection process This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  52. 52. 154© Operational Excellence Consulting. All rights reserved. Quality Tools • How is the supplier monitoring its quality? One common tool used is Statistical Process Control (SPC) charts. • SPC identifies an acceptable range of quality measurements and then graphs actual measurements both between upper and lower limits of acceptability and outside those limits. • Ask the supplier to show you how quality tools are used to monitor quality. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
  53. 53. 157© Operational Excellence Consulting. All rights reserved. Sampling Arrangements • In mass production, not every unit made is inspected. • Ask the supplier to show you how they choose the size and composition of inspected samples. This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/managing-effective-quality-audits-162
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