SlideShare a Scribd company logo
Quality Management
Systems, Standards, and
Benefits/Costing
1
QMS
A quality management system (QMS) is a system that
defines operations to achieve consistency and
creditability with customers
QMS refers to what the organization does to manage
its processes, or activities in order that the products
or services that it produces meet the objectives it has
set itself (ISO, 2004)
ISO 9000 series (International Standards
Organization standard on quality management)
2
ISO 9000
ISO 9000 is a generic standard - means that the
standard can be applied to any organization, large or
small, whatever its product in any sector of activity
ISO is an auditable system – organization may be
certified to a market standard by outside agency
(Weigers, 2001)
ISO 9000 predominant QMS today – adopted by 149
countries/economies (ISO, 2004)
3
4
Quality Management Principles of ISO 9000:2000 (ANSI, 2000; ANSI,
2000a)
Customer focus
Leadership
Involvement of people
Process Approach – A set of interrelated activities which transforms inputs
into outputs
System approach to management – Manage set of interrelated processes
Continual Improvement
Factual approach to decision making
Mutually beneficial supplier relationships
General Introduction
Growth of ISO 9000
CURRENT: 1M ISO certs.
Top 10 countries for
registrations:
China (approx. 27%)
Italy
UK
Japan
Spain
USA (approx. 9%)
Germany
Australia
France
South Korea
5
ISO 9000 Characteristics
Leadership demonstrates commitment to customer
requirements.
Policy and measurable quality objectives are set and
renewed.
Processes are identified, analyzed, and
managed.
Customer satisfaction is measured.
Data are collected, analyzed, and used.
System effectiveness is continually improved.
6
ISO Process Approach
Company must identify
and manage numerous
linked activities.
An activity uses
resources, is managed
in order to enable the
transformation of inputs
into outputs.
7
Timeline for Standard Development
1
6
5
4
3
2
PROPOSAL
PREPARATORY
COMMITTEE
ENQUIRY
APPROVAL
PUBLICATION
Working Draft
WD
Committee Draft
CD
Draft International Standard
DIS
Final Draft International Standard
FDIS
Publication-International Standard
IS
New Work Item
NWIP
8
Key Aspects of ISO Participation
Timely – prompt response to enquiries within the
accepted timeline
Consensus – all points of view are accepted in
forming the TAG position, majority support for the
position
Transparent – activities of the committee are open
and may be inspected by all interested parties
Traceable – all items must be accompanied by a
voting record
9
Dual Roles for ISO 9000/9004
QMS for fulfilling customer, regulatory, etc.,
requirements (ISO 9000)
“Management should consider development of
innovative financial methods to support and
encourage improvement of the organizational
performance” (ISO 9004 – Guidelines for
performance improvements)
10
Allocation of Costs: Process Approach
Early methods of tracking quality costs was too
limited “focus on cost of non-conformance i.e.
external and internal failure costs”.
Process-cost broadens economics of quality by
classifying cost of non-conformance and cost of
conformance I.e. “costs incurred when a process is
running without failure”
11
Process Approach: Added
Benefits
Utilize cost of non-conformance (often called
Cost of Poor Quality) and cost of
conformance = greater cost saving
opportunities may be available in reducing
cost of conformance
12
Process Costing
Allows the tracking and reduction of costs
normally associated with efficiency in addition
to effectiveness (quality)”
Process simplification in addition to reduction
of errors become objectives
Relate the economics of quality to the
amount of activity performed
13
Process Costs i.e. Costs of Inefficient Processes
Examples
Variation of product characteristics from optimum
Unplanned downtime and/or loss of
processing/storage capacity
Inventory shrinkage
Variation of process characteristics from ‘best
practices’ (cycle times from to start to finish of
activities)
Other non-value added activities
NOTE: Improvement is also an objective
14
Don’t Ignore Quality Failures
Cost of non-conformity:
Internal failure costs
External failure costs
Cost of Poor Quality
Cost of lost
opportunities for sales
revenue
Cost of conformity:
process approach
15
Internal Failure Costs Examples
Labor and material overhead spent on defective
product – spoilage, defectives, scrap etc.
Correcting defectives in physical or service products
i.e. reworking product
Sorting bad/good product
Re-inspection, retest of product
Changing processes to correct deficiencies (CAR’s)
Downgrading product
16
External Failure Cost Examples
Costs involved in replacing/making repair for
warranty product
Investigation and adjustment costs to justified
complaints of quality defective product
Returned material
Concession costs due to substandard product
accepted by customer
Correcting errors on external supporting processes
Revenue losses in support operations
(Gyrna)
17
Allocation of Costs
The company must decide what to measure
depending upon circumstances, objectives,
etc.
However,
The overall idea is to “allocate costs and not
to absorb such costs into overhead” (ISO/TR
10014)
18
Deriving Benefits
Reduction of failures due to QMS
Improvement of process efficiencies due to QMS
Pre and post measures of implementation
However, improvements should be done as identified
Using quality tools such as flowcharting, value add
analysis, cycle time reduction, process
simplification, root cause investigation, etc.
19

More Related Content

Similar to ISO 9000 overview.ppt

International Organization for Standardization (ISO)
International Organization for Standardization (ISO)International Organization for Standardization (ISO)
International Organization for Standardization (ISO)
Universiti Malaysia Sabah
 
SAI Global Webinar: Tips for Effective Internal Auditing
SAI Global Webinar: Tips for Effective Internal AuditingSAI Global Webinar: Tips for Effective Internal Auditing
SAI Global Webinar: Tips for Effective Internal Auditing
Switzerland09
 
Quality Course 2, Including Iso9001
Quality Course 2, Including Iso9001Quality Course 2, Including Iso9001
Quality Course 2, Including Iso9001
Fin1
 
Modern Facility Management
Modern Facility ManagementModern Facility Management
Modern Facility Management
Ady Sadek E.
 
9001
90019001
QMS Awareness Session
QMS Awareness SessionQMS Awareness Session
QMS Awareness Session
Engr. Syed Noor Mustafa Shah
 
Asq presentationkjkj
Asq presentationkjkjAsq presentationkjkj
Asq presentationkjkj
Heriberto Marin
 
Asq presentation
Asq presentationAsq presentation
Asq presentation
Uppiliappan Gopalan
 
9001 Awareness Session Current
9001 Awareness Session Current9001 Awareness Session Current
9001 Awareness Session Current
senioke
 
Total Quality Management (TQM)
Total Quality Management (TQM)Total Quality Management (TQM)
Total Quality Management (TQM)
adnanqayum
 
Unit-I Introduction
Unit-I  IntroductionUnit-I  Introduction
Unit-I Introduction
Dr.Raja R
 
Tools and Ways of Improving Quality.pptx
Tools and Ways of Improving Quality.pptxTools and Ways of Improving Quality.pptx
Tools and Ways of Improving Quality.pptx
AbiolaOgunsanwo
 
The Principles of Quality Management
The Principles of Quality ManagementThe Principles of Quality Management
The Principles of Quality Management
EU Water Initiative plus for Eastern Partnership
 
Tqm 1
Tqm 1Tqm 1
Tqm 1
Isahito
 
Section1 unit6
Section1 unit6Section1 unit6
Section1 unit6
shailesh_65
 
Operations Management
Operations ManagementOperations Management
Operations Management
03232007798
 
Week 4Quality ManagementOPERATIONS MANAGEMENT.docx
Week 4Quality ManagementOPERATIONS MANAGEMENT.docxWeek 4Quality ManagementOPERATIONS MANAGEMENT.docx
Week 4Quality ManagementOPERATIONS MANAGEMENT.docx
melbruce90096
 
TS 16949 ASQ Presentation.ppt
TS 16949 ASQ Presentation.pptTS 16949 ASQ Presentation.ppt
TS 16949 ASQ Presentation.ppt
RakeshKumarSSDISO
 
SWE 333 - ISQM ISO 9000-3.ppt
SWE 333 - ISQM ISO 9000-3.pptSWE 333 - ISQM ISO 9000-3.ppt
SWE 333 - ISQM ISO 9000-3.ppt
Oswaldo Gonzales
 
IATF Awareness
IATF AwarenessIATF Awareness
IATF Awareness
dannymorrison4
 

Similar to ISO 9000 overview.ppt (20)

International Organization for Standardization (ISO)
International Organization for Standardization (ISO)International Organization for Standardization (ISO)
International Organization for Standardization (ISO)
 
SAI Global Webinar: Tips for Effective Internal Auditing
SAI Global Webinar: Tips for Effective Internal AuditingSAI Global Webinar: Tips for Effective Internal Auditing
SAI Global Webinar: Tips for Effective Internal Auditing
 
Quality Course 2, Including Iso9001
Quality Course 2, Including Iso9001Quality Course 2, Including Iso9001
Quality Course 2, Including Iso9001
 
Modern Facility Management
Modern Facility ManagementModern Facility Management
Modern Facility Management
 
9001
90019001
9001
 
QMS Awareness Session
QMS Awareness SessionQMS Awareness Session
QMS Awareness Session
 
Asq presentationkjkj
Asq presentationkjkjAsq presentationkjkj
Asq presentationkjkj
 
Asq presentation
Asq presentationAsq presentation
Asq presentation
 
9001 Awareness Session Current
9001 Awareness Session Current9001 Awareness Session Current
9001 Awareness Session Current
 
Total Quality Management (TQM)
Total Quality Management (TQM)Total Quality Management (TQM)
Total Quality Management (TQM)
 
Unit-I Introduction
Unit-I  IntroductionUnit-I  Introduction
Unit-I Introduction
 
Tools and Ways of Improving Quality.pptx
Tools and Ways of Improving Quality.pptxTools and Ways of Improving Quality.pptx
Tools and Ways of Improving Quality.pptx
 
The Principles of Quality Management
The Principles of Quality ManagementThe Principles of Quality Management
The Principles of Quality Management
 
Tqm 1
Tqm 1Tqm 1
Tqm 1
 
Section1 unit6
Section1 unit6Section1 unit6
Section1 unit6
 
Operations Management
Operations ManagementOperations Management
Operations Management
 
Week 4Quality ManagementOPERATIONS MANAGEMENT.docx
Week 4Quality ManagementOPERATIONS MANAGEMENT.docxWeek 4Quality ManagementOPERATIONS MANAGEMENT.docx
Week 4Quality ManagementOPERATIONS MANAGEMENT.docx
 
TS 16949 ASQ Presentation.ppt
TS 16949 ASQ Presentation.pptTS 16949 ASQ Presentation.ppt
TS 16949 ASQ Presentation.ppt
 
SWE 333 - ISQM ISO 9000-3.ppt
SWE 333 - ISQM ISO 9000-3.pptSWE 333 - ISQM ISO 9000-3.ppt
SWE 333 - ISQM ISO 9000-3.ppt
 
IATF Awareness
IATF AwarenessIATF Awareness
IATF Awareness
 

Recently uploaded

john krisinger-the science and history of the alcoholic beverage.pptx
john krisinger-the science and history of the alcoholic beverage.pptxjohn krisinger-the science and history of the alcoholic beverage.pptx
john krisinger-the science and history of the alcoholic beverage.pptx
Madan Karki
 
ISPM 15 Heat Treated Wood Stamps and why your shipping must have one
ISPM 15 Heat Treated Wood Stamps and why your shipping must have oneISPM 15 Heat Treated Wood Stamps and why your shipping must have one
ISPM 15 Heat Treated Wood Stamps and why your shipping must have one
Las Vegas Warehouse
 
Electric vehicle and photovoltaic advanced roles in enhancing the financial p...
Electric vehicle and photovoltaic advanced roles in enhancing the financial p...Electric vehicle and photovoltaic advanced roles in enhancing the financial p...
Electric vehicle and photovoltaic advanced roles in enhancing the financial p...
IJECEIAES
 
ML Based Model for NIDS MSc Updated Presentation.v2.pptx
ML Based Model for NIDS MSc Updated Presentation.v2.pptxML Based Model for NIDS MSc Updated Presentation.v2.pptx
ML Based Model for NIDS MSc Updated Presentation.v2.pptx
JamalHussainArman
 
CompEx~Manual~1210 (2).pdf COMPEX GAS AND VAPOURS
CompEx~Manual~1210 (2).pdf COMPEX GAS AND VAPOURSCompEx~Manual~1210 (2).pdf COMPEX GAS AND VAPOURS
CompEx~Manual~1210 (2).pdf COMPEX GAS AND VAPOURS
RamonNovais6
 
Hematology Analyzer Machine - Complete Blood Count
Hematology Analyzer Machine - Complete Blood CountHematology Analyzer Machine - Complete Blood Count
Hematology Analyzer Machine - Complete Blood Count
shahdabdulbaset
 
UNLOCKING HEALTHCARE 4.0: NAVIGATING CRITICAL SUCCESS FACTORS FOR EFFECTIVE I...
UNLOCKING HEALTHCARE 4.0: NAVIGATING CRITICAL SUCCESS FACTORS FOR EFFECTIVE I...UNLOCKING HEALTHCARE 4.0: NAVIGATING CRITICAL SUCCESS FACTORS FOR EFFECTIVE I...
UNLOCKING HEALTHCARE 4.0: NAVIGATING CRITICAL SUCCESS FACTORS FOR EFFECTIVE I...
amsjournal
 
学校原版美国波士顿大学毕业证学历学位证书原版一模一样
学校原版美国波士顿大学毕业证学历学位证书原版一模一样学校原版美国波士顿大学毕业证学历学位证书原版一模一样
学校原版美国波士顿大学毕业证学历学位证书原版一模一样
171ticu
 
KuberTENes Birthday Bash Guadalajara - K8sGPT first impressions
KuberTENes Birthday Bash Guadalajara - K8sGPT first impressionsKuberTENes Birthday Bash Guadalajara - K8sGPT first impressions
KuberTENes Birthday Bash Guadalajara - K8sGPT first impressions
Victor Morales
 
Use PyCharm for remote debugging of WSL on a Windo cf5c162d672e4e58b4dde5d797...
Use PyCharm for remote debugging of WSL on a Windo cf5c162d672e4e58b4dde5d797...Use PyCharm for remote debugging of WSL on a Windo cf5c162d672e4e58b4dde5d797...
Use PyCharm for remote debugging of WSL on a Windo cf5c162d672e4e58b4dde5d797...
shadow0702a
 
Computational Engineering IITH Presentation
Computational Engineering IITH PresentationComputational Engineering IITH Presentation
Computational Engineering IITH Presentation
co23btech11018
 
spirit beverages ppt without graphics.pptx
spirit beverages ppt without graphics.pptxspirit beverages ppt without graphics.pptx
spirit beverages ppt without graphics.pptx
Madan Karki
 
Embedded machine learning-based road conditions and driving behavior monitoring
Embedded machine learning-based road conditions and driving behavior monitoringEmbedded machine learning-based road conditions and driving behavior monitoring
Embedded machine learning-based road conditions and driving behavior monitoring
IJECEIAES
 
Casting-Defect-inSlab continuous casting.pdf
Casting-Defect-inSlab continuous casting.pdfCasting-Defect-inSlab continuous casting.pdf
Casting-Defect-inSlab continuous casting.pdf
zubairahmad848137
 
Manufacturing Process of molasses based distillery ppt.pptx
Manufacturing Process of molasses based distillery ppt.pptxManufacturing Process of molasses based distillery ppt.pptx
Manufacturing Process of molasses based distillery ppt.pptx
Madan Karki
 
BPV-GUI-01-Guide-for-ASME-Review-Teams-(General)-10-10-2023.pdf
BPV-GUI-01-Guide-for-ASME-Review-Teams-(General)-10-10-2023.pdfBPV-GUI-01-Guide-for-ASME-Review-Teams-(General)-10-10-2023.pdf
BPV-GUI-01-Guide-for-ASME-Review-Teams-(General)-10-10-2023.pdf
MIGUELANGEL966976
 
Properties Railway Sleepers and Test.pptx
Properties Railway Sleepers and Test.pptxProperties Railway Sleepers and Test.pptx
Properties Railway Sleepers and Test.pptx
MDSABBIROJJAMANPAYEL
 
Certificates - Mahmoud Mohamed Moursi Ahmed
Certificates - Mahmoud Mohamed Moursi AhmedCertificates - Mahmoud Mohamed Moursi Ahmed
Certificates - Mahmoud Mohamed Moursi Ahmed
Mahmoud Morsy
 
DEEP LEARNING FOR SMART GRID INTRUSION DETECTION: A HYBRID CNN-LSTM-BASED MODEL
DEEP LEARNING FOR SMART GRID INTRUSION DETECTION: A HYBRID CNN-LSTM-BASED MODELDEEP LEARNING FOR SMART GRID INTRUSION DETECTION: A HYBRID CNN-LSTM-BASED MODEL
DEEP LEARNING FOR SMART GRID INTRUSION DETECTION: A HYBRID CNN-LSTM-BASED MODEL
gerogepatton
 
Literature Review Basics and Understanding Reference Management.pptx
Literature Review Basics and Understanding Reference Management.pptxLiterature Review Basics and Understanding Reference Management.pptx
Literature Review Basics and Understanding Reference Management.pptx
Dr Ramhari Poudyal
 

Recently uploaded (20)

john krisinger-the science and history of the alcoholic beverage.pptx
john krisinger-the science and history of the alcoholic beverage.pptxjohn krisinger-the science and history of the alcoholic beverage.pptx
john krisinger-the science and history of the alcoholic beverage.pptx
 
ISPM 15 Heat Treated Wood Stamps and why your shipping must have one
ISPM 15 Heat Treated Wood Stamps and why your shipping must have oneISPM 15 Heat Treated Wood Stamps and why your shipping must have one
ISPM 15 Heat Treated Wood Stamps and why your shipping must have one
 
Electric vehicle and photovoltaic advanced roles in enhancing the financial p...
Electric vehicle and photovoltaic advanced roles in enhancing the financial p...Electric vehicle and photovoltaic advanced roles in enhancing the financial p...
Electric vehicle and photovoltaic advanced roles in enhancing the financial p...
 
ML Based Model for NIDS MSc Updated Presentation.v2.pptx
ML Based Model for NIDS MSc Updated Presentation.v2.pptxML Based Model for NIDS MSc Updated Presentation.v2.pptx
ML Based Model for NIDS MSc Updated Presentation.v2.pptx
 
CompEx~Manual~1210 (2).pdf COMPEX GAS AND VAPOURS
CompEx~Manual~1210 (2).pdf COMPEX GAS AND VAPOURSCompEx~Manual~1210 (2).pdf COMPEX GAS AND VAPOURS
CompEx~Manual~1210 (2).pdf COMPEX GAS AND VAPOURS
 
Hematology Analyzer Machine - Complete Blood Count
Hematology Analyzer Machine - Complete Blood CountHematology Analyzer Machine - Complete Blood Count
Hematology Analyzer Machine - Complete Blood Count
 
UNLOCKING HEALTHCARE 4.0: NAVIGATING CRITICAL SUCCESS FACTORS FOR EFFECTIVE I...
UNLOCKING HEALTHCARE 4.0: NAVIGATING CRITICAL SUCCESS FACTORS FOR EFFECTIVE I...UNLOCKING HEALTHCARE 4.0: NAVIGATING CRITICAL SUCCESS FACTORS FOR EFFECTIVE I...
UNLOCKING HEALTHCARE 4.0: NAVIGATING CRITICAL SUCCESS FACTORS FOR EFFECTIVE I...
 
学校原版美国波士顿大学毕业证学历学位证书原版一模一样
学校原版美国波士顿大学毕业证学历学位证书原版一模一样学校原版美国波士顿大学毕业证学历学位证书原版一模一样
学校原版美国波士顿大学毕业证学历学位证书原版一模一样
 
KuberTENes Birthday Bash Guadalajara - K8sGPT first impressions
KuberTENes Birthday Bash Guadalajara - K8sGPT first impressionsKuberTENes Birthday Bash Guadalajara - K8sGPT first impressions
KuberTENes Birthday Bash Guadalajara - K8sGPT first impressions
 
Use PyCharm for remote debugging of WSL on a Windo cf5c162d672e4e58b4dde5d797...
Use PyCharm for remote debugging of WSL on a Windo cf5c162d672e4e58b4dde5d797...Use PyCharm for remote debugging of WSL on a Windo cf5c162d672e4e58b4dde5d797...
Use PyCharm for remote debugging of WSL on a Windo cf5c162d672e4e58b4dde5d797...
 
Computational Engineering IITH Presentation
Computational Engineering IITH PresentationComputational Engineering IITH Presentation
Computational Engineering IITH Presentation
 
spirit beverages ppt without graphics.pptx
spirit beverages ppt without graphics.pptxspirit beverages ppt without graphics.pptx
spirit beverages ppt without graphics.pptx
 
Embedded machine learning-based road conditions and driving behavior monitoring
Embedded machine learning-based road conditions and driving behavior monitoringEmbedded machine learning-based road conditions and driving behavior monitoring
Embedded machine learning-based road conditions and driving behavior monitoring
 
Casting-Defect-inSlab continuous casting.pdf
Casting-Defect-inSlab continuous casting.pdfCasting-Defect-inSlab continuous casting.pdf
Casting-Defect-inSlab continuous casting.pdf
 
Manufacturing Process of molasses based distillery ppt.pptx
Manufacturing Process of molasses based distillery ppt.pptxManufacturing Process of molasses based distillery ppt.pptx
Manufacturing Process of molasses based distillery ppt.pptx
 
BPV-GUI-01-Guide-for-ASME-Review-Teams-(General)-10-10-2023.pdf
BPV-GUI-01-Guide-for-ASME-Review-Teams-(General)-10-10-2023.pdfBPV-GUI-01-Guide-for-ASME-Review-Teams-(General)-10-10-2023.pdf
BPV-GUI-01-Guide-for-ASME-Review-Teams-(General)-10-10-2023.pdf
 
Properties Railway Sleepers and Test.pptx
Properties Railway Sleepers and Test.pptxProperties Railway Sleepers and Test.pptx
Properties Railway Sleepers and Test.pptx
 
Certificates - Mahmoud Mohamed Moursi Ahmed
Certificates - Mahmoud Mohamed Moursi AhmedCertificates - Mahmoud Mohamed Moursi Ahmed
Certificates - Mahmoud Mohamed Moursi Ahmed
 
DEEP LEARNING FOR SMART GRID INTRUSION DETECTION: A HYBRID CNN-LSTM-BASED MODEL
DEEP LEARNING FOR SMART GRID INTRUSION DETECTION: A HYBRID CNN-LSTM-BASED MODELDEEP LEARNING FOR SMART GRID INTRUSION DETECTION: A HYBRID CNN-LSTM-BASED MODEL
DEEP LEARNING FOR SMART GRID INTRUSION DETECTION: A HYBRID CNN-LSTM-BASED MODEL
 
Literature Review Basics and Understanding Reference Management.pptx
Literature Review Basics and Understanding Reference Management.pptxLiterature Review Basics and Understanding Reference Management.pptx
Literature Review Basics and Understanding Reference Management.pptx
 

ISO 9000 overview.ppt

  • 1. Quality Management Systems, Standards, and Benefits/Costing 1
  • 2. QMS A quality management system (QMS) is a system that defines operations to achieve consistency and creditability with customers QMS refers to what the organization does to manage its processes, or activities in order that the products or services that it produces meet the objectives it has set itself (ISO, 2004) ISO 9000 series (International Standards Organization standard on quality management) 2
  • 3. ISO 9000 ISO 9000 is a generic standard - means that the standard can be applied to any organization, large or small, whatever its product in any sector of activity ISO is an auditable system – organization may be certified to a market standard by outside agency (Weigers, 2001) ISO 9000 predominant QMS today – adopted by 149 countries/economies (ISO, 2004) 3
  • 4. 4 Quality Management Principles of ISO 9000:2000 (ANSI, 2000; ANSI, 2000a) Customer focus Leadership Involvement of people Process Approach – A set of interrelated activities which transforms inputs into outputs System approach to management – Manage set of interrelated processes Continual Improvement Factual approach to decision making Mutually beneficial supplier relationships General Introduction
  • 5. Growth of ISO 9000 CURRENT: 1M ISO certs. Top 10 countries for registrations: China (approx. 27%) Italy UK Japan Spain USA (approx. 9%) Germany Australia France South Korea 5
  • 6. ISO 9000 Characteristics Leadership demonstrates commitment to customer requirements. Policy and measurable quality objectives are set and renewed. Processes are identified, analyzed, and managed. Customer satisfaction is measured. Data are collected, analyzed, and used. System effectiveness is continually improved. 6
  • 7. ISO Process Approach Company must identify and manage numerous linked activities. An activity uses resources, is managed in order to enable the transformation of inputs into outputs. 7
  • 8. Timeline for Standard Development 1 6 5 4 3 2 PROPOSAL PREPARATORY COMMITTEE ENQUIRY APPROVAL PUBLICATION Working Draft WD Committee Draft CD Draft International Standard DIS Final Draft International Standard FDIS Publication-International Standard IS New Work Item NWIP 8
  • 9. Key Aspects of ISO Participation Timely – prompt response to enquiries within the accepted timeline Consensus – all points of view are accepted in forming the TAG position, majority support for the position Transparent – activities of the committee are open and may be inspected by all interested parties Traceable – all items must be accompanied by a voting record 9
  • 10. Dual Roles for ISO 9000/9004 QMS for fulfilling customer, regulatory, etc., requirements (ISO 9000) “Management should consider development of innovative financial methods to support and encourage improvement of the organizational performance” (ISO 9004 – Guidelines for performance improvements) 10
  • 11. Allocation of Costs: Process Approach Early methods of tracking quality costs was too limited “focus on cost of non-conformance i.e. external and internal failure costs”. Process-cost broadens economics of quality by classifying cost of non-conformance and cost of conformance I.e. “costs incurred when a process is running without failure” 11
  • 12. Process Approach: Added Benefits Utilize cost of non-conformance (often called Cost of Poor Quality) and cost of conformance = greater cost saving opportunities may be available in reducing cost of conformance 12
  • 13. Process Costing Allows the tracking and reduction of costs normally associated with efficiency in addition to effectiveness (quality)” Process simplification in addition to reduction of errors become objectives Relate the economics of quality to the amount of activity performed 13
  • 14. Process Costs i.e. Costs of Inefficient Processes Examples Variation of product characteristics from optimum Unplanned downtime and/or loss of processing/storage capacity Inventory shrinkage Variation of process characteristics from ‘best practices’ (cycle times from to start to finish of activities) Other non-value added activities NOTE: Improvement is also an objective 14
  • 15. Don’t Ignore Quality Failures Cost of non-conformity: Internal failure costs External failure costs Cost of Poor Quality Cost of lost opportunities for sales revenue Cost of conformity: process approach 15
  • 16. Internal Failure Costs Examples Labor and material overhead spent on defective product – spoilage, defectives, scrap etc. Correcting defectives in physical or service products i.e. reworking product Sorting bad/good product Re-inspection, retest of product Changing processes to correct deficiencies (CAR’s) Downgrading product 16
  • 17. External Failure Cost Examples Costs involved in replacing/making repair for warranty product Investigation and adjustment costs to justified complaints of quality defective product Returned material Concession costs due to substandard product accepted by customer Correcting errors on external supporting processes Revenue losses in support operations (Gyrna) 17
  • 18. Allocation of Costs The company must decide what to measure depending upon circumstances, objectives, etc. However, The overall idea is to “allocate costs and not to absorb such costs into overhead” (ISO/TR 10014) 18
  • 19. Deriving Benefits Reduction of failures due to QMS Improvement of process efficiencies due to QMS Pre and post measures of implementation However, improvements should be done as identified Using quality tools such as flowcharting, value add analysis, cycle time reduction, process simplification, root cause investigation, etc. 19