BUSINESS EXCELLENCE

Excellence In Performance Auditing

and
Draft ISO9001:2008

Iranian Society of Quality Managers

August 23-25, 2008

SHAN RUPRAI
President APQO
Chairman AOQ NSW Australia
Chairman AIBI Australia
JAS-ANZ Board Member Accreditation Review

The complexity of globalisation and change can create

confusion. Analysing role in world economy.

Sustainability Global Customer

Driven

Shareholders Vision
Expectations

Globalisation
Stakeholder
Politics
Input

Effectiveness Empowerment

Auditor
• Many new programs…no way to relate them
• Loss of focus
• Overwhelmed with data on several important aspects of the business
٢

١
 ISO9001:2000 CERTIFICATION DATA
Dec. 2002 to Dec. 2006

•IRAN (Source International Standardization Organisation)

•WORLD ( )
Source International Standardization Organisation

•ISSUES AND CONCERNS

ISO 9001:2000 Certifications in Iran

Growth from end of 2002 to end of 2006

Dec.2002 Dec.2003 Dec.2004 Dec.2005 Dec.2006

16 470 3000 3090 5250

٢
 ISO9001:2000 PRINCIPAL RESULTS
World Dec. Dec. Dec. Dec. Dec.
Results 2002 2003 2004 2005 2006

World
Total 167124 47999 660132 773867 897866

World
Growth 122736 330795 162213 113735 123999

Number of
Countries/ 133 149 154 161 170
Economies

٣
 Certification audits
Issues/Concerns
• Accreditation organizations were initially funded by the
government.
• JAS-
JAS-ANZ 70%$ from Australia Government at 30% from
New Zealand Government.
• Auditors capabilities.
• Certification Bodies accredited by Accreditation
organisation
• However when money changes hands independence can
be at risk through customer supplies relationship.
• Certification of quality management systems is a big
business.
• Certification Bodies want bigger share of market.
• Auditors on the take.

Cost & Revenue of Certification

• Over a million certifications in the world.
• Big cost for companies to get certification
• Huge revenue/income for certification
Bodies
• REPUTATION OF ACCREDITING
ORGANIZATIONS???
• WHAT ARE THE BENEFITS FOR THE END
USER/CUSTOMER???
• REGULATORS CONFIDENCE IN
CERTIFICATION?

٤
 CHANGES IN THE DRAFT ISO 9001:2008

• Clause 1.1 (Scope)

o Clarification that “product”
product” also includes intermediate
product
o Explanation regarding statutory, regulatory and legal
requirements
• Clause 4.1 (General requirements)
o Notes added to explain more about outsourcing
o Types of control that may be applied to outsourced
processes
o Relationship to clause 7.4 (Purchasing)
o Clarification that outsourced processes are still
responsibility of the organization and must be included in
the quality management system

• Clause 4.2.1 (Documentation)

o Clarification that QMS documentation also
includes records
o Documents required by the standard may be
combined
o ISO 9001 requirements may be covered by more
than one documented procedure
• Clause 4.2.3 (Document control)
o Clarification that external documents relevant to
the QMS need to be controlled
• Clause 4.2.4 (Records control): Editorial
changes only (better alignment with ISO 14001)
• Clause 5.5.2 (Management rep)
o Clarifies that this must be a member of the
organization’
organization’s own management

٥
 • Clause 6.2.1 & 6.2.2 (Human resources)
o Clarification that competence requirements are
relevant for any personnel who are involved in
the operation of the quality management system
• Clause 6.3 (Infrastructure): Includes
information systems as example
• Clause 6.4 (Work environment)
o Clarifies that this includes conditions under
which work is performed and includes, for
example physical, environmental and other
factors such as noise, temperature, humidity,
lighting, or weather

• Clause 7.2.1 (Customer related processes)

o Clarifies that post-
post-delivery activities may include:
o Actions under warranty provisions
o Contractual obligations such as maintenance
services
o Supplementary services such as recycling or final
disposal
• Clause 7.3.1 (Design & development
planning)
o Clarifies that design and development review,
verification and validation have distinct purposes
o These may be conducted and recorded separately
or in any combination as suitable for the product
and the organization

٦
 • Clause 7.3.3(Design & development outputs):
Clarifies that information needed for production and
service provision includes preservation of the product
• Clause 7.5.4 (Customer property): Explains that
both intellectual property and personal data should be
considered as customer property
• Clause 7.6 (Now retitled Control of Monitoring
and Measuring equipment)
o Explanatory notes added regarding the use of computer
software: “Confirmation of the ability of computer
software to satisfy the intended application would
typically include its verification and configuration
management to maintain its suitability for use.”
use.”

• Clause 8.2.1 (Customer satisfaction)

o Note added to explain that monitoring of customer
perception may include input from sources such as
customer satisfaction surveys, customer data on
delivered product quality, user opinion surveys, lost
business analysis, compliments, and dealer reports
• Clause 8.2.3 (Monitoring / Measurement of
process)
o Note added to clarify that when deciding on appropriate
methods, the organization should consider impact on the
conformity to product requirements and on the
effectiveness of the quality management system.

NOTE: ISO 9001:2008 Includes clarifications, not

additional requirements from the 2000 version

٧
 Draft ISO9001:2008

Continual Improvement of
Management System

C S
a C
Management
u R Responsibility t
i u
e
s q
s
f s
u
t i Resource
Measurement,
Analysis,
a
c t
r Management
o e
Improvement t
i o
m
m e
o
n m
n
e t Input Output
e
Product
r s
Realisation
Product
r
IMS

Australian Contractor Quality Systems

Audit Process
JAS/ANZ
Watchdog

Certification Systems Stakeholders

Bodies and eg: Legal, BA,
Compliance Finance, Asset
Department of Audit Team: Performance,
Contractor QMU
Housing Contract ED
SCM
AOM
HCC
Subcontractors

Maintenance Services to Inspections Risk management

Department of Housing & Audits plan AS4360 and
Assets/Clients action plan

Audit Plan:
AD, TL
AOM, QA, TS

٨
 Audit Strategy approved by the Minister

INSPECTIONS AUDITS
Department of Housing Audit of MTC Quality Systems
Inspections (ISO 9001:2000 Audits)
• Site Inspections (%) CONTRACTOR • ISO 9001:2000 Audit Checklist
• Phone Inspections (%) • Field Audit Inspection
PERFORMANCE
• WIP Inspections (%)
• Desktop Inspections
Internal Audit

• General Post Work Manual

Inspections
• Work to Standard Inspections
(%)

CONTRACTOR Audit of MTC Quality Systems

Contractor Inspections (Contractual Requirements)
RISK PROFILE & • Contractor Requirement Audit
• Post Work Site Inspections (%) RISK
• WIP Inspections (%) Checklist
• Phone Inspections (%) MANAGEMENT • Desktop Audits on Contractor
PLAN Inspections

Continuous Improvement

١٧

PLAN THE BUSINESS AND SET THE PERFORMANCE

AUDIT OBJECTIVES
QUALITY OH & S ENVIRONMENT FINANCE
1. Reduce NCNby 1. No LTIs 1. Reduce waste by 20%
25% 1. Profit %
2. No hazardous 2. 100% compliance to DoH
2. On time delivery work & Legislation 2. No over / under
charging

Receive Arrange Do the job Check

and Subcontractor compliance
review Purchase
orders consumables
Invoice
and
collect
CORE BUSINESS PROCESSES money

Select and Market and Develop Plan and Plan and Manage Monitor Manage our
monitor sell product our manage our manage our our and information
suppliers people facilities finances improve
products our system

SUPPORT BUSINESS PROCESSES

٩
 TYPES OF AUDIT
System

Compliance - Surveillance

Product

1st party

2nd Party

3rd Party

AUDIT OVERVIEW

Authority for the

programme Audit
Initiating the audit

Auditor Conducting document review

Establish
On-site
Preparing for the on-site Opening meeting
Knowledge Skills
Implement activities
Conducting
Education Conducting on-site activities interviews
Personal
attributes
&
experience
Monitor and
review Audit reporting Team meeting

Closing meeting
Completing the audit
Improvement

Follow up

١٠
 AUDIT PROGRAMME PROCEDURES

• How to plan and schedule - Risk

• Are auditors competent?
• Selecting a team
• How to conduct audits
• When and how to follow up
• What records need to be kept; plans & reports
• Monitoring and effectiveness of the programme

IMPLEMENT THE AUDIT PROGRAMME

• Communicate the plan

• Evaluate the auditors
• Provide necessary resources
• Ensure the programme and procedures
are adhered to
• Review of reports
• Keeping of records
– Reports and non-conformance
– Audit assessments and competence

١١
 IMPROVING THE AUDIT PROGRAMME

• Find the root cause

• Amend the programme
• Identify what ~
– Stop doing
– Keep doing
– Start doing

POOR DOCUMENTATION REVIEW

Concentrate on familiar areas only

Miss key processes

Incorrectly prioritise

Dwell on high profile activities and
processes

١٢
 AUDIT PLAN
Should include

Objectives, scope and criteria

An appropriate timetable including dates, times,
places, processes and personnel to audit

Team responsibilities

Legal, Regulations, Industry Codes of Conduct

Safety, health, environmental, financial, tax,
insurance

All cultural, religious and / or social customs in the
organisation

Dress Codes

The language to be used for the audit

On-site facilities

QUESTIONING

• Use simple language

• Keep sentences short
• Ask direct open questions
• Clarify where necessary using another
question
• Ask auditee to explain / show / demonstrate

١٣
 LISTENING
• Put talker at ease
• Show you want to listen - active
• Remove distractions
• Empathise
• Summarise and feedback your
understanding
• Stop talking and be patient

O B S E R V E
• Look what’s happening around you
• Is it under control?
• Resources adequate
• Work environment appropriate
• Non-verbal communication

gestures

eye contact

relative positions

facial expression

١٤
 INTERVIEW AT DIFFERENT LEVELS

Top Management

Objectives, policy, commitment, communication, system review

Process Owner

Outline / describe the process (Process Flow)

What are the performance measures?

How is the process being improved?

Analyse the process (model) together

Worker

outline / describe their part in the process

records that show the process is working

show work-in-progress product

documents that support them in their work

COLLECTING AND VERIFYING INFORMATION

• Since last audit

• Appropriate sampling
• Completeness of content
• Verifiable
• Record it – Write it down
• Ensure it is in scope
Verify subjective evidence

١٥
 PERFORMANCE AUDITOR

PERSONAL ATTRIBUTES

• Ethical
• Open minded
• Diplomatic
• Observant
• Perceptive
• Versatile
• Tenacious
• Decisive
• Self-reliant

KNOWLEDGE AND SKILLS

Team Leader

Plan and make effective use of resources

Represent the team

Organise and direct

Provide direction and guidance

Lead to reach conclusions

Prevent and resolve conflict

Prepare and complete the audit report

١٦
 PRINCIPLES OF
PERFORMANCE AUDITING
Ethical conduct
Trust, integrity, confidentiality and discretion

Fair presentation
Reflect truthfully and accurately the findings including
diverging opinions

Due professional care

In the importance of the task they perform

Independence
Free from bias and conflict of interest

Evidence-based approach
Evidence is verifiable during a finite period of time

SITUATIONAL LEADERSHIP THEORY

Match the style to the situation

III SUPPORTING II COACHING

High
Leader’s role is to actively listen and
facilitate decision-making on
members part.
Leaders work with member to
evaluate members work.
SUPPOR
Leader explains decisions and
solicits members’ ideas.
Two way communication is
increased.
Leader continues to direct and
evaluate members work.

IV DELEGATING I DIRECTING
T

Leader allows members to control

Leader controls decision making and
decision making, accepts decisions
provides specific direction.
and periodically monitors
performance. Communication is largely one-way.
Leader allows members to evaluate Leader closely supervises and
own work. evaluates the work of members
Leader allows members to take
Low responsibility and receive credit.

Low DIRECT High

MATURITY LEVEL

١٧
 TEAM PERFORMANCE

ABLE ABLE
UNWILLING WILLING
ABILITY

(FILIBUSTER) (DELIVERS)

UNABLE UNABLE
UNWILLING WILLING

(COLLAPSE) (ANALYSIS PARALYSIS)

WILLINGNESS

Performance Audits Teamwork

CLARITY IN
SCIENTIFIC AN
TEAM GOALS IMPROVEMENT
APPROACH PLAN

TEAM CLEARED
GROUP
DEFINED
PROCESS WORK
ROLES

ESTABLISHED
APPROACH
CLEAR
GROUND RULES
COMMUNICATION

BALANCE WELL DEFINED BENEFICIAL

PARTICIPATION DECISION TEAM

PROCEDURES BEHAVIOURS

١٨
 Performance Audit Outcomes
• Satisfy customer
requirements
• Improve process
• Increase efficiency
• Enhance productivity
• Competitive positioning
• Employee empowerment
• Performance
measurements
• Risk identifications and
solutions

R I S K

= Impact X Probability
= Consequence X Likelihood X Availability
• Higher Risk = Greater control
• AS4360 Risk Management

١٩
٢٠
٢١
 Celebrate success
of Iran’s Leadership
in Best Quality
Products and
Services.

٢٢