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SMMT IF ISO/TS16949: 2002 Newsletter

Volume 5, Issue July 2006

Welcome to this fifth edition of the SMMT IF ISO/TS16949: 2002 newsletter.

This regular publication is aimed to keep readers up to date with developments
with ISO/TS16949 and SMMT IF services.
Any comments and suggestions for future editions would be welcomed,
addressed to paul.hardiman@industryforum.co.uk

Update of AIAG core tool manuals

PPAP

The fourth edition of the AIAG PPAP manual was issued in March 2006.
The requirements become effective from the 1st June 2006.
Changes to the fourth edition includes the following:
• Identified issues in the application of PPAP
• Removal of QS-9000 references
• Necessary edits including typographical or grammatical corrections
• Removal of OEM customer specifics
• Some rearrangement of clauses to improve flow
The change bring into line the PPAP requirements with the ISO/TS16949
process approach, and now includes an example process flow:

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There is also more emphasis in keeping the customer notified of any proposed
changes that may trigger the need for re-submission.

Customer specific requirements for PPAP can be found on relevant websites. For
example on www.iaob.org, you can find the PPAP customer specific
requirements for Daimler Chrysler and GM, which were updated in May 2006.

FMEA

The FMEA third edition manual is currently under review but no date for a
revised version has yet been established. Watch this space!

Growth in demand for ISO/TS16949: 2002

As at the end of May 2006 22727 organisations had been registered against the
requirements of ISO/TS16949: 2002.
As the deadline date for the end of QS-9000 approaches the growth in
registrations is set continue, and early indications is that many organisations will
not meet the deadline and hence will loose their automotive approvals.

25000
22727

20000

15000

10000

5000

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SMMT IF 2006 course programme

For full details of SMMT IF open and in-house course programmes visit
www.industryforum.co.uk

In addition to our range of established ISO/TS16949: 2002 courses:

• Two-day Internal Auditor

• Five-day Supplier Auditor certification course
• Management/employee awareness
• Automotive core tools
o FMEA
o SPC
o MSA
o APQP/PPAP

We now offer the following new courses:

Two-day ISO/TS16949: 2002/ ISO14001 integrated audit training

The course focuses on using the process approach to develop and audit an
integrated system

Currently may organizations ISO14001 systems are based upon the clauses of
the standard, and auditing is purely linked to compliance, and in many cases not
focused on the effectiveness of the system to meet the legal and regulatory
requirements, and the organizations objectives and targets.

The following diagram shows one possible approach to developing a process

based integrated system.
The organization identified and maps each high level business process, and then
considers the issues at each stage of the process related to environment and heath
and safety

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 The following diagram shows an example for the goods receiving and storage
process:

The diagram shows the process, and the link to the relevant key performance
indicators (linked to objectives and targets)
Once processes are defined, processes can be auditing utilizing the process
approach using turtle diagrams to plan the audits:
Process Audit Preparation "Turtle Diagram" Manufacturing
With What? - (Materials / Equipment) With Who? - (Competence / Skills / Training)
ISO/TS16949 ISO14001 ISO/TS16949 ISO14001
Plant and machinery (6.3) Operational control (4.4.6) Competence criteria (6.2.1) Environmental policy (4.2)
Process equipment (6.3) Monitoring and measurement (4.5.1) Induction/ training records (6.2.2) Resources, roles, responsibility and
Measuring equipment (7.6)
Agency/ Contract labour (6.2.2.3) authority (4.4.1)
Tooling (7.5.1.5)
Job responsibilities/ authorities (5.5) Competence, training and
Maintenance (7.5.1.4)
Training effectiveness (6.2.2) awareness (4.4.2)
Packaging/labelling (7.5.5)
SPC awareness (8.1.2) Communication (4.4.3)
Cleanliness of premises (6.4.2)
Personnel safety (6.4.1)
Customer property (7.5.4)
Awareness of policy/ objectives (6.2.2.4)
Transportation (6.3)

Inputs Process Outputs

Customer schedule (7.5.1.6, 4.3.2)

Manufacturing Conforming product delivered to
Raw materials (7.4) customer schedule (8.2.1.1)
Process
(7.5, 4.4.6)

How? - (Procedures & Methods) What Results? - (Performance Indicators)

ISO/TS16949 ISO14001 ISO/TS16949 ISO14001

Control plans (7.5.1.1)
Work instructions (7.5.1.2)
Preventive maintenance (7.5.1.4)
SPC (8.1.1)
Nonconforming product procedure
(8.3)
Dispatch process (7.5.1.7)
Contingency plan (6.3.2)
Document control/ records (4.2.3)
Change control (7 1 4)
Environmental aspects (4.3.1)
Legal and other Requirements (4.3.2)
Objectives, targets and programme(s) (4.3.3)
Documentation (4.4.4)
Control of documents (4.4.5)
Operational control (4.4.6)
Nonconformity, corrective action and preventive
action (4.5.3)
Emergency preparedness and response (4.4.7)
Analysis of data (8.4.1)
Customer satisfaction (8.2.1)
Other Organisational objectives (5.4.1)
Maintenance objectives (7.5.1.4)
Cost of poor quality (5.6.1.1)
Process capability (8.2.3.1)
Management review (5.6.)
Continual improvement results (8.5)
Audit records (8.2.2)
Environmental aspects (4.3.1)
Objectives, targets and programme(s)
(4.3.3)
Monitoring and measurement (4.5.1)
Evaluation of compliance (4.5.2)
Internal audit (4.5.5)
Management review (4.6)

Support Processes: IT, Human resources, Logistics, Sales, Quality, Preventive maintenance

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To find out more visit www.industryforum.co.uk

One-day Auditor refresher course

Many organizations train auditors and then because of priorities/pressure of

work they do not put into practice the skills learnt.

We offer a one-day course specifically developed for auditors that want to

refresh their skills, or for practicing auditors who want an update on the current
thinking from IATF and the process approach.
The course can be run in-house, or at open venues.

To find out more visit www.industryforum.co.uk

Two-day ISO9001: 2000 Internal auditor course

This course is applicable for organizations in the automotive supply chain that
are not eligible for ISO/TS16949: 2002 certification, but want to understand and
implement the process approach to quality management and auditing.

To find out more visit www.industryforum.co.uk

If you have any questions related to any of the above courses, please visit our
website, or contact Karen Smith on 121 717 6614.

Value added auditing

Auditors often ask how the finance/accounts function can be audited within the
context of a quality management system, as there is little reference to cost within
ISO/TS16949: 2002

Firstly 7.2.2 requires that an organization reviews the customer contract and
resolves any issues prior to acceptance.
This should include verification of product and shipping costs.

For design responsible organizations product cost is also mentioned in 7.3.2.1

Some recent audits have shown that in some organizations the process to ensure
the customer is invoiced the correct price is not robust, and the link between the
relevant functions involved in the process is not effective.

This can cause customer dissatisfaction, maybe resulting in wasted time and
credit/debit notes, or internal issues related to efficiency (the customer may not
complain if not charged enough!)

Given this situation it may be worth auditing this utilizing the process approach.

Several customer contracts/orders could be selected, agreed prices noted, and

then invoices selected in accounts related to products shipped related to the
contracts/orders to ensure they match. As part of the process audit the process
on how any agreed price changes, maybe resulting from an engineering change
or cost down initiative are communicated to all concerned.

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ISO/TS16949: 2002 also requires and organization to verify the effectiveness
(customer satisfaction) and efficiency (organization or stakeholder satisfaction)

Effectiveness could be integrated into the audit by reviewing credit/debit notes

and ensuring there is any effective process to analyze the root cause of such
problems and effective actions are taken to prevent reoccurrence.

Efficiency could be reviewed by looking at the costing process and asking the
question “ are we making any money from the sale of the product?”

I would be interested in the results of any audits undertaken!

Feedback from recent ISO/TS16949: 2002 audits

In discussing with organizations findings from external audits, there are a

number of common themes running through the results. The following gives
details of two issues:

Quality Policy

External auditors are encouraged to focus more on the organization policy, how
it is linked to the organizations objectives and how it is effectively deployed
through the organization.

Many organizations have policies that contain bold or ambiguous statements.

Internal audits should:

Verify that any statements made are objective, and can be linked to the
organizations objectives:

Examples may be:

“ABC is a world-class manufacturer of______”

The audit questions should be:

What is world class?
Where are you in relation to the world-class criteria?
Where there are any identified shortfalls what is being done to address this?

“ABC strives to exceed customer requirements_______”

The auditor questions should be:

What is the process to understand customer expectations?
How do you measure customer satisfaction?
How do you strive to exceed customer requirements?

Maybe by asking such questions this will encourage top management to review
the policy for continued suitability and effectiveness.

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Production scheduling

ISO/TS16949: 2002 clause 7.5.1.6 requires an organization:

“Production shall be scheduled to meet customer requirements, such as just in

time supported by an information system that permits access to production
information at key stages of the process and is order driven”

Many organizations implementing ISO/TS16949: 2002 have struggled to

understand and meet this requirement.

The first part of the requirement focuses on having a scheduling system that is
geared up to meet customer requirements.
The next part intimates that it should be possible through a system (note this
does not say an electronic system) to find out the status of work in
progress/finished stock.
The last part states that the process is order driven.

An organization may elect, as part of contingency planning, to carry a fixed

minimum stock (this is also sometimes mandated by customers, but the intent of
the requirement is that product is made to order/schedule, and not in
anticipation of sale.

Internal audits should focus on auditing this as a process (which may cut across
several departments in an organization) to ensure the process is effective to meet
customer requirements and efficient to meet the organizations requirements.

Funding

SMMT Industry Forum has access to several programmes that provide funding
to SME’s in the West Midlands area.

If your organization would like to investigate this further, or if you have any
suppliers that may be interested in such funding, please contact Paul Hardiman
on paul.hardiman@industryforum.co.uk or on 07790 771230 and we can
investigate possible options.