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How Can You Move From QS-9000 to TS 16949:2002?

More Challenges of QS-9000 to TS 16949:2002 Transition

By Chad Kymal and David Watkins
Publishers Note: This article has been reprinted with permission from THE INFORMED OUTLOOK Newsletter, July 2002 issue. hat will become clear to you as you become familiar with ISO/TS 16949:2002 is that, not only does a QMS in conformance with the TS need to consist of crossfunctional processes that bind an organization together, but the key challenge in transitioning from QS-9000:1998 to the second edition of the TS is understanding the customer flows originating from and returning to the customer. In November 2001, we introduced what we had identified as the 15 key challenges for automotive suppliers that plan to transition their quality management systems (QMSs) from the third edition of QS-9000 to the second edition of ISO Technical Specification (TS) 16949 (see Key Challenges of the QS9000 to TS 16949:2002 Transition, THE OUTLOOK, November 2001). At that time, we explored the first 3 of those 15 challenges under the expectation that there would be little change between the balloting draft of TS 16949:2002 and the final ISO document. Much has happened since November 2001 that led us to pause in the continuation of the series. ISO/TS 16949:2002, Quality management systemsParticular requirements for the application of ISO 9001:2000 for automotive production and relevant service part organizations, was released and the International Automotive Task Force (IATF) rolled it out in April 2002. Since then, we have learned a lot more about the expectations of the IATF regarding supplier use of ISO/TS 16949:2002, particularly among those IATF members that subscribe to the use of QS9000:1998 by their suppliers. For instance, the TS is not to be regarded as a stand-alone document, but something that needs to be understood in the context of four additional types of documents: IATF Guidance to ISO/TS 16949:2002 Quality System Assessment Checklist to ISO/TS 16949:2002 (QSA Checklist) ISO/TS 16949:2002 Automotive Certification SchemeRules for Achieving IATF Recognition Customer-specific requirements. Of these, the customer-specific

requirements are still not available from each original equipment manufacturer (OEM) that accepts and may soon require supplier registration to ISO/TS 16949:2002. In fact, the changes that took place between the balloting draft and published edition of ISO/TS 16949:2002 warranted a reevaluation of the challenges table. We have identified changes in the published TS in customer-owned processes, the Octopus model, process characteristics, customer satisfaction supplemental indicators and the auditing process requirements that caused us to rethink our approach to TS 16949:2002. You will find that, in Table 1 on the next page, there are several challenges where new text appears in italics, which reflects additions as a result of our reevaluation. It does not eliminate what was already required, but it does in several instances expand the challenges of some clauses and subclauses of the TS. In April 2002, we revisited the 3 challenges that we explored in November 2001 to discuss what has changed, although the changes made do not affect the guidance offered in November (see What QS-9000 Registered Suppliers Need to Prepare For, THE OUTLOOK, April 2002). To help you continue in your organizations preparations for the transition, we will explore 3 more of the 15 challenges in this articleSubclause 5.4.1, Clause 5.6 and Subclause 8.2.1 that not only will require a change in your organizations QMS, but demon-

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2 THE INFORMED Outlook

strate the cross-functional nature of ISO/TS 16949:2002. However, we want to start by revisiting Clause 4.1 to discuss what is noted in italics in Table 1. maps out all the processes and their elements that define what your organization does, including all its key activities and more. When creating a process map, an organization will need to go beyond the clauses and subclauses of TS 16949:2002 to truly meet its intention for an effective QMS. Telltale signs to auditors that a QMS is not truly effective is a process map that only includes QMS elements related to the stan-

Reprint: July 2002

dard being audited. Inherently, a process focus is different from a departmental focus in that a process may move through every department within an organization. The antithesis of the process approachis the compliancedriven approach of many organizations, which implement quality system procedures based solely upon elements of QS-9000 without any thought of creating systems that actually support and enhance the

4.1, Quality Management SystemGeneral Requirements

This clause requires an organization to create a process map or equivalent document showing the sequence and interactions of the processes in the organization. In November 2001, we noted: A process map is a flowchart that

Table 1. The 15 Transition Challenges for QS-9000 Organizations (with revisions)

Clause/Subclause 4.1, Quality Management System General Requirements* 5.2, Management Responsibility Customer Focus 5.4.1, PlanningQuality Objectives 5.5.3, Internal Communication 5.6, Management Review 6.1, Resource Management Provision of Resources 6.2, Human Resources (particularly 6.2.2.3 and 6.2.2.4) 7.0, Product Realization 7.1.4, Change Control 7.3, Design and Development* 7.4, Purchasing* 8.2.1, Monitoring and Measurement Customer Satisfaction Influenced by ISO 9001:2000 Challenges Requirements for process map (or equivalent), process management, customer-owned processes, support processes and process characteristics Decision on customers vs. interested parties. Need for process to gather needs and expectations of customer/interested parties Deployed Objectives addressing customer expectations Creation of internal communication processes suitable to organization Revision of previous management review process. TS adds additional items to be reviewed Establishment of a resource allocation process Provision of job competency, on-the-job training and employee motivation and empowerment Documents for effective control of all processes in process map Minor change for most suppliers Inclusion of design and development of processes, not just product (note required development and use of FMEAs) Inclusion of service suppliers in coverage and use of supplier monitoring indicators. ISO 9001:2000 registration of suppliers Customer rating for quality and delivery insufficient; monitoring of customer perceptions of quality. Importance of customer satisfactionsupplemental requirements, including delivered part quality and schedule performance to IATF Manufacturing process and product audits and audits based on the COP and process approach Process studies on manufacturing processes. Measurement of all processes in process map Increased scope from QS-9000

ISO 9001:2000 ISO 9001:2000 and TS 16949:1999 ISO 9001:2000 ISO 9001:2000 and TS16949:1999 ISO 9001:2000 ISO 9001:2000 and TS 16949:1999 ISO 9001:2000 New (actually Fords Q1 2002) New New ISO 9001:2000

8.2.2, Internal Audit 8.2.3, Monitoring and Measurement of Processes 8.4, Analysis of Data

TS 16949:1999 ISO 9001:2000 and TS 16949:1999 ISO 9001:2000

*Clauses/Subclauses examined in the third article in series (November 2001).

Reprinted with permission from THE INFORMED OUTLOOK July 2002 issues

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Volume 7, Number 7
processes within their operations. Our organization recommends that your organization study four types of processes for inclusion in the process map: TS 16949 Processes Product Realization Processes Support Processes Business Processes. In addition to defining those four types of processes, we indicated that there is overlap among the four, although Product Realization Processes and Support Processes are either one or the other, not both. After studying these different processes, your organization can create a process map that identifies the most important processes to it. The

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Figure 1. A Representation of Customer-Owned Processes

Figure 2. The Octopus Model

process map also can show the sequence and interaction of these processes. However, in discussing the process approach embodied in Clause 4.1, the QSA Checklist indicates that auditing of a TS 16949:2002-conforming QMS requires the auditing of Customer Owned Processes (COP), which Chapter 1, Process Oriented Auditing, of the QSA Checklist defines as follows: The COP is a model that was introduced by ISO 9001:2000 and refers to the fact that any organization needs customer input to comply to specified and expected needs of the customer (output). This is accomplished by value adding processes of product realization and appropriate support processes, both enabled by management activities and provided resources. Chapter 1 also indicates that the auditor shall audit all applicable requirements to an identified COP. Figure 1 at left provides a representation of a COP as described by the IATF and the Checklist. Only organizational processes that repeat continuously can meet customer requirements, so a series of processes, subprocesses and support processes need to be defined by the organization and audited by the auditor. Figure 2 at left presents a series of such processes that we refer to as the Octopus Model, which has been discussed at an ISO/TS 16949:2002 Rollout Meeting in April 2002 and in IATF registrar training sessions. Although not included in the Checklist or the IATF Guidance manuals, the IATF has provided examples of COPs at the ISO/TS 16949:2002 Rollout Meeting in April, which include the following processes: Market Analysis Bid/Tender Order/Request Product and Process Verification/ Validation Product Production Delivery Payment Warranty/Service Post-Sale/Customer Feedback. At the Rollout Meeting, the IATF also identified six unique, but consis 2002 by INFORM & ASQ

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4 THE INFORMED Outlook

tent characteristics that are inherent in a process and necessary for an organization to have effective quality management: 1. A process owner exists 2. The process is defined 3. The process is documented 4. Process linkages are established 5. The process is monitored and improved 6. Records are maintained. Remember that the COP is something that needs to be included in an audit and that the Octopus model is an auditing methodology, but they are not necessarily requirements for organizations implementing TS 16949:2002. However, when an auditor requests documentation and other evidence relative to the COP, an organization will be required to provide the evidence. In reality, the auditor should be able to assess the COP by observing operations within an organization, which will demonstrate that these processes are implemented and effective. However, our organization considers the creation of process maps, the defining of the COP and identification of the process characteristics as the best implementation guidelines for the process approach. In addition, our organization has begun to use an existing methodology to help suppliers to identify the COP. It is referred to as the alignment methodology, because it carefully aligns or links the customer requirements a supplier must satisfy to the suppliers quality objectives and the customer-owned processes that help meet those requirements. The methodology involves the use of an alignment chart to identify and list out all the processes an organization has and uses to meet customer needs and expectations. Figure 3 at right is an example of an alignment chart, which will help you see how the alignment methodology can be used to identify an organizations COP. extend beyond what is captured in any definition of product quality, the achievement of which nevertheless must be a key objective. Quality Objectives is contained in Section 5, Management Responsibility, and should be one of the first processes that top management undertakes in the transition to TS 16949:2002. Further, the addition of 5.4.1.1 to ISO 9001:2000 requires an

Reprint: July 2002

automotive supplier to include Quality Objectivesand measurements of the achievement of those objectivesin its business plan and that they address customer expectations. Especially with the supplemental requirements in 5.4.1.1, customer expectations to be addressed by the objectives could include cost, lead time, delivery and technology along with

Figure 3. Example of an Alignment Chart

Customer Expectations Category Strategic Goals Internal Quality 99.95% FOA Date External Quality 20 ppm Date

Product Quality

Eliminate Reworks Owner

No Incoming Inspections GM

Improve Problem Solving Ford

Result Measurables

External Quality PPM per Part

Internal Quality Rejects per 1000 pieces

Key Processes

Process Engineering

Quality Assurance

Procurement

Potential Causes

Poor Process Design

Problems Not Resolved

Poor Incoming Product

5.4.1, PlanningQuality Objectives

In both ISO 9001:2000 and ISO/ TS 16949:2002, this subclause requires that objectives or strategic goals are aligned with customer expectations, as shown in Figure 3. Although deemed quality objectives, these objectives
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Process Measureables

Process Capability % Cpk<1.33

Problem Solving # Recurring Problems

Material Quality Tons Rejected

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Volume 7, Number 7
product quality. And not only do these objectives need to be measurable, but they must be deployed to relevant functions and levels within an organization. This means that these measurable objectives cannot just be high-level targets to be pursued and reviewed only by top management. The organization will then need a deployment process to carefully assign responsibilities throughout the organization. Finally, these objectives need to be in the business plan of the organization, as noted above, which means that management throughout the organization must treat the quality objectives as part and parcel of the organizations business objectives. In effect, there are three differences between the TS 16949:2002 and QS9000 requirements as far as what is required by Subclause 5.4.1, which corresponds to what is covered in Subclauses 4.1.1, Quality Policy (in part), and 4.1.4, Business Plan (in whole), of QS-9000. Although both require comprehensive objectives that need to be included in the business plan, TS 16949:2002 also requires that they be: 1. Measurable 2. Deployed to relevant functions and levels within the organization 3. Aligned with customer expectations.

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5.6, Management Review

The processes that constitute Management Review in ISO/TS 16949:2002 are very different from what is asked for in QS-9000:1998. TS 16949:2002 requires a form of Management Review that truly helps the organization manage its business processes. Unlike the Management Review spelled out in Subclause 4.1.3 of ISO 9001:1994 and QS-9000, where the review comes across as a passive activity and is considered something of a quality system afterthought, Clause 5.6 of ISO 9001:2000 and TS 16949:2002 requires customer- and improvement-oriented meetings that help steer the business forward. Management Review will now help identify and make changes to the quality policy, objectives and the overall management system. There are four aspects that differentiate Management Review in TS 16949:2002 from QS-9000:1998: 1. With TS 16949:2002, Management Review includes 21 business cat-

Table 2. Areas That Define Business Categories for Management Review

ISO/TS 16949:2002 5.1.1, Process Efficiency 5.6.1.1, Quality Management System Performance 5.6.2, Review Input Topic(s) to Include in Management Review Product realization and support processes (2 business categories) QMS and its performance trends, quality objectives, cost of poor quality and customer satisfaction with product supplied (4 categories) Audit results, customer feedback, process performance, product conformity, status of corrective and preventive actions, follow-up actions from previous reviews, changes that affect the QMS and recommendations for improvement (9 categories) Actual/Potential field failures (1 category)

5.6.2.1, Review Input Supplemental

7.3.4.1, Design and Development Measurements of design and development ReviewMonitoring (1 category) 8.2.1.1, Customer Satisfaction Supplemental Although it does not mention management review or top management, the importance of this performance evaluation to the IATF requires its review by top management. This includes delivered part quality performance, customer disruptions (including field returns), delivery schedule performance (including premium freight) and customer notifications related to quality or delivery (4 categories)

egories to be reviewed. Table 2 below identifies several subclauses and other areas that require or mention the need for the inclusion of topicsbusiness categoriesin the Management Review. While there is some overlap between categories and some are more individual measurements than full-fledged categories, they are classified as 21 categories to simplify the communication of the magnitude of the measurements required in Management Review. 2. Based on what is required in TS 16949:2002, it is not practical to conduct this review in a single meeting once a year. In fact, to treat all the categories that need to be reviewed on an equal basis will make Management Review difficult and unproductive. In reality, the top management team needs to decide the frequency with which each of the 21 categories needs to be presented to top management and subject to evaluation and decision-making based on the nature of the organization. Some categories may require review on a monthly basis, while others may only need quarterly, biannual or annual reviewing. 3. Management Review meetings must be improvement-oriented and focused on making changes required in the QMS. The inputs for Management Review are more clearly defined than in QS-9000:1998 and point to the need for the QMS to be effective, for top management to actually look at the systems performance in terms of meeting and exceeding customer requirements and for top management to proactively revise the Quality Objectives so as to aim the QMS (and thus the organization) toward improvement. 4. The output of Management Review meetings must be documented. And not just any type of output is required, but an output that records decisions and actions related to improvements in the organizations QMS, processes and products as well as resources needed to achieve those improvements. Management Review in TS 16949:2002 is no longer a fuzzy concept, but a defined business process for management to perform. This Management Review is a significant improvement over what is required in QS-9000. It is recom 2002 by INFORM & ASQ

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6 THE INFORMED Outlook

mended that organizations integrate this form of Management Review into their operations and overall business reviews. It is also important to note that the measurements relative to the quality objectives an organization establishes per Subclause 5.4.1 discussed above will help drive Management Review with TS 16949:2002. way or another, How satisfied are you with XXXXX? In this manner, an organization can accurately hear the level of satisfaction with the various aspects of its relationship with the customer and better respond to customer needs where it will impact on the level of satisfaction. It is our opinion that a survey or interview is the only way to determine satisfaction, but the survey or interview must have value in terms of the information the organization obtains and must be a positive experience for the customer that does not lead to dissatisfaction. TS 16949:2002 requires a supplier to undertake the following four supplemental customer satisfaction measurements that can lead to improvement: 1. Delivered part quality performance 2. Customer disruptions, including field returns 3. Delivery schedule performance, including incidents of premium freight 4. Customer notifications related to quality or delivery issues. These measurements are considered the overall metrics for determining customer satisfaction among the automotive OEMs. And these same measures are required of suppliers. Hence, they will become overall measures of management system effectiveness within an organization and throughout the supply chain. Further, TS 16949:2002 states the following after listing the customer satisfaction supplemental measures: The organization shall monitor the performance of manufacturing processes to demonstrate compliance with customer requirements for product quality and efficiency of the process. In other words, if the measures are poor, there are no guarantees that processes arent poor. A representative from one of the Big Three who was addressing the auditor attendees at the April Rollout Meeting told them that if an organization being audited against TS 16949:2002 was not conducting and using the results from the four customer satisfaction measures, then the auditors should stop the audit and call him, because a steak dinner would be the reward for in effect declaring the QMS nonconforming by virtue of the absence

Reprint: July 2002

of the measures. Both the requirement for measuring customer perceptions and the requirement to measure the customer satisfaction supplemental measures are new requirements with TS 16949:2002. These are not difficult measures to take and use, nor is the measurement of customer perceptions a difficult new task that has no value. On the contrary, the OEMs are basically providing your organization with an opportunity to easily gain a better understanding of what is needed to satisfy the customer, thereby ensuring a better working relationship and potential opportunities for increased business.

8.2.1, Customer Satisfaction

Many organizations assume that, because Subclause 4.1.6, Customer Satisfaction, of QS-9000 required a supplier to have a documented process for determining customer satisfaction, they are already meeting the customer satisfaction requirements in ISO/TS 16949:2002. For organizations that took 4.1.6 to heart and implemented an effective process for customer satisfaction beyond what could be minimally done to satisfy QS-9000s requirements, the requirements in the second edition of the TS will be easy to meet. For the rest, Subclause 8.2.1 and other areas of TS 16949:2002 that indicate requirements relating to customer satisfaction mean that they have some work to do. For example, many suppliers have followed suggestions that, to ascertain customer satisfaction, they could use customer score cards for quality and delivery to meet QS-9000:1998s requirement. By comparison, TS 16949:2002 suggests that customer satisfaction is in the eye of the customer, meaning that an organization needs to proactively seek customer feedback and measure customer satisfaction as perceived of by the customer. Indeed, accompanying the definition of customer satisfaction in 3.1.4 of ISO 9000:2000, Quality management systemsFundamentals and vocabulary, are two NOTES that in effect state that an organization could be very successful in meeting customer requirements for product quality and delivery, but this doesnt guarantee the customer satisfaction perception will be high. Your organization and its top management might want to treat these NOTES as a warning not to use proxy measures when determining customer satisfaction. Customer perception can only be gauged by asking the customer in one
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Three Linked Challenges and a Word About Auditors

You have now had an examination of 3 more of the 15 challenges we believe many organizations must overcome to make an effective and beneficial transition to ISO/TS 16949:2002. What is important to consider now is that these three challenges, which are actually clauses/subclauses of TS 16949:2002, are interconnected and that each feeds into and receives feedback from the others. For instance, when top management sets the Quality Objectives, management should consider that the measurements taken to see if those objectives are being met will be evaluated during Management Review, and that achieving those objectives may and should positively affect customer satisfaction levels. Likewise, the measurements of customer satisfaction will also be evaluated during Management Review and could lead to changes in the Quality Objectives. While it is helpful to examine the changes from QS-9000:1998 in each of the 15 challenges, it is also important to see them as interconnected parts of a greater wholethe QMS. If done properly, the transition to TS 16949:2002 will provide your organization with a stronger QMS and a stronger organization, and the transitioning of each QMS element will help many of the other elements complete the transition. While this will make the registration upgrade easier to achieve, the most important result will be to minimize the expendiWeb Site: HTTP :// WWW .INFORM INTL . COM

Volume 7, Number 7
ture of energy, time and money and maximize the return on investment, since the upgraded system will take your organization to both a higher level of performance and a more globally accepted registration status. Speaking of registration, it is worth noting where the registration scheme for ISO/TS 16949:2002 stands. The International Automotive Oversight Bureau (IAOB) has begun offering registrar auditor training for the second edition of the TS, and registrars qualified by the IAOB to conduct ISO/TS 16949:2002 assessments and issue certificates of registration have begun to audit organizations. Whats more, auditors from a registrar not yet qualified are allowed to complete five audits before their witness audits. Based on the observation of a recent registrar audit of an organization for TS 16949:2002 conformance and a subsequent discussion with the auditors by one of us, it is not clear if all of the IATFs hot points have been communicated in the registrar training. However, an understanding of the process approach, of how to audit a process approach-based QMS and of the importance of the customerowned processes came through loud and clear in the audit. The IATF has made it clear to registrars and auditors alike that only the best registrars will be allowed to conduct ISO/TS 16949:2002 audits and that the number of registrars conducting QMS assessments in the automotive sector is expected to continue decreasing during the next few years. It is our opinion that ISO/TS 16949:2002 has a significant capability for success. However, the expectations required of the QMS auditors need to be communicated to the automotive supply base. Quality cannot be audited in. Registrars surprising organizations with seemingly new requirements for COPs and process characteristics will create a poor customer-supplier relationship. Indeed, we believe the IATF needs to more clearly identify what its expectations are for the content and results of QMS audits against TS 16949:2002 either in the guidance or rules for TS 16949:2002 or in the customer-specific requirements. Lastly, although ISO/TS 16949:2002 is published and readily available, not all the required documents for TS 16949:2002 implementation and auditing are available for immediate delivery, with several on backorder. And as noted above, the customer-specific requirements for all the OEMs are still not available. We think it is advisable that organizations that want to make the transition in the near future place orders for these guidance and rules documents now and begin to consider what the challenges of transitioning will be for their organizations. That way, when all the pieces are finally in place, the planning process will have been completed and those organizations will be able to

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move forward. We will examine three more challenges in an upcoming issue of THE OUTLOOK. ### Chad Kymal is Chief Executive Officer of Omnex, Inc., an international consulting, training and software organization specializing in business quality improvement methodologies. Omnex has worked with hundreds of organizations to meet the requirements of ISO 9001/2/3, QS-9000 and ISO/TS 16949 worldwide and to obtain registration. He assists organizations worldwide in his capacity as a consultant and trainer and also serves as a Lead Auditor for AQSR, an accredited registrar that is qualified to conduct ISO/TS 16949:2002 assessments. Mr. Kymal served in the past two years on the Malcolm Baldrige National Quality Award Board of Examiners, has a BSME from General Motors Institute and has an MS in Industrial Operations Engineering and an MBA from the University of Michigan. He can be contacted by e-mail (ckymal@omnex.com). David Watkins is President of Omnex, Inc., and is a senior trainer/consultant. He has a wide range of international experience focused on enhancing the ability of organizations to create value for their customers and stockholders and integrating QMSs and other management systems to enhance performance. Mr. Watkins can be contacted by e-mail (dwatkins@omecconsultants.com).

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