Quality & Quality Models

Quality Definitions

Pavankumar Pothuraju — Mon, 30 Aug 2004 18:47:00 GMT

Five Ways of Looking at Quality Definitions David M. Dilts, Professor of the Faculty of Science at the University of Waterloo, Waterloo Ontario, Canada made a list of quotations according to 5 different targets:

1. Customer - based

"Quality consists of the capacity to satisfy wants."(C.D. Edwards, "The Meaning of Quality", in Quality Progress Oct.1968)

"Quality is fitness for use." (J.M. Juran, ed. Quality Control Handbook 1988)

2. Manufacturing - based

"Quality is the degree to which a specific product conforms to a design or specification"

(H.L. Gilmore: Product Conformance Cost. Quality progress June 1974)

"Quality [means] conformance to requirements." (P.B. Crosby: Quality Is Free)

3. Product - based

"Quality refers to the amount of the unpriced attributes contained in each unit of the priced attribute." (K. B. Leifler: Ambiguous Chamges in Product Quality, American Economic Review Dec.1982)

4. Value - based

"Quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost." (R. A. Broh: Managing Quality for Higher Profits, 1982)

5. Transcendent

"Quality is neither mind nor matter, but a third entity independent of the two, even though Quality cannot be defined, you know what it is." (R. M. Pirsig: Zen and the Art of Motorcycle Maintenance)

Quality in different areas of society

Area	Examples
Airlines	On-time, comfortable, low-cost service
Health Care	Correct diagnosis, minimum wait time, lower cost, security
Food Services	Good product, fast delivery, good environment
Postal Services	Fast delivery, correct delivery, cost containment
Academia	Proper preparation for future, on-time knowledge delivery
Consumer Products	Properly made, defect-free, cost effective
Insurance	Payoff on time, reasonable cost
Military	Rapid deployment, decreased wages, no graft
Automotive	Defect-free
Communications	Clearer, faster, cheaper service

Selection and Use of the ISO 9000:2000 family of standards

Pavankumar Pothuraju — Fri, 06 Aug 2004 21:38:00 GMT

The following text is an integral reproduction of the content of the brochure "ISO 9000 - Selection and use". Hard copies of the brochure are available from sales@iso.org.

The ISO 9000 family of international quality management standards and guidelines has earned a global reputation as the basis for establishing quality management systems.

This brochure has been developed by ISO Technical Committee ISO/TC 176, Quality management and quality assurance, which is responsible for developing and maintaining the ISO 9000 family. The brochure has been updated to take into account the revisions of several of the core series standards in the ISO 9000 family which were published on 15 December 2000 by ISO (International Organization for Standardization). These revised standards are identified by the "2000" in their designation.

The purpose of this brochure is to provide you with a general perspective on the ISO 9000 family of standards with emphasis on the features of the revised versions. It presents an overview of the standards and demonstrates how, collectively, they form a basis for continual improvement and business excellence. In particular, you will see how to distinguish between the various documents in the ISO 9000 family and how they may be utilized to your maximum benefit.

The familiar three standards ISO 9001, ISO 9002 and ISO 9003 have been integrated into the new ISO 9001:2000. This brochure provides you with general information on how to use the revised standard together with other documents in the ISO 9000 family to meet your specific requirements.

ISO 9001:2000 specifies requirements for a quality management system for any organization that needs to demonstrate its ability to consistently provide product that meets customer and applicable regulatory requirements and aims to enhance customer satisfaction.ISO 9001:2000 has been organized in a user-friendly format with terms that are easily recognized by all business sectors. The standard is used for certification/registration and contractual purposes by organizations seeking recognition of their quality management system.

The greatest value is obtained when you use the entire family of standards in an integrated manner. It is suggested that, beginning with ISO 9000:2000, you adopt ISO 9001:2000 to achieve a first level of performance. The practices described in ISO 9004:2000 may then be implemented to make your quality management system increasingly effective in achieving your own business goals. ISO 9001:2000 and ISO 9004:2000 have been formatted as a consistent pair of standards to facilitate their use.

Using the standards in this way will also enable you to relate them to other management systems (e.g. environmental), many sector specific requirements (such as ISO/TS/16949 in the automotive industry) and will assist in gaining recognition through national award programmes.

This brochure provides you with:

A list of the ISO 9000 quality management standards and guidelines;
Examples of typical applications of the documents;
A step-by-step process to implement a quality management system;
A brief view of the future evolution of the ISO 9000 family.

The ISO 9000 family

The standards, guidelines and technical reports which make up the ISO 9000 family and which are listed below are available separately, or as collections. The ISO 9000 Compendium presents the ISO 9000 family in hard copy form.

Standards and guidelines	Purpose
ISO 9000:2000, Quality management systems - Fundamentals and vocabulary	Establishes a starting point for understanding the standards and defines the fundamental terms and definitions used in the ISO 9000 family which you need to avoid misunderstandings in their use.
ISO 9001:2000, Quality management systems - Requirements	This is the requirement standard you use to assess your ability to meet customer and applicable regulatory requirements and thereby address customer satisfaction. It is now the only standard in the ISO 9000 family against which third-party certification can be carried.
ISO 9004:2000, Quality management systems - Guidelines for performance improvements	This guideline standard provides guidance for continual improvement of your quality management system to benefit all parties through sustained customer satisfaction.
ISO 19011, Guidelines on Quality and/or Environmental Management Systems Auditing (currently under development)	Provides you with guidelines for verifying the system's ability to achieve defined quality objectives. You can use this standard internally or for auditing your suppliers.
ISO 10005:1995, Quality management - Guidelines for quality plans	Provides guidelines to assist in the preparation, review, acceptance and revision of quality plans.
ISO 10006:1997, Quality management - Guidelines to quality in project management	Guidelines to help you ensure the quality of both the project processes and the project products.
ISO 10007:1995, Quality management - Guidelines for configuration management	Gives you guidelines to ensure that a complex product continues to function when components are changed individually.
ISO/DIS 10012, Quality assurance requirements for measuring equipment - Part 1: Metrological confirmation system for measuring equipment	Give you guidelines on the main features of a calibration system to ensure that measurements are made with the intended accuracy.
ISO 10012-2:1997, Quality assurance for measuring equipment - Part 2: Guidelines for control of measurement of processes	Provides supplementary guidance on the application of statistical process control when this is appropriate for achieving the objectives of Part 1.
ISO 10013:1995, Guidelines for developing quality manuals	Provides guidelines for the development, and maintenance of quality manuals, tailored to your specific needs.
ISO/TR 10014:1998, Guidelines for managing the economics of quality	Provides guidance on how to achieve economic benefits from the application of quality management.
ISO 10015:1999, Quality management - Guidelines for training	Provides guidance on the development, implementation, maintenance and improvement of strategies and systems for training that affects the quality of products.
ISO/TS 16949:1999, Quality systems - Automotive suppliers - Particular requirements for the application of ISO 9001:1994	Sector specific guidance to the application of ISO 9001 in the automotive industry.

Examples of the ISO 9000 standards in use

ISO 9001:2000 is used if you are seeking to establish a management system that provides confidence in the conformance of your product to established or specified requirements. It is now the only standard in the ISO 9000 family against whose requirements your quality system can be certified by an external agency. The standard recognizes that the word "product" applies to services, processed material, hardware and software intended for, or required by, your customer.

There are five sections in the standard that specify activities that need to be considered when you implement your system. You will describe the activities you use to supply your products and may exclude the parts of the Product Realization section that are not applicable to your operations. The requirements in the other four sections ? Quality management system, Management responsibility, Resource management and Measurement, analysis and improvement? apply to all organizations and you will demonstrate how you apply them to your organization in your quality manual or other documentation.

Together, the five sections of ISO 9001:2000 define what you should do consistently to provide products that meets customer and applicable statutory or regulatory requirements. In addition, you will seek to enhance customer satisfaction by improving your quality management system.

ISO 9004:2000 is used to extend the benefits obtained from ISO 9001:2000 to all parties that are interested in or affected by your business operations. Interested parties include your employees, owners, suppliers and society in general.

ISO 9001:2000 and ISO 9004:2000 are harmonized in structure and terminology to assist you to move smoothly from one to the other. Both standards apply a process approach. Processes are recognized as consisting of one or more linked activities that require resources and must be managed to achieve predetermined output. The output of one process may directly form the input to the next process and the final product is often the result of a network or system of processes. The eight Quality Management Principles stated in ISO 9000:2000 and ISO 9004:2000 provide the basis for the performance improvement outlined in ISO 9004:2000.

The nature of your business and the specific demands you have will determine how you apply the standards to achieve your objectives.

Here are a few examples:

Example 1

A metal parts fabricating company used ISO 9000:2000 to develop a plan to implement their quality management system. When they were ready, they prepared a quality manual and quality system procedures as required by ISO 9001:2000, excluding the requirements covering product design and development because their products are made to designs prepared by their customers. Later, in order to bid on the supply of parts to a major automotive company, they adapted their quality system to meet the sector specific requirements of ISO/TS 16949.

Example 2

A welfare agency decided to establish a quality improvement strategy. It adopted ISO 9004:2000 as the basis for planning and implementing its system. The agency found that ISO 9000:2000 provided very useful additional guidance and plans to seek certification to ISO 9001:2000 to gain more credibility.

Example 3

A washing machine manufacturer had a well-established company culture of continual improvement and effective production control. The management decided to improve the company's development processes and to implement ISO 9001:2000 to obtain certification for commercial purposes. The company used ISO 9004:2000 to guide its improvement processes and ISO 10006:1997 to develop a project management plan.

Example 4

A large chemical processing company was required by its major customers to gain registration/certification to ISO 9001:2000. In order to obtain additional benefits, company leadership planned a comprehensive management strategy based on ISO 9000:2000 and ISO 9004:2000. A thorough review of their business processes indicated that all elements of ISO 9001:2000 were applicable to their quality management system. The company used ISO 10013:1999 to guide the development of quality documentation in its various production divisions and ISO 10015:1999 for guidance in the preparation of training plans for their employees.

Example 5

A firm of international lawyers wanted to improve their client management processes and to achieve registration/certification to ISO 9001:2000. Their quality management system provides for the design and development of new services such as international tax planning and modifying traditional services to meet the requirements of new or amended legislation. They included purchasing control to cover the selection of computer hardware and software, as well as purchasing the services of specialist lawyers as needed. After successfully implementing ISO 9001:2000, they used the self-assessment guidelines of ISO 9004:2000 to monitor their progress as they improved their quality management system.

Example 6

A computer software developer serving a niche market recognized that as their user base expanded they would be faced with issues concerning product management and configuration control. Changes to base products, user hardware and regulatory requirements were compounding customer service issues. ISO 9004:2000 provided the guidance they needed to establish documented procedures to control process change and improvement. ISO 10006:1997 and ISO 10007:1995 provided additional assistance as they managed the project and prepared procedures for configuration management. They later acquired another software developer and were able to use their quality management system to integrate the acquisition into their own structure very quickly with a minimum of disruption to customers.

Example 7

A bank decided to implement a quality management system for its on-line Internet banking services. They ensured that their quality manual made clear that their other conventional banking services were not included in their quality management system. While adopting the requirements of ISO 9001:2000, the bank obtained guidance from ISO 9000:2000 to interpret words and phrases used in the standard for their application. They applied all the requirements of Clause 7, recognizing that design and development is an important part of creating new service processes. The bank used ISO 10013:1995 to prepare their documentation, which they posted on their internal computer network to ensure current procedures are available to their staff.

Implementing your ISO 9001:2000 quality management system

1. Identify the goals you want to achieve

Typical goals may be:

Be more efficient and profitable
Produce products and services that consistently meet customer requirements
Achieve customer satisfaction
Increase market share
Maintain market share
Improve communications and morale in the organization
Reduce costs and liabilities
Increase confidence in the production system

2. Identify what others expect of you

These are the expectations of interested parties (stakeholders) such as:

Customers and end users
Employees
Suppliers
Shareholders
Society

3. Obtain information about the ISO 9000 family

For general information, look to this brochure
For more detailed information, see ISO 9000:2000, ISO 9001:2000 and ISO 9004:2000
For supporting information, refer to the ISO Web site
For implementation case studies and news of ISO 9000 developments worldwide, read the ISO publication ISO Management Systems.

4. Apply the ISO 9000 family of standards in your management system.

Decide if you are seeking certification that your quality management system is in conformance with ISO 9001:2000 or if you are preparing to apply for a national quality award.

Use ISO 9001:2000 as the basis for certification
Use ISO 9004:2000 in conjunction with your national quality award criteria to prepare for a national quality award

5. Obtain guidance on specific topics within the quality management system

These topic-specific standards are:

ISO 10006 for project management
ISO 10007 for configuration management
ISO 10012 for measurement systems
ISO 10013 for quality documentation
ISO/TR 10014 for managing the economics of quality
ISO 10015 for training
ISO/TS 16949 for automotive suppliers
ISO 19011 for auditing

6. Establish your current status, determine the gaps between your quality management system and the requirements of ISO 9001:2000

You may use one or more of the following:

Self assessment
Assessment by an external organization

7. Determine the processes that are needed to supply products to your customers

Review the requirements of the ISO 9001:2000 section on Product Realization to determine how they apply or do not apply to your quality management system including;

Customer related processes
Design and/or development
Purchasing
Production and service operations
Control of measuring and monitoring devices

8. Develop a plan to close the gaps in step 6 and to develop the processes in step 7

Identify actions needed to close the gaps, allocate resources to perform these actions, assign responsibilities and establish a schedule to complete the needed actions. ISO 9001:2000 Paragraphs 4.1 and 7.1 provide the information you will need to consider when developing the plan.

9. Carry out your plan

Proceed to implement the identified actions and track progress to your schedule

10. Undergo periodic internal assessment

Use ISO 19011 for guidance in auditing, auditor qualification and managing audit programmes

11. Do you need to demonstrate conformance?

If yes, go to step 12
If no, go to step 13

You may need or wish to show conformance (certification/registration) for various purposes, for example:

Contractual requirements
Market reasons or customer preference
Regulatory requirements
Risk management
To set a clear goal for your internal quality development (motivation)

12. Undergo independent audit

Engage an accredited registration/certification body to perform an audit and certify that your quality management system complies with the requirements of ISO 9001:2000.

13. Continue to improve your business

Review the effectiveness and suitability of your quality management system. ISO 9004:2000 provides a methodology for improvement.

Maintaining the benefits and continual improvement

Most new users obtain measurable benefits early in the process of deploying the standard requirements in their operations. These initial benefits are generally due to improvements in their organization and internal communication. The benefits must be strengthened through effective internal auditing and management review of system performance. Like all systems, it either improves or becomes less effective. It does not remain static for long.

When you adopt ISO 9001:2000, you must strive for the satisfaction of your customers and the continual improvement of your quality management system. Continual improvement is a process of increasing the effectiveness of your organization to fulfill your quality policy and your quality objectives. ISO 9001:2000 requires that you plan and manage the processes necessary for the continual improvement of your quality management system. ISO 9004:2000 provides information that will be helpful in going beyond ISO 9001:2000 to improving the efficiency of your operation. It is recommended that you obtain data from various sources, both internal and external, to assess the appropriateness of your quality system goals. This information can also be used to improve the performance of your processes.

Some organizations may expand their management systems by extending the ISO 9001:2000 structure to include the requirements of ISO 14001:1996, Environmental management systems. The structural and organizational requirements of the two management systems have been designed to be compatible.

The future evolution of ISO 9000

In order for the ISO 9000 family to maintain its effectiveness, the standards are periodically reviewed in order to benefit from new developments in the quality management field and also from user feedback. ISO/TC 176, which is made up of experts from businesses and other organizations around the world, monitors the use of the standards to determine how they can be improved to meet user needs and expectations when the next revisions are due in approximately five years' time.

ISO/TC 176 will continue to integrate quality assurance, quality management, sector specific initiatives and various quality awards within the ISO 9000 family.

ISO's commitment to sustaining the ISO 9000 momentum through reviews, improvement and streamlining of the standards guarantees that your investment in ISO 9000 today will continue to provide effective management solutions well into the future.

For further information

Web sites

ISO:
www.iso.org

ISO/TC 176:
www.tc176.org

ISO/TC 176 Subcommittee 2:
www.bsi.org.uk/iso-tc176-sc2

Information on the ISO 9000 standards is also available from ISO's national member institutes or from the ISO Central Secretariat ISO 9000 enquiry service. Sales enquiries should also be directed to the ISO members or to the ISO Central Secretariat sales department.

ISO publishes the bimonthly ISO Management Systems, which provides updates on these families of standards and news on their implementation around the world. A Spanish-language edition is published by the Spanish national standards institute, AENOR.

Quality management principles

Pavankumar Pothuraju — Fri, 06 Aug 2004 21:34:00 GMT

The following text is an integral reproduction of the content of the document "Quality Management Principles".

Introduction

This document introduces the eight quality management principles on which the quality management system standards of the revised ISO 9000:2000 series are based. These principles can be used by senior management as a framework to guide their organizations towards improved performance. The principles are derived from the collective experience and knowledge of the international experts who participate in ISO Technical Committee ISO/TC 176, Quality management and quality assurance, which is responsible for developing and maintaining the ISO 9000 standards.

The eight quality management principles are defined in ISO 9000:2000, Quality management systems Fundamentals and vocabulary, and in ISO 9004:2000, Quality management systems Guidelines for performance improvements.

This document gives the standardized descriptions of the principles as they appear in ISO 9000:2000 and ISO 9004:2000. In addition, it provides examples of the benefits derived from their use and of actions that managers typically take in applying the principles to improve their organizations' performance.

Principle 1 Customer focus

Organizations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations.

Key benefits:

Increased revenue and market share obtained through flexible and fast responses to market opportunities.
Increased effectiveness in the use of the organization's resources to enhance customer satisfaction.
Improved customer loyalty leading to repeat business.

Applying the principle of customer focus typically leads to:

Researching and understanding customer needs and expectations.
Ensuring that the objectives of the organization are linked to customer needs and expectations.
Communicating customer needs and expectations throughout the organization.
Measuring customer satisfaction and acting on the results.
Systematically managing customer relationships.
Ensuring a balanced approach between satisfying customers and other interested parties (such as owners, employees, suppliers, financiers, local communities and society as a whole).

Principle 2 Leadership

Leaders establish unity of purpose and direction of the organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization's objectives.

Key benefits:

People will understand and be motivated towards the organization's goals and objectives.
Activities are evaluated, aligned and implemented in a unified way.
Miscommunication between levels of an organization will be minimized.

Applying the principle of leadership typically leads to:

Considering the needs of all interested parties including customers, owners, employees, suppliers, financiers, local communities and society as a whole.
Establishing a clear vision of the organization's future.
Setting challenging goals and targets.
Creating and sustaining shared values, fairness and ethical role models at all levels of the organization.
Establishing trust and eliminating fear.
Providing people with the required resources, training and freedom to act with responsibility and accountability.
Inspiring, encouraging and recognizing people's contributions.

Principle 3 Involvement of people

People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization's benefit.

Key benefits:

Motivated, committed and involved people within the organization.
Innovation and creativity in furthering the organization's objectives.
People being accountable for their own performance.
People eager to participate in and contribute to continual improvement.

Applying the principle of involvement of people typically leads to:

People understanding the importance of their contribution and role in the organization.
People identifying constraints to their performance.
People accepting ownership of problems and their responsibility for solving them.
People evaluating their performance against their personal goals and objectives.
People actively seeking opportunities to enhance their competence, knowledge and experience.
People freely sharing knowledge and experience.
People openly discussing problems and issues.

Principle 4 Process approach

A desired result is achieved more efficiently when activities and related resources are managed as a process.

Key benefits:

Lower costs and shorter cycle times through effective use of resources.
Improved, consistent and predictable results.
Focused and prioritized improvement opportunities.

Applying the principle of process approach typically leads to:

Systematically defining the activities necessary to obtain a desired result.
Establishing clear responsibility and accountability for managing key activities.
Analysing and measuring of the capability of key activities.
Identifying the interfaces of key activities within and between the functions of the organization.
Focusing on the factors such as resources, methods, and materials that will improve key activities of the organization.
Evaluating risks, consequences and impacts of activities on customers, suppliers and other interested parties.

Principle 5 System approach to management

Identifying, understanding and managing interrelated processes as a system contributes to the organization's effectiveness and efficiency in achieving its objectives.

Key benefits:

Integration and alignment of the processes that will best achieve the desired results.
Ability to focus effort on the key processes.
Providing confidence to interested parties as to the consistency, effectiveness and efficiency of the organization.

Applying the principle of system approach to management typically leads to:

Structuring a system to achieve the organization's objectives in the most effective and efficient way.
Understanding the interdependencies between the processes of the system.
Structured approaches that harmonize and integrate processes.
Providing a better understanding of the roles and responsibilities necessary for achieving common objectives and thereby reducing cross-functional barriers.
Understanding organizational capabilities and establishing resource constraints prior to action.
Targeting and defining how specific activities within a system should operate.
Continually improving the system through measurement and evaluation.

Principle 6 Continual improvement

Continual improvement of the organization's overall performance should be a permanent objective of the organization.

Key benefits:

Performance advantage through improved organizational capabilities.
Alignment of improvement activities at all levels to an organization's strategic intent.
Flexibility to react quickly to opportunities.

Applying the principle of continual improvement typically leads to:

Employing a consistent organization-wide approach to continual improvement of the organization's performance.
Providing people with training in the methods and tools of continual improvement.
Making continual improvement of products, processes and systems an objective for every individual in the organization.
Establishing goals to guide, and measures to track, continual improvement.
Recognizing and acknowledging improvements.

Principle 7 Factual approach to decision making

Effective decisions are based on the analysis of data and information

Key benefits:

Informed decisions.
An increased ability to demonstrate the effectiveness of past decisions through reference to factual records.
Increased ability to review, challenge and change opinions and decisions.

Applying the principle of factual approach to decision making typically leads to:

Ensuring that data and information are sufficiently accurate and reliable.
Making data accessible to those who need it.
Analysing data and information using valid methods.
Making decisions and taking action based on factual analysis, balanced with experience and intuition.

Principle 8 Mutually beneficial supplier relationships

An organization and its suppliers are interdependent and a mutually beneficial relationship enhances the ability of both to create value

Key benefits:

Increased ability to create value for both parties.
Flexibility and speed of joint responses to changing market or customer needs and expectations.
Optimization of costs and resources.

Applying the principles of mutually beneficial supplier relationships typically leads to:

Establishing relationships that balance short-term gains with long-term considerations.
Pooling of expertise and resources with partners.
Identifying and selecting key suppliers.
Clear and open communication.
Sharing information and future plans.
Establishing joint development and improvement activities.
Inspiring, encouraging and recognizing improvements and achievements by suppliers.

The next step:

This document provides a general perspective on the quality management principles underlying the ISO 9000:2000 series. It gives an overview of these principles and shows how, collectively, they can form a basis for performance improvement and organizational excellence.

There are many different ways of applying these quality management principles. The nature of the organization and the specific challenges it faces will determine how to implement them. Many organizations will find it beneficial to set up quality management systems based on these principles.

The requirements of quality management systems and supporting guidelines are given in the ISO 9000 - Selection and use.

Further information on the ISO 9000 standards is available from ISO's national member institutes or from the ISO Central Secretariat ISO 9000 enquiry service. Sales enquiries should also be directed to the ISO members or to the ISO Central Secretariat sales department.

ISO publishes the bimonthly ISO Management Systems, which provides updates on these families of standards and news on their implementation around the world. A Spanish-language edition is published by the Spanish national standards institute, AENOR.

QUALITY CULTURE

Pavankumar Pothuraju — Fri, 06 Aug 2004 21:27:00 GMT

What is Quality Culture?

Quality Culture IS

Quality Culture IS NOT

Listening to customers to determine their requirements
Identifying cost of quality and focusing on prevention
Doing the right thing right the first time
Continuing process improvement
Taking ownership at all levels of the organization
Demonstrating executive leadership and commitment

Assuming you know your customer’s requirements
Overlooking the hidden cost of poor quality
Doing it over to make it right
One-time fix
Assigning responsibility for quality to one department
Assigning responsibility for quality to others

COST OF QUALITY

Pavankumar Pothuraju — Fri, 06 Aug 2004 21:25:00 GMT

(Quality discussed in the context of software)

When calculating the total production costs associated with the development of a new application or system, two components must be considered.

The first component consists of costs associated with producing the product “right the first time” or RTF costs. These costs include labor, materials, and tools associated with the actual development of the application. Cost of Quality is a term that is used to quantify the total cost of failure, appraisal, and prevention costs associated with the production of software.

The second component includes the additional costs associated with assuming that the product delivered meets the quality goals established for the product. This cost component is called the Cost of Quality, and includes all costs associated with the prevention, identification, and correction of product defects.

The three categories of costs associates with producing quality products are:

Prevention costs – Money required to prevent error and to do the job right the first time. These normally require up-front costs for benefits that will be derived months or even years later. This category includes money spent on establishing methods and procedures, training workers, acquiring tools, and planning for quality. Prevention money is all spent before the product is actually built.

Appraisal costs – Money spend to review completed products against requirements. Appraisal includes the cost of inspections, testing and reviews. This money is spent after the product is built before it is shipped to the user or move into production.

Failure costs – All costs associated with defective products that have been delivered to the user or moved into production. Some failure costs involve repairing products to make them meet requirements. Others are costs generated by failures such as the cost of operating faulty products, damage incurred by using them, and the costs associated with operating a Help Desk.

The cost of quality will vary form one organization to the next. The majority of costs associated with the Cost of Quality are associated with the identification and correction of defects. To minimize production costs, the project teams must not only focus on defect prevention but on the cost of overheads. The goal is to optimize the process to the extent that rework is eliminated and inspection is built into the production and also supporting processes. Any quality assurance group must identify the costs within the above three categories, quantify them and then develop programs to minimize the totality of these three costs. Applying the concepts of continuous testing (control systems) to the product process will reduce the cost of quality.

Quality Basics

Pavankumar Pothuraju — Fri, 06 Aug 2004 18:39:00 GMT

Quality

ISO 9000:2000

“The degree to which a set of inherent characteristics fulfils requirements”

IEEE STD 610.12-1990

“The degree to which a system, component or process meets specified requirements,

The degree to which a system, component or process meets customer or user needs or expectations.”

What is quality?

Quality essentially lies ‘in the eyes of the beholder’. What may be high quality for one customer may not be high quality for another. A customer will consider a product or service as ‘high quality’ if it meets (or exceeds) what he/she wants from that product or service. Any organization that wants to deliver quality products and services needs to understand what would be considered as quality by its customers.

There are five perspectives of quality:

transcendent (I know it when I see it),
product-based (process desired features),
user-based (fitness for use),
development and manufacturing-based (conforms to requirements), and
value based (at an acceptable cost).

Each of the above must be considered as important to the customer.

Peter R. Scholtes introduces the contrast between effectiveness (doing the right things) and efficiency (doing things right). Quality organizations must be both effective and efficient.

Patrick Townsend examines quality in fact and quality in perception. Quality in fact is usually the supplier’s point of view, while quality in perception is the customer’s. Any difference between the former and the later can cause problems between the two. An organization’s quality policy must define and view quality from their customer’s perspectives. If there are conflicts, they must be resolved.

Quality In Fact

Quality Perception

- Doing the right thing

- Doing it the right way.

- Doing it right the first time.

- Doing it on time.

- Delivering the right product.

- Satisfying our customer’s needs.

- Meeting the customer’s expectations

- Treating every customer with integrity, courtesy and respect

COST OF POOR QUALITY

The cost of poor quality has been quoted by various sources as being between 15 percent and 50 percent of the cost of doing business. Recent studies have shown that the cost of poor quality may be as high as 20 percent of gross sales for manufacturing and 30 percent of gross sales for the service sector. Poor quality cost any organization many of its scarce dollars.

THE QUALITY-PRODUCTIVITY CONNECTION

Townsend states, “Increase in quality in fact can lead directly to increases in productivity. Emphasis on quality, in manufacturing operations, through the use of statistical quality control, can lead to the conversion of the ‘hidden factory’. The hidden factory produces scrap, rework, repair, sorting, and customer complaints.” The way to improve productivity is to reduce rework and scrap (i.e. improve the quality of processes). Expense reduction is another by-product of quality improvement. At most of the times the objective of Cost Control automatically acts upon as the processes move towards improved quality.

EMPLOYEE INVOLVEMENT

Employee involvement is another cornerstone of any quality program. Teams are the device sued to assure communication and cooperation between management and the rest of the employees. Through team, all employees will be allowed to participate and contribute to the improvement of processes. Employees will be asked to share the responsibility for innovation and quality. If an organization is not functioning as a team it is probably inefficient, ineffective and not satisfying its customers.

Notes by Pavan

ISO 9000

Pavankumar Pothuraju — Wed, 14 Jul 2004 00:09:00 GMT

ISO has been developing voluntary technical standards over almost all sectors of business, industry and technology since 1947.

With the exception of ISO 9000 and ISO 14000, the vast majority of ISO standards are highly specific. They are documented agreements containing technical specifications or other precise criteria to be used consistently as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes and services are fit for their purpose.

Then, in 1987, came ISO 9000, followed nearly 10 years later by ISO 14000, which have brought ISO to the attention of a much wider business community. These are very different from the majority of ISO's highly specific standards.

Generic management system standards

The vast majority of ISO standards are highly specific to a particular product, material, or process. However, both ISO 9000 and ISO 14000 are known as generic management system standards.

Generic means that the same standards can be applied to any organization, large or small, whatever its product - including whether its "product" is actually a service - in any sector of activity, and whether it is a business enterprise, a public administration, or a government department.

Management system 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, such as the following:

satisfying the customer's quality requirements,
complying to regulations, or
meeting environmental objectives.

In a very small organization, there is probably no "system", as such, just "our way of doing things", and "our way" is probably not written down, but all in the head of the manager or owner head. The larger the organization, and the more people involved, the more the likelihood that there are some written procedures, instructions, forms or records. These help ensure that everyone is not just "doing his or her own thing", and that the organization goes about its business in an orderly and structured way, so that time, money and other resources are utilized efficiently.

To be really efficient and effective, the organization can manage its way of doing things by systemizing it. This ensures that nothing important is left out and that everyone is clear about who is responsible for doing what, when, how, why and where.

Management system standards provide the organization with a model to follow in setting up and operating the management system. This model incorporates the features on which experts in the field have reached a consensus as representing the international state of the art. A management system which follows the model - or "conforms to the standard" - is built on a firm foundation of state-of-the-art practices.

Large organizations, or ones with complicated processes, could not function well without management systems - although they may have been called by some other name. Companies in such fields as aerospace, automobiles, defence, or health care devices have been operating management systems for years.

The ISO 9000 and ISO 14000 families of management system standards now make these successful practices available for all organizations when it comes to meeting their objectives concerning quality and the environment.

ISO 9000 and ISO 14000 in plain language

This section tells you briefly what ISO 9000 and ISO 14000 are and what they are not.

Both "ISO 9000" and "ISO 14000" are actually families of standards which are referred to under these generic titles for convenience. Both families consist of standards and guidelines relating to management systems, and related supporting standards on terminology and specific tools, such as auditing (the process of checking that the management system conforms to the standard).

ISO 9000 is primarily concerned with "quality management". In the everyday context, like "beauty", everyone may have his or her idea of what "quality" is. But, in the ISO 9000 context, the standardized definition of quality refers to all those features of a product (or service) which are required by the customer.

"Quality management" means what the organization does to ensure that its products or services satisfy the customer's quality requirements and comply with any regulations applicable to those products or services.

ISO 14000 is primarily concerned with "environmental management". In plain language, this means what the organization does to minimize harmful effects on the environment caused by its activities.

In addition, both ISO 9000 and ISO 14000 require organizations that implement them to improve their performance continually in, respectively, quality and environmental management.

Both ISO 9000 and ISO 14000 concern the way an organization goes about its work, and not directly the result of this work. In other words, they both concern processes, and not products - at least, not directly. Nevertheless, the way in which the organization manages its processes is obviously going to affect its final product.

In the case of ISO 9000, the efficient and effective management of processes is, for example, going to affect whether or not everything has been done to ensure that the product satisfies the customer's quality requirements.

In the case of ISO 14000, the efficient and effective management of processes is going to affect whether or not everything has been done to ensure a product will have the least harmful impact on the environment, at any stage in its life cycle, either by pollution, or by depleting natural resources.

However, neither ISO 9000 nor ISO 14000 are product standards. The management system standards in these families state requirements for what the organization must do to manage processes influencing quality (ISO 9000) or the processes influencing the impact of the organization's activities on the environment (ISO 14000).

In both cases, the philosophy is that management system requirements are generic. No matter what the organization is or does, if it wants to establish a quality management system or an environmental management system, then such a system has a number of essential features which are spelled out in the relevant ISO 9000 or ISO 14000 standards.

Certification, registration and accreditation

Three words that will certainly crop up on your road to ISO 9000 or ISO 14000 are "certification", "registration" and "accreditation". Just what exactly do they mean? Let's first take the first two.

According to the standardized definitions*, they are not quite the same thing. In the context of ISO 9000 or ISO 14000, "certification" refers to the issuing of written assurance (the certificate) by an independent, external body that has audited an organization's management system and verified that it conforms to the requirements specified in the standard. "Registration" means that the auditing body then records the certification in its client register.

The organization's management system has therefore been both certified and registered. For practical purposes, in the ISO 9000 and ISO 14000 contexts, the difference between the two terms is not significant and both are acceptable for general use.

"Certification" seems to be the term most widely used worldwide, although registration (from which "registrar" as an alternative to registration/certification body) is often preferred in North America, and the two are also used interchangeably.

On the contrary, using "accreditation" as an interchangeable alternative for certification or registration is a mistake, because it means something different. In the ISO 9000 or ISO 14000 context, accreditation refers to the formal recognition by a specialized body - an accreditation body - that a certification body is competent to carry out ISO 9000 or ISO 14000 certification in specified business sectors. In simple terms, accreditation is like certification of the certification body. Certificates issued by accredited certification bodies - and known as "accredited certificates" - may be perceived on the market as having increased credibility.

Therefore, it is okay to state that your organization has been "certified" or "registered" (if, indeed, it has!), but inaccurate to state that it has been "accredited" (unless your organization is a certification/registration body).

Certification is not compulsory

You can implement ISO 9000 or ISO 14000 without seeking to have your management system audited and certified as conforming to the standards by an independent, external certification body. What?!?

That's right! We are so used to hearing about ISO 9000 and ISO 14000 certification that it's easy to assume you can't have the standard with certification - but it's a fact, you can implement and benefit from an ISO 9000 or ISO 14000 system without having it certified. Like all ISO standards, ISO 9000 and ISO 14000 are voluntary standards. Your organization can implement them solely for the internal benefits they bring in increased effectiveness and efficiency of your operations, without incurring the investment required in a certification programme.

Deciding to have an independent audit of your system to confirm that it conforms to the standard is a decision to be taken on business grounds - if for example:

- it is a contractual, regulatory, or market requirement,
- it meets customer preferences,
- it is part of a of a risk management programme, or if you think
- it will motivate your staff by setting a clear goal for the development of the management system.

Choosing a certification body

When choosing a certification body to carry out ISO 9001 or ISO 14001 certification, these are the aspects the organization needs to take into account.

The first point out that an organization can implement ISO 9001 or ISO 14001 without seeking certification. The best reason for wanting to implement the standards is to improve the efficiency and effectiveness of company operations. Certification of your management system is not an ISO 9001 or ISO 14001 requirement.
Deciding to have an independent audit of your system to confirm that it conforms to ISO 9001 or ISO 14001 is a decision to be taken on business grounds: for example

- if it is a contractual or regulatory requirement
- if it is a market requirement or to meet customer preferences
- if it falls within the context of a risk management programme
- or if you think it will motivate your staff by setting a clear goal for the development of your management system.

Criteria to consider include:

- evaluate several certification bodies,
- bear in mind that the cheapest might prove to be the most costly if its auditing is below standard, or if its certificate is not recognized by your customers
- establish whether the certification body has auditors with experience in your business sector
- following the publication of the ISO 9000:2000 series, establish whether the certification body has integrated the evolution in the focus of the standards from conformity to performance.

Another point to clarify is whether or not the certification body has been accredited and, if so, by whom. Accreditation, in simple terms, means that a certification body has been officially approved as competent to carry out certification in specified business sectors by a national accreditation body. In most countries, accreditation is a choice, not an obligation and the fact that a certification body is not accredited does not, by itself, mean that it is not a reputable organization. For example, a certification body operating nationally in a highly specific sector might enjoy such a good reputation that it does not feel there is any advantage for it to go to the expense of being accredited. That said, many certification bodies choose to seek accreditation, even when it is not compulsory, in order to be able to demonstrate an independent confirmation of their competence.

ISO does not carry out ISO 9001 or ISO 14001 certification

ISO is responsible for developing, maintaining and publishing the ISO 9000 and ISO 14000 families of standards but ISO does not itself audit or assess the management systems of organizations to verify that they have been implemented in conformity with the requirements of the standards. ISO does not issue ISO 9001 or ISO 14001 certificates.

The auditing and certification of management systems is carried out independently of ISO by more than 750 certification bodies active around the world. ISO has no authority to control their activities. The ISO 9000 and ISO 14000 certificates issued by certification bodies are issued under their own responsibility and not under ISO's name.

ISO itself does not carry out assessments or audits to check that its standards are being implemented by users in conformity with the requirements of the standards. Conformity assessment - as this process is known - is a matter between suppliers and their customers in the private sector, and of regulatory bodies when ISO standards have been incorporated into public legislation.

In addition, there exist many testing laboratories and certification bodies which offer independent (also known as "third party") conformity assessment services to provide confirmation that products (including hardware, software and processed materials), services or systems measure up to ISO standards. Such organizations may perform these services under a mandate to a regulatory authority, or as a commercial activity, the aim of which is to create confidence between suppliers and their clients.

In some countries, the national standards institutes that make up ISO's membership carry out conformity assessment, either on behalf of their respective governments, or as a business operation. ISO itself has no authority to control conformity assessment activities, whether these are business activities by its members, or by other organizations.

However, ISO's Committee on conformity assessment, ISO/CASCO, develops standards and guidelines covering various aspects of conformity assessment activities and the organizations that perform them. The voluntary criteria contained in these standards and guides represent an international consensus on what constitutes good practice. Their use contributes to the consistency and coherence of conformity assessment worldwide and so facilitates trade across borders.

ISO's logo is not for use

Upon certification, many organizations turn to ISO to request use of "the ISO 9000 logo". No such ISO logo exists. There is only the ISO logo itself, which is a registered trademark. Unless authorized by ISO, use of its logo is prohibited. ISO will not allow its logo to be used in connection with the certification of management systems, even when these certifications attest conformity to ISO 9001 or ISO 14001.

Examples of unacceptable use of the ISO logo would include use on products, on Web sites, in marketing materials, advertisements and company letterheads.
Allowing the ISO logo to be used would give the false impression that ISO carries out certification activities, or has approved or authorized the organization using its logo. These activities are not business functions of ISO.

ISO is not an auditor, assessor, registrar, or certifier of management systems, products, services, materials or personnel, nor does it endorse any such activities performed by other parties. ISO develops International Standards but does not operate any schemes for assessing conformity with them.

ISO 9001 and ISO 14001 certificates are issued independently of ISO by more than 750 certification bodies worldwide, although the organization does develop voluntary standards and guidelines to encourage good practice by these certification bodies.

ISO has no "ISO 9000 logo". In addition, you may not use ISO's logo, which is copyrighted. ISO will take whatever actions it considers necessary to prevent the misuse of its logo.

Publicizing your certification

If your business or organization has invested time, energy and money to obtain an ISO 9001 or ISO 14001 certificate, you understandably wish to publicize your achievement. To help you to do so, ISO has published guidelines: Publicizing your ISO 9001 or ISO 14001 certification. The guidelines will help you to apply good practice in publicizing, communicating and promoting your certification to stakeholders such as staff, customers, business partners and the general public.

These guidelines will prove useful in preparing promotional and communication materials such as press releases, advertisements, marketing brochures, videos, staff announcements, logos, slogans and catch lines for diverse media ranging from print and broadcasting, and Internet, to product labels, signs, banners, vehicle fleets and so on.

Among misleading practices that ISO wants to put an end to are the following:

Misuse of the ISO logo, which is a registered trademark.
Giving the false impression, through expressions such as "ISO certification", that it is ISO which has issued a certificate. ISO's core business function is developing standards. Certification to ISO standards is carried out independently of ISO. ISO does not issue certificates relating to ISO 9001, ISO 14001, or any other of the thousands of International Standards it has developed.
Failing to specify whether a certification is to ISO 9001:2000 or to a 1994 version of ISO 9001, ISO 9002 or ISO 9003. This failure invites confusion between the new and improved 2000 version and the older standards which it has replaced.
Giving the false impression that ISO 9001 is a product quality label, or that ISO 14001 is a label signifying a "green" or "environmentally friendly" product. This is not so. They are not product standards. The requirements of a product standard are specific to the product concerned - a child's car seat, for example, has different specifications to an office chair and standards for these two products will have correspondingly different requirements. ISO 9001 and ISO 14001 are what are known as "generic management system standards". "Generic" means that the standards' requirements can be applied to any organization, regardless of the product it makes (or whether the "product" is actually a service activity). "Management system" refers to what the organization does to manage its processes (the activities it undertakes to realize a product or a service).

When an organization has a management system certified to ISO 9001 or ISO 14001 standard, this means that an independent auditor has checked that the processes influencing quality (ISO 9001), or the processes influencing the impact of the organization's activities on the environment (ISO 14001), conform to the relevant standard's requirements. The objective is to give the organization's management and its customer’s confidence that the organization is in control of the way it does things. While this confidence logically extends to the things it makes, neither ISO 9001 nor ISO 14001 contains requirements for specific products. Therefore, certifications to these standards should not be presented as product guarantees.

Compatibility of ISO 9000 and ISO 14000 families

ISO has no plans to merge the ISO 9000 and ISO 14000 families and is nevertheless sensitive to the needs of users who wish to implement both quality and environmental management systems.

Therefore, the ISO technical committees ISO/TC 176 (responsible for ISO 9000) and ISO/TC 207 (responsible for ISO 14000) have an ongoing collaboration to achieve a high degree of compatibility between the two families of standards to facilitate their implementation by user, either as side-by-side systems, or as integrated management systems.

This collaboration addresses such issues as common terminology and structure of the standards and its biggest achievement so far is the development of a joint auditing standard for quality and environmental management systems.

ISO 19011:2002, Guidelines for quality and/or environmental management systems auditing, replaces six older standards in the ISO 9000 and ISO 14000 families. Its use will give organizations a more integrated and balanced view of their operations, making it an outstanding tool for continuous improvement towards business excellence. It is also aimed to help user organizations optimize their management systems, facilitate the integration of quality and environmental management, and, in allowing single audits of both systems, save money and decrease disruption of work units being audited.

Both the ISO 9000 and ISO 14000 families of International Standards emphasize the importance of audits as a management tool for monitoring and verifying the effective implementation of an organization's policy for quality and/or environmental management. Audits are also an essential part of activities such as external certification/registration and of supply chain evaluation and surveillance.

ISO 19011 provides a uniform approach for the auditing of environmental and quality management systems. As many organizations implement both EMS and QMS - either as separate systems or as an integrated management system - they want to harmonize and, where possible, combine the auditing of these systems.

ISO 9000 for busy managers

Welcome to the ISO 9000-specific portion of our Magical Demystifying Tour!

What is ISO 9000?

The ISO 9000 family of standards represents an international consensus on good management practices with the aim of ensuring that the organization can time and time again deliver the product or services that:

- Meet the customer's quality requirements, and
- applicable regulatory requirements, while aiming to
- enhance customer satisfaction, and
- achieve continual improvement of its performance in pursuit of these objectives.

These good practices have been distilled into a set of standardized requirements for a quality management system, regardless of what your organization does, its size, or whether it's in the private, or public sector.

Why should my organization implement ISO 9000?

The existence of an organization without customers, or with dissatisfied customers, is in peril! To keep customers - and to keep them satisfied - your product (which may, in fact, be a service) needs to meet their requirements. ISO 9000 provides a tried and tested framework for taking a systematic approach to managing your business processes (your organization's activities) so that they consistently turn out product conforming to the customer's expectations. And that means consistently happy customers!

How does the ISO 9000 model work?

The requirements for a quality system have been standardized - but most of us like to think our business is unique. So how does ISO 9000 allow for the diversity of say, on the one hand, a "Mr. and Mrs." enterprise, and on the other, to a multinational manufacturing company with service components, or a public utility, or a government administration?

The answer is that ISO 9000 lays down what requirements your quality system must meet, but does not dictate how they should be met in your organization - which leaves great scope and flexibility for implementation in different business sectors and business cultures...as well as different national cultures.

What if my organization implements ISO 9000?

The organization should itself audit its ISO 9000-based quality system to verify that it is managing its processes effectively - or, to put it another way, to check that it is fully in control of its activities.

In addition, the organization may invite its clients to audit the quality system in order to give them confidence that the organization is capable of delivering products or services that will meet their requirements.

Lastly, the organization may engage the services of an independent quality system certification body to obtain an ISO 9000 certificate of conformity. This last option has proved extremely popular in the market-place because of the perceived credibility of an independent assessment. The organization may thus avoid multiple audits by its clients, or reduce the frequency or duration of client audits. The certificate can also serve as a business reference between the organization and potential clients, especially when supplier and client are new to each other, or far removed geographically, as in an export context.

Where ISO 9000 came from and who is behind it

Who?

In the ISO system, ISO standards are developed by national delegations of experts from business, government and other relevant organizations. They are chosen by the ISO members - the national standards institutes participating in the technical committee concerned - and are required to present a national consensus position based on the views of stakeholders in their country.

In 1979, a new ISO technical committee was approved: ISO/TC 176, Quality management and quality assurance. Initially, 20 member countries decided to become active participants (P-members) in the work of this new committee and another 14 countries opted to follow the work as observers (O-members). Today, the number of countries participating in ISO/TC 176 is 69, with another 18 as observers. The new committee set to work and, in 1986, had completed its first standards. Published in the early part of 1987, these standards were known as the ISO 9000 series.

Why 'ISO 9000'?

At the end of 2002, ISO had 13 544 standards in its portfolio. ISO standards are usually assigned a catalogue number automatically. When the first output of ISO/TC 176 was nearing completetion, ISO was already approaching an total of some 9 000 published standards. It was realized even then that TC 176's standards would have a significant impact and so it was decided to give the series the next available round figure - 9000 - as a designation because round figures are more memorable.

What?

When ISO/TC 176 embarked on the development of generic quality management standards for worldwide application, it was able to take advantage of a substantial base of national experience, notably in the United Kingdom and in Canada. In the United Kingdom, the BS 5750 standards were well on their way to broad acceptance and, in Canada, a series of national standards known as CSA Z299 were also widely used. Other countries with well developed quality management practices, such as Japan, also took a keen interest in the work of the new committee. In addition, experience of military quality assurance specifications, such as the NATO AQAP series and US MIL-SPEC, enriched the sources from which TC 176 was able to draw.

How?

At this point, you may be wondering how you can help shape the ISO 9000 standards. In the ISO system, the business sectors most interested in implementing the eventual standards are the ones who provide experts to develop the standards. Your own interest may be such that you would like to provide input, or even participate in the work. In fact, there are channels and opportunities for you have a say in the future development of ISO 9000. Contact the ISO member for your country for details.

Get the best of out of the ISO 9000 family

The emphasis on certification tends to overshadow the fact that there is an entire family of ISO 9000 standards. This family comprises standards providing requirements, guidance, terminology and vocabulary for quality management systems, and supporting standards addressing specific issues, such as auditing.

The ISO 9000 family is presented in the free brochure, ISO 9000 - Selection and use. This is the second edition of this brochure which has been updated to take into account the publication of the ISO 9000:2000 series. It presents the main features of the revised standards, such as the merging of the familiar ISO 9001, ISO 9002 and ISO 9003 into the new ISO 9001:2000, which is now the unique certification standard in the ISO 9000 family.

However, the principal aim of the brochure is to emphasize that organizations stand to obtain the greatest value when the standards in the new core series are used in an integrated manner, both with each other and with the other standards making up the ISO 9000 family as a whole.

The brochure includes:

A list of the ISO 9000 quality management system standards and guidelines
Examples of typical applications of the documents
A step-by-step process to implement a quality management system

A brief view of the future evolution of the ISO 9000 family.