Some of you aren’t buying the “fear, uncertainty, and doubt“ story, though. You’re going about your business logically, methodically, and with a clear sense of direction and purpose. You’re making things happen now and you’ll be in the lead when 2011 rolls around.

For the rest of us, there are many things we could be doing to make great strides forward in the coming year. Among them are implementing or refining the following key procedures:

10. Vendor Evaluation – We’ve all outsourced many of our “non-core” functions, but how many of us are guilty of inattentive behavior with respect to our outsourcers? You get a little complacent and what happens? Deadlines start to slip, or substandard product starts to sneak in. Now is a good time to evaluate your product and service vendors to see if they’re measuring up to your standards.

9. Document Control – Do you know if your employees are following the same guidelines? If you had to ask an employee to take over another’s duties for the day because of an illness, would that first employee know where to go for information? Do they have access to the latest version of the procedure? It’s important that you keep your documentation, however critical it is, under control.  One easy way to do this is using policy management or document compliance management software.

8. Process Monitoring and Measurement – Companies that don’t monitor and measure their performance have no way of knowing for certain if they’re doing better than they were six months or a year ago, or in which direction they’re headed. We can’t improve what we don’t measure.

7. Control of Nonconforming Product – One of the worst things that can happen to your company…worse than finding an error on the production line, worse than finding a nonconformity during inspection…is having a customer find a nonconformity for you. Nothing hurts your company’s reputation worse than a customer finding a poor quality product, getting a late delivery, or finding a billing error in your favor.

6. Identification and Traceability – This is one of the biggest issues in food safety. As important as identifying unsafe product and removing it from the food supply chain is tracing the offending product to its source. ISO 22000 already had a clause addressing traceability when ISO developed a new standard, ISO 22005, to address the issue further. Whether you’re in the food business or another line of work, your customers will benefit from improved traceability of your components.

5. Competence, Awareness, and Training – Very few things improve your company’s performance — and reputation — more than a well-trained, capable work force. Ongoing training not only helps your employees gain self-confidence; it lets them know how important they are to your success.

4. Customer Satisfaction – Some refer to it as “customer loyalty”; others call it “the customer experience”. Whatever label you give it, your company wants to do more than retain customers. You want your customers telling all their contacts how great you are, how if every supplier was as customer-conscious as you, their business would be exceptional.

3. Control of Records – “Those who ignore the past are condemned to repeat it.” (Santayana) Your quality records, your accounting records, your sales records — these are the foundation for your company’s success, now and in the future. Barring the invention of a foolproof “crystal ball” app for your smartphone, knowing where you are in relation to where you’ve been and acting on that knowledge to improve your processes are key to your growth. Without adequate recordkeeping, you are flying blind into the future.

2. Internal Auditing – The best way to ensure the effectiveness of your operations and the viability of your organizations is to have your systems — accounting/finance, operations, IT, quality, etc. — audited. You should have a third party, someone with knowledge, experience, and impartiality, periodically audit your systems. In between, you should self-audit your systems to ensure that they’re in compliance, are effectively implemented and maintained, and that they’re achieving the desired results.

And the most important procedure you can implement to improve your quality and performance in 2011?

1. Corrective and Preventive Action – It’s a two-way tie for number one. Corrective and preventive actions are intertwined, though they’re not interchangeable.

A corrective action is the one you take to ensure that a problem does not happen again. A preventive action is what you do to prevent, or lessen the likelihood of, the problem from happening in the first place. Think of a heart attack: surgery to repair the damaged heart, combined with other measures (improved diet, exercise, etc.), is a corrective action. Regular exercise, a healthy diet, and (when you reach a certain age) regular visits to a cardiologist before you have a heart attack are a preventive action.

And, don’t forget what binds these procedures together — a mission, vision, and strategic plan for your firm. More on that later. For now, what do you think? Are there any procedures you’d add to, or take out of, this list? Would you put them in a different order?

If you qualify as a non-accelerated filer (i.e., your company’s public float is under $75 million), you’ll have to start complying with Section 404(b) of SOX, which requires company management and independent auditors to sign off on, or attest to, the effectiveness of your risk control framework or accounting policies and procedures for internal control.  Are your processes protecting you from the risk of material misstatements (RMM)?

Sarbanes Oxley Compliance Costs Too High?

When it was first enacted, the Sarbanes-Oxley Act (SOX) did not apply to non-accelerated filers because it was believed SOX compliance costs would be too high.  Several delays and extensions have been given to non-accelerated filers because the Office of Economic Analysis (OEA), which advises the SEC, needed to complete a study on SOX compliance costs. The study was completed in September, 2009, and was quickly followed by the announcement (on October 2) of the June 15th compliance deadline.

It didn’t surprise anyone when the OEA study showed that SOX compliance costs increase with company size; the study also confirmed that annual compliance costs decrease over time and that, overall, compliance costs have decreased since 2007.  In other words, while larger companies achieving SOX compliance had higher costs overall, there are fixed SOX compliance costs that impact all organizations, regardless of size, and companies have gotten smarter on how to implement Sarbanes-Oxley.

How Do You Control Sarbanes-Oxley Compliance Costs?

There are three major factors that drive up the cost of complying with SOX: cost of scale; cost of review; and cost of improvement.  The more control you have over all three of these, the lower your costs to implement Sarbanes-Oxley compliance will be.

Sarbanes-Oxley Cost of Scale

Why do larger companies incur higher overall compliance costs?  Because of the sheer size — scale – of their operations!  More operating locations, more employees, and more processes means more time and people needed to review accounting policies, procedures, and internal controls.  There is no easy answer to the question of scale: larger size translates into more risk management, internal controls, and accounting processes.

You can reduce the scope of SOX compliance by addressing the greatest risks first (note that PCAOB Auditing Standard #5 was developed for this purpose).  Don’t try to address all risks at once — this is what drives up compliance costs.  But, which risks do you address first?  Determine a threshold, or cutoff, for risk materiality, then decide which risks are most material to your company.

Remember — this is an ongoing process of improving your SOX compliance, not a one-time SOX compliance event.  Next year, you can (and probably should) lower the threshold and address your “second-tier” risks, and continue to annually adjust your threshold until you are comfortable.  Management decides on the internal controls needed to cover the identified risks.

Also, if you decide wrong and set your risk threshold too low or too high, you’ve identified a material weakness in your risk control framework.  You think you’ve exposed a flaw in your system, but consider that your system is also about continual improvement.  The only flaw is failing to improve: work on improving your internal controls – adjust your risk threshold – and you can demonstrate that you have a SOX-compliant system.

Sarbanes-Oxley Cost of Review

The cost of review represents the Check and Act phases of the Plan-Do-Check-Act (PDCA) process approach.  All companies needing to comply with SOX have to have some form of review process that tests accounting’s internal controls and gives management the confidence to attest to the validity of the company’s financial statements.

Internal audits, management reviews, management and auditor attestation, and board oversight are fixed costs of Sarbanes-Oxley compliance.  Every company has to operationally demonstrate to top management that internal controls are in place and are working.  Larger companies have to spend more, of course, but every company must spend a minimum amount for basic compliance.

As with the cost of scale, you can reduce the scope of SOX compliance by addressing the largest risks first in your audit plan.  You don’t have to audit every accounting process every year.  Start with the accounting processes that have the greatest impact — those that pose the greatest risk of material misstatement if they don’t work.  Review past audit opinions, your compliance plan, and your definition of materiality and adjust your audit plan to deal with the greatest risks.

Management decides on the internal controls and testing needed to ensure that the identified risks are controlled.  If you find that your audit plan hasn’t addressed the right risks, you adjust the plan.  Again, lessons learned — and implemented — show that your system is driving improvement and is, therefore, Sarbanes-Oxley-compliant.

Sarbanes-Oxley Cost of Improvement

The cost of improvement comes under the “Plan” and “Do” phases of the PDCA process.  Sarbanes-Oxley compliance starts with a compliance plan, one that identifies the risks you need to control.  Your compliance plan is the foundation of your risk control framework.  With a sound compliance plan in place, management can make better decisions regarding internal controls, such as implementing accounting policies and procedures that reduce or eliminate the risk of material financial misstatement.

Developing accounting policies and procedures is the “Do” in “Plan-Do-Check-Act”.  Your risk control framework identifies individual risks (e.g., the chance a receivable is not collected on time). Your accounting policies (e.g., collect accounts receivable within 30 days) and procedures (daily A/R aging reports, phone calls, collection letters, etc.) are forms of internal control that demonstrate your compliance with Section 404 of SOX.

Are your accounting policies and procedures for compliance, or control?  Well, control comes before compliance, but many companies have confused the two and wasted a lot of time and money.  You can reduce the scope of SOX compliance by controlling your greatest risks first with your accounting policies and procedures.

You don’t have to write a policy or procedure for every accounting process at once.  Once again, start with the accounting processes that, if they don’t work, pose the greatest risk of material financial misstatement.  Review audit opinions, your compliance plan, and your definition of materiality, then develop and implement the accounting policies and procedures that address your greatest risks first.

Management makes the final determination of which accounting policies and procedures are needed.  If you develop cash policies and procedures that do not (adequately) control the identified risks, you have a material weakness.  Improve your accounting procedures for internal control and you demonstrate Sarbanes-Oxley compliance.

Bizmanualz Accounting Policies and Procedures Reduce Sarbanes-Oxley Compliance Costs

Sample accounting policies and procedures serve as a model, or framework, for your own accounting policies and procedures.  The CFO Accounting Policies and Procedures Manuals set contains 239 procedures you can use to address the ten accounting cycles.

SEC Chief Mary Schapiro recently stated that “there will be no further Commission extensions.  It is important for all public companies – and their auditors – to act with deliberate speed to move toward full Section 404 compliance.”  Although legislation has recently been introduced to permanently exempt non-accelerated filers from Sarbanes-Oxley Section 404(b) compliance, there’s no guarantee that Congress will act or that the public won’t demand better information and you won’t need to comply with 404.  Besides, having an effective system of internal controls makes good business sense.

Using prewritten procedures will save you hundreds — possibly thousands — of hours in researching, writing, and implementing accounting policies, procedures, and internal control for Section 404 compliance.  Save even more time implementing additional internal controls for sales and marketing, security, disaster recovery, and ISO 9001 compliance using the CEO Company Policies and Procedures Manuals.  Download free samples of our procedures and judge for yourself.

Get a Handle on Your ISO 9001 Required Records

Clause 7 “Product Realization” (recall that we can substitute “service” anywhere the word “product” occurs) covers the spectrum from product development (literally from the moment an order is taken or a product conceived) until the product is shipped to the customer.

Besides understanding and complying with the “shall statements” in Clause 7 (as we discussed for Clause 5 and Clause 6), a key element to complying with ISO 9001 Clause 7 is getting a handle on the required records.  A lion’s share of the ISO 9001 required records (14 of 21) come from Clause 7.  These include

• Clause 7.1 Planning of Product Realization – 1 record
• Clause 7.2 Customer Related Processes – 1 record
• Clause 7.3 Design and Development – 5 records
• Clause 7.4 Purchasing – 1 record
• Clause 7.5 Production and Service Provision – 3 records
• Clause 7.6 Control of Monitoring and Measuring Equipment – 3 records

Some organizations seem to struggle with all the required realization records.  For example, I recently worked with a company that took great effort and pride in their meticulous record keeping.  The problem was, however, that they did not understand how the records they kept met the record requirements of the ISO 9001 QMS.

As you create a QMS to comply with Clause 7, there are two things to always keep in mind:

1)  What do I need to do to comply with the requirements?
2)  How can keeping these records help my organization?

In order to comply, particularly in terms of records, an organization has to reflect on the specific requirements listed, as well as on how this record fits in with the unique ways each organization fulfills product realization.  Ensuring you comply with the spirit and letter of the ISO 9001 Standard will require taking some time to understand the requirements and to reflect on your realization processes.

Understand Specific ISO 9001 Requirements for Records

As we know, the ISO 9001 QMS requirements are not very detailed or specific when it comes to record keeping.  It is this generic approach that gives ISO 9001 the flexibility to be applied to disparate organizations.  So each organization can define exactly what form the records will take, and what kind of information will be collected.

But there are some specifics associated with each record that one must be aware of in order to comply with ISO 9001 requirements.  For example, Clause 7.3.4 states specifically that the design and development review records shall contain the results of the reviews and any necessary actions.  So, early in the effort to create records to comply with Clause 7, an organization must have a clear picture of what records are needed and what specifically must be included in the record.

Using ISO 9001 Records for Continual Improvement

While compliance is important, the whole goal of implementing ISO 9001 is to improve as an organization.  So how you use the records to help the organization improve is equally important.  The point of keeping records is not because ISO says we need to, or even because auditors want to see them (though it does, and they will…).   In several places of the ISO 9001 QMS requirements (i.e. Clause 4.1e) the standard requires organizations to monitor, measure, and analyze processes.  Records play an important role in that they are used to capture data and information about processes that are used for monitoring, measuring, and analyzing.

This is what record keeping is really about.  Using them to understand your processes and learn ways to improve.  Are we capturing the customer requirements properly and avoiding rework, scrap, and other waste?  Are design reviews generating actions that improve the product and meet requirements?  Are design projects on schedule and budget or do they consistently suffer from scope creep or delays?  Are process objectives being met?

Employ the ISO 9001 Process Approach

One useful way to get a handle on realization records is to consider product realization as a set of processes, and then identify where, as part of the process, a record is generated and what record requirement is fulfilled.  Ideally, realization processes, like all processes, should have key objectives established that measure effectiveness.  The goal should be to collect information in the records that relates to process effectiveness.

Your ISO records should tell you a lot about how effective your processes are operating.  If they don’t, then perhaps you are meeting bare minimum ISO requirements by generating the record, but you’re not meeting the spirit of the ISO standard by using the QMS for continual improvement.  And the continual improvement philosophy applies to the records themselves.  If you find that you are not getting useful information from your records, then change what you are doing.

Try to Simplify ISO Compliance

With so many required records from Clause 7, it also important to look for ways to streamline and simplify the record keeping.  Do you need 14 different forms?  For example, perhaps a general form can be used for all the design and development records.  For the calibrations records, it may be easier to track the calibration of monitoring and measuring equipment electronically in a database or spreadsheet instead of on paper.

As always, the best approach is to start simple and build on it as you identify needs and areas for improvement.  It is easier to build on a basic, simple system than it is to strip unnecessary elements from an overly complex system.

Using and Auditing ISO 9001 QMS

Now we have covered all the clauses of the ISO 9001 QMS that have requirements.  If you build your ISO compliant QMS in phases over a period of time it becomes less daunting.  Obviously, we could not cover all the elements of compliance, but hopefully we have delineated a path to compliance in manageable steps.

If you recall, earlier we only created drafts of some system procedures.  As you use and review your system, you should get the procedures in finalized forms and release them into document control.  To verify and improve the QMS you should regularly audit it (including records, documents, and improvement activity).  But the most important thing you can do with you ISO 9001 QMS is use it.  Communicate the QMS to the staff; involve them with reviewing procedures, keeping records, and conducting process reviews.  Develop an internal auditing staff who understands the requirements and the organizational goals in employing ISO 9901.

Once you feel comfortable that your ISO Quality Management System is operating and functional, you are ready to contact an ISO 9001 Registrar and set up an audit for certification.  If you need help building your ISO 9001 QMS, we have products and consulting services that can help.  We also offer public and on-site ISO 9001 Internal Auditing classes that can help get the most out of your continual improvement efforts.

• Become familiar with the ISO 9001 QMS Requirements
• Identify key QMS processes and their interaction
• Create drafts of the Quality Manual, Quality Policy, and Policy Objectives
• Write a draft of Document and Record Control Procedures

After completing these tasks (delineated in Clause 4 of the ISO 9001 Standard), the next crucial step in implementing an ISO 9001 QMS is to create the continual improvement processes as described in Clause 8 of the standard. In terms of Clause 8 continual improvement primarily consists of Customer Satisfaction, Internal Auditing, and Corrective Action, and Preventive Action.

Sketch Out the Continual Improvement ISO Processes

After putting the basic components of the general QMS requirements in place during phase 1, in phase 2 the focus is on continual improvement because it is the continual improvement processes of the ISO QMS that provides value and benefit to your organization. So, in order to gain these benefits as soon as possible, start putting these processes in place and practicing them.

Much as was described for the critical QMS processes in phase one, sketch out your continual improvement processes. Ask questions such as: How will using Corrective Actions and Preventive Actions (CAPA) most benefit the organization? Who are the process owners? What are inputs and outputs? Are certain departments integral to CAPA or should everyone get into the act? Of course, when resolving such questions, it is a good idea to involve the ISO Strategy Team. They can provide perspectives from various departments or segments of the organization.

Drafting the ISO 9001 Procedures

Once you have a continual improvement process sketched out, write a draft procedure. Remember, it is better to document a process in the way you are capable of doing it, not how you think it should be done in a perfect world. After you have a draft procedure, train the involved staff and start executing the process. You don’t have to wait until the procedure is finalized or the ISO QMS is fully implemented to start executing Corrective Actions, for example. This is a great opportunity to learn and implement practices that are effective while ditching things that don’t work and while you can easily update your draft documentation.

One important note: I mentioned writing procedures. Corrective Action, Preventive Action, Non-Conforming Material, and Internal Audit are required procedures for an ISO 9001 QMS. You don’t have to write a procedure to describe every process. In fact, the most common mistake organizations make when implementing an ISO 9001 QMS is over-documenting: writing too many procedures that end up not followed, not used, not updated, and not correct. So it is important to note that I list writing procedures as an important step for these continual improvement processes because the ISO Standard requires them. (Note the emphasis on continual improvement in the ISO 9001 requirements it involves four of the six required procedures. There are also key required records associated with these processes.)

Focusing on the Continual Improvement Processes

Corrective Action is the process you use to fix the root causes of problems. They could be internal process problems (office or production), product problems, or even problems with the QMS. There are some basic steps that have to be included: fix any current problems, investigate root causes and solutions, make necessary corrections/improvements, and then verify they are effective and the problem doesn’t reoccur.

Preventive Action is the process of making improvements before a problem occurs. Frequently organizations struggle with Preventive Actions; perhaps because they envision preventive action as being something big or major. That doesn’t have to be the case. Small improvements prevent problems as well. So the real goal for the preventive action process is to create a system that documents all improvements – big and small.

Nonconforming Product is where you log defects found either in receiving inspection, manufacturing, or customer returns. Each defect needs to be logged, isolated from good product, and a disposition determined, which could lead to a corrective action.

Internal Audits are used like instruments to measure the effectiveness of the ISO 9001 QMS. Of course, your internal audit team will need training and to understand the ISO 9001 QMS Requirements, so an Internal Auditor Class may be helpful.

With an internal audit procedure and audit training you can start auditing the ISO 9001 QMS even though the system isn’t fully implemented. But it provides ISO 9001 auditing practice and generates required audit records. The audit findings are also entered into the corrective action process so we can practice doing corrective actions.

Since the ISO 9001 QMS is still being implemented, some records and documents may not be available for audits. Auditors can start, however, by auditing processes put in place implementing Clauses 4.1 and 4.2 in phase one. We can use the internal audit program to continually improve our growing ISO 9001 QMS.

Additional ISO System Components of Continual Improvement

Other pieces of continual improvement include customer satisfaction and analysis of data. While there are no required procedures or records associated with them, you still need to have defined processes for capturing data about customer satisfaction, and for regularly collecting and analyzing data from the critical processes identified in the Quality Manual. After all, improvement is the whole point of implementing the ISO 9001 QMS, and one key to improvement is to set objectives for your processes and then regularly compare actual results to the objectives, and then taking action to correct deficiencies.

Now you have completed phase two of implementation by putting in place your continual improvement processes. Next week we will cover phase three: implementing Clause 5-Management Responsibility and Clause 6- Resource Management.

St. Louis, MO – February 27, 2009 – Bizmanualz, Inc., a business publications, training and consulting company based in St. Louis, MO, today announced the launch of a completely redesigned version of its ISO 9001 QMS Internal Auditor Training course.  This ISO training course demonstrates requisite auditing skills to beginning auditors, and is also valuable to experienced auditors and quality managers looking for a refresher course or the opportunity to discuss innovative approaches.

The redesigned two-day ISO auditor class focuses on helping participants understand the criteria, the skills, and the activities required to be an effective internal auditor as part of an ISO 9001 Quality Management System.  The class is offered regularly at the Bizmanualz Learning Center in St. Louis. It can also be conducted privately on-site for organizations that would like to hold group internal auditor or quality auditor training sessions in-house.

“We had been using the previous design for several years now, and we have continually improved and updated it,” said Don Reed, Technical Writing Director at Bizmanualz and the primary designer/instructor for the class. “We have learned so much, however, through our experience teaching the course and through carefully listening to student feedback, that we felt it was time to start from scratch and use everything we have learned to completely rework the course.” 

The ISO 9001 Internal Auditing course is currently the most popular training class offered by Bizmanualz.  The totally redesigned Internal Auditor class was conducted for the first time on February 9 & 10 at the Bizmanualz to a great success. The participants responded very positively to the new approach and the reworked materials.

“The newly redesigned ISO 9001 Internal Audit Class focuses on giving the participants exactly what they want and need from an ISO 9001 Internal Auditor class: an interactive, seminar-style discussion along with real world examples and exercises,”  said Chris Anderson, Managing Director of Bizmanualz. “For example, we no longer use PowerPoint because we just don’t feel it creates the interactive environment that participants expect and deserve.”

Mr. Reed agrees. “Professionals prefer to learn in smaller classes with an atmosphere that encourages discussions and questions; where participants share their experiences and challenges. This produces a better learning experience for everyone.”

In this auditor training course, students will learn the basics of an ISO Quality Management System, as well as how it can drive organizational improvement.  Students will become familiar with using the ISO 9001 Standard as criteria for auditing, the importance of an audit program, along with basic auditing principles.  Most importantly, however, students will learn the step by step methods of conducting an audit, and participate in an audit of a QMS process. ISO 19011 – Guidelines for Quality and Environmental Auditing is used for fundamental guidance on auditing principles and methods. Plus, all participants receive a free copy of the ISO 9001:2008 Quality Management System Requirements.

Bizmanualz schedules the Internal Auditor Training Course at least once every  three months.  Please visit the Bizmanualz website at Bizmanualz.com to register for the class or to see a detailed course description and a upcoming training schedule

Bizmanualz also offers strategic process improvement services for growing businesses as well as a range of quality training classes. In addition, standard operating procedures manuals from Bizmanualz have helped thousands of companies develop policies and procedures to standardize their core business processes and implement best practices.

Operational Assessment as a Management Tool

Operational assessment is one way to manage your way out of such a mess. With operational assessment you work your way through a logical sequence of steps to get your department back on track. The first step is to understand what the ultimate goals of the department should be, followed by firmly grasping what the department is actually doing. Now you can use this information to help get the department started down the right path.

The assessment begins by understanding requirements. Who are your customers;they could be internal customers or external customers or a combination;.it doesn’t really matter. Identify the customers and then identify clearly what they want. You may think you know;.but have you asked them lately? Technology is changing methods all over the globe. Are you really sure you know exactly how the customer is using the product? A combination of simple surveys and in-depth interviews can help you collect the needed information.

Know Your Customer!

This leads to another important concept;.you want to talk to your customers regularly, but you also may want to watch and observe how your customers use your product. They might not really know specific pieces of information to share with you that would be helpful, but observation could make certain changes ; changes that will make it easier for you and your customer. These kind of efforts drive satisfaction and loyalty, but they also improve effectiveness and efficiency.

Taking the perspective of the customer leads to knowing what the customer wants and values. This information is very valuable for operational assessment. Are you focusing on doing things that add value to the customer? Are you wasting time, effort, and/or material doing things the customer doesn’t care about, or worse, doesn’t want to start with? Focusing on doing the things the customer wants and eliminating wasted efforts is key to creating an effective and efficient operation.

The Importance of Measurement

Now that you know what is important; how well are doing in these areas? The next important step is creating clear objectives;.specific measurable items that provide key performance information. Collecting data on performance should be part of everyone’s job. It is easy, however, to get off track and create complicated measurements that generate difficulty and confusion;and in turn causes departments and staff to lose focus, not gain it. The key here is to find objectives and measurements that are meaningful and not overly difficult.

Frequently departments are collecting data that is similar to what is needed, it is just not being collected or employed properly or fully. Finding ways to easily collect important performance data without encumbering or over burdening an already busy staff is one of the biggest challenges of a manager, but a very important one. Don’t be afraid to modify or change things that aren’t working. Pay attention to what is happening with the data and be flexible. If the data is too difficult to collect or is not being employed properly, it won’t be long until the staff realizes that collecting data is not really important, and they will abandon it.

Now that you are focused on clear objectives that are important to the customers and you have ways (measurements) of knowing how well you are doing in these areas; the assessment part becomes easy. Where are the gaps? What gaps should have priority? Trying to fix everything at once can cause the staff to lose focus again.

Getting staff buy-in also bears mentioning here. As always with good management – honest communication is the key. Be clear that the goal of using assessment to improve the department is not to “fix” people; it is to improve the system and the environment that people function and operate in. The ultimate goal is to make a better system that will make things easier and more clear for the staff. If you can communicate and follow through with these goals, and not fall into the trap of using measurements for “gotcha’s,” then most people will follow your lead and fully participate.

Closing the Gap

Those are basics of operations assessment. Figure out the gap between what you should be doing versus what you are doing, then create action plans to address the gap. We use a similar method when we help companies build or improve their ISO 9001 Quality Management System. The first step is to do a Gap Assessment that clearly identifies what they should be doing to be in complete compliance with the ISO 9001 Standard versus what they are actually doing. Next is a clear plan of action that closes that gap between the should and the actual; so that soon what they are actually doing is what they should be doing.

We also apply these principles to our Well-Defined Processes training class, where a key feature for the class is to identify clear goals and objectives for processes, and then using measurement and review to bring processes under control. The same principle applies whether the process is on a factory floor or inside an office. Our ISO 9001 Internal Auditing class also uses assessment principles. There is an old saying that states, “To know which direction to go you first need to know where you are at.” Operational assessment puts legs to that idea.

Frequently the ISO 9001 Standard is perceived to be complicated and heavy on documentation requirements. These perceptions are not necessarily accurate. The ISO 9001 Standard is actually very straightforward with simple requirements for procedures and records. The ultimate goal, however, of implementing ISO 9001 should be to create an organization that continually improves.

Why Implement an ISO 9001 Quality Management System?

Why should your organization use the ISO 9001 Standard? An honest reply can say a lot about how effectively the standard can improve your business. If you are using the standard as a marketing gimmick (a plaque on the wall; a logo on a website), or just because a customer requires it, then the standard will be a burden, not a benefit. If the honest reason for implementing the standard is improvement, then it can truly help your organization become better.

Read more about why implement ISO 9001;

Using ISO 9001 Makes Your Organization More Competitive

Implementing the ISO 9001 Standard as a Quality Management System can improve your business. In fact, that is why it was created. It is broadly recognized as a proven method of using a systems and process approach to make your business better. It can make your organization more effective, and therefore more competitive.

Read more about using ISO 9001 to become more competitive;

Improving Organizational Culture by Implementing ISO 9001

Another important advantage of implementing the ISO 9001 Standard is improved organizational culture. Faithfully employing the standard can actually change how people feel and behave in the organization, and how its members interact with peers, subordinates, and superiors.

Read more about improving organizational culture through ISO 9001;

If you are interested in using ISO 9001 to improve your organization – Bizmanualz can help. We offer training for well-defined processes based on the ISO 9000 continually improving process approach and for effective internal auditing (a key facet of the ISO 9001 Standard). We also provide customized consulting engagements to help you start down the path of effective ISO 9001 implementation or improve an existing system. We also have an off-the-shelf manual the assist you is creating the documentation needed for an ISO 9001 Quality Management System.

On That Note

Answer to this month’s question:

Implementing the ISO 9001 Standard can improve your organization in several ways. Most importantly, it creates an environment where reflective objective setting and measurement becomes the norm. This is foundation for improvement. Contrary to popular belief, ISO 9001 can actually help you streamline your document and record system and make it more effective. Finally, using the ISO 9001 Standard can improve your competitiveness and your organizational culture.

Please feel free to contact us with any questions or comments. Also, please let us know if you’d like any specific topic addressed in our future articles.

Implementing ISO 9001 or Certification?

As mentioned in our previous article, you may notice that I am using the phrase “implementing ISO9001” as opposed to “becoming certified.” Gaining a certification is nice, but it should not be the ultimate point of using the standard. Organizations who view gaining certification as the reason for using the ISO 9001 are missing a great opportunity for improvement. As frequently stated, ISO 9001 is a journey, not a destination.

If you sincerely implement the ISO Standard as business improvement tool, then gaining certification sometime down the line, if you choose to do so, should be a simple step.

In the last article we attempted to address a common misconception about the ISO 9001 Standard – that it is a document nightmare. Actually, there are very limited document requirements in the standard. Having hopefully dispelled that myth, let’s discuss how implementing ISO 9001 can help your organization become more competitive.

What causes problems in your organization? Wasted efforts due to changing demands and requirements? The lack of a strategic vision that helps the organization pull in the same direction? Poorly defined processes and poorly defined responsibilities? Supplier problems? These are common issues that can be improved using ISO 9001.

Using the Process Approach

One of the first steps in implementing ISO 9001 is to define and determine the core processes of the organization. Imagine the benefit of simply conducting this reflective exercise; identifying what is important to the organization and to its customers. When you attach goals and objectives to these processes and communicate them throughout the organization, suddenly everyone understands what is important and what they should be focused on and working toward.

Framed this way, we can see how using the process approach to understanding organizational functions can produce positive results. Now consider using a continually improving process approach, another foundation of ISO 9001. With a continually improving process approach;

• A clear plan is created for how each process should be conducted (Plan)
• Process activities are carried out while capturing key information (Do)
• Process results are regularly reviewed, comparing actual results to the plan (Check)
• Lessons learned as a result of reviews are used to improve performance (Act)

The Most Important Person in Your Business – The Customer

Another key element of the ISO 9001 Standard that can improve competitiveness is in understanding customer requirements. Several of the ISO 9001 required records relate to capturing and reviewing customer requirements. How many times has your organization been caught off-guard due to a lack of understanding of what your customer wants and needs? How many more times do you want it to happen? Implementing the customer focus clearly spelled out in ISO 9001 (along with the continually improving process philosophy) will make it happen more infrequently, until perhaps it happens rarely or never at all.

The earlier that misconceptions or mistakes in customer requirements are caught, the easier and cheaper it will be to correct. I am sure most of you have heard of the 1-10-100 rule. (Mistakes caught in production are 10 times more costly to fix than if they were caught in design, and mistakes caught by the customer are 100 times more costly to fix.) Improving the focus on understanding customer requirements as called for by ISO 9001 provides two important benefits: 1) significant savings through catching errors and oversights sooner; 2) increased customer satisfaction because customers are highly pleased with the products and services they buy. Just imagine how being highly effective in these two areas can improve the competitiveness of your organization.

Supplier Relationships Enhance Effectiveness

Along with a customer focus, the ISO 9001 Standard emphasizes supplier evaluation and relationship based on a total cost perspective. Sure, the union shop across town may not be able to compete on a per unit price basis with a third world supplier, but what about when you incorporate total costs? How expensive is it to deal with delay and dissatisfaction caused by defective or wrong material, especially if it takes 4-6 weeks for replacements to arrive due to great supplier distances? What about the cost of sending quality and purchasing managers half way around the world to deal with supplier issues, not to mention the lost time that they could have doing more productive and valuable tasks?

Suppliers are an integral part of many businesses, and creating strong relationships with good suppliers while avoiding relationships with bad suppliers provides a firm competitive advantage. If you implement the ISO 9001 Standard your organization can discern good suppliers from bad suppliers because regular supplier evaluation is a requirement.

If you believe that defining and continually improving key processes, understanding what your customers want, and determining who the best supplier is on total cost would not help your organization be more competitive, then perhaps the ISO 9001 isn’t for you. For the rest of us, well;.excuse me;.I have some processes to define.

Meanwhile, if you are interested in learning more about using ISO 9001 to improve your organization then Bizmanualz can help. We offer a range of products and services from off the shelf manuals and ISO 9001 Internal Auditing courses to consulting engagements that build or enhance your ISO 9001 Quality Management Systems. We believe that ISO 9001 isn’t just about getting a plaque;.it is about getting better.

We have helped a number of clients build a QMS that complies with the ISO 9001 Standard, and we have assisted them in gaining ISO 9001 Registration, We have just recently, however, started our journey to gain ISO 9001 Registration. The initial reaction to the concept of gaining certification was “we are just too small.” Eventually, however, came the realization that any size or type of organization can benefit from the philosophies established by an ISO 9001 QMS.

Although we are still early in the journey, we have already found significant benefits from developing a QMS that complies with ISO 9001.

Customer Focus

While we never considered understanding our customers a weakness, implementing the ISO system with its routine internal audits has allowed us to identify several important areas for improvement. ISO 9001 has a high level of emphasis on understanding and documenting customer needs, and improving some of our customer requirements processes was in order to meet that high standard. We are currently improving our processes to ensure all meaningful customer feedback is captured and understood.

Not all of our product lines had the same issues with customer focus. For example, our policies, procedures and forms manual product line had strong efforts to capture post-sale customer satisfaction, but was lacking in efforts to use customer feedback in making decisions such as which type of product to develop next.

Conversely, in our consulting product line, great efforts were taken to understand client needs and expectations prior to starting the consultation. But more effort is needed to measure customer satisfaction levels after the engagement is complete. Using a QMS based on ISO 9001 is helping us close these important gaps.

An Innovative Approach

We have also created a learning experience through taking a unique approach to implementing an ISO 9001 QMS. We are trying to build an ISO system that minimizes documentation, and even further minimizes paper documentation. Our system will contain the minimum number of required procedures and forms, and the ones we are creating will be viewed and used electronically. A strong focus on employee training, visual workplace, planning and goal setting enables us to take this minimalist, yet fresh approach.

Instead of an internal control system that consists of static paper, we envision a system of dynamic training, on-line information, and a visual workplace. Experimenting with and developing a innovative approach to building a ISO 9001 QMS will help us better serve our clients seeking assistance with ISO 9001, even those who want to build a very traditional system.

Continual Improvement

Continual improvement is a cornerstone of how a ISO 9001 QMS can help your business. We certainly take that philosophy of continual improvement to heart. For every department and functional area, we set S.M.A.R.T. objectives that are meaningful to our internal processes and to our customers. Then we constantly measure and reflect on our performance.

This kind of activity, especially done in the positive spirit of improvement (as opposed to the negatives of punishment and retribution) is a crucial activity for meaningful business evolution. While we were always strong in this area, the journey of becoming ISO 9001 registered has improved our efforts.

Internal auditing is also an important facet of our continual improvement. All of the Bizmanualz staff has received formal internal auditor training, and over half of the staff are ASQ Certified Quality Auditors and have successfully completed the IRCA-certified ISO 9001 Lead Auditor course. Of course, we are putting this training to use through an aggressive internal auditing program that regularly measures our effectiveness at designing and executing the QMS.

A Journey of Goals

While achieving ISO 9001 Registration is an important goal, it is really just a step on an even more important journey. After we achieve ISO 9001 Registration, we will work toward achieving the Missouri Quality Award, and then move on to the Malcolm Baldridge Quality Award. Continually setting goals and working toward them can keep your business and your staff motivated and energized, and your business moving forward. Standing pat should never be good enough. What goals are you setting for your organization?

We will keep you informed on how we are doing in our ISO 9001 Registration journey; we hope to gain our ISO Registration in the first quarter of 2008. If you’re interested in learning more about how ISO 9001 can improve your business, keep reading our regular emails. In early 2008 we will present a series of articles that explain in detail why you should consider implementing the ISO 9001 QMS.

We have had a great 2007 at Bizmanualz, with considerable successes for all three product areas (training, off-the-shelf manuals, and consulting) in our mission to help businesses and organizations discover and follow the path to success.

Policies and Procedures Manuals

The biggest news of 2007 in our off-the-shelf manual product line was the release of the Sales and Marketing manual. This manual applies the controlled and continually improving process approach to sales and marketing functions, including setting process plans based on proven best practices, setting and measuring key performance metrics, and continually improving processes based on past results. The Sales & Marketing manual is available individually, and it was added to our very popular CEO Company Policies Procedures Series.

We have also made significant progress on our next Policies, Procedures & Forms manual offerings—a Finance manual. The controlled and continually improving process approach is applied to treasury management. The Finance manual will be available in early 2008.

Process Improvement Training

The biggest news in regard to training is the addition of the new Bizmanualz Learning Center. It is an improved area for conducting our wide variety of training programs that is more convenient, comfortable, flexible, and includes a state of the art media system. The Learning Center also has several breakout rooms to facilitate group exercises that stimulate real world situations; a staple of our training curriculum.

We have also redesigned and improved several of our training courses, most notably our ISO 9001 Internal Auditor course. This is quickly becoming one of our most popular classes, as more and more companies recognize the important role internal auditing can play, not only in meeting compliance, but with continuous improvement as well.

We have also improved our Well-Defined Processes class to include more emphasis on properly documenting your processes with well-written procedures, including expanded sections on effective document design and formatting, document control, and writing.

Consulting Services

Through our consulting services, we have assisted several facilities achieve ISO 9001 Certification in 2007, and helped several others put themselves in a position to gain certification in the near future. We helped start-up companies define and improve their key processes and we assisted mature companies experiencing rapid growth meet the needs of their swiftly expanding number of customers.

And we helped clients of all kinds and sizes identify and eliminate waste, improving processes in the office and factory floor to release capacity and free up cash tied up in unproductive inventory and accounts receivable.

Looking Forward to 2008

For 2008, we’re looking forward to doing it all again. Expanding and improving our products, services, and facilities in order to help your business or organization to expand and improve. We look forward to helping you.