quality revolution … evolution -...

ASQ 22nd Audit Division Conference • October 10-11, 2013 • Hilton el Conquistador Resort, Tucson, AZ

Quality Revolution … Evolution

How Delightful is your Audit Program? The next step in the evolution of your audit program…

Lance Coleman, Sr.

ASQ CQA, CBA, CSSGB

[email protected]


Objectives • How do we objectively evaluate an internal audit

program?

• What are the steps needed to evolve an internal

audit program?

• Who is the auditor of the 21st century?

• What is the environment needed for this growth to

occur?


Agenda

• Introduction - Viewing the audit program through the

eyes of Kano

• Audit Program Mechanics

• The auditor of the future

• Evolving from current to future state

• Q&A


Introduction


The Kano Model – An Introduction

• The Kano model is a theory of product

development and customer satisfaction developed

in the 1980s by Profession Noriaki Kano, a student of

Kaoru Ishikawa (of Ishikawa Diagram fame). This tool

is used as a means to

• Prioritize Critical to Quality characteristics of a

product or service as defined by the customer

• Identify implicit as well as explicit customer

needs.


The Kano Model – An Introduction

The Kano diagram graphically depicts three states of

product or service delivery

• Basic Needs

• Achieving Performance

• Providing Delightful Service

Key Point:

Delivering better and better performance

“raises the bar” on expectation, yet does

not guarantee customer loyalty.


Kano Model Plot

Basic “Must Haves”


Implicit vs. Explicit Needs The way to move from performance to delight, from

the customer’s perspective is to take into account the

implicit as well as explicit needs of your customer.

• Explicit – clearly stated needs or requirements

• Implicit – implied needs or requirements

1) Sometimes implicit needs are more

important than explicit ones

2) Sometimes the customer might not

even realize what their implicit needs

are

Key Points:


The Voice of the Customer (VOC)

Voice of the Customer - Collective insight in the wants,

needs, expectations and perceptions of the customer, derived

through direct and indirect questioning. This insight is used to

match as closely as possible product or service developed by an

organization to its customers needs, both explicit and implicit.


The Audit Program Customer

Who is the audit program customer and what do they

want?

• Specific Site

• Entire Organization

• End User (Consumer)


Audit Program Evolution

There are 4 phases through which an audit program

may evolve:

• Precertification

• Newly Certified

• Beyond Certification

• World Class


Audit Program Evolution Phase 3 – Beyond Certification Phase 4 – World Class

Starting to talk to other systems

Beginning to shift focus from

compliance based to integrated

system

Action planning based on data

analysis

Higher visibility of audit results

Fully integrated with other systems

All three pillars of auditing clearly

evident

Clearly defined and appropriate

reporting strategy

Phase 1 – Precertification Phase 2 – Certified

Seeking structure and control

Backward facing

Reactive

Compliance and correction driven

“Fleshing out” the system

Data collection and reporting


Charting the path forward…


Audit Program Mechanics


The Pillars of Auditing

An audit program can be thought of as a platform

that rests on the three pillars of:

• Compliance

• Improvement

• Risk Management


Compliance

The key initial drivers of organizational improvement

are a robust internal audit and corrective action

program. One way for an auditor to verify compliance

to a QMS is to verify the 3D’s:

• Define your requirements

• Document how you will meet requirements

• Do what you document


Compliance

D.O.oR.S. and L.O.C.kS.

One good way to remember the types of acceptable objective evidence is to remember the acronym D.O.R.S.

• Documents

• Observations

• Records

• Statements


Compliance

D.O.oR.S. and L.O.C.kS.

There are four types of criteria against which to audit:

o Legal – federal, state or local laws

o Organizational – internal procedures, work instructions and specifications

o Contractual – those requirements imposed by the customer in their contract

o Standards – those requirements imposed by ISO standards on those organizations that are registered to or seeking to be compliant with them


Risk Management – Defining Risk

• Risk – combination of the probability of occurrence

of harm and the severity of that harm.

ISO 14971:2007

• Risk – the effect of uncertainty on objectives

ISO 31000:2009

• Consumer Risk – the risk of accepting a bad part as

good

• Producer Risk – the risk of rejecting a good part as

bad


Risk Management

Where does risk lie in our process?

1. Complexity of the process

2. Complexity of the product

3. Criticality of the product

4. Process location of the product

5. Newness of the product

6. Newness of employees

7. History of the process


Risk Management

How do auditors help manage risk?

1. Audit frequency

2. Sample size

3. Complexity of audit plan

4. Containment

5. Corrective action plans

6. Effectiveness verification

7. Special training


Risk Management

How do we formally integrate risk management into

the audit process?

• By tying finding classification to risk assessment

• Let finding risk dictate actions taken

• Let finding risk dictate report distribution

• Establish feedback loop to risk management

program


Improvement

Lean and Six Sigma tools can be integrated into

current audit methodology in order to develop a

more robust, value added, and continuous

improvement driving internal audit program.


Improvement

Let’s take three opportunities to incorporate Lean Six

Sigma tools into the audit program

• Value Stream Mapping

• SIPOC Diagrams

• Control Charting


Improvement Value Stream Mapping

• Value add vs non-value add activities

• Potential process bottlenecks

• Opportunities to match cycle to takt time

Receive

Product

(1)

Review

Shipping

Docs

(1)

Review

Certs &

Inspect

(1)

Label

Product

(1)

Inventory

(1)

Material

Handler

(1)

Staging

(1)

FREIGHT

TRANSPORT

COMPANY

2

PRODUCTION

oods Inventory

/ Shipping

SUPPLIER

CUSTOMER

I

TT TT

TT

TT

TT

TT

I

% Defect

Total time

NVA time

Amount/Unitsrs. 1878

1878

Cap. 1710

TPP 0.96

Emp. 15

MnHrs. 2938

Cap. N/A

TPP N/A

Emp. N/A

MnHrs. N/A

Cap. N/A

TPP 0.34

Emp. 4

MnHrs. 740

Cap. 855

TPP 1.29

Emp. 8

MnHrs. 1888

Cap. 2765

TPP 0.18

Emp. 3

MnHrs. 676

CUSTOMER SERVICE/PURCHASING Orders Orders

SCHEDULING

Lead Time/Value Added Time


Improvement

SIPOC Diagrams

• Identify implicit needs

• Identify input value streams


Improvement

Control Charts

• Trending

• Training

• Equipment Discrimination

Key Thought: The three primary purposes for

use of control charts in production are to monitor

the process, identify special and common cause

variation, and show if the process is in control

//upload.wikimedia.org/wikipedia/commons/f/f7/ControlChart.svg


The Auditor of the Future


The 21st Century Auditor

Bodies of Knowledge:

• Audit Methodology

• Quality Tools

• Standards/Regulations

• Technical Expertise

• Critical Thinking



Needed Skill Sets

• General Auditing Skills

• Metrology

• Lean Six Sigma

• Risk Management

• Root Cause Analysis

• Good Documentation Practices



Training and Educational Opportunities:

• College Degree

• External online and on site training

• Certifications

• Company Training

• Mentorship

• Conferences

• Self-study


Evolving Program Evolution


5 Steps to Evolving the Audit Program

• Assess the Audit Program

• Determine Desired Future State

• Perform Gap Analysis

• Develop Plan w/ feedback and C.I. loop

• Implement Plan


Audit Program Assessment

• Planning - 40%

• Implementation & Results – 30%

• Reporting, Data Analysis and Records – 30%

Base score of up to 100%


Audit Program Assessment – Value Add

Points/Description

+5 Observation that leads directly to $1000+

Lean savings

+2 Observation that leads directly to $1 - $1000

Lean savings

+0.5 OFI that is implemented by area

management


Audit Program Assessment – Reality Check

Points/Description (Based on External Audit Results)

-5 Each major finding against audit program

-3 Each major finding from that was previously

identified internally

-2 Each major finding against QMS

-1 Each minor finding against audit program


Summary • The three pillars of auditing – compliance, risk

management and improvement – must all be fully instated for an quality audit program to be considered truly robust.

• The auditor of the future will need to expand their skill set to include risk management, Lean and six sigma knowledge.

• The audit function is a service, and would benefit from clearly defined goals and objectives, stated from the perspective of the customer.

• Take a good look at your audit program when you return home and ask yourself, could we be doing more and if so, then why aren’t we?


Resources

• Auditing Beyond Compliance

• Author: Janet Bautista Smith

• ISBN-13: 978-0-87389-840-9

• Gembawalks for Service Excellence

• Author: Bob Petruska

• ISBN: 978-1-4398-8674-8

• www.fullmoonconsulting.com

• www.asq.org/audit


Questions?