Objectives:

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Objectives
Background

• To develop and implement Quality Audit within The
  XYZ Company

Effective execution of our requirements through
the consistent execution of quality audits
throughout manufacturing
Impact
Assumptions
The Quality of our products and processes is a
critical component of the XYZ Company Compliance
to our performance requirements will deliver
products meeting our customer and consumers needs
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DMADV Storyboard
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Auditing Project Objective

• To develop and implement processes for Quality
• Audits of
• All facilities and operations on an annual basis
• Suppliers Major Product Suppliers

Auditing Project Opportunity Statement
Monitoring and refining our quality assurance
processes are critical elements to maintaining
the quality standards of our products as expected
by our customers and consumers. There is an
opportunity to achieve greater consistency in our
governance responsibilities through an audit
program addressing the basics of the
manufacturing processes.
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Preliminary Project Objective

• By January 1, 2005, To develop and implement
  processes for
• Quality audits of Manufacturing facilities
• Environmental and Occupational Health and Safety
  Audits for manufacturing facilities

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Audit Program Process Macro Flow
Processes
Distribution
Req./ Contract
New Product Introduction
Customer Service
Core
Marketing
Logistics
Production
Planning
Sales
Communicate Business Plans
Execute Plans
Evaluate Performance
Develop Plans
Business Environmental Data
Level 1
Execute Audit Plan
Report Audit Performance
Determine Audit Needs
Secure Resources
Level 2
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Audit Level 2 Process Project Scope
Auditors
BU/QD
Supplier
Operating Division
Schedule
Prepare
Collect information and protocols
Complete Logistics
Conduct
Conduct on-site evaluation including audit
close-out
Confirm findings
Report
Issue Audit Reports to Facility and Division
Issue Audit Summaries
CAP
Develop and submit CAP
Execute CAP
Review CAP
Project Scope
Audit Close-out Confirming the status of the
corrective actions taken against the findings of
previous audits.
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Audit Project Interview Questions

1. For our team to get a common understanding,
   please tell us how you interpret the term
   Quality Auditing?
2. What do you see as the attributes of a successful
   Quality Audit program?
3. What are the top 3 attributes in order of
   importance?
4. How would you measure whether a Quality Audit
   program meets your expectations on these top 3
   attributes?

Identified key attributes of the program

1. What are your top 3 issues related to
   Manufactured Quality in your organization today?
2. Do you see a Quality Audit program helping to
   resolve these issues?
3. If so, how do you see a Quality Audit program
   helping to resolve these issues?

Identified needs arising from current challenges

1. What information should a Quality Audit program
   generate for your organization?
2. How will this information be used within your
   organization?

Identified informational needs and attributes

1. Is there anything else you would like to share
   with us?

Catch all
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Audit Project VOC Analysis

• Extracted solutions, issues and needs from
  interviews
• 253 need statements transcribed to Post-it notes
• Post-it notes color coded by customer segment
• Top needs from each customer highlighted
• Needs affinitized and sorted using tree diagrams

All customers needs and priorities were similar
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Audit Program Project Track
QFD (Quality Function Deployment) Track selected
for current project
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Audit Project New Process Objective

• To develop and implement a program for Quality
  Audits of all Manufacturing facilities and
  operations on an annual basis that
• Is reliable
• Audits the right things in the right places
• Has actionable outputs

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Audit Project Design Ideas
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Audit Program QFD
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Audit Project Trade-offs
Inclusion of Division QA in audit team and
Convertible Rating System conflict with other
design elements
Top 6 design elements have no conflicts and are
synergistic
Potential synergies and conflicts between design
ideas identified
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Audit Program FMEA
Routine for considering the incorporation of
local needs into Audit program
Mix of Internal and External auditors enables
annual audits of all manufacturing operations
Top design requirements tested for failure and
countermeasures incorporated in design
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Audit Program Process Flow
Audit planning designed in accordance with ISO
19011
Report Audit Performance
Determine Audit Needs
Execute Audit Plan
Secure Resources
Level 2
Establish Current Status
Identify Audit Type
Identify Audit Team Required
Level 3
Schedule Audits

• Identify number of plants to be audited and
  location
• Establish maturity of facility and rank
  operations based on potential risk. (Based on
  Division assessment against established criteria)
  

• Determine audit type required based on facility
  maturity
• Determine additional auditing needs (obtained by
  use of the collaborative routine established in
  the GAP)
• Determine the preferred audit timing from the
  Divisions

• Select the audit team
• based on
• Qualification
• Right process knowledge
• Location of auditor
• Language ability
• Availability
• Lead Auditor

• Develop audit schedule
• Schedule systems audits based on auditees
  readiness and auditor availability
• Firm scheduling of compliance audits (prioritized
  based on risk profile)
• Draft Schedule indicates
• Availability of auditee
• Duration and type of audit
• Timing of audit team who will conduct audit
• Confirmation of schedule
• Communication of final schedule

• IT Enablers
• Searchable Auditor and Operation Databases
• Scheduling Software

How Much 80 of time match audit type to
auditee 100 match of audit team on process
knowledge In 2004 at least 50 of audits
conducted with fully certified auditors 2005
onwards 80 of audits conducted with fully
certified auditors
Firm scheduling routines to have the right team
at the right location conducting the right
audit
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Audit Program Process Flow
Selection, training and evaluation of auditors
consistent with ISO-19011
Report Audit Performance
Determine Audit Needs
Execute Audit Plan
Secure Resources
Level 2
Certification Maintenance
Certification
Training
Selection
Level 3
Periodic re-training and evaluation

• Select using criteria for
• Personal Attributes
• Education
• Related experience

• Train auditors in
• Audit principles
• Audit execution
• ISO Lead Assessor
• Process Technologies
• Business Processes
• Quality Management System (ISO-9000)
• Laws and regulations

Certify auditors Certification criteria

• How much
• By 31 January, 2004
• 80 of internal auditors recruited/transitioned
• 100 of external audit service providers
  identified

• How much
• 80 of auditors trained by end of June 2004
• 100 of auditors certified to ISO Lead Assessor
  by 31 January 2005

• How much
• 80 of auditors and 100 of lead auditors
  certified
• Certification criteria by 31 December 2004

How much Maintain steady state of 80 of
auditors and 100 of lead auditors certified
Auditor Certification Program - Internal and
external auditors have the right skills and
competences
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Audit Program Process Flow
Report Audit Performance
Determine Audit Needs
Execute Audit Plan
Secure Resources
Level 2
Audit execution designed to meet ISO-19011
guidelines
Level 3
Perform Plant Audit
Plan Plant Audit
Standardized protocol module for planning,
execution and reporting of individual audit
outcomes
Standardized modules to evaluate compliance of
processes and systems during individual audits
Includes Decision criteria and process for
consistent ratings.

• IT Enabler
• Electronic Protocol Distribution

• How Much
• 100 of 25-30 Compliance modules completed by
  January 1, 2004
• 100 of 14 Systems modules completed by June 1,
  2004
• 100 of Manufacturing Operations audited by 31
  December, 2004

Sub-Team with geographic representation, to
compile, review and standardize modules.
In-depth protocols and decision criteria deliver
consistent and fair audits
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Audit Program Process Flow
Audit reporting activities designed to meet
ISO-19011
Report Audit Performance
Determine Audit Needs
Execute Audit Plan
Secure Resources
Level 2
Summarize Audit Data
Communicate Detailed Audit Findings
Communicate Summarized Information
Level 3

• Incorporate reporting of audit information into
  established management routines for Quality
  performance at the BU level. Information can be
  used to drive resource allocation at the BU and
  Division level.
• Audit summary provided to BOD. Information will
  be used as input to resource allocation, and
  greater understanding of the risks in the
  organization.

• Detailed Audit report issued to Auditee that
  identifies critical and systemic risks
• Auditee uses report information to drive program
  improvement
• Formalized communication of high risk findings to
  appropriate management levels.

• Gather, analyze and trend data to create a
  summary report that includes identification of
  high risk issues, status of corrective action,
  successful practices and learnings.
• Audit summary to provide comparative data of
  Division / BU performance against our performance.

• IT Enabler
• Searchable Audit report Database

How Much Provide bi-monthly reports for BOD
meetings provide monthly reports to Executive
Committee, Quality Division and BU/Vision heads
by February 5, 2004
Actionable audit information available - Auditee
to BOD
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Audit Program Detailed Design Ideas

• Detailed design ideas related to the process flow
  generated through
• High level design review with extended team
• Surveys Quality Managers)
• Idea generation within the Core Team

QUALITY AND TECHNICAL Audit SURVEY As you are
aware, a team under the sponsorship of Jim Power
is working to design a Quality Audit program for
implementation beginning January 2004. The
immediate focus is the program design for audits
of Manufacturing Operations. Early on in the
project, SBU heads, Division Presidents and other
senior leaders were surveyed. Their expectations
for the program are It is reliable Audits the
right things in the right places The program
design requirements to meet these high level
needs are Certified auditors Match audit type
and audit team appropriate for the auditees
facility status, in collaboration with local
BU/Division Standardized, modular, protocols and
work aids for Systems and Compliance
audits Decision criteria and process for
consistent ratings of individual findings and
overall facility performance Audit program
certified by recognized third party to ISO
19011 Combination of external/internal audit teams
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Audit Project - Determine Audit Needs
QFD 1
High Level Design Elements
Detailed Design Options
QFD 2
CTQs
Preliminary Flowchart
High Level Design Elements
Value-Added Analysis
Productivity Analysis
Error Proofing
Final Flowchart
Detailed design options selected, flowcharted and
measures identified
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Audit Program Features of Electronic
Management System

• Document Management
• Audit program, management of procedures and
  modules, incorporating
• Document creation
• Document review
• Document distribution
• Document archiving
• (Above done with electronic workflow)

• Document revision
• Document approval
• Document control

This functionality is available with current
solutions and/or off-the-shelf software
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Individual Ratings - Revalidation Exercise

• Conclusions
• Improved consistency in applying the definitions
• Auditors did not have a good understanding of the
  findings used (and/or lack of context or
  different context)
• Most auditors did well with the audit format
• Next Steps
• Incorporate above into development of ongoing
  Auditor Training and Calibration exercises
  (already built into Auditor Development and
  Certification)

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Process Management Control System
D
M
A
D
V
Process Name Audit Primary Customer of Process Plant Management Customers CTQs Clearly ID Current Potential Risk Problems Fair Audits Outcome Indicators (Ys) Y1 of Reportable Incidents That Were Preventable Y2 of Survey Scores Indicating Dissatisfaction
Process Map Outcome Indicators (Ys) Upstream Indicators (Xs) Capturing Data Misc. Information

-Name -Numerator Denominator - Specification -Name -Numerator Denominator or Description Indicator Chart Type Physical Item to Check When to Check Who Performs Check Recovery Action -Indicator Formula -Procedures -Abbreviations -Comments
X1.1 of Audits Scheduled with incomplete knowledge on team ( of audit knowledge requirements not met in schedule / total number of audit knowledge requirements scheduled in 1 wk) P Chart Audit Plan Weekly Hub Audit Mgr HUB Mgr adjusts to get a qualified audit team prior to audit execution The team must collectively cover all the process knowledge and local knowledge required. All team members must have been trained in behavioral skills. Each audit will have 3 defect opportunities ( (1) process knowledge required, (2) local knowledge (culture, language, govt, etc., (3) behavioral skills.)



Mfg.
Manufacturer
Rev Date Change Log Describe Revisions By Apppr
1 12/30/03 B. Cappad

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Summary

• The Design was completed on schedule and full
  scale implementation began January 5, 2005
• Preliminary results indicate all CTQs will be
  met
• An estimated 2.0 million in cost saving from
  improved productivity and global contracting
• Audit process design can be created and
  implemented in 4 months