Quality Management Principles

QUALITY MANAGEMENT PRINCIPLES


Introduction

This document introduces the eight quality management principles on which the quality Management system standards of the revised ISO9000:2000 series are based. These principle s can be used by senior management as a frame work to guide their organization towards improved performance. The principles are derived from the collective experience and knowledge of the 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.

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 enhances 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 others 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 organisation.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 organisation’s goal 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 with the organization
Innovation and creativity in furthering the organisation’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 prioritize 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,
Analyzing 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 intrested parties,

Principle 5: System approach to management.
Identifying, understanding and managing inter-related 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 organisation.
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 referance 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 the 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 cost 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 general perspectives on the quality management principles underlying the ISO 9000:2000 series. It gives an overview of these principles and show how, collectively, they can form a basis for performance improvement and organizational excellence.
There are many different ways of applying this quality management principle,
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 are supporting guidelines are given in the ISO 9000-Selection and use.




FREQUENTLY ASKED QUESTIONS (FAQ’S)


In developing this list of Frequently Asked Questions (FAQ’s), input has been obtained from experts and users of the ISO 9000 standards from around the world. The list will be reviewed and updated on a regular basis to maintain its accuracy, and to include new questions where appropriate. It is indented that this list will also provide a good source of information for new users of the standards.
What are the ISO 9000 standards?
The ISO 9000 standards are a collection of formal International Standards, Technical Specification, Technical Reports, Hand books and web based documents on Quality Management and Quality Assurance. There are approximately 25 documents in the collection altogether, with new or revised documents being developed on an ongoing basis.

Who is responsible for developing the ISO 9000 standards?
ISO Technical Committee (TC) number 176(ISO/TC 176), and its Sub-committees, are responsible for the development of standards. The work is conducted on the basis of “consensus” among quality and industry experts nominated bt the National Standards Bodies, representing a wide range of interested parties.
Where should an organisation go if it needs clarification or interpretation of the standards?
The starting point for an interpretation should be with your National Standards Body. ISO Central Secretariat and ISO/TC176 cannot accept direct request from individuals for interpretations of the ISO 9000 standards. Instead, ISO/TC 176 has established a Working Group for interpretation, with a formal procedure to provide answers to the questions that are forwarded by the National Standards Bodies. Details of agreed interpretations are now being published on the ISO/TC 176.
What happened to the 1994 editions of ISO 9001, ISO 9002 and ISO 9003?
Following extensive consultation with users and National Standards Bodies, it was agreed that the 1994 editions of ISO 9001, ISO 9002 and ISO 9003 should be consolidated into a single revised document, which is now represented by ISO 9001:2000.
What are the main benefits to be derived from implementing an ISO 9000 quality management system?
The ISO 9000 standards give organizations an opportunity to increase value to their activities and to improve their performance continually, by focusing on their major processes. The standards place great emphasis on making quality management systems closer to the processes of organizations and on continual improvement. As a result, they direct users to the achievement of business results, including the satisfaction of customers and other interested parties.
The management of an organization should be able to view the adoption of the quality management system standards as a profitable business investment, not just as a required certification issue.
Among the perceived benefits of using the standards are:
• The connection of quality management systems to organizational processes
• The encouragement of a natural progression towards improved organizational performance, via:
- the use of the Quality Management Principle
- the adoption of a “process approach”
- emphasis of the role of top management
- requirements for the establishment of measurable objectives at relevant functions and levels
- being orientated toward “continual improvement” and “customer satisfaction, including the monitoring of information on “customer satisfaction” as a measure of system performance,
- measurement of the quality management system ,processes, and product
- Consideration of statutory and regulatory requirements.
- Attention to resource availability
• The concept of a “consistent pair” of standards; with ISO9001establishing initial requirements and ISO 9004 for going beyond the requirements to further improve the performance of the organization.
• Consideration of the needs of all interested parties.
• The concept of organizational self-assessment as a driver for improvement (see ISO 9004:2000)

What benefits are there to an organization implementing ISO 9004?
If a quality management system is appropriately implemented, utilizing the eight Quality Management principles, and in accordance with ISO 9004, all of an organization’s interested parties should benefit.
For example:
Customers and users will benefit by receiving the products (see ISO 9000:2000) that are:
Conforming to the requirements
Dependable and reliable
Available when needed
Maintainable
People in the organization will benefit by:
Better working conditions
Increased job satisfaction
Improved health and safety
Improved morale
Improved stability of employment
Owners and investors will benefit by:
Increased return on investment
Improved operational results
Increased market share
Increased profits
Suppliers and partners will benefit by:
Stability
Growth
Partnership and mutual understanding
Society will benefit by:
Fulfillment of legal and regulatory requirement
Improved health and safety
Reduced environmental impact
Increased security

Are the standards compatible with national quality awards criteria?
The standards are based on 8 Quality Management Principles, which are aligned with the philosophy and objectives of most quality award programs. These principles are:
1. Customer focus,
2. Leadership,
3. Involvement of people,
4. Process approach,
5. System approach to management,
6. Continual improvement,
7. Factual approach to decision making, and
8. Mutually beneficial supplier relationships.
ISO 9004:2000 recommends that organizations perform self-assessments as part of their management of systems and processes, and includes an annex giving guidance on this approach. This is similar to many quality awards programmes.
Do the standards address financial issues?
Financial issues are not directly addressed in ISO 9001:2000, but may be inferred through the requirements for the provision of resources ISO 9004:2000 gives guidance that emphasizes the financial resources needed for the implementation and improvement of a quality management system.ISO/TR 10014:19988”Guidelines for managing the economics of quality also gives further guidance.
How will implementation of the standards help an organization to improve its efficiency?”
ISO 9001:2000 aims at guaranteeing the effectiveness (but not necessary the efficiency) of an organization. For improved organizational efficiency, however, the best result can be obtained by using the guidance given in ISO9004;2000 in addition to ISO 9001:2000. Additionally, the guiding Quality Management principles are intended to assist an organization in continual improvement, which should lead to efficiency throughout the organization.

Why is the requirement for monitering “customer satisfaction” included in ISO 9001?
“Customer satisfaction “is recognized as one of the driving criteria for any organization. In order to evaluate if a product meets customer needs and expectations,it is necessary to monitor the extent of customer satisfaction .Improvements can be made by taking action to address any identified issues and concerns.
Can the standards improve “customer satisfaction”?
The quality management system details that are described in the standards are based on Quality Management principle that include the “process approach’ and “customer focus”. The adoption of these principles should provide customers with a higher level of confidence that products will meet their needs and increase their satisfaction.


What is the process approach”?


The “process approach” is a way of obtaining a desired result, by managing activities and related resources as a process. The ‘process approach” is a key element of the ISO9000 standards.
Can the “process approach be applied to other management systems?
Yes. The “process approach” is a generic management principle, which can enhance an organization’s effectiveness and efficiency in achieving defined objectives.
How can the PDCA cycle be used in the “process approach”?
The PDCA cycle be used in the “process approach”?
The PDCA cycle is an established, logical, method that can be used to improve a process. This requires:
• (P) planning (what to do and how to do it),
• (D) executing the plan (do what was planned),
• (C) checking the results (did things happened according to plan) and
• (A) act to improve the process (how to improve next time).
The PDCA cycle can be applied within an individual process, or across a group of processes.
Can any organisation apply the “process approach”?
Yes. Many organizations already apply a “process approach” without recognizing it. They could achieve additional benefits by understanding and controlling it.
Why should an organization apply the “process approach”?
By applying the “process approach”, an organization should be able to obtain the following types of benefits:
• The integration and alignment of its processes to enable the achievement of its planned results.
• An ability to focus effort on process effectiveness and efficiency.
• An increase in the confidence of customers and other interested parties as to the consistent performance of the organization.
• Transparency of operations within the organization.
• Lower costs and shorter cycle times through effective and efficient use of resources.
• Improved, consistent and predictable results.
• The identification of opportunities for focused and prioritized improvement initiatives.
• The encouragement and involvement of people, and the clarification of their responsibilities.
• The elimination of barriers between different functional units and the unification of their focus to the objectives of the organization.
• Improved management of process interfaces.


What is meant by the “sequence” of processes and their “interactions”? The “sequence “of processes shows how the processes follow, or link, to each other to result in a final output.
For example, one process may become the output of the next process or processes
The “interactions” show how each process affects or influences one or more of the other processes.
For example, the monitoring or controlling of a process may be established in a separate process.
How can the processes in an organization be determined?

Identify all process inputs and outputs, along with the suppliers and customers, who may be internal or external.
Identify the sequence and interactions of the processes
Should an organization define and document all its processes?
The main purpose of documentation is to enable the consistent and stable operation of an organization’s processes.
Although statutory, standards’ or customer requirements may requirements may require certain documentation, there is no defined “catalogue,” or list of processes that has to be documented in ISO 9001, apart from the 6 indicated ones.
The organization should determine which processes are to be documented on the basis of:


• The size of the organization and type of its activities,
• The complexity of its processes and their interactions,
• The criticality of the processes and
• Availability of competent personnel.
A number of different methods can be used to document processes, such as graphical representations, written instructions checklists flow charts visual media, or electronic methods.
How much details are required in process documentation?
The extent of detail is likely to depend upon factors such as :
• The size of an organization and its type of activities,
• the complexity of its processes and their interactions, and
• the competence (level of education, training, skills and experience)of its personnel.
Is there a standard way of describing a process?
No, there is no standard way to describe a process. It depends on the culture, management style, staff literacy, personal attributes and their interactions.
A process may be described using a flow chart, block diagrams, responsibility matrix, written procedures or pictures.
Process flowcharts or block diagrams can show how policies, objectives, influential factors, job functions, activities, material, equipment, resources, information, people and decision making interact and /or interrelate in a logical order.
What should an organization do to adopt the “process approach”?
To adopt the “process approach” an organization should apply the following steps:
• Identify the process of the organization,
• Plan the processes ,
• Implement and measure the processes,
• Analyze the processes,
• Improve the processes
What is a “process owner”?
A person who is given the responsibility and authority for managing a particular process is sometimes referred to as the “process owner”.
It may be useful for an organization’s Management to appoint individual “process owners” and to define their roles and responsibilities; these should include the responsibility for ensuring the implementation, maintenance and improvement of their specific process and its interactions.
It should be noted, however, that ISO9001:2000 does not specifically require the appointment of “process owners.”

How can a process be measured?
There are various methods of measuring process controls and process performance, ranging from simple monitoring systems up to sophisticated statistically based systems (e.g. Statistical process control, or SPC, systems) The selection and use of any particular method will be dependent on the nature and complexity of an organizations processes and products. The effectiveness of an individual process may be measured by the conformity of its output or product to customer requirements. Its efficiency may be measured from its use of resources. In all cases the measurement of the process determines if its (measurable) objectives have been achieved. Sometimes it only requires monitoring to confirm process operation.
Typical factors that are useful to consider when identifying measures of process control and process performance include:
• Conformity with requirements,
• Customer satisfaction,
• Supplier performance,
• On time delivery,
• Lead times,
• Failure rates,
• Waste,
• Process costs,
• Incident frequency
What is the difference between a “process” and a “procedure”?
A ”process” may be explained as a set of interacting or interrelated activities ,which are employed to add value. A ”procedure “is a method of describing the way in which all part of that process is to be performed.
ISO 9000:2000 defines a procedure as a “specified way to carry out an activity or a process,” which does not necessarily have to be documented.
An organization has a well –established set of procedures. Can these procedures be used to help describe its processes?
Yes, if the procedures describe inputs and outputs, appropriate responsibilities, controls and resources needed to satisfy customer requirements.
What is meant by “continual improvement”?
ISO 9001 requires an organization to focus on continually increasing the effectiveness of its quality management system, to fulfill its policies and objectives. One way of doing this is for the organization to improve its processes. The organization may also wish to consider improving the efficiency of its processes, for which ISO9004:2000 provides guidance. Continual improvement (where “continual “highlights that an improvement process requires progressive consolidation steps) responds to the growing needs and expectations of customers and ensures a dynamic evolution of the quality management system.

Economics of Quality Assurance & Management Practices for success

Economics of Quality Assurance
Prevention costs- planning, Training
Appraisal Cost- inspection,test, internal failure cost
External failure cost:Direct failure( warranty, customer return..)
Indirect failure( loss of good will)
Management Practices for success
Satisfy customer
Make quality an intrinsic value
Clearly articulate quality values
Cultivate an open and responsive culture
Empower the workers
encourage continuous systematic improvement
Enlist suppliers in the effort
Manufacturing excellent categories
Management ( leadership drive)
Planning ( future vision)
Continuous improvement ( be better)
Quality ( excellence)
Cost ( affordable)
Delivery ( on time ahead of schedule)
Customer Satisfaction ( delighted customer)
Technology ( superior product)
People and culture ( trained/ motivated employees)
Health and safety ( environmental concerns)
Stakeholders ( return on concerns)
Flexibility ( adaptability)
Operations and systems ( processes /flow defined and documented)
Supplier development and certification (supplier partnership)

Approach, Deployment and Results

Approach to any activity should include:
-Prevention
-Sustained continious improvement
-Problem measurement
-Goal/benchmark settings
-Innovation/uniqueness.
Deployment should include
Customer supplier involvement
Cross functional teams
Employee involvement
Management involvement
Results should include
Customer/supplier benefits
Relative improvement per goal/bench mark
Sustained game
comparison

Continious Improvement Strategy

Highest achievable quality
Variability Reduction
Through understanding of the customers
Involvement of employees
Consistency of goals
Long term orientation
Process driven ,not people driven
Organization's success first
visibility and active participation of management
True partnership with suppliers and customers
Needs understood by all
Creation of positive environment
Solid implementation plan
Stong commitment

Process Management Attributes

Prevention-rather than detection/reaction
Systematic- disciplined ways to do things
Management by fact-based on objectives, reliable information
Control-assure things go as intended
Evaluation-rootcauses of process upsets
Learning-use of process feedback for improvement

Quality Management Principles

Customer satisfaction- A perfect interface must be achieved between company performance and customer needs in all aspects that customers consider to be important.
Leadership- quality improvement is primarily a task and responsibility of management as a whole.
Total Involvement- There must be total involvement of all employees at all levels and in all functions. Equally important is the complete involvement of all suppliers of goods and services.
Integrated Approach-Integration must be achieved between functions and between levels. Traditional organizational barriers must be removed.
Systematic Approach- A Systematic approach must start with a clearly defined business strategy which is then translated into an improvement policy,objectives,and priorities.Thease must be followed by detailed planning, implementation and monitoring of progress.
Defect prevention- Defects must be prevented from occuring.Performance must be the result of built in capabilities
Continuous Improvement- The approach should not have a charecter of a campaign or a project.Excellence can only be achieved by continuously investing in improvement, step by step, year after year.
Maximum quality- Long term objectives must be set which reflect the will to strive for excellence. The path towars excellence must be marked by challenging but achievable and acceptable targets.
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