282

Operations Management
LESSON

11
ISO QUALITY CERTIFICATION CONCEPTS

CONTENTS
11.0 Aims and Objectives
11.1 Introduction
11.2 Essence of International Standards
11.3 Overview of ISO Standards
11.4 ISO 9000 Quality Standard
11.5 ISO 9000 Quality System Certification
11.6 ISO 9000 Family
11.7 ISO 14000
11.8 QS 9000
11.9 Documentation of Quality System
11.9.1 Quality Manual
11.9.2 Quality Procedures
11.9.3 Quality Records
11.9.4 Controlled Documents
11.10 Implementing ISO 9001: 2000
11.11 Quality Assurance
11.12 Quality Assurance Review
11.13 Objectives of Quality Assurance Review
11.13.1 Business Review
11.13.2 Technical Review
11.13.3 Management Review
11.13.4 Roles and Responsibilities
11.14 Six Sigma Concepts
11.15 Six Sigma Roles and Responsibilities
11.16 Six Sigma Methodology
11.16.1 The Differences of DMAIC and DMADV
11.16.2 When to use DMAIC
11.16.3 When to use DMADV
11.17 Let us Sum up
11.18 Lesson End Activity
Contd…
 11.19 Keywords 283
ISO Quality Certification Concepts
11.20 Questions for Discussion
11.21 Suggested Readings

11.0 AIMS AND OBJECTIVES

After studying this lesson, you will be able to:
Describe the various ISO-standards
Explain advantages of implementation of various standards
Learn about the documentation procedure of various ISO-certificates

11.1 INTRODUCTION
Introduction to ISO 9000 is a family of standards for quality management systems.
ISO 9000 is maintained by ISO, the International Organization for Standardization
and is administered by accreditation and certification bodies. Some of the
requirements in ISO 9001 (which is one of the standards in the ISO 9000 family)
include:
a set of procedures that cover all key processes in the business;
monitoring processes to ensure they are effective;
keeping adequate records;
checking output for defects, with appropriate and corrective action where
necessary;
regularly reviewing individual processes and the quality system itself for
effectiveness; and
facilitating continual improvement.
A company or organization that has been independently audited and certified to be in
conformance with ISO 9001 may publicly state that it is "ISO 9001 certified" or "ISO
9001 registered." Certification to an ISO 9000 standard does not guarantee the
compliance (and therefore the quality) of end products and services; rather, it certifies
that consistent business processes are being applied.
Although the standards originated in manufacturing, they are now employed across a
wide range of other types of organizations. A "product", in ISO vocabulary, can mean
a physical object, or services, or software. In fact, according to ISO in 2004, "service
sectors now account by far for the highest number of ISO 9001:2000 certificates -
about 31% of the total."
ISO 9001 certification does not guarantee that the company delivers products of
superior (or even decent) quality. It just certifies that the company engages internally
in paperwork prescribed by the standard. Indeed, some companies enter the ISO 9001
certification as a marketing tool.
Standards are documented agreements containing technical specifications or other
precise criteria to be used consistently as rules, guidelines, or definitions of
characteristics, to ensure that materials, products, processes and services are fit for
their purpose.
For example, the format of the credit cards, phone cards, and smart cards that have
become commonplace is derived from an ISO International Standard. Adhering to the
284 standard, which defines such features as an optimal thickness (0.76 mm), means that
Operations Management
the cards can be used worldwide.
International Standards thus contribute to making life simpler, and to increasing the
reliability and effectiveness of the goods and services we use.
Similarity, there are several existing international standards for software development
organization and more are added from time to time depending on the requirement.

11.2 ESSENCE OF INTERNATIONAL STANDARDS

International standardization is well-established for many technologies in such diverse
field as information processing and communications, textiles, packaging, distribution
of goods. Energy production and utilization, shipbuilding, banking and financial
services. It will continue to grow in importance for all sectors of industrial activity for
the foreseeable future.
The main reasons are:

Worldwide Progress in Trade Liberalization

Today’s free market economies increasingly encourage diverse sources of supply
and provide opportunities for expanding markets.
On the technology side, fair competition needs to be based on identifiable, clearly
defined common reference that are recognized from one country to the next, and
from one region to other.
An industry wide standard, internationally recognized, developed by consensus
among trading partners, serves as the language of trade.

Interpenetration of Sectors
No industry in today’s world can truly claim to be completely independent of
components, products, rules of application, etc., that have been developed in other
sectors.
Bolts are used in aviation and for agricultural machinery, welding plays a role in
mechanical and nuclear engineering, and electronic data processing has penetrated
all industries.
Environmentally friendly products and processes, and recyclable or biodegradable
packaging are pervasive concerns.

Worldwide Communications Systems

The computer industry offers a good example of technology that needs quickly
and progressively to be standardized at a global levels.
Full compatibility among open system fosters healthy competition among
producers, and offers real options to users since it is a powerful catalyst for
innovation improved productivity and cost cutting.

Global Standards for Emerging Technologies

Standardization programmes in completely new fields are now being developed.
Such fields include advanced materials, the environment, life sciences,
urbanization and construction.
In the very early stage of new technology development, applications can be
imagined but functional prototypes do not exist.
 Here, the need for standardization is in defining terminology and accumulating 285
ISO Quality Certification Concepts
databases of quantitative information.

Developing Countries
Development agencies are increasingly recognizing that a standardization
infrastructure is a basic condition for the success of economic policies aimed at
achieving sustainable development.
Creating such an infrastructure in developing countries is essential for improving
productivity, market competitiveness, and export capability.
Industry wide standardization is a condition existing within a particular industrial
sector when the large majority of products or services confirm to the same standards.
It results from consensus agreements reached between all economic players in that
industrial sector suppliers, users, and often governments. They agree on specifications
and criteria to be applied consistently in the choice and classification of materials, the
manufacture of products, and the provision of services.
The aim is to facilitate trade, exchange and technology transfer through:
Enhanced product quality and reliability at a reasonable price.
Improved health, safety and environmental protection, and reduction of waste.
Greater compatibility and interoperability of goods and services.
Simplification for improved usability.
Reduction in the number of models, and thus reduction in costs.
Increased distribution efficiency, and ease of maintenance.
Users have more confidence in products and services that confirm to International
Standards. Assurance of conformity can be provided by manufacturers’ declaration or
by audits carried out by independent bodies.

11.3 OVERVIEW OF ISO STANDARDS

The International Organization for Standardization based in Geneva, Switzerland is
commonly known as “ISO.” Migration from equal to standard and the choice of ISO is
easy to follow, with the additional advantage that the name requires no transaction in
the International Organization for Standardization’s three official languages English,
French and Russian.
ISO is an international, non-governmental organization that promotes the development
and implementation of voluntary international standards. This is done through a
cooperative, consensus building process that results in the creation of product and
process management standards. ISO consists of 120 member countries each
represented by a national organization. The American National Standards Institute
(ANSI) represents the United States at ISO.

Quality and its Essence

The dictionary defines quality as a degree of excellence. This may explain why some
people say quality is really in the eye of the beholder.
Others try to be more precise and say quality is conformance to requirements.
A measure of quality may be how well a product exceeds expectations and pleases the
customer.
Quality can be viewed as the degree to which products and services meet requirements
and satisfy customers in an affordable and timely manner.
286 Satisfied customers may buy again. Poor quality offerings cause companies to waste
Operations Management
time, money and materials. The result may be the loss of customers, or worse yet, the
risk of going out of business.
Quality should be a key business strategy. That is why companies are learning the
language of quality as spoken by the ISO 9000 international standard.

ISO Standards
ISO standards are written specification and guidance documents that establish
internationally harmonized conventions for the operation, design, performance, or
management of products (technical standards) and processes (management standards).
ISO standards are developed within ISO Technical Committees, commonly referred to
as “TSc.” TCs are made up of individual experts from industry, government, public
interest groups and academia from any member countries that wish to participate. TCs
prepare draft versions of the standards which are sent for formal support and
comments to each of the participating ISO member countries. Through iterations,
using a consensus building process, feedback is incorporated with the goal of realizing
an agreed upon international standard. ISO standards are adopted as final when
approved by at least 75% of the member bodies casting a vote. This process usually
takes 7 to 8 years. Most ISO standards are technical standards. The ISO 9000 Series
and the ISO 14000 Series are management standards.

11.4 ISO 9000 QUALITY STANDARD

ISO 9000 is a series of standards dealing with quality management systems. The
standards are published by the International Organization. All industrialized countries
are members and participate in writing the standards.
Most countries have adopted and published ISO 9000 as their own national standard.
In the United States, it has been issued as Q9000 with virtually the same text as the
original standard.

Conformance and Guidance Standards

ISO 9000 consists conformance standards and guidance standards. The conformance
standards are ISO 9001, ISO 9002, and ISO 9003, and state the requirements for an
effective quality system. The guidance standards recommend how to use the series,
develop quality systems, and apply the requirements in various industries.
ISO 9001 contains requirements for quality assurance in the design, development,
production, installation, and serving activities. ISO 9002 is the same as ISO 9001, but
without the design and development requirements. ISO 9003 only applies to
companies that are limited to the final inspection and testing of products and services.

ISO Standard Series and Some Other Standards

The ISO Standard Series includes the following Systems Standards indicating their
specific purposes:
ISO 9000: Quality Management and Quality Assurance Standards Guidelines for
Selection and Use.
ISO 9001: Model for Quality Assurance in Design/Development, Production
Installation, and Servicing.
ISO 9002: Model for Quality Assurance in Production and Installation.
ISO 9003: Model for Quality Assurance in Final Inspection and Test.
ISO 9004: Generic Guidelines for Quality Management and Systems. 287
ISO Quality Certification Concepts
ISO 9004-2: Guidelines for Services
ISO 14001: Environmental Management System Guidelines for Principles, Systems,
and Supporting Techniques.
Some other System Standards include:
QS 9000: Encompasses ISO 9000 and the Big Three Auto Makers specific
requirements.
TS 9000: Based on ISO 9001 establishes quality systems requirements for the
worldwide telecommunications network.
FDA-CGMP: Medical Device, Current Good Manufacturing Practices (includes all of
ISO 9001).
Check Your Progress 1
Fill in the blanks:
1. The International Organization for Standardization based in
………………………………..
2. ISO consists of ………………….. member countries each represented by
a national organization.
3. …………………….. is a series of standards dealing with quality
management systems.

11.5 ISO 9000 QUALITY SYSTEM CERTIFICATION

Initially ISO 9000 was used as the basis for specifying quality requirements in
contractual arrangements between a purchaser and supplier. Customers would perform
on-site assessments of their suppliers to ensure compliance.
Third-party “registrars” are now being used to perform independent ISO 9000
assessments. These certifying bodies are officially authorized by a national
accreditation group to carry out the audits and issue certificates. Registrars certify to
customers that a supplier is complying with all the applicable requirements of the
standard.

Reasons for Certification

Why are so many firms ISO 9000 certification? The primary reason is customer
demand. It is fast becoming a requirement for doing business. An ISO 9000 certificate
is also the passport for access to worldwide markets.
Some companies are pursuing ISO 9000 registration to achieve a competitive
advantage. The certificate itself may be necessary to bid on certain contracts.
In addition, the lower costs and higher quality associated with ISO 9000 systems give
registered companies a competitive edge.
In many cases, companies are simply interested in ISO 9000 as a proven framework
for quality improvement. They want to benefit from the quality system structure, its
consistence operation, and the focus on preventing costly problems.
288 Benefits of ISO 9000 Certification
Operations Management
Some basic benefits of ISO 9000 Certification are summarized below:
Improved customer satisfaction
Greater quality awareness
Higher real and perceived quality
Positive cultural change
Competitive edge
Increased market share
Increased productivity
Reduced costs

Limitation of ISO 9000 Certification

Though ISO 9000 has proved to be very effective for software development
organizations, however, it also suffers from several limitations.
ISO 9000 does not automatically lead to total quality management (TQM) i.e.
continuous improvement.
ISO 9000 does not provide any guideline for defining an appropriate process.
ISO 9000 certification process is not foolproof and thus variations in the
certification norms may exist.

11.6 ISO 9000 FAMILY

ISO 9000 includes the following standards:
ISO 9000:2000, Quality Management Systems–Fundamentals and Vocabulary:
Covers the basics of what quality management systems are and also contains the
core language of the ISO 9000 series of standards. A guidance document, not used
for certification purposes.
ISO 9001:2000 Quality Management Systems–Requirements is intended for use
in any organization which designs, develops, manufactures, installs and/or
services any product or provides any form of service. It provides a number of
requirements which an organization needs to fulfill if it is to achieve customer
satisfaction through consistent products and services which meet customer
expectations. It includes a requirement for the continual (i.e. planned)
improvement of the Quality Management System, for which ISO 9004:2000
provides many hints.
This is the only implementation for which third-party auditors may grant
certification. It should be noted that certification is not described as any of the
'needs' of an organization as a driver for using ISO 9001 (see ISO 9001:2000
section 1 'Scope') but does recognise that it may be used for such a purpose
(see ISO 9001:2000 section 0.1 'Introduction').
ISO 9004:2000 Quality Management Systems-Guidelines for Performance
Improvements covers continual improvement. This gives you advice on what you
could do to enhance a mature system. This standard very specifically states that it
is not intended as a guide to implementation.
There are many more standards in the ISO 9001 family, one of many may be Leicester
University which also found out the electronic fingerprinting, but for other standard
see ("List of ISO 9000 standards" from ISO), many of them not even carrying "ISO 289
ISO Quality Certification Concepts
900x" numbers. For example, some standards in the 10,000 range are considered part
of the 9000 family: ISO 10007:1995 discusses Configuration management, which for
most organizations is just one element of a complete management system. ISO notes:
"The emphasis on certification tends to overshadow the fact that there is an entire
family of ISO 9000 standards ... Organizations stand to obtain the greatest value when
the standards in the new core series are used in an integrated manner, both with each
other and with the other standards making up the ISO 9000 family as a whole".
Note that the previous members of the ISO 9000 family, 9001, 9002 and 9003, have
all been integrated into 9001. In most cases, an organization claiming to be "ISO 9000
registered" is referring to ISO 9001.

11.7 ISO 14000

Environmental management standards exist to help organizations minimize how their
operations negatively affect the environment (cause adverse changes to air, water, or
land), comply with applicable laws and regulations).
ISO 14001 is the international specification for an Environmental Management
System (EMS). It specifies requirements for establishing an environmental policy,
determining environmental aspects and impacts of products/activities/services,
planning environmental objectives and measurable targets, implementation and
operation of programs to meet objectives and targets, checking and corrective action,
and management review.
ISO 14000 is similar to ISO 9000 quality management in that both pertain to the
process (the comprehensive outcome of how a product is produced) rather than to the
product itself. The overall idea is to establish an organized approach to systematically
reduce the impact of the environmental aspects which an organization can control.
Effective tools for the analysis of environmental aspects of an organization and for the
generation of options for improvement are provided by the concept of Cleaner
Production.
As with ISO 9000, certification is performed by third-party organizations rather than
being awarded by ISO directly. The ISO 19011 audit standard applies when auditing
for both 9000 and 14000 compliance at once.

Standards
The material included in this family of specifications is very broad. The major parts of
ISO 14000 are:
ISO 14001 is the standard against which organizations are assessed. ISO 14001 is
generic and flexible enough to apply to any organization producing and/or
manufacturing any product, or even providing a service anywhere in the world.
ISO 14004 is a guidance document that explains the 14001 requirements in more
detail. These present a structured approach to setting environmental objectives and
targets and to establishing and monitoring operational controls.
These are further expanded upon by the following:
ISO 14020 series (14020 to 14025), Environmental Labeling, covers labels and
declarations.
ISO 14030 discusses post-production environmental assessment.
ISO 14031 Evaluation of Environmental Performance.
290 ISO 14040 series (14040 to 14044), Life Cycle Assessment, LCA, discusses
Operations Management
pre-production planning and environment goal setting.
ISO 14050 terms and definitions.
ISO 14062 discusses making improvements to environmental impact goals.
ISO 14063 is an addendum to 14020, discussing further communications on
environmental impact.
ISO 14064-1:2006 is Greenhouse gases – Part 1: Specification with guidance at
the organization level for the description, quantification and reporting of
greenhouse gas emissions and removals.
ISO 14064-2:2006 is Greenhouse gases – Part 2: Specification with guidance at
the project level for the description, quantification, monitoring and reporting of
greenhouse gas emission reductions and removal enhancements.
ISO 14064-3:2006 is Greenhouse gases – Part 3: Specification with guidance for
the validation and verification of greenhouse gas assertion.
ISO 19011 which specifies one audit protocol for both 14000 and 9000 series
standards together. This replaces ISO 14011 meta-evaluation—how to tell if your
intended regulatory tools worked. 19011 is now the only recommended way to
determine this.

11.8 QS 9000
QS 9000 is the name given to the Quality System Requirements of the automotive
industry which were developed by Chrysler, Ford, General Motors and major truck
manufacturers and issued in late 1994. QS-9000 replaces such quality system
requirements as Ford Q-101, Chrysler's Supplier Quality Assurance Manual, GM's
NAO Targets for Excellence and the Truck Manufacturer's quality system manuals.
The influence of QS-9000 is being seen throughout the automotive industry as it has
virtually eliminated varying demands and waste associated with redundant systems.
Proof of conformance to QS-9000 is certification/registration by an accredited third
party such as Underwriter's Laboratories (UL) or the American Bureau of Shipping
(ABS). Companies that become registered under QS-9000 will be considered to have
higher standards and better quality products.
QS-9000 will help companies to stay ahead of their competition. It will do this by
filling gaps in the business and quality systems that can cause problems. QS-9000
eliminates redundant and unnecessary work practices. QS-9000 tells current and
potential customers that the product has consistent quality and is manufactured under
controlled conditions. This system is globally accepted as proof of quality in the
automotive industry and is also a major customer requirement.

11.9 DOCUMENTATION OF QUALITY SYSTEM

The first step in setting up a quality management system within a company is to
generate a quality manual. This should be done even before any quality procedures or
specifications are written.
Effective documentation and records produces development. The quality manual is the
company’s quality bible or constitution. It is a document that states in a concise and
brief format the high-level policies and objectives of the company required to achieve
its desired level of quality. This is enhanced by a management system operating with
the concept.
Once the quality system plan of the company has been completed, the quality system 291
ISO Quality Certification Concepts
must undergo full documentation that comprehends:
The complexity of the production process.
The manpower skills required for production, and
The training requirements to achieve these manpower skills.
Some of the main objectives of an organization’s documentation are:
As a tool for information transmission and communication
Evidence of conformity to confirm what was planned, has actually been done
Knowledge sharing by disseminating and preserving the organization’s
experiences.
Documentation requirements documents may be in any form or type of medium like:
Paper
Magnetic
Electronic or optical Computer Disc
Photograph
Master Sample, etc.
The extent of the QMS documentation may differ from one organization to another
due to:
The size of organization and type of activities;
The complexity of processes and their interactions, and
The competence of personnel.
At the minimum, quality system documentation should include the company’s quality
manual and specifications showing the company processes, work instructions in
support of these processes, and production/quality records required by these work
instructions.
Processes exist within the organization and the initial approach should be limited to
identifying and managing them in the most appropriate way. In determining which
processes should be documented the organization may wish to consider factors such
as:
Effect of quality
Risk of customer dissatisfaction
Statutory and/or regulatory requirements
Economic risk
Effectiveness and efficiency
Competence of personnel
Complexity of processes
Where it is found necessary to document processes, a number of different methods can
be used, such as graphical representations, written instructions, checklists, flow charts,
visual media, or electronic methods.
292 Documentation is the heart of the QMS system. It shall include:
Operations Management
Statement of quality policy and quality objectives,
A quality manual
Required documented procedures,
Documents like Work Instructions needed to ensure:
Effective planning,
Operation, and
Control of processes, and
Required records.
Quality policy refers to the statements from Top management regarding their
commitment relative to quality products and services. They are basically the purpose
and vision of the organization. This must be expanded in the quality objectives.
It is essential that the Top management is able to define the quality policy and quality
objectives with clarity that all the employees are able to understand and strive for it.
These are displayed prominently in the work area to act as motivators for all.
Requirements for the quality policy and quality objectives and defined in clauses 5.3
and 5.4.1 of ISO 9001:2000 respectively. These documented quality objectives and
quality policy are subject to document control requirements of clauses 4.2.3.
The next four types of documentation are usually referred as the four levels of ISO
9000 documentation
Level 1: Quality manual
Level 2: Quality Procedures
Level 3: Quality documents
Level 4: Quality Records

11.9.1 Quality Manual

Quality manual states the organization’s philosophy and vision. The quality manual
represents the strategic plan for an organization’s quality system and contains its
mission statement.
Clause 4.2.2 of ISO 9001:2000 specifies the minimum content fort a quality manual.
The format and structure of the manual is a decision for each organization, and will
depend on the organization’s size, culture and complexity. The quality manual is a
document that has to be controlled in accordance with requirements clauses 4.2.3.

11.9.2 Quality Procedures

This documentation describes the actions that have to take place. It also spells out the
actual steps must be followed. The level of detail should be sufficient for a new person
to read the document and understand what has to be done. It also states who is
responsible for each ISO 9000 section. They outline the workflow between
departments, suppliers, and the customer.
ISO 9001:2000 specially requires the organization to have “documented procedures”
for the following activities:
4.2.3.Control of Documents:
4.2.4.Control of records
 8.2.2.Internal audit 293
ISO Quality Certification Concepts
8.3 Control of nonconforming product
8.5.2. Corrective action
8.5.3.Preventive action
There are also to be controlled in accordance with the requirements of clauses 4.2.3.
Quality Documents: In order for an organization to demonstrate the effective
implementation of its QMS, it may be necessary to develop documents other than
documented procedures even though the only documents specially mentioned in ISO:
2000 are:
Quality policy (clause 4.2.1.a)
Quality objectives (clause 4.2.1.a)
Quality manual (clause 4.2.1.b)
Quality documents the process. These documents represent how tasks are executed
such as design specifications, operating instructions and assembly instructions. They
involve the details of how individual or group is to perform specific task or job. This
is very important to maintain uniformity. It also ensures that the job can still be done
even if key employee is unavailable.
Examples of these documents are:
Organization charts
Specifications
Drawings
Blueprints
Process maps, process flow charts and /or process descriptions
Work and/or test instructions
Documents containing internal communications
Production schedules
Approved supplier lists
Test and inspection plans
Test procedures
Quality plans
Operation sheets
Inspection instructions.
Quality documents tell “what to do” For example, work instructions would be a
quality document. They can also be the specifications for a new product design, which
list engineering requirements for the design and govern the product development
cycle.
Documents are a unique type of data and are important as:
They can be unpredictable, created on an as-needed basis in virtually any form.
They’re dynamic. They can be changed, modified and enhanced within very short
time periods, or over long life cycles.
294 They’re complex. Documents can be structured on a logical basis, a temporal axis
Operations Management
or almost any configuration.
They may contain other documents. They can include vital and volatile source
information from CAD, spreadsheets or MRP that needs to be updated regularly.
They may contain technical drawing and images.
They can be developed using pencil and paper, a CAD system, a spreadsheet or a
word processor.
They are the circulatory system of an organization. And they must be managed to
be effective.

11.9.3 Quality Records

They document the results of actions specified in level 3. A Quality record is evidence
that the organization has fulfilled the actions described in quality documents.
Records required by ISO 9001:2000 are:
Inspection reports
Test data
Qualification reports
Defect checklist
Validation reports
Audit reports
Calibration data
Audit reports
Factory log
These records shall be legible, readily identifiable, and retrievable. Using the example
of product testing, the quality record would describe who did the test and would
include the data, location, time which product, test result and then the actions taken.
A documented procedure shall be established to define the controls needed for the
identification, storage, protect6ion, retrieval, retention time, and disposition of
records. can be used to document tractability and to provide evidence of verification,
preventive action, and corrective action.
Documentation is thus the heart of the ISO 9000 standards. It may be in any form or
type of medium. Many companies fail because important process information does not
reside in documents, but rather in management.
The quality manual drives the ISO 9000 quality system implementation. Policies and
procedures describe the quality practices–what each department must do. Quality
documents describe the process–how procedures are to be done, at an individual level.
Quality records report the outcome of processes and support the results.
“Managers know what to do. They just do it. Why should we keep records for
everything we do?” The answer is that the ISO 9000 standards require you to create
and maintain quality records. Thee quality documents and quality records represent
the work instructions and records that instructions have been followed in your
organization.
These are the vital elements of any ISO 9000 project. Because these documents are 295
ISO Quality Certification Concepts
dynamic, the document control is critical to ensure that the right version of these
documents are used and maintained.

11.9.4 Controlled Documents

Documents required by the QMS shall be controlled. ISO stipulates a documented
procedure to define the control needed to:
approve documents prior to use,
review, update, and re approve as necessary,
identify the current revision status,
ensure that current versions are available at the point of use,
ensure that documents are legible and readily identified,
identify and distribute documents of external origin, and
provide for the prompt removal of obsolete documents and identify suitably what
may be retained.
Documented procedure means that the QMS shall be controlled. ISO stipulates a
documented procedure to define the control needed to:
approve documents prior to use,
review, update, and re approve as necessary,
identify the current revision status,
ensure that current versions are available at the point of use,
ensure that documents are legible and readily identified,
identify and distribute documents of external origin, and
provide for the prompt removal of obsolete documents and identify suitably what
may be retained.
Documented procedure means that procedure is established, documented,
implemented, and maintained. It also makes it mandatory to document the revisions
with its unique system of versions.
A controlled document is a document that, if changed, affects some part of the process
or product. These can be “procedures”, process documents, product or part drawings
(prints) or other ‘similar’ documents. Forms a typically controlled document.
Typically there will be one or more list(s) of master documents.
If a controlled document is changed, a record of the change has to be made. This
means these must be a History of All Changes.
If a document is changed, people who use it must know about the change. This
means thee has to be a distribution list or other effective way to let everyone who
uses it know the document has changed (read Communicate the changes).
Every employee must know how to check to see if documentation they are using
is the most current version.
296 Check Your Progress 2
Operations Management
Fill in the blanks:
1. Third-party “registrars” are now being used to perform independent
………………….. assessments.
2. …………………. exist to help organizations minimize how their
operations negatively affect the environment.

11.10 IMPLEMENTING ISO 9001: 2000

Quality management system involves the following preparations:
1. Identify the goals the organization wants to achieve. Typical goals may be:
Be more efficient and profitable
Produce products and services that consistently meet customer requirements
Achieve customer satisfaction
Increase market share
Maintain market share
Improve communications and morale in the organization
Reduce costs and liabilities
Increase confidence in the production system
2. Identify what others expect of the organization. These are the expectations of
interested parties (stakeholders) such as:
Customer and end users
Employees
Suppliers
Shareholders
Society
3. Obtain information about the ISO 9000 family.
4. Decide the type of certification of the quality management system required like:
Using ISO 9001:2000 as the basis for certification
Using ISO 9004:2000 in conjunction with the national quality award criteria
to prepare for a national quality award.
5. Obtain guidance on specific topics within the quality management system. These
topic-specific standards are:
ISO 10006 for project management
ISO 10007 for configuration management
ISO 10012 for measurement systems
ISO10013 for quality documentation
ISO/TR 10014 for managing the economics of quality
ISO 10015 for training
 ISO/TS 16949 for automotive suppliers 297
ISO Quality Certification Concepts
ISO 19011 for auditing
6. Establish the current status and determine the gaps between the current quality
management system and the requirements of ISO 9001: 2000 by
Self-assessment
Assessment by an external organization
7. Determine the process that is needed to supply products to your customers.
Review the requirements of the ISO 9001: 2000 section on Product Realization to
determine how they apply or do not apply to your quality management system
including;
Customer related processes
Design and/or development
Purchasing
Production and service operations
Control of measuring and monitoring devices.
8. Develop a plan to close the gaps in step 6 and to develop the processes in step 7.
Identify actions needed to close the gaps, allocate resources to perform these
actions, assign responsibilities and establish a schedule to complete the needed
actions. ISO 9001:2000 Paragraphs 4.1 and 7.1 provide the information needed to
consider when developing the plan.
9. Carry out the plan: Proceed to implement the identified actions and track progress
to your schedule.
10. Undergo periodic internal assessment. Use ISO 19011 for guidance in auditing,
auditor qualification and managing audit programmes.
11. Is there a need to demonstrate conformance?
If yes, go to step 12
If no, go to step 13
The need or wish to show conformance (certification/registration) can be for
various purposes, like:
Contractual requirements
Market reasons or customer preference
Regulatory requirements
Risk management
To set clear goal for the internal quality development (motivation)
12. Undergo independent audit. Engage an accredited registration/certification body
to perform an audit and certify that your quality management system complies
with the requirements of ISO 9001:2000.
13. Continue to improve the business. Review the effectiveness and suitability of the
quality management system. ISO 9004:2000 provides a methodology for
improvement.
298 The processes involved in the implementation are given below:
Operations Management
1. The Management Commitment: For a successful implementation the top
management must support it and must be committed to it.
2. Appointment the Management Representative (MR): A management
representative is to be appointed. MR can be a senior manager. He will
co-ordinate the implementation activities.
3. Awareness: The implementation of the quality system should involve everyone in
the organization. Hence everyone should understand the quality system. They
should know how it would affect day-to-day operations. They also must know
about the potential benefits.
4. Assembling of an implementation Team: Since it is teamwork, and
implementation team has to be assembled. It must contain people from all
departments and from all levels. The team should identify the QMS processes and
their sequence and interaction.
5. Training: Members of the implementation team, supervisors, and internal audit
team should be trained. The training can be done in house for all.
6. Time schedule: A time schedule must be developed for the implementation and
registration of the system. This schedule must be further divided for the various
tasks within the same.
7. Select Element Owners: Selection of owners for each of the system element is the
next step. These owners would make up teams to assist them.
8. Review the Present System: Review the current system is done by the element
owners.
9. Write the Documents: Prepare the Quality Policy, Quality manual, Work
instructions etc. The documentation must be simple and easily understandable.
10. Install the New System: Install the new system. Train all the people in the use of
the various procedures, etc.
11. Internal Audit: Conduct an internal audit of the quality system. Make the
necessary corrections as they occur. The audit people must be different from those
who have made it.
12. Management Review: The management review is done to judge the effectiveness
for the system in achieving the stated quality. Revise of needed.
13. Pre assessment: This step may not be necessary. But it serves as a rehearsal.
14. Registration: This is the final step towards certification. The Policy and procedure
manuals are reviewed by the certifying agency. They then conduct the system
audit.
15. The audit would start with an opening meeting where the auditors would explain
the process of auditing. This will be followed by the audit itself. In the closing
meeting the auditors would discuss the findings of the audit.
16. Any minor non-conformity would be corrected. Once the auditors are satisfied,
they would issue the certification.
Some pitfalls to successful implementation are:
Over documentation of documentation that is too complex.
Using external consultants without internal ownership and involvement.
 Lack of top management’s involvement. 299
ISO Quality Certification Concepts
Developing a system that odes not represent the actual system.

1.11 QUALITY ASSURANCE

Quality assurance comprises variety of tasks associated with the following seven
major activities:
Application of technical methods
Conduct of formal technical reviews
Software testing
Enforcement of standards
Control of change
Measurement
Record keeping and reporting

Application of Technical Methods

Quality is designed into the software but not added afterwards. Implies must have set
of technical methods and tools to help analyst generated high quality specifications
and designs.

Formal Technical Reviews

A formal technical review is a stylised meeting conducted by technical staff to
uncover quality performs.
Reviews can be as effective as testing in uncovering defects in software.

Software Testing
Appropriate strategies for software testing should be applied. Note that testing cannot
uncover all errors.

Enforcement of Standards
There are several quality standards such as ISO 9000, SEI CMMs, etc. meant for
ensuring software quality. If these standards are used, can be applied by developers as
part of a formal review. These can be independently verified by SQA group
conducting an audit.

Control of Change
Changes can introduce errors. Change control includes:
Formalized requests for change
Evaluates the nature of the change
Controls the impact of the change

Measurement
Software metrics are needed to track quality and assess impact of methodological and
procedural changes.
300 Record Keeping and Reporting
Operations Management
Collection and dissemination of software quality assurance information is required.
Results of audits, reviews, change control, testing and other SQA activities are part of
the historical record of the project.

11.12 QUALITY ASSURANCE REVIEW

Reviews, inspections and walkthroughs are claimed to improve productivity and
reduce errors in software during development as well as resulting in higher quality
software at the end of development process.
The inclusion of reviews, inspections and walkthrough in a development process
should:
Increase project productivity be detecting defects early, thus reducing rework time
and possibly decreasing time which needs to be spent on testing.
Improve the quality of the system.
Inform (educate) other members of the tem about developments. This improves
productivity by reducing the errors caused by ignorance and makes the team more
able to cope with the problems caused by loss of staff.
Mark the completion of a stage in the development if the software.
Produce more maintainable software. The chain of reasoning is that for software
to be reviewed the reviewers must be able to understand it. it must therefore be
well documented. The review thus forces the developer to produce documentation,
which might not otherwise have been produced until the end of project, at which
resource constraints might have reduced its quality. In addition the review process
will increase the understanding of the software being developed.
A review consists of activities conducted by a team of people to identify problem. The
purpose of software quality assurance reviews is to assure the quality of a deliverable
(a product that has to be delivered to a customer) before the development process is
allowed to continue. Once a deliverable has been reviewed, revised as necessary, and
approved, it can safely be used as the basis for further development.

11.13 OBJECTIVES OF QUALITY ASSURANCE REVIEW

The objectives of the quality assurance review are:
Identify required improvement in a product.
Assure that the deliverable is complete.
Assure that the deliverable is technically correct (e.g., all the data flow diagram
are correct).
Measure the progress of the project.
Identify and defects early, thus resulting in cost and timesaving.

11.13.1 Business Review

The business review ensure that the following objectives are met:
The deliverable is complete.
The deliverable provides the information required for the next phase (i.e., can the
system design be developed from the requirements document?)
 The deliverable is correct. 301
ISO Quality Certification Concepts
There is adherence to the procedures and policies.

11.13.2 Technical Review

The technical review ensure that the software confirms to your company’s standards
of development. These standards may include, but are not limited to, any standards for
GUO, windows, user interface, naming conventions, repository completeness, and so
forth. The technical review process also ensure that any changes to the software are
implemented according to pre-defined procedures and standards.
Project managers need an evaluation of the technical output from the development
team. A technical review is a form of testing of a software configuration item and is
classified according to the project being reviewed. It is a formal team evaluation of a
software elements which tries to identify any discrepancies from the specification of
the software element.
The review leader is responsible for selecting the review team, planning and
scheduling the review, ensuring that entire documentation is distributed, conducted the
review and issuing the report. The reviewers might be chosen from the following
groups:
User
Maintainer
Quality engineer
Specialists with knowledge of the application
Specialists with knowledge of the design methodology.
The review must take place as soon as possible after the work to be reviewed has been
completed. The input to review process includes a statement of objectives for the
review, item being reviewed, specification of item being reviewed and any plans,
standards or guidelines against which the team is being examined. Each of the
reviewers is given sufficient time to prepare. Then the meeting is called after some
time. The review leader should monitor individual reviewer’s responses that reviewers
make during the meeting. Each of the reviewers must be given sample opportunity to
comment on the item being reviewed. However, the structure of the meeting must be
conducted in strict accordance with the agenda. If errors are found during the review,
it must be decided whether the item should be reviewed again after correction of the
item. If no errors are found, then the item can be accepted. The recorder’s main task is
to provide information for the accurate report of the review. The information is about
such things as defects, inconsistencies, omissions, ambiguities, decisions and
recommendations. At the end of the meeting, the recorder summarizes the notes and
the conclusions, which will form the basis of the report. The review have been
addressed and the report has been issued. Issues relating to style should not be raised,
the evaluation is concerned with technical accuracy. The copy of the report should be
kept with project documentation.

11.13.3 Management Review

The intent of the management reviews is to:
Validate from a management perspective that the project is making progress
according to the project plan.
Ensure a deliverable is ready for management approval.
Resolve issues that require management’s attention.
302 Identify if the project needs a change of direction.
Operations Management
Control the project through adequate allocation of resources.
Generally, these reviews are not planned and they may occur on an “as needed” basis.
The management review team consists of the representatives of all the areas affected
by the development effort.
The project manager is responsible for formally reporting the status of the project,
ensuring that all supporting documents of the review are available for distribution to
the appropriate managers and distributing the minutes. Each member of the
management review team us responsible for reviewing the documents and making
notes for issue before attending the review meeting.
During the review, the team:
Examine the project status.
Determine if the project fulfills user requirements and performance criteria.
Ensure that properly trained resources are allocated to the project.
Generates a list of issues, associated risks, recommendations, and resource of
actions to be taken to resolve the issues.
Examine the project cost.
Reviews the initial project plan; notes variations to the cost and identities the
possible occurrences causing the variations; identifies strategic activities and time
frame to address the variations.
Recommends authorization for additional management reviews if necessary.
The output from the management review process is the management review report
which lists action items, ownership and status, issues and recommendation identified
by the management review team that are addressed for the project to meet its
milestone, and recommendations for the improvement of the process to avoid the same
defects from occurring in the future.

11.13.4 Roles and Responsibilities

Whenever a group problem solving session is held, there is a well defined set of roles
that are played by the participants. This is true whether you are talking about a review,
inspection, or any other type of problem solving. One way in which these roles can be
defined is as follows:

Facilitator
The facilitator is the individual who thoroughly understand the subject matter under
review and can present the background information and assign roles to other members.
The facilitator also encourages participation for all the attendees and ensures all
problems are adequately reviewed. The facilitator understands the issues and keeps the
meeting focused and moving. In addition, he or she makes a general agreement on
problem and makes sure that everyone has a chance to express view or receive
clarification on any misunderstanding. The facilitator is required to perform the duties
of a reviewer and records issues if the recorder is not present.

Author (Producer)
The author ensures that the subject material is ready for the review and distributes it.
During the meeting, the author paraphrases the document a section at a time. The
author is responsible for scheduling the review; selecting the review participants,
determining if entry criteria for the review are met; providing information about the
product during all stages; clarifying any unclear issues and correcting any problems 303
ISO Quality Certification Concepts
identified and providing dates for reworks and resolution.

Recorder
The recorder collects and records each defect uncovered during the review meeting.
Then, the recorder develops and issues list and identifies whose responsibility it is to
resolve each issue. In addition, he or she records meeting decisions on the issues,
prepares the minutes, and publishes the minutes.

Reviewer
Each member of the review team spends time prior to the meeting reviewing the
information, makes notes of defects and becomes familiar with the product to be
reviewed and identifies strengths of the product.

Observer
The observer is a new member to the project team who learns the product and
observes the review techniques.

11.14 SIX SIGMA CONCEPTS

Six Sigma is a business management strategy originally developed by Motorola, USA
in 1981. As of 2010, it enjoys widespread application in many sectors of industry,
although its application is not without controversy.
Six Sigma refers to a disciplined, data-driven approach and methodology for
eliminating defects in any process—from manufacturing to transactional and from
product to service. A defect is a component that does not fall within the customer’s
specification limits. For example, in administrative processes, Six Sigma may mean
optimizing response time to inquiries, maximizing the speed and accuracy with which
inventory and materials are supplied, and fool proofing such support processes from
errors, inaccuracies and inefficiency.
Traditional quality programs focus on detecting and correcting defects. However, Six
Sigma programs seek to reduce the variation in the processes that lead to these defects.
One of the most important measures of variation is the standard deviation. The
standard deviation (‘σ’) of a set of sample scores is a measure of variation of scores
about the mean, and is defined by the following formula:

Where,
‘x’ is the value of the attribute
‘x‾’ is the mean value, and
‘n’ is the number of readings
The philosophy underlying Six Sigma is to reduce process output variation. The
performance of a process in terms of its variability is compared with different
processes using a common metric. This metric is defects per million opportunities
(DPMO). This calculation requires three pieces of data:
Unit. The item produced or being serviced.
Defect. Any item or event that does not meet the customer’s requirements.
Opportunity. A chance for a defect to occur.
304 A calculation is made using the following formula.
Operations Management
DPMO = (Number of defects × 1,000,000) / Number of opportunities for error per unit
× Number of units
As we have already studied, the control limit of acceptable error of any stream of
numbers is ± 3 ‘σ’ (‘σ’ being the standard deviation). A product is considered
acceptable if the variation is ± 3 σ on the normal specification. This limits in
specifications permit 66,738 defects per million. In Six Sigma, on a long-term basis,
no more than 3.4 defect parts per million or 3.4 defects per million opportunities
(DPMO) are permitted.
For a Six Sigma process with only one specification limit (upper or lower), there are
six process standard deviations between the mean of the process and the customer's
specification limit. This is the origin of the name ‘Six Sigma’. For a process with two
specification limits (upper and lower), this translates to slightly more than six process
standard deviations between the mean and each specification limit such that the total
defect rate corresponds to equivalent of six process standard deviations. This
relationship is shown graphically in Figure 11.1.

LSL Target USL

Shifted 6 Sigma Process: 3 Sigma Process Centered

3.4 total Defects of One Around The Target: 66.738
Million Opportunities Total Defects of One Million
Below The LSL Opportunities Outside the
Lower and Upper
Specification Limits

Figure 11.1: Six Sigma – A Statistical Representation

A process that is in Six Sigma control will produce no more than two defects out of
every billion units. Often, this is stated as four defects per million units which is true if
the process is only running somewhere within one sigma of the target specification.
The overall performance of a process, as the customer views it, might be 3.4 DPMO.
However, a process could indeed be capable of producing a near perfect output. As the
process sigma value increases from zero to six, the variation of the process around the
mean value decreases. With a high enough value of process sigma, the process
approaches zero variation and is known as 'zero defects.'
There are two aspects to Six Sigma programs: the people side and the methodology
side. We will take this up in order.

11.15 SIX SIGMA ROLES AND RESPONSIBILITIES

Successful implementation of Six Sigma is based on using sound personnel practices
as well as technical methodologies. The roles and responsibilities of different people
in a Six Sigma organization are shown in Exhibit 11.1.
 Exhibit 11.1: Roles and Responsibilities in a Six Sigma Organization 305
ISO Quality Certification Concepts
To convey the need to vigorously attack problems, professionals are given martial arts titles reflecting
their skills and roles:
Quality Leader/Manager (QL/QM) – The quality leader represents the needs of the customer. The
Quality function is independent from the manufacturing or transactional proce ssing functions to
maintain impartiality. The quality leader is generally on the CEO's staff, and has equal authority to all
other direct reports.
Master Black Belt (MBB) – Master Black Belts are typically assigned to a specific area or function
such as marketing or machine shop, die shop, etc. MBBs work very closely and share information
with the owners of the process to ensure that quality objectives and targets are set, plans are
determined, progress is tracked, and training is provided.

Process Owner (PO) – Process owners are responsible for specific processes. For instance, in the
marketing department there is usually one person in charge of marketing—the chief of marketing is
the process owner for marketing. Depending on the size of the business and core activities, there may
be process owners at lower levels of the organizational structure. For example, in the marketing
department there may be a head of marketing services: that's the process owner.
Black Belt (BB) – Black Belts are at the heart of the Six Sigma quality initiative. Their main purpose
is to lead quality projects and work full time until they are complete. Black Belts can typically
complete four to six projects per year. They also coach Green Belts on their projects.
Green Belt (GB) – Green Belts are employees trained in Six Sigma who spend a portion of their time
completing projects, but maintain their regular work role and responsibilities.

Source: Adapted from 2000-2005 iSixSigma LLC

306 Six sigma needs leaders and ’champions’, truly committed to it, to promote it
Operations Management
throughout the organization. Corporate wide training in Six Sigma concepts and tools
is essential. Professionals in the organization need to be qualified in Six Sigma
techniques. MBBs receive in-depth training on statistical tools and process
improvement techniques. They must identify appropriate metrics early in the project.
They must make certain that the improvement effort focuses on business results that
are to be improved. They are the trainers of trainers.

11.16 SIX SIGMA METHODOLOGY

While Six Sigma’s methods include many of the statistical tools that are employed in
other quality movements, DMAIC and DMADV are both special tools developed for
Six Sigma applications:
Six Sigma methodologies used to drive defects to less than 3.4 per million
opportunities.
Data intensive solution approaches.
Implemented by Green Belts, Black Belts and Master Black Belts.
Ways to help meet the business/financial bottom-line numbers.
Implemented with the support of a champion and process owner.

11.16.1 The Differences of DMAIC and DMADV

DMAIC and DMADV sound very similar, but operate differently. The two
methodologies are compared in Table 11.1.
Table 11.1: Differences between DMAIC and DMADV
DMAIC Define Identify customers and their priorities
Measure
Define the project goals and customer (internal and external)
Analyze
deliverables. Identify CTQs (critical-to-quality characteristics) that
Improve
the customer considers to have the most impact on quality.
Control
Measure the process to determine current performance
Identify the key internal processes that influence CTQs and
measure the defects currently generated relative to those processes.
Analyze and determine the root cause(s) of the defects
Improve the process by eliminating defects
Control future process performance
DMADV Define Identify customers and their priorities
Measure
Define the project goals and customer (internal and external)
Analyze
deliverables. Identify CTQs.
Design
Verify Measure and determine customer needs and specifications
Identify the key internal processes that influence CTQs and
measure the defects currently generated relative to those processes.
Analyze the process options to meet the customer needs
Design (detailed) the process to meet the customer needs
Verify the design performance and ability to meet customer needs

11.16.2 When to Use DMAIC

The DMAIC cycle is a more detailed version of the Deming PCDA cycle, which
consists of four steps—plan, do, check, and act—that underlie continuous
improvement. The DMAIC methodology, instead of the DMADV methodology,
should be used when a product or process is in existence at your company but is not 307
ISO Quality Certification Concepts
meeting customer specification or is not performing adequately. The objective here is
to modify the process to stay within acceptable range. Determine the control
parameters and how to maintain the improvements. Put tools in place to ensure that
the key variables remain within the maximum acceptance ranges under the modified
process.

11.16.3 When to Use DMADV

The DMADV methodology, instead of the DMAIC methodology, should be used
when:
A product or process is not in existence and the company one needs to be
developed
The existing product or process exists and has been optimized (using either
DMAIC or not) and still doesn't meet the level of customer specification or Six
Sigma level.
The objectives of the DMADV methodology finds application in product and process
design, or reengineering that have been discussed in earlier chapters. The design
parameters are determined and tools put in place to ensure that the key variables
remain within the maximum acceptance ranges under the new or reengineered
process.
Check Your Progress 3
Fill in the blanks:
1. ………………….. is similar to ISO 9000 quality management in that both
pertain to the process rather than to the product itself.
2. QS-9000 will help companies to stay ahead of their ……………………..
3. A …………………….. is a component that does not fall within the
customer’s specification limits.

11.17 LET US SUM UP

There are many more standards in the ISO 9001 family, one of many may be Leicester
University which also found out the electronic fingerprinting, but for other standard
see ("List of ISO 9000 standards" from ISO), many of them not even carrying "ISO
900x" numbers. For example, some standards in the 10,000 range are considered part
of the 9000 family: ISO 10007:1995 discusses Configuration management, which for
most organizations is just one element of a complete management system. ISO notes:
"The emphasis on certification tends to overshadow the fact that there is an entire
family of ISO 9000 standards ... Organizations stand to obtain the greatest value when
the standards in the new core series are used in an integrated manner, both with each
other and with the other standards making up the ISO 9000 family as a whole".

11.18 LESSON END ACTIVITY

Write a note on ISO 9000 and the way to get a license.
308
Operations Management 11.19 KEYWORDS
ISO 9000: It is a family of standards for quality management systems.
ISO 14000: The environmental management standards exist to help organizations
minimize how their operations negatively affect the environment (cause adverse
changes to air, water, or land), comply with applicable laws and regulations).
Standard: A practice or procedure that is imposed and enforced throughout the
organization.
Vendor: A person or organization that sells part or all of a product, usually for
inclusion in a large product being developed by a producer.

11.20 QUESTIONS FOR DISCUSSION

1. Explain the concept of Business Process Reengineering System.
2. Describe about the ISO standards and what are its advantages.
3. Explain the procedure for documentation of quality system.
4. Discuss the elements of ISO 9000 standard.

Check Your Progress: Model Answers

CYP 1
1. Geneva, Switzerland
2. 120
3. ISO 9000

CYP 2
1. ISO 9000
2. Environmental management standards

CYP 3
1. ISO 14000
2. Competition
3. defect

11.21 SUGGESTED READINGS

Bailey, J. E., Pearson, S. W., “Development of a Tool for Measuring and Analyzing
Computer user Satisfaction”, Management Science.
Delen, G.P.A.J. and Rijsenbrij, D.B. B., “A specification, Engineering and
Measurement of Information Systems Quality”.
Drucker, P.E., “The Information Executives Truly Need”, Harvard Business Review.
Fox, C., Levitin, A. and Redman, T., “The Notion of Data and its Quality
Dimensions”, Information Processing & Management.
Greene, R.T., “Global Quality – A Synthesis of the World Best Management Methods, 309
ISO Quality Certification Concepts
1993, New York, ASQC Quality Press.
Hari, A. (editor), “The Quality Terms Lexicon”, 1995, Israel, Quality and Excellence
Center, Prime minister Office (Hebrew text).
Rolph, P. and Bartram, P., “The Information Agenda: Harnessing Relevant
Information in a Changing Business Environment”, 1994, London, Management
Books.
30
Micro-Finance:
Perspectives and Operations