Auditing customer feedback processes

Performance Improvement Solutions for Your Business Needs April 2007
In this issue

  • Auditing customer feedback processes
  • Want to Comment on ISO 9001:2009?
  • Writing Checklist for Documents
  • Tax Deduction for ISO 9001
  • Courses and Schedule
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    Auditing customer feedback processes

    Customer feedback is a process. It needs to be audited as a process, not as a “clause of the standard”. An evaluation also needs to be performed on the way in which the process is managed (see ISO 9001:2000 clause 4.1.c), and its ability to provide meaningful information with which to judge the overall effectiveness of the QMS. The way in which the organization obtains this feedback (“the method”) is up to the organization to define.

    The auditor needs to be aware of the specific characteristics of the organization’s products that are likely to impact customer satisfaction. Throughout the audit the auditor should be alert for indications that may suggest customer satisfaction or dissatisfaction which could serve as input into the audit of the customer feedback process. Good sources of such information may include, for example:

    • Goods returned by the customer;
    • Warranty claims;
    • Revised invoices;
    • Direct observation of, or communication with the customer (for example in a service organization).

    These are some of the issues an auditor should address during an audit of the customer feedback process:

    a) What is the desired output of this process? What information is actually available on customer perceptions? How is this information used by management to drive improvements to the product, processes and the QMS?

    b) How is the data collected to feed the process? There are many ways for an organization to monitor its customers’ perceptions, and the auditor should avoid preconceived ideas about how this should be done. Some examples of techniques the organization can use include:

    • face-to-face visits and evaluations,
    • telephone calls or visits made periodically or after delivery of products and services,
    • internal enquiries among the organization’s personnel who are in contact with customers,
    • other contacts with customers, for example by service or installation personnel

    c) How is the data analyzed? Simply collecting data on customer perceptions is not sufficient – the auditor must follow the process through, to check how the data is analyzed (see ISO 9001:2000 clause 8.4), and what conclusions are made with respect to the effectiveness of the QMS. 1) Are there any trends? 2) Is the situation stable, improving, or deteriorating? 3) Are customer needs and expectations changing? Although it is not a requirement of ISO 9001:2000, it may be appropriate to ask the organization about industry comparisons, or benchmarking activities, in order to put customer feedback into perspective

    d) How does the information generated by this process feedback into the QMS as a whole? Organizations should be using the results of the customer feedback process to trigger corrective and/or preventive actions and as one of the overall measures of the QMS performance. The way in which these processes interact should also be subject to audit.

    The auditor should be able to recognize that the output from the customer feedback process forms an important input into other QMS process, such as data analysis, management review and continual improvement processes. An auditor who strives to add value will try to ensure that the organization recognizes the benefits a sound customer feedback process can bring, and will encourage (but can not require) the organization to think beyond simply “meeting the requirements of the standard”.

    Want to Comment on ISO 9001:2009?

    The ISO 9000:2000 family of quality management system standards is being updated with an anticipated final release date in 2009. The updated standards (ISO 9001 and ISO 9004) are being released as committee drafts and available for review at the American Society for Quality (ASQ) web site.

    Of course, the two documents are not intended to be used for quality system design purposes. As committee drafts, the two standards are offered only for public review and comment.

    For ISO 9001, the requirements standard, the plan is to produce minor changes for clarification and compatibility with ISO 14001. Although the changes are expected to be minor, even small changes to the standard may dramatically impact your quality management system.

    For ISO 9004, the guidelines document, the plan is to produce a major revision with its focus on providing guidance on organizational sustainability rather than performance improvement. ASQ and the international standards developers are making these committee drafts available at this early stage in their development in an effort to determine if the direction of the two standards is on target with user needs.

    The ISO 9001 draft includes yellow highlighted text to indicate the changed areas. However, the ISO 9004 draft is very different, uses a different clause structure, and does not include any highlighting of its changes.

    Writing Checklist for Documents

    When writing a procedure, keep in mind these questions:

    . What is the objective of process? Know its purpose before starting.
    . Which activities are part of scope? Agree on coverage of activities.
    . Who is responsible for these activities? Identify key process players.
    . What are inputs and who are suppliers? Identify inputs and providers.
    . What are outputs and who are customers? Identify outputs and recipients.
    . What is referenced as an information source? Identify related documents.
    . What is the logical series of steps? Organize the steps in a logical sequence.
    . How are the activities performed? Interview users and observe operations.
    . Which departments use the process? Know readers and users of the process.
    . What reports or records are generated? Identify records for the process.
    . What forms are used? Don’t overlook forms used to collect information.
    . When and where is the work performed? Identify timing and location of work.
    . What products are covered by the process? Define its applicability.
    . What process documentation already exists? See if documents can be adapted.
    . What are the requirements of the process? Know user and organization needs.
    . What are the quality criteria? Identify the acceptance criteria.
    . What are the related procedures? Ensure compatibility with other processes.
    . Which tasks have or need instructions? Add or refer to needed instructions.
    . How might the process be audited? Be able to demonstrate conformity.

    Tax Deduction for ISO 9001

    The Internal Revenue Service issued a ruling in 2000 that allows businesses to take a tax deduction for the costs of implementing and maintaining ISO 9001 registration. Several organizations had petitioned the IRS to permit firms to deduct ISO 9001-related costs in a single year instead of spreading the expenses over several years.

    The IRS ruling stated, “Although ISO 9000 is voluntary, it increasingly is a contractual requirement for doing business with many organizations, both public and private, worldwide.” A prior unofficial IRS position paper had concluded all ISO 9000 costs had to be capitalized over a three year period.

    The costs of ISO 9001 are now viewed as satisfying the conditions for applying section 162 of the Income Tax Regulations: it is an expense, ordinary, necessary, paid or incurred during the tax year, and made to carry out a trade or business. The ruling that ISO 9001 registration is necessary was, in part, responsible for this policy change. “ISO 9000 certification does not itself result in the creation of an asset having a useful life substantially beyond the taxable year,” according to the IRS ruling.

    For more information, see: Internal Revenue Bulletin 2000-4. It states, “Cost incurred by a taxpayer to obtain, maintain, and renew ISO 9000 certification are deductible as ordinary and necessary business expenses under section 162 of the Code, except to the extent they result in the creation or acquisition of an asset having a useful life substantially beyond the taxable year (e.g., a quality manual).”

    In addition, see: Internal Revenue Bulletin 2004- 7. It states in Example 4 for business process certification, “Z corporation, a manufacturer, seeks to obtain a certification that its quality control standards meet a series of international standards known as ISO 9000. Z pays $50,000 to an independent registrar to obtain a certification from the registrar that Z’s quality management system conforms to the ISO 9000 standard. Z’s payment is an amount paid to obtain a certification of Z’s business processes and is not required to be capitalized under this paragraph (d) (4).”

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