Identifying Outsourced Processes

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Sustaining Edge Solutions, Inc. Newsletter
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Performance Improvement Solutions for Your Business Needs June 2008
. In this issue

  • Identifying Outsourced Processes
  • Software Calibration
  • AS9100, AS9110, or AS9120?
  • International Energy Management Standard
  • Training Courses
  • Greetings!

    Welcome to Sustaining Edge Solutions E- Newsletter

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    Identifying Outsourced Processes
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    Has your organization outsourced any processes? Are these processes being properly controlled?

    ISO 9001:2000 clause 4.1 states: “Where an organization chooses to outsource any process that affects product conformity with requirements, the organization shall ensure control over such processes. Control of such outsourced processes shall be identified within the quality management system.”

    What is considered an outsourced process? Document ISO/TC 176/SC 2/N 630R2 at the ISO web site describes an “outsourced process” as a process that has been identified as needed for the quality management system, but one which the organization has chosen to be carried out by an external party.

    An outsourced process can be performed by a supplier that is totally independent from the organization, or which is part of the same parent organization. For example, a separate department or division not subject to the same quality management system. The process may be provided within the physical premises or work environment of the organization, or at an independent site. The intent of Clause 4.1 is to emphasize that when an organization chooses to outsource a process (permanently or temporarily) that affects product conformity, it cannot simply ignore this process or exclude it from the quality management system. The organization has to demonstrate it exercises sufficient control to ensure the process is performed according to the relevant ISO 9001:2000 requirements, as well as, the requirements of the quality management system.

    The nature of this control will depend on the importance of the outsourced process, the risk involved, and the competence of the supplier. Also, the outsourced process will interact with other processes (either carried out by the organization or outsourced). These interactions must be managed as required by ISO 9001:2000 clauses 4.1.a (process identification) and 4.1.b (sequence and interaction).

    The acquisition of an outsourced process will normally be subject to the requirements of both ISO 9001:2000 clause 7.4 (Purchasing) and clause 4.1 (General Requirements). In some situations, the organization might not actually “purchase” the outsourced process. It might receive the service from a corporate office or from another division, without a monetary transaction taking place. Under these circumstances, however, ISO 9001:2000 Clauses 7.4 and 4.1 are still applicable.

    There are two situations that frequently must be considered when deciding the appropriate level of control of an outsourced process:

    1. When an organization has the competence and ability to carry out a process, but chooses to outsource that process (for commercial or other reasons), the process control criteria should already have been defined and can be transposed into requirements for the supplier, if necessary.

    2. When the organization does not have the competence to carry out the process itself, and chooses to outsource it, the organization has to ensure the controls proposed by the supplier of the outsourced process are adequate. In some cases, it may be necessary to involve external specialists in making this evaluation.

    It may be convenient, or even necessary, to define some or all of the methods to be used for control of the outsourced processes in a contract between the organization and the supplier. Care should be taken, however, not to inhibit the supplier from proposing innovations to the outsourced process.

    In some situations, it might not be possible to verify the output from the outsourced process by subsequent monitoring or measurement. In these cases, the organization must ensure the control over the outsourced process includes process validation in accordance with ISO 9001:2000 clause 7.5.2.

    The new ISO/DIS 9001:2008 standard has added two notes under clause 4.1 to further explain outsourced processes. One note says, “An outsourced process is identified as one being needed for the organization’s quality management system, but chosen to be performed by a party external to the organization.”

    The other note says, “The type and nature of control to be applied to the outsourced process may be influenced by factors such as,

    a) the potential impact of the outsourced process on the organization’s capability to provide product that conforms to requirements;

    b) the extent to which the control for the process is shared;

    c) the capability of achieving the necessary control through the application of clause 7.4.

    Ensuring control over outsourced processes does not absolve the organization of the responsibility of conformity to all customer, statutory, and regulatory requirements.”

    To audit the outsourcing of processes, an auditor might ask these questions:

    • Have any processes been outsourced?
    • What is your criteria for outsourcing?
    • How are the suppliers being evaluated?
    • Are relevant ISO 9001 requirements assigned?
    • What outsourcing controls are in place?
    • How is risk considered in the controls?
    • How is supplier performance evaluated?
    • How are supplier problems handled?

    If an organization uses outsourced processes, it is still responsible for conforming to customer and legal requirements. Carefully evaluate the suppliers of outsourced processes according to ISO 9001:2000, clause 7.4.1, as you must for all other suppliers of products and services.

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    Software Calibration
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    Regardless of size, facilities with the need to calibrate instruments can benefit by implementing calibration software. These software products allow an organization to maintain its calibration records, calibration procedures, instrument location, and instrument history in a secure, readily accessible database. Another advantage of using calibration software is it can alert the operator when an instrument is due for calibration, prevent the use of overdue instruments, and communicate the overall performance of the measurement system.

    Automated management trumps the abilities of homegrown software because an Access database or an Excel spreadsheet still relies on someone looking at it periodically to act on what the data is telling them. However, calibration software informs you, ‘This instrument is due.”

    The software can send an e-mail to remind operators that a gage is due for calibration, they failed to take action, or the gage is missing. Instrument due-date alerts can escalate through an organization’s hierarchy. For example, if an operator isn’t responding to an alert, the manager can receive e-mail notification that the issue is not being promptly handled.

    When an organization is being audited, calibration software can help with both preparation and the audit. With a paper system, locating records can be a daunting task. With a computerized approach, verifying that the system works correctly is the focus, rather than dealing with how the system works. Calibration solutions are typically able to integrate with measurement system assessment activities and inspection software. Other key features to look for include bar code reading, expansive statistical capabilities, automated printing of labels and certificates, grouping of instruments, and visual representations of instruments.

    In general, calibration solutions are moving toward the use of centralized databases to allow multiple users and locations to share data. And, because many organizations outsource much of their calibration needs, solutions are available that allow users to interface with their calibration vendors.

    Considerations

    When considering which calibration software solution fits your needs, thoroughly analyze prospective solutions by asking questions such as:

    • Will the software help us meet industry or customer requirements?
    • Do we need basic or expansive functionality and features in a solution?
    • How many users or locations will need access to the software?

    Organizations should also be aware of factors such as whether or not a solution supports a calibration system directly, integrates with other enterprise systems, offers bar code reading, or has the capability to expand to perform future tasks. Beyond the initial purchase cost, find out how often the software is updated, what type of support is offered, and what additional costs may be incurred, e.g., maintenance activities.

    Price vs. Capability

    Calibration software ranges in price and capability, and your organization’s situation, size, throughput, and resources should dictate the product selection. Low-cost solutions are appropriate for small shops in which calibration data is needed for only one location, few instruments need calibrating, and with minimum requirements for industry compliance. These will be stand-alone solutions that offer basic gage surveillance features, calibration and measurement history, and reporting tools.

    Mid- to high-end software is appropriate for organizations looking to implement a large deployment of a common solution. Such software will be feature rich and will have advanced statistical capabilities; furthermore, it will enable multiple users and locations to share data through the use of centralized databases or a web- based architecture.

    When multiple computers or manufacturing locations require access to calibration data, a system that allows open database connectivity to a central database is required. In laboratory environments, a hosted web- based solution that automatically collects calibration data from instruments may be the answer.

    Also, mid- to high-range software will provide scalability, reliable product support, and a focus on continuous adherence to industry standards, such as, ISO 9001 and ISO 17025; with solutions that satisfy the requirements of 21 CFR Part 11 and 10 CFR 50 tending to be more expensive.

    More Inforamtion

    Visit Quality Online and type “Calibration Software” into the search engine to find related articles.

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    AS9100, AS9110, or AS9120?
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    Which standard, AS9100, AS9110, or AS9120, is applicable to an organization in the aerospace industry? According to the International Aerospace Quality Group (IAQG), the three quality management system standards are to be applied as follows:

    AS9100 – Quality Management Systems – Aerospace – Requirements

    AS9100:2004, Revision B, is intended for use by organizations that design, develop, and/or produce aviation, space, and defense products; as well as, by organizations providing post-delivery support, including the provision of maintenance, spare parts, or materials for their own products.

    AS9101:2006, Revision C, is the Quality Management System Assessment standard. It defines the content and presentation of the AS9100 Assessment Report.

    AS9110 – Quality Management Systems – Aerospace – Requirements for Maintenance Organizations

    AS9110:2003 is intended for use by organizations whose primary business is providing maintenance, repair, and overhaul services for aviation sector products. It is tailored for organizations with National Airworthiness Authority (NAA) repair station certification, but is also suitable for non-certificated organizations, including those that provide maintenance, repair, and overhaul services for military aviation products.

    The standard is also intended to be used by organizations with maintenance, repair, and overhaul operations that operate autonomously, or that are substantially different from their manufacturing operations.

    AS911:2005 is the Quality Management System Assessment standard for Maintenance Organizations.

    AS9120 – Quality Management Systems – Aerospace – Requirements for Stockist Distributors

    AS9120:2002 is intended for use by organizations that procure parts, materials, and assemblies and sell these products to a customer in the aviation, space, and defense industries. This includes organizations that procure products and split them into smaller quantities. This standard is not intended for organizations that rework or repair products. Organizations that perform work that affects, or could affect, product characteristics or conformity should use AS 9100 or another general quality management system standard.

    AS9121:2007, Revision A, is the Quality Management System Assessment standard for Stockist Distributors.

    Upcoming AS9100 Revision

    AS9100 uses ISO 9001:2000 as its foundation, with additional aerospace requirements highlighted in bold, italic type. The ISO 9001 standard is being amended and its release is expected in October this year. This ISO 9001 revision is driving an update of AS9100.

    The first draft of the AS9100 revision was issued November 8, 2007 based on the September 20, 2007 draft of ISO 9001. The publication of the AS9100 revision should be a few months after the issuance of ISO 9001:2008.

    The AS9110 (Maintenance Organizations) and AS9120 (Stockist Distributors) standards are undergoing a similar revision process. Since they use AS9100 as the baseline, they are expected to trail the AS9100 revision by about six months.

    The AS9101 checklist is being revised as a more process- oriented tool, as well as, to apply across AS9100, AS9110, and AS9120. It will be introduced into the audit process as organizations make the transition to the revised AS9100, AS9110, and AS9120 standards.

    AS9100 Training

    If you are interested in implementing or auditing an AS9100-based quality management system, see our training courses or for further information contact us on any of these valuable standards.

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    International Energy Management Standard
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    ISO has approved the creation of a project committee to develop an international standard on energy management. The standard will provide all types of organizations a practical and widely recognized approach to increase energy efficiency, reduce costs, and improve environmental performance. If you are interested in participating in the development of this standard, please see the contact information at the end of this article.

    The standard is intended to be broadly applicable to various sectors of national economies, including utility, manufacturing, commercial building, general commerce, and transportation sectors. As a result, the standard could have an influence on as much as 60 percent of the world’s energy demand.

    ISO Secretary-General Alan Bryden commented: “The urgency to reduce GHG emissions, the reality of higher prices from reduced availability of fossil fuels, and the need to promote efficiency and the use of renewable energy sources, provide a strong rationale for developing this new standard building on the most advanced good practices and existing national or regional standards”.

    Following the successful examples of the ISO 9000 series on quality management and the ISO 14000 series on environmental management, the project committee ISO/PC 242, Energy Management, will consider the development of a standard that provides management system requirements together with guidance for use, implementation, measurement, and metrics. The standard will be based on the continual improvement and Plan-Do-Check-Act approach utilized in ISO 9001 and ISO 14001 to provide compatibility and integration opportunities.

    Among the main benefits of the future standard are that it will:

    • provide organizations with a well-recognized framework for integrating energy efficiency into their management practices
    • offer organizations with operations in more than one country a single, harmonized standard for implementation across the organization
    • provide a logical and consistent methodology for identifying and implementing improvements that may contribute to a continual increase in energy efficiency across facilities
    • assist organizations to better utilize existing energy consuming assets, thus reducing costs and/or expanding capacity
    • offer guidance on benchmarking, measuring, documenting, and reporting energy intensity improvements and their projected impact on reductions in GHG emissions
    • create transparency and facilitate communication on the management of energy, promote energy management best practices, thus reinforcing the value of good energy management behaviors
    • provide a framework for organizations to encourage suppliers to better manage their energy, thus promoting energy efficiency throughout the supply chain

    The secretariat of ISO/PC 242 will be held jointly by the ISO members for the United States (American National Standards Institute: ANSI) and for Brazil (Associação Brasileira de Normas Técnicas: ABNT). ANSI has approved the formation of a United States Technical Advisory Group (US TAG) for ISO PC 242. The TAG is a mechanism for identifying issues and developing national consensus regarding energy management. The TAG’s primary purpose is to develop and transmit to the International Organization for Standardization (ISO), via ANSI, the US position on activities and ballots of their ISO Project Committee.

    The US TAG for PC 242 will consist of experts and practitioners in the field of energy management. The selected delegates will participate in the activities of ISO/PC 242, including the development of the ISO standard on energy management and others that will be approved in the future. Participation in the US TAG 242 provides an opportunity for representatives of all affected U.S. constituencies (industry, commerce, NGO, education, government, etc.) to influence the development of international energy standards.

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    Training Courses
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    To see the course description, schedule, and on-line registration click on the course title below. Courses are awarded Continuing Education Units.

    Understanding & Implementing ISO9001:2000
    ISO 9001:2000 Process Based Internal Auditor
    Documenting Your Quality Management System

    Understanding & Implementing AS9100B:2004
    AS9100B: 2004 Process Based Internal Auditor
    Documenting Your Quality Management System

    Understanding and Implementing ISO/TS16949:2002
    ISO/TS16949:2002 Process Based Internal Auditor
    Documenting Your Quality Management System

    Understanding and Implementing ISO14001:2004
    ISO14001:2004 Process Based Internal Auditor

    The Five Pillars of a Lean Workplace Organization
    Continuous Process Improvement
    Lean Six Sigma

    All courses can be delivered at your company. Don’t see a course, location, or date that fits your needs?

    Contact Us

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