Quality Objectives are Business Objectives

Performance Improvement Solutions for Your Business Needs March 2008
In this issue

  • Quality Objectives are Business Objectives
  • Clarification of Intent for ISO 14001:2004
  • Small Business Diaster Guide
  • FMEA – Quality Improvement Tool
  • Training Courses
  • Greetings!

    Welcome to Sustaining Edge Solutions E- Newsletter

    Our newsletters provide guidance on operational and quality systems ISO 9001, AS9100, ISO/TS 16949, TL 9000, ISO 13485, ISO 14001, and others. This includes process improvement methods Six Sigma, Lean Enterprise, and other topics of interest to our readers.

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    Quality Objectives are Business Objectives
    tool

    Are you having a difficult time identifying quality objectives for your organization? Think about your business.

    According to ISO 9000:2005, 3.2.5, a quality objective is something sought or aimed for, related to quality. ISO 9001:2000, 5.4.1, states your quality objectives must be measurable and consistent with the quality policy.

    Clause 5.3 of ISO 9001:2000 says your quality policy is a framework for establishing quality objectives. It also says that the policy must include a commitment to 1) comply with requirements and 2) continually improve the effectiveness of the quality management system. Using the quality policy as a framework, you would have a quality objective to measure the degree to which requirements are being met, as well as, a quality objective that measures the results of the quality management system.

    If your quality policy identifies other important areas, for example, product reliability, you would be expected to have another measurable target for product reliability. ISO 9001:2000, clause 8.2.1, says a required performance measure is for customer satisfaction.

    Remember, goals are conditions to be achieved in the future. They should be defined consistent with your vision and mission. Goals are established to guide your decisions and actions. They don’t change as much as objectives. Your objectives must involve measurable results to achieve your goals.

    Objectives are focused on critical issues and milestones. They describe the activities and targets to achieve your goals. They even identify the dates for completing the activities. They are measurable in terms of being achieved, or not. For example, a general goal might be to reduce waste. The related, specific objective might be to reduce rework from 10% to 5% by the end of 2008.

    Depending on your industry, you might consider quality objectives such as:

    • Scrap Rate = Product Rejects / Products Produced
    • Return Rate = Products Returned / Products Shipped
    • Complaint Rate = Received Complaints /Total Customers
    • Customer Satisfaction Index = (Questions x Ratings) /Surveys Returned
    • On-time Delivery = Deliveries by Due Date / Deliveries Scheduled
    • Design Stability = Change Requests / Product Releases
    • Service Quality = Defective Transactions / Total Transactions
    • Requirements Traceability = Traceable to Design / Total Requirements

    Some of these metrics would be expressed over a period of time, e.g., complaints per customer per year. And, some values may be multiplied by 100 to give a percentage. Also, the objectives don’t have to be variable measures. You could include installation of a new MRP System by the end of 2008 as an objective.

    Be careful how you set these objectives and how you communicate them. You might find people actually manipulating processes to achieve the desired results, especially if the numbers are used to evaluate employee performance. When handled poorly, performance targets can result in internal competition and a lack of cooperation. In fact, a specific process objective can be optimized at the expense of overall system performance.

    If a target is perceived as arbitrary, and set beyond the capability of the process, it may lead to employee frustration, reduced morale, and even lower performance. Individuals must feel they have some control over the outcome for an objective to actually promote improvement. The objectives should help monitor and control the processes, not the people.

    Have a Business / Strategic Plan? These objectives should be based on comprehensive strategic planning. You should define measures to help identify needed process improvements and to grow your business.

    Clarification of Intent for ISO 14001:2004
    Interview

    The U.S. Technical Advisory Group (TAG) to ISO/TC 207 has issued two new Clarifications of Intent for ISO 14001:2004:

    Question: Is it a onconformance if an organization establishes Objectives, Targets, and Programs but, at the time of the audit, none relate to an identified significant aspect?

    Answer: No. Clause 4.3.3 requires that significant environmental aspects be taken into account when establishing and reviewing objectives and targets, but it does not explicitly require that there be an objective and target related to a significant aspect at all times. It is the intent of the standard that the organization be able to demonstrate that it has taken significant aspects into account in setting objectives. Over time, however, given the required commitment to continual improvement, it would be expected that there would be one or more objectives related to one or more significant aspects to demonstrate conformance to ISO 14001.

    Question: Under the third paragraph, second sentence of 4.3.3, how strong is the wording for “shall take into account”?

    Answer: No. Clause 4.3.3 requires that significant environmental aspects be taken into account when establishing and reviewing objectives and targets, but it does not explicitly require that there be an objective and target related to a significant aspect at all times. It is the intent of the standard that the organization be able to demonstrate that it has taken significant aspects into account in setting objectives. Over time, however, given the required commitment to continual improvement, it would be expected that there would be one or more objectives related to one or more significant aspects to demonstrate conformance to ISO 14001.

    To see all the clarifications of intent for ISO 14001:2004, go to the ASQ Standards Group web site.

    Small Business Diaster Guide

    The Small Business Administration (www.sba.gov) and Nationwide Mutual Insurance Company have teamed up to launch a disaster planning guide for small business owners.

    The 10-page brochure provides information that business owners need to develop an effective plan to protect customers and employees in the event of a disaster. The guide provides key disaster preparedness strategies to help small businesses identify potential hazards, create plans to remain in operation if the office is unusable, and understand the limitations of their insurance coverage.

    Understanding this, the SBA and Nationwide created this guide to help business owners get their arms around the disaster planning process, and convince them to mitigate their risk. An electronic version, PDF of the guide is available at this SB A Web Page.

    FMEA – Quality Improvement Tool

    Have you heard about FMEA, but remain unsure of its use as a quality tool? Well, FMEA is the acronym for Failure Modes and Effects Analysis.

    Failure Modes are the ways in which something might fail. The failures are actual or potential errors or defects, especially those affecting the customer. Effects Analysis refers to studying the consequences or effects of those failures.

    Failures are prioritized according to the seriousness of their consequences, the frequency of their occurrence, and likelihood of their detection. The purpose of FMEA is to take actions to eliminate or reduce failures, starting with the higher priority ones.

    FMEA is used during design to prevent failures. Later, it is used for control before and during operation of the process. Ideally, FMEA begins during the earliest conceptual stages of design and continues throughout the life of the product or service. It is a step- by-step approach for identifying all possible failures in a design, a manufacturing or assembly process, or a product or service.

    To see detailed information and an FMEA example from The Quality Toolbox, go to this ASQ web page.

    Training Courses
    training

    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?

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