Effective Process Auditing

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Our newsletters provide information on business management systems and process improvement methods. These systems include our services ISO 9001 QMS, AS9100 Aviation, Space and Defense, TS 16949 Automotive, ISO 27001 Information Security, ISO 13485 Medical Devices, and ISO 14001 Environmental Management Standards, and more. 
Further subjects include methods of performance improvement such as Six Sigma, Lean Enterprise, and other topics of interest to our readers.

Do you have a topic of interest for a subject article in mind? Please let us know.


Effective Process Auditing

With the current business environment due to the pandemic, virtual auditing has been a hot topic with various webinars and articles. In this newsletter, we want to complement that focus on how experienced auditors have their own favorite questions to ask when auditing, and how auditors should pay attention to the human side of auditing.

Some auditors struggle with what are the most important audit questions to ask, including are my favorite questions providing the right objective evidence needs? Let’s take a look at what audit questions can help to evaluate your organizations effectiveness and overall performance. The following are some valuable examples.

1. How do you access product or service requirements?

Everyone has a product or service they perform. It can be internal or external, and it can be as simple as passing it on to your fellow co-worker on an assembly line. Ensuring product information, for example documentation be available at points of use. Having access to this information is extremely valuable and the ability to describe how the requirements are carried out.  Specific questions relating to requirements can include:
  • Are the product requirements complete?
  • How do you ensure that correct versions are available?
  • How do requirements get reviewed prior to acceptance?
  • How do you know that the product meets the stated requirements?
  • What happens when changes are made to product requirements, and how are you informed?

2. How are problems identified and prevented?

Correcting a problem can be simple. Define, identify the cause, and take the necessary action. However, preventing it from occurring can be more of a challenge. Examples include:
  • How do you document product or problems?
  • How is the data reviewed and is trending being conducted?
  • How do you communicate ideas for improvement?
  • What statistical methods being used?
  • How do you record an issue that may require corrective action?
  • Do you use a formal problem solving method?

3. How are customer complaints handled?

Customer complaints do happen. Customer complaints represent a large risk as well as a valuable opportunity to improve the organization. As always, it all depends on how the complaints are handled. This is especially relevant to “customer touch point” personnel such as sales people, customer service representatives, technical personnel, and top management.
The auditor must find proof of a systematic approach to dealing with complaints. This typically will include defined responsibilities for logging and tracking customer complaints (internal and external) clear problem statements with all relevant facts included, logical analysis and problem causes, and actions that address the causes.
Here are a few related questions:
  • What method is used to capture complaints?
  • What tools are used to identify the causes of complaints?
  • What is the largest complaint category in your respective area?
  • How are personnel trained to prevent complaints?
  • How are customers made aware of actions on their complaints?
  • Has the number of complaints changed over time?

4. How does top management review the organization’s performance?

Top management should regularly analyze data and trends that show current performance. Is your company becoming more efficient, effective, more competitive, and better at pleasing customers?
ISO 9001 specifically requires management review, with defined inputs and outputs. This does not mean that a separate review is the answer. Effective companies integrate operational reviews and the more timely and action-oriented the review is the better the results. Here are some related audit questions:
  • Who is involved in reviewing the organization’s performance?
  • Are documented actions visible and resources identified?
  • Are comprehensive records kept and distributed?
  • Are all the required inputs and outputs addressed?
  • Documented evidence of continual improvement recorded?
  • How are all personnel made aware of the actions and decisions made?
These process audit questions are just a few examples of what may work for your organization. The best questions for you to ask depends on your organizations priorities, risks, and customer requirements. Focus your audit process on what is relevant, and you will achieve tangible results.

Human Side of Auditing Process
 This article discusses how auditors can be technically proficient, but struggle with the more human side of the auditing process. Proven techniques can help during interviews and make the auditee more comfortable. The following is a synopsis of a Quality Progress article – Which is Well Worth the Read and Practice! 

“The interview is more than a simple process of asking questions. It’s a relationship, however brief, between two people.”
The relationship starts the moment that you, the auditor or assessor, enter the room. There is never a second chance to make a good first impression: Did you enter with an expression of interest or suspicion? How confident did you appear? Did you introduce yourself or wait to be introduced? Did you take on the role of host or guest? Did you display enthusiasm? Your answers form the baseline of the interview relationship, and they determine the quality of the information you will obtain.
Let’s outline five underlying principles and techniques journalists use to conduct productive interviews:

1. Establish two-way trust: Work from the assumption the interviewee wants to share information and wants to make a valuable contribution to your audit or assessment results. Be professional, open and non-judgmental. While your subject may have his or her own agenda, set aside your concerns about that for the moment and try to put the person at ease. People need to feel confident you value what they offer and believe what they say-and that they can trust you.

2. Create a comfort zone: An interview should be relaxed and conversational. Social psychologists suggest we feel more comfortable around people who appear similar to us, with whom we feel familiar, who appear to like us and whose personalities are inherently attractive. If we try to conform to these ideas, there can be a real improvement in the quality of the interview.

By nature, people are unlikely to be open to complete strangers, so share a bit about who you are from the outset. Be prepared. Before you meet your interviewees, try to learn about their work and achievements. If you have the opportunity to meet them in their surroundings, look carefully around their offices and note photos, plaques or other memorabilia.

3. Pay attention: People who make eye contact while speaking are judged to be friendly, self-confident, mature and sincere, while non-lookers are judged as cold, pessimistic, defensive, evasive and immature.

In some instances, people look away when they are being evasive, but sometimes your subject may break the visual connection because he or she is thinking in a more introspective manner. To reestablish eye contact, lean forward as you ask your next question, arrange your face in a quizzical manner or make a hand gesture to draw the person’s attention back to you.

4. Paraphrase: During the interview, you might include an interviewee’s words and phrases in your questions. By paraphrasing, you indicate to your subject that you are listening and following. This technique creates empathy, suggests you are free of preconceptions and clarifies information for others who might be involved in the interview, such as representatives of partners, customers or suppliers. When you paraphrase, you speak the other person’s language, and it helps to convey shared meaning clearly.

5. Downplay yourself: The purpose of an interview is to gather information, not to talk about yourself. The best interviewers “concentrate on their interviewees so much that they almost become invisible. Use mirroring body language to establish rapport. If they sit back relaxed, you sit back relaxed. If they lean forward, you lean forward. it needs to be subtly done.

The best interviews do not just happen! They are the result of careful and conscientious preparation by the interviewer. Auditors must spend a great deal of time learning about the organization, the employees and the processes involved before asking the first question.
The best way to improve your interview skills is to practice-the more opportunities you have to ask questions, the better you will become at procuring the information you seek and your organization needs.

Building Success Through People

The term “people engagement” has been around for a couple of decades and is an often used buzzword, yet many organizations and managers are not entirely sure what it means. People engagement means much more than being present as an employee; it means making an active contribution, feeling genuinely valued and achieving quality outcomes for your organization.

Two ISO standards on people management have undergone an update to include useful steps on how the value of an employee can be enhanced, extended and nurtured. ISO 10015:2020 has become Quality management – Guidelines for competence management and people development, and ISO 10018:2020 is now Quality management – Guidelines for people engagement. Both International Standards present practical steps for managers and leaders to follow, adopt and measure. These standards are designed to be regularly referred to and not simply handed to employees in binders and then left to gather dust on the shelf.

Engaged organizations will have well-thought-out ways of developing their staff. Their aim is to have people there for a career, not just a job. Successful organizations often provide opportunities for staff to move to different areas within the organization to learn new skills and enhance their expertise.

These standards can be purchased at the ANSI Webstore.

Performance Metrics Mix
Performance metrics are a vital part of managing an organization. Many organizations have a tendency to select metrics by copying what competitor’s measure, what is read in the business press, and what benchmark firms are using.

The best organizational metrics keep the focus on its strategic direction, not the direction in which others are going! 

The types of metrics and the right mix of metrics drives effective outcomes. For example, some metrics should focus on customer needs (externally focused, effectiveness metrics) and some on organizational needs (internally focused, efficiency metrics) so the organization can effectively balance the management of resources used to achieve the market results. An organization with high customer satisfaction and costs that create negative profitability is not going to be a sustainable venture.

Some metrics should be able to evaluate results (outcome or lagging metrics), while others should allow proactive management of the vital factors (process or leading metrics) that create those outcomes. For example, on-time delivery (an outcome) might be significantly impacted by equipment reliability (a leading indicator for delivery performance). However, equipment reliability is an outcome measure for the maintenance management process. As much as possible, metrics should be biased toward business drivers, such as process or leading indicators, instead of outcomes.
Once the desired metrics have been identified, the real work begins. Decisions must be made regarding:
  • Who owns the metric?
  • Where will the data be acquired and how often?
  • How might the raw data be manipulated (normalized) to allow more equivalent comparisons over time?
  • How often should the metrics be reported and analyzed for decision making?
Although it might sound simple, creating operational definitions is an important component of metric details. What is meant by the terms as expressed in mathematical terms (for example, numerator, and denominator and time boundaries)? A company might ask, “What is meant by on-time delivery?” When it is picked up by the carrier or when it arrives at the target location?  Clear measurement and accurate definitions are important to an organizations success.


In the News

CFOs Preparing for Up to 30% Decline in Revenue

Gartner, the world’s leading research and advisory company survey shows 51% of CFOs Are Preparing for Up to 30% Decline in Revenue This Year Due to COVID-19.

A survey of 145 CFOs and senior finance leaders on April 12, 2020 revealed 51% of respondents said they were preparing for a revenue contraction of up to 30% this year due to the coronavirus pandemic.
Twenty-eight percent of respondents believe the impact to their organization’s revenue could be higher than 30%. “Most CFOs have told us they are using the most severe downside scenarios to inform their decisions right now.
This is leading CFOs to consider drastic cost management actions across April and May”, said Alexander Bant, practice vice president, research, for the Gartner Finance Practice. “When CFOs were asked how these downside scenarios are impacting their ability to fund long-term growth investments,  70% of CFOs said they are now showing caution in this area.”
For more information on this Gartner Survey visit the Gartner Newsroom.

Training Courses
Due to COVID-19 Virus course scheduling and delivery is currently suspended.  Let us know if you have a future Year 2020 training need. Stay Safe. 
All courses can be delivered at your company or at our training centers. We do provide training beyond our home state of Arizona. Click on the course title for description, schedule, registration and payment. Group discounts are available. We also provide custom designed training to fit your specific needs. All training is fully documented for your training records and certificates of training are awarded.
Don’t see a course or schedule that fits your needs?  Contact us.

Remote Versus Virtual Audits – We’re conducting Virtual Audits- Are You?   

“Auditing of a virtual location is sometimes referred to as virtual auditing.” ISO 19011. Remote auditing use techniques such as interactive web-based collaboration, web meetings, teleconferences and/or electronic verification of the client’s processes. Remote audits refer to the use of ICT to gather information, interview an auditee, when “face-to-face” methods are not possible or desired. (ISO 19011)

ISO 9001 Auditing Practices Group Guidance on: REMOTE AUDITS – Link to PDF Guidance.

Best regards, 

Walter Tighe and SES Team
Sustaining Edge Solutions, Inc.
Toll Free 888-572-9642

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