QMS Design for Functional Deployment 1

QMS Design for

Functional Deployment
A Step-by-Step Guide to QMS Creation and
success
Jeremy Hazel
 QMS Design For Functional Deployment 2

Introduction

Within the realm of quality there is no selection of topic more convoluted and misrepresented
that that of the Quality Management System (QMS). From what it is, to how to create it, and
more importantly what it is not; there is a general lack of understanding from those that are
working in the field to the board room of decision makers. For those users who have the distinct
pleasure of developing their system from scratch, to those given an unenviable task of retro-
fitting their current QMS, this manual is for you. Whether you are a professional process
engineer or a novice looking to make your mark, the opportunities for success have never been
greater, as the fundamentals of quality management system development borrow from a host of
tried and true methodologies. It is important to note however that without utilization as a way to
do business, the QMS will be neither effective nor efficient, and certainly will not result in
positive advancements for your organization, only unnecessary overhead.

The need for a QMS

While it’s not the be all end all of quality, the classification and categorization of our world is the
thing that allows we as human beings to organize and rationalize the world around us. In
situations where we can not directly observe a relationship in the physical sense, we seek to use
abstract models as a representation of the interactions around us. At a base level, this is all a
QMS is … a defined model of the interactions of systems, comprised of processes, that allows us
to understand the cause and effect relationships which are the result of the interactions.

However, as supply chains and business in general get more and more complex, we need to
understand how the activities we perform are really linked to the customer’s satisfaction, and
subsequently to the financial performance of the organization. This is where ISO 9000 enters the
picture as a standard playing field for organizations regardless of service, product or corporate
structure.

While various industries have adopted specific interpretations of a standard ( AS9100 for
aerospace and TS16949 for the automotive industry), it is important to note that companies in all
industries are being registered to ISO 9000 as a symbol of a customer-oriented philosophy. It has
value as demonstrated by the willingness to spend the money to prove it to the world. It is
important to note that the creation of an effective QMS should not undertaken with a focus on
meeting some defined criteria and holding up a certificate. A system like that is doomed to
failure due to a poor target at its outset. A QMS should be internalized as the way a company
manages and continues to improve its processes and customer satisfaction while, at the same
time, keeping an eye on the overall goal of a business; to make money.

So, in short, this is a simple instruction manual about making your QMS the linkage between
what really drives customer loyalty and retention and the processes that deliver your product or
service. Remember that the idea of a QMS is that it is a Management System that increases value
for customer, shareholders, and stakeholders. If you cannot manage with it, then you do not have
a viable QMS.
 QMS Design For Functional Deployment 3

The Design

Physical Location

Let’s start with the basics, at the highest level. Company ABC has a corporate office that
provides them with sales and design support and then manufactures the product at another
location. So let’s draw 2 simple boxes as we attempt to discover what goes where.

Exercise: Determine the Physical Locations for your companies QMS

Core Activities

To start, look at your QMS as a blank slate, even if you are doing a retro-fit of an existing system
as the same questions must be asked. First and foremost, what are the activities that your
organization engages in? What are those things that touch the customer?

In certain methodologies these would be referred to as COPs – Customer Oriented Processes,

however these I prefer to call your “Core Activities”. With your core activities, you may be
dealing with either an external or an internal customer. However, for our purposes, we will deal
with the external customer only, because in reality all individuals you provide services or goods
to should be treated as a customer, period. To develop an arbitrary second class of customer can
be a recipe for disaster, and management by exception.

For the purposes of this manual we will use a manufacturing company, ABC, that provides a
product X to a customer. ABC uses an external coating supplier to do a powder coat application
This becomes important later in the example. The core processes identified for company ABC
are shown below in Figure 1.
 QMS Design For Functional Deployment 4

Figure 1

Exercise: At This point define the top-level, core processes for your organization’s
business model

Systems

For each core process there are supporting systems. These systems are a collection of many
individual processes that all flow up and support the “Core Activities”. This relationship is
shown in figure 2. Notice that we’re still not going very deep, only one to two levels. Remember
that in QMS design, as in any other business design, less is more. Anything you create you will
have to maintain so be diligent in separating want from need and theory from practice. Also,
reality is the rule. We care about what is actually being done, not an ideal state, or might be
state, but the real current state. To move forward without clarity on these two items will likely
lead to failure when it comes time for certification.
 QMS Design For Functional Deployment 5

Figure 2

Exercise: Define and name the Systems that support your company’s Core Activities

Now, we will take the physical location and apply over it a rough sketch of what systems are
taking place at which locations, this will form the skeleton of our QMS map. This is a
requirement for ISO 9000, but more importantly it will form the basis for every important
decision we make from here on out. See Figure 4 for the first steps toward defining the QMS for
your organization. Changes prior to this step are OK, however from here on the decisions you
make will begin to consume your organization’s resources, so I encourage you to take the time
and solidify your commitment.

Figure 4

Exercise: Place Your Systems in the physical locations according to your structure
 QMS Design For Functional Deployment 6

Standard Systems

There are certain required processes in the ISO9001 standard that must be included. The
required processes according to the ISO 9000:2008 standard are listed in Appendix A, Table 1
for reference. They are grouped according to logical systems and summarized here, and then
placed into the QMS map at strategic locations, which we will address in the following pages.
See Figure 5 for the revised Map

Corrective and Preventative Action System- CPS

Non-Conforming Product and Process System- NCS
Internal Auditing System- IAS
Document and Record System-DRS

Figure 5

Now company ABC, due to the high volume of work that they do and the frequency of their
design changes, has decided to add a few more systems into their QMS based on their needs.
According to ISO, these are not required to be formally documented, however there must be
something in place. NOTE THE DISTINCTION BETWEEN REQUIRED WRITTEN
PROCESS AND ONE THAT IS NOT. ABC has chosen to add CCS- Change Control System,
MMS- Machine Maintenance System, TTS- Team Training System, and finally ITS- Inspection
and Test System. The revised map is shown below in figure 6.
 QMS Design For Functional Deployment 7

Figure 6

Exercise: Identify the below items for your own organization, placement is not important
at this stage. Remember to take only what you need, a QMS should be lean and the more
high level processes you have, the lower level “shalls” you are imposing on yourself.

Flow and Interaction

It is a requirement of ISO that organizations document the interaction of its processes in the
quality manual. In the past this meant the infamous matrix showing the standard requirements
and a lot of little tick marks all over the page. The challenge all too many times is that no one
uses it, not even the auditor. This map must be the cornerstone of your QMS. Think about this
map as a machine. Requirements come in and quality product comes out.

Now, it’s time to define those flows and to do this we will use 3 different styles of line. It is
important to note that the flow of “stuff” isn’t just parts like on an assembly line, but a
fundamental basis for feedback loop. ABC has chosen to structure their flow as shown in figure
7.
 QMS Design For Functional Deployment 8

Figure 7

Notice how there are no lines or interactions with the top 5 systems. This is because they are
what I call “abstract processes”. These processes are ever present and always in play, yet do not
directly impact the customer. They are like the oil in the engine, essential to keep things moving
but not necessarily the power that keeps the wheels turning. As an example, look at inspection
and test (ITS). Would you need work instructions and records? Would you occasionally need to
initiate corrective action? Would you audit it? Would people require training? The answer to all
of these is yes.

So there you have it. Figure 8 has identified the hypothetical QMS map for company ABC. This
is only the first step in an incredible journey. Next we will talk about processes.

Exercise: Identify the flows for product, information and NC product (you may even go
as far as to separate internal and external information flows if you want to)
 QMS Design For Functional Deployment 9

Figure 8

Processes

Now it’s time to get down to the true engineering work that makes a QMS a job for truly gifted
process engineer. We have to define processes. Processes (plural) are what systems are
comprised of and they are the building blocks of what makes the world go around. It’s a
conscious decision by the system creator how complex they need to be to functionally do the job.
Remember, all the customer wants is good parts on time, at a good price. The customer does not
care how this happens; all they care about is the end product. While we all have a great inventor
in us who desires to make a lasting mark, I encourage you to keep it simple at this point. There
will be plenty of time to exercise our complex problem solving brain in the later portions of the
system, but for right now less is more.

A process can be defined in many different ways, but in its essence it’s just a collection of
activities orchestrated in a sequence that has an output. In short: things go in one end and a
product comes out the other. As a practical example, when you pay bills, unpaid bills go in one
side, and paid bills come out the other. In a forging operation raw molten metal goes in one side
and a forging comes out the other. In both cases, there is a process that does a transformation.
The thing going in must be different in some way from the thing coming out and ideally this
process must add value to create something a customer is willing to pay for.

But not every step in the process adds value from the customer’s perspective. Steps that do not
are non-value-add activities. This does not always mean they aren’t necessary, just not value
add from the customer’s perspective, and they ARE costing money. We’ll discuss this more
later.
 QMS Design For Functional Deployment 10

For now, in our ABC company, we’ll shift from the macro view and begin to go deeper. To keep
things simple, we’ll choose only one System, the Manufacturing Realization System (MRS), to
define processes for.

Luckily, the MRS is by far the most basic of all systems. It is something we can see, touch and
audit to. The MRS can be broken down into whatever level business ABC requires but it must tie
back to a “Core Activity”. We must assure that the intent, measure and construction of the
processes is consistent with a flow down of performance alignment. In company ABC the
processes identified for inclusion into the MRS are listed below in figure 9.

Figure 9

For purposes of the illustration, we’ll examine the overall flow, but will focus only on the
machine check in process. Realization is simple. We create the documents that will guide our
work, check in the machines that do the job, control the running of those machines, deal with any
unplanned events and then evaluate the data coming out of the process. Regardless of whether or
not it is a service or a product, the steps are relatively similar. ISO 9000 requires a process based
approach and the auditors that will perform your registration audit using a variation of a process
based audit tool (I have seen 4 different versions myself from registrars).

We have a process (“Machine Check in”), we have it linked to a system, so now we need a
format. At its most basic level, we need to show inputs, outputs and a process flow. But there
are many other things you can/should identify, to make it useful. A sample of an effective
template is shown below in figure 10, and this is what we will use for the remainder of the
discussion on process. We should have already answered the first 2 questions so we will begin
with number 3.

Question 1- What is the Process?

Question 2-Who owns the Process?

 QMS Design For Functional Deployment 11

Question 3- What do we want the Process to do?

Question 4- What does the Process flow look like?

Figure 10

Document # XXXX-XXXX Measures Revision

Process Title Machine Check In Effective : % of Machines found with non-identified out of spec values
Process Owner Mfg. Mgr Company ABC Efficient: % of values requiring additional verification A
Date Effective 4/1/2010 Frequency and visibility: Monthly Mgmt review meeting
Input Who What How Measure Process Flow Output

Exercise: Define a Process using your QMS Map and the above 2 questions

This should be no different than developing your core product. There is no room in today’s lean
manufacturing world for waste, and your QMS is no exception. I recommend starting with the
SIPOC, a high-level process diagram showing the Suppliers, Inputs, Processes Outputs, and
Customers for the process. For the Machine Check in Process, ABC developed the following list
of customers through quadrant segmentation and CTC (Critical to Quality) analysis:

1. Site Quality Manager

2. Site Manufacturing Manager
3. Next operation in line
4. Machine Operator
5. Assembly Line Supervision

Next we have to go to the stakeholders and determine what, in their eyes, is critical for the
process. This will help determine the CTQ metrics, which is what we use to measure process.
For the stakeholders above, the below list was tabulated following discussions with the
stakeholders

Figure 11

Customer Requirement CTC Metric

1. Site Quality Manager Effective Covers all process controls on control plan
2. Site Manufacturing Manager Efficient Takes no longer than 5minutes
3. Next operation in line Effective Make sure the out of spec values have been cleared
4. Machine Operator Efficient Raised repeat issues to Mgmt. Attention
5. Assembly Line Supervision Efficient Raises the issues to get them fixed the first time

Exercise: For the process you have selected from the QMS system, brainstorm stakeholders and
define their CTQ requirements in designing your process
 QMS Design For Functional Deployment 12

Once you define what you want to get out of it, you are ready to map it. This part differs a bit
depending on whether or not you are doing a retro-fit of an existing process, or doing a
deployment from scratch, but the basics are the same.

First identify the steps present in the process, don’t worry about being pretty, or fancy at this
point. If you don’t get it wrong the first time then you have not thought the process through
enough. For company ABC the process they have developed looks like this.

Figure 12
Document # XXXX-XXXX Measures Revision
Process Title Machine Check In Effective : % of Machines found with non-identified out of spec values
Process Owner Mfg. Mgr Company ABC Efficient: % of values requiring additional verification A
Date Effective 4/1/2010 Frequency and visibility: Monthly Mgmt review meeting
Input Who What How Measure Process Flow Output

Operator Does
Initial Proecess
Check In

Are Values
In ?

Checksheet
quarantined in High
risk section Process Checksheet
is verified by
subsequent station

Are Values
In ?
Team Leader
coordinates
appropriate
response
Machinery is
Approved to Run

Now, group the process flow into smaller chunks. We do this because if a process is not
performing we want to know at variable points, before the entire train is completely off the
tracks. Remember this is one process for one system, and there are many more to go, so don’t get
too down in the weeds during the initial creation. A QMS will grow and evolve on its own, so
walk before you run. We have identified the sub processes for the Machine check in process in
yellow.
 QMS Design For Functional Deployment 13

Figure 13

Document # XXXX-XXXX Measures Revision

Process Title Machine Check In Effective : % of Machines found with non-identified out of spec values
Process Owner Mfg. Mgr Company ABC Efficient: % of values requiring additional verification A
Date Effective 4/1/2010 Frequency and visibility: Monthly Mgmt review meeting
Input Who What How Measure Process Flow Output
Initial Check In

Operator Does
Initial Proecess
Check In

Are Values
In ?

Checksheet
Verification quarantined in
High risk
section Process Checksheet
is verified by
subsequent station

Are Values
In ?
Correction Team Leader
coordinates
appropriate
response
Machinery is
Approved to Run

Now we fill in the sub-processes with the input and the output, who, what, how and we define
enough measures to be able check ourselves. This is ideally identifying all of the sources of
variability in the process, so mark down who interacts, what can go wrong… An example of
some of those items ABC has chosen are shown in figure 14
 QMS Design For Functional Deployment 14

Figure 14
Document # XXXX-XXXX Measures Revision
Process Title Machine Check In Effective : % of Machines found with non-identified out of spec values
Process Owner Mfg. Mgr Company ABC Efficient: % of values requiring additional verification A
Date Effective 4/1/2010 Frequency and visibility: Monthly Mgmt review meeting
Input Who What How Measure Process Flow Output
Initial Check In
Unchecked Machine Production Operator Press Process Check Sheet Checked Machine
Operator Does
Quarantine Area Average Cycle time for Check-in
Initial Process
Check In

Are Values
In ?

Check sheet
Verification quarantined in
Checked machine Subsequent Operator NA Process Check sheet High risk Verified Machine
Verification Cycle time Process Check sheet
section
% identified with no issue is verified by
subsequent station

Are Values
In ?
Correction Team Leader
Machine Needing Verification Line Leader Approved Check sheet
coordinates
Line Operator Press Process Check sheet % requiring additional verification
appropriate
Line Maintenance Quarantine Area Repeating NC values
response
Machinery is
Approved to Run

Exercise: Define your Sub Processes and identify your inputs, outputs, who, what, how
and measures based on your process selected

Measurement Points

Now that you have what to measure and the process pieces, it’s time to identify your
measurement points. How are you going to collect the data? How are you going to report it?
How are you going to show it? These are all very important questions for the next phase, which
draws the financial line. We have used a blue dot to identify the measurement points in the
process. This helps to identify what resources will be required and what the expectations are in
creating the tools to track what we need to track.
 QMS Design For Functional Deployment 15

Figure 15
Document # XXXX-XXXX Measures Revision
Process Title Machine Check In Effective : % of Machines found with non-identified out of spec values
Process Owner Mfg. Mgr Company ABC Efficient: % of values requiring additional verification A
Date Effective 4/1/2010 Frequency and visibility: Monthly Mgmt review meeting
Input Who What How Measure Process Flow Output
Initial Check In
Unchecked Machine Production Operator Press Process Check Sheet Checked Machine
Operator Does
Quarantine Area Average Cycle time for Check-in
Initial Process
Check In

Are Values
In ?

Check sheet
Verification quarantined in
Checked machine Subsequent Operator NA Process Check sheet High risk Verified Machine
Verification Cycle time Process Check sheet
section
% identified with no issue is verified by
subsequent station

Are Values
In ?
Correction Team Leader
Machine Needing Verification Line Leader Approved Check sheet
coordinates
Line Operator Press Process Check sheet % requiring additional verification
appropriate
Line Maintenance Quarantine Area Repeating NC values
response
Machinery is
Approved to Run

Exercise: Develop your measurement points for your process

Now, you have a complete process that you can deploy to the floor and bring into your QMS. It
is auditable, actionable and visible. But, still, without a tie to real business impact ($$$’s) you
have little or no chance of getting management to care. So, how do you make the case for your
process to management system and establish the QMS as a viable part of the organization, just
like manufacturing a part? Assign cost in terms of dollars, using Cost of Poor Quality(COPQ).
CoPQ can be as high as 30% of revenues and eats up the bottom line after all is said and done.

Financial Tie In

Let’s say ABC has 100 machines and each one is overseen by an operator. The facility runs 3
shifts and pays a flat 10.00 per hour per person. The math is simple going back to the CTQ
(Critical to Quality) requirements from before. The requirements from the manufacturing floor
said initial check in should be less than 5 minutes. So each shift there is 500 minutes of check in
(100 machines*5) so that is right around 8.3 hours each shift of machine check in. Now
multiplied by 3 shifts says that there is 25 hours every day of machine check in going on.
Multiply that by 10.00/ hr and the machine check in costs 250.00 per day over an average of 200
working days per year it comes out to 50,000 dollars. Now this is assuming that each machine
passes the first time. Through the metrics we know that only 80% of the machines pass the first
time, so this means an additional 20% for a redundant check. This increases the cost up to 60K
annually.
 QMS Design For Functional Deployment 16

This, however, is just the tip of the iceberg. What if every time the team leader had to investigate
we spend 10 minutes on the additional check, not just 5, and we also have to count the time
maintenance and engineering spend investigating. Soon we are up to a $100K check. All of this
can be proved through a brief look into standardized work cost, lean manufacturing and a quick
cycle time study. We can absolutely assign a hard dollar value to the activity …. and that is
what needs to be shown in Mgmt. review. Think of it using the following parameters:

If I had to make the case tomorrow for additional resources, how would I prove that I really
needing them (hint: saying “I think I…” will get you booted out of the race for resources before
you even begin). Try this instead:

ABC has identified the standard cost for its “Machine Check in Process” in figure 15 below.
Note that the 23K comes from the holding cost for material that had to be put on hold (excess
inventory, labor, changeovers) caused by the operator failing to identify the process was out of
spec. Clearly the process is not effective (nor at 40% NRFTT is it efficient).

Figure 16

Measures Performance Financial Impact

23,000 dollars of inventory had to be put on hold due to out of spec
values that were not identified by the original and subsequent
Effective : % of Machines found with non-identified out of spec values 30% operator
Efficient: % of values requiring additional verification 40% 100 machines over 3 shift for 20 mfg days = $ 400.00 from NRFTT
Frequency and visibility: Monthly Mgmt review meeting NA NA

Exercise: Define the CTQ efficiency and effectiveness criteria as you would present it to Mgmt.
review. It must be quantifiable in dollar value

CI and Mgmt. Review

The purpose of a QMS, at its most basic level, is to increase customer satisfaction and improve
company performance. There are two other extremely important portions of the QMS. First, the
CIS (Continual Improvement System) must be in place to address processes that are not
performing at an acceptable level, from the customer and/or business perspective. This is where
basic process improvement tools, Lean, and Six Sigma come in. If it’s a flow or cycle time
problem, think Lean. If it’s a quality or defect problem, think Six Sigma. It may be that the
process is so broken that it needs a complete redesign. This is where Design for Six Sigma
(DFSS) could be useful. Don’t become a zealot to the methodologies. Have all the tools in your
improvement toolbox, and use what makes sense.

The MRS (Management Responsibility System) is also critical. For your QMS to offer real
benefits, it must be an integral part of management review, and ACTIONS must be identified
and taken in lieu of review. I have seen organizations hold semiannual “ISO 9000” reviews that
serve no purpose other than meeting a requirement and checking the box. This is not what we’re
after. Each process owner should present their own accountability measures for their own
processes in management reviews, and they should take place side by side with the
 QMS Design For Functional Deployment 17

manufacturing reviews. To do otherwise invites the idea in that “it is outside of our normal
business, and as such is unimportant”

A final representation of the ABC QMS map is shown in Figure 17.

Figure 17

Conclusion

While none of this is earth shattering or even new, it represents a departure from traditional
paper based QMS systems to a living breathing collection of processes. These processes form
the basis for the system, and the systems form the QMS map, and the map represents what an
organization is on the inside. It is the workings behind the watch face. Management must see the
QMS as something as natural as financial accounting, and equally important. To do this, it must
be presented in financial terms. Why? Because what is the goal of a business: to make money.

This is the first installment of materials relating to financially-centric and practical QMS
deployment, and sets the stage for the more advanced concepts that we will release in the near
future.
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Definitions and Key terms

Core Activities –Those activities that have a customer interface and have a DIRECT opportunity
to negatively impact the customer.

Process- a collection of activities orchestrated in a sequence

Requirements for a Process:

 Input
 Output
 Transformation

System- A Collection of Processes that support the Core Activities

Value Added- A customer would pay for that

Non-Value Added- A step a customer would not pay for

NRFFT- Not Right First Time Through. This is the amount of product which can be said to pass
the first time and is equal to the total ran / those passed the first time.

VOC- Voice of the Customer