Automotive Quality Management System Evolves
Second edition has its pluses, but lacks focus on business planning
by R. Dan Reid
ISO Technical Specification (TS) 16949, based on ISO 9000, is an international fundamental quality management system specification for the automotive industry and the first technical specification of the International Organization for Standardization, known as ISO.
The International Automotive Task Force (IATF) and the Japanese Automobile Manufacturers Association (JAMA) produced TS 16949 with support from ISO Technical Committee 176 (TC 176). TC 176 is the ISO committee that deals with quality management standards.
Members of ISO TC 176 recently voted on the draft second edition of TS 16949. The outcome of this vote was unknown at the time this issue went to press.
In this column, I will look at the second edition's significant changes from the first and from QS-9000, the fundamental quality management system requirements for suppliers of DaimlerChrysler, Ford, GM and many others in the automotive industry. There are also some proposals for areas of particular emphasis going forward. Note the following analysis uses ISO DTS 16949:2002, which was the version voted on by TC 176. It is subject to change prior to its release.
TS 16949:2002, as it will be called, utilizes the full text of ISO 9001:2000, with all its pros and cons. This incorporation changes the TS 16949 format significantly. Like ISO 9001, the new TS 16949 is less prescriptive than the first edition, due in part to the planned development of a new accompanying guidance document to be called "IATF Guidance to ISO/TS 16949:2002."1
This guidance document will contain examples and further explanations of the content of TS 16949 but will not be a certifiable document. In reality some of the guidance text and graphics found in TS 16949:1999 are simply being relocated.
To exclude or not to exclude
The ISO 9000:2000 series reduces the number of certifiable standards from three (ISO 9001, 9002 and 9003) to one (ISO 9001). To provide for certification of various types of nonmanufacturing organizations, there is a provision in ISO 9001:2000 for exclusion of some of the standard's requirements, with the following caveats:
- Exclusions are limited to requirements in clause seven, which deals with product realization.
- Exclusions cannot affect the organization's ability to meet customer and applicable regulatory requirements.2
Further, the International Accreditation Forum (IAF), primarily made up of national accreditation bodies for quality system certification, has released a guidance document for applying ISO 9001:2000. The IAF operates a program of conformity assessment with goals that include elimination of trade barriers and international acceptance of its accreditations and certificates issued by its accredited certification bodies.
The notion of "permissible exclusion" of some of the ISO 9001 requirements creates problems and is a cause of significant customer concern. Thus, IAF requires that any exclusion taken by a certified organization be clearly stated on the certificate within the scope of the quality management system.3
Since exclusions are specific to section seven on product realization, it is important to understand what requirements are found there. They include the planning of product realization; customer related processes that include review of product related requirements and customer communications; design and development; purchasing; production and service provision, which includes production control, process validation, identification and traceability, customer property and product preservation; and the control of measuring and monitoring equipment.
Customers of the certified organization could be concerned about the exclusion of some or all of these requirements. To address this, TS 16949:2002, clause 1.2, limits the permissible exclusions to clause 7.3, covering design and development. The exclusion is thus only for organizations not responsible for product design and development.
"Design" and "development" are now linked in each usage in the new ISO 9000 family. It is important to note the new term is defined very broadly in ISO 9000 as a "set of processes that transforms requirements into specified characteristics or into the specification of a product, process or system."4
Note also the term "product" continues to include software, services and bulk materials. Thus, a legitimate exclusion of clause 7.3 compared to the current number of ISO 9002 certifications should rarely occur, at least in industry. (ISO 9002, which will eventually expire, applies to organizations that have no design capability.)
IATF argued for the inclusion of process design and development in drafting ISO 9001:2000. The subject is now addressed in the standard in clause 7.1, note 2. As a note, it is not an ISO 9001 requirement. It does continue as a TS 16949 requirement, however, and is not subject to exclusion for TS 16949 certification.
Some customers continue to have company specific additional requirements that must be included in the scope of certification if TS 16949 certification is to be accepted.
But what does this stuff mean?
One giant step backward in TS 16949:2002 is the deletion of numerous terms and definitions. ISO TC 176 recognized the importance of the definition of terms used in the ISO 9000 family and provided a separate document for this purpose: ISO 9000.
Definition of terms is critical. In QS-9000's third edition, 85 terms are defined to provide for common understanding and consistent application. Use of these definitions is mandatory. In TS 16949:1999, this number fell to 60, and in the new revision, there are only 13.
Because TS 16949 is intended to be a global document and terms in English can be ambiguous compared to other languages, this reduction in the number of defined terms will likely result in wider variation in the application and interpretation of the requirements. Because reduction of variation is a fundamental of quality management, a more thorough definition of TS 16949 terms would have been appropriate.
The writers of the ISO 9000 standards, however, deserve congratulations for agreeing on a definition of "quality" as "the degree to which a set of inherent characteristics fulfills requirements."5
Let there be efficiency
TS 16949:2002 adds a new requirement for top management to monitor product realization and support processes to assure both their effectiveness and efficiency.6 It is unfortunate there is no requirement in this clause for top management to take appropriate action when effectiveness or efficiency is compromised.
In an earlier "Standards Outlook" column, I discussed W. Edwards Deming's philosophy, in particular, of management's responsibility to have profound knowledge of the processes it supervises.7 Management is responsible for the system the employees use, so it must understand the processes and what is necessary to improve them. Deming also emphasized the need for competency, which has now found its way into ISO 9001.8
Process effectiveness and efficiency will continue to be of critical importance to industry in general. In recent months we have seen significant declines in industrial growth. Unemployment has steadily risen as thousands have been laid off. Companies have gone out of business. Many others are flirting with bankruptcy. For the foreseeable future there is an urgent need to have a laserlike focus on cost.
Organizations and their certification bodies should therefore proactively focus on process capability, effectiveness and efficiency. TS 16949 or QS-9000 elements such as the business plan, quality system performance, and analysis and use of data could help in this effort.
Managers in a TS 16949 or QS-9000 certified organization should use design records, failure mode effects analyses, control plans and operator instructions as elements of the same process instead of treating them as separate unrelated exercises. Other elements such as contingency planning and supplier development should also be proactively utilized to avoid crisis.
Organizations need to know the capacity utilization and financial condition of their suppliers. Rapid and large increases or decreases in sales volume place critical stress on an organization and its quality management system. Process reengineering and training become urgent as a result of this fluctuation.
Lending organizations become wary in difficult economic times, so operating cash and advances may not be as obtainable for new programs. Key purchased products, therefore, should be reviewed for dual sourcing. Organizations in an acquisition mode need to understand what constitutes adequate due diligence to avoid buying into a problem.
Subtractions to the equation
With the advent of quality management standards for the environment (ISO 14000), occupational health and safety, social accountability and the like, the natural evolution for international standardization will surely be toward an overall management system standard in which quality is but one part.
Unfortunately, the business plan element has been deleted from TS 16949:2002. There are TS 16949:2002 elements in which the organization's business plan is assumed (for example, 22.214.171.124 and 126.96.36.199). As a result there are no longer requirements for:
- Short- and long-term goals and plans based on analysis of competitive products.
- Benchmarking inside and outside the organization's industry and commodity.
- Methods to ensure the plan is followed and communicated internally.
Also deleted are specific requirements in the delivery element. These include: the requirement to establish systems to support 100% on-time delivery, the communication to the customer of an anticipated delivery problem, implementation of corrective action when 100% on-time delivery is not met and adherence to lead time requirements. Other requirements deleted from this section, for example, use of advance ship notices, electronic communications systems with the customer, and specified routings and containers are addressed in customer specific requirements or contracts.
The sum result is a document focused more on the small "q," the quality function, than on total quality management or the business in general.
Because it is linked to the ISO 9001 management review requirement (clause 5.6), the TS 16949:2002 quality management system performance clause (188.8.131.52) is also weaker than the clause in the first edition.
Organizations typically conduct the ISO 9001 required management review once or twice a year. This creates long feedback loops between the system performance review and actions taken. Also, the first edition of TS 16949 required that the results of an evaluation of quality system performance be used for improvement or corrective action as appropriate. The implicit expectation was these evaluations would take place more frequently than does management review.
Positive additions to the equation
As industry becomes more competitive and customers demand more value in products, organizations are forced to turn to new technology not only to compete but also to gain competitive advantage and address regulatory requirements. Certification bodies and internal auditors should periodically review technology trends in industry.
Clause 184.108.40.206 of TS 16949:2002 on employee motivation and empowerment has a significant addition requiring an organization to create an environment to promote innovation and technological awareness. This is a definite improvement.
Another improvement is in the supplier development clause (220.127.116.11). There is now a requirement that suppliers to TS 16949 certified organizations be ISO 9001:2000 certified by Dec. 15, 2003. The overall impact of this change should be positive, subject in part to how well the conformity assessment community enforces the permissible exclusions clause I discussed earlier.
There are also some newly specified performance indicators for determining customer satisfaction (clause 18.104.22.168). These include:
- Delivered part quality, for example parts per million.
- Supplier fault customer plant disruptions, including field returns.
Around the next corner
Results of the global rollout of QS-9000 are impressive--in both cost and quality in certified companies. There still have been too many incidents, however, of poor quality product from certified companies.
During the past few years, automakers have been moving slowly away from reliance on certification alone to ensure product quality from their suppliers. They have been using company specific initiatives including tailored versions of advanced product quality planning and second-party quality system assessments of suppliers to provide additional assurances. This is likely to proliferate as time goes on.
With the QS-9000 rollout, variation was controlled by a task force of only three companies (GM, Ford and DaimlerChrysler) and a supplier council, with initiatives such as sanctioned interpretations and auditor recertification. With TS 16949, there are now five oversight bodies in five different countries: the United States, United Kingdom, Italy, France and Germany.
Numerous companies are involved. Despite IATF agreement on use of a common process, the probability of process variation has already increased exponentially. Now with JAMA involvement, this number of oversight bodies and companies involved may grow and add more variation.
As process variation increases, customer confidence in the process will decrease. When customer confidence in the automotive sector scheme approaches the level of confidence for the basic ISO 9000 scheme, the value of third-party certification of suppliers will be questionable.
Here's a recommendation for the third-party assessment community: One way to address the variation in the international certification process is to reduce its scope. Instead of claiming the certification process can provide customer assurances for the entire quality management system, with more than 400,000 ISO 9000 certified companies worldwide, perhaps accrediting and certification bodies should identify a smaller number of specific elements for which they can deliver customer assurance--then deliver it all the time. It is a question of process capability for the international conformity assessment process.
Once the conformity assessment community demonstrates it can deliver a consistent product internationally, even if it is smaller in scope, then customers of organizations and sectors using ISO 9000 based quality systems can identify the difference between what they can get from certification and what they need. Organizations can then develop initiatives to efficiently fill the gap.
What do you think?
1. Technical Specification ISO/TS 16949, Quality Management Systems; Automotive Suppliers; Particular Requirements for the Application of ISO 9001:2000, IATF final draft, July 26, 2001, clause 0.3.1.
2. ANSI/ISO/ASQ Q9001-2000, Quality Management Standards--Requirements, Dec. 13, 2000, clause 1.2.
3. International Accreditation Forum (IAF), "IAF Guidance on the Application of ISO 9001:2000," Guidance 3.
4. ANSI/ISO/ASQ Q9000-2000, Quality Management Standards--Fundamentals and Vocabulary, Dec. 13, 2000, clause 3.4.4.
5. ANSI/ISO/ASQ Q9000-2000, American National Standard, Quality Management Systems--Fundamentals and Vocabulary, Dec. 13, 2000, clause 3.1.1.
6. Technical Specification ISO/TS 16949, Quality Management Systems; Automotive Suppliers; Particular Requirements for the Application of ISO 9001:2000, IATF final draft, July 26, 2001, clause 5.1.1.
8. ANSI/ISO/ASQ Q9001:2000, American National Standard, Quality Management Systems--Fundamentals and Vocabulary, Dec. 13, 2000, clause 6.2.1 and 6.2.2.
R. DAN REID is manager, advanced activities, worldwide purchasing, at GM Powertrain. He is co-author of the three editions of QS-9000, ISO Technical Specification 16949; the Chrysler, Ford, GM Advanced Product Quality Planning With Control Plan; the Chrysler, Ford, GM Production Part Approval Process Third Edition; the Chrysler, Ford, GM Failure Mode and Effects Analysis manuals; ISO 9001:2000 and ISO IWA 1, an ISO 9004 based guidance document for health service organizations. He was also delegation leader of the International Automotive Task Force and has served on numerous International Organization for Standardization (known as ISO) committees, working groups and task groups, including the group developing the guidance document based on ISO 9004:2000 for healthcare organizations.