STANDARDS OUTLOOK

Why a New ISO 9004?

by John E. “Jack” West

In the rush that is today’s business environment, we often worry more about details than we do the big picture.

In terms of the management system, this often means we spend much of our time on issues related to conformity with specific requirements of quality management systems (QMSs) like ISO 9001 or environmental management systems like ISO 14001.

Don’t get me wrong—there is nothing wrong with meeting the detailed requirements. But the real goal should not be simply to comply with each requirement of the standards, but rather to most efficiently meet a requirement in a way that provides synergy with other elements of the management system.

A system’s individual elements—its objectives, processes, activities and resources—need to work together to meet requirements and, when needed, improve business results.

Back when ISO 9001:2000 was being developed, the need for guidance related to improvement was clearly recognized. The ISO 9004 performance improvement guidelines were created to fill this need as a companion to ISO 9001.

At the time, writers of the two standards referred to ISO 9001 and ISO 9004 as the “consistent pair” of QMS standards. ISO 9004 is not a guide for implementing ISO 9001, but rather a guide for improving a system so it yields improved performance.

I think the writers were successful. If users give ISO 9004 more than a casual look, they tend to find it useful in providing ideas they have not thought of for specific aspects of their management systems.

Getting the compliance method right is a key first step in developing an excellent management system. The method you use to meet a requirement should be dependent on your expectations and how that process or activity fits with the others.

Management Review Example

As an example, let’s look at the requirement for management review. In some systems, management review is viewed as an infrequent event, while in others it is more of an ongoing process and an integral part of day-to-day activities.

Management system standards generally are not prescriptive on this requirement. While requiring the reviews to focus on identifying changes needed for system improvement, they recognize that many approaches will work.

ISO 9001 and ISO 14001 permit organizations to choose a management review process that works best given their circumstances. But that is not where it ends. Management review has to work with other parts of the system. Needed inputs might come from the organization’s measurement, audit, corrective action and other processes.

And, to be truly effective, the management review needs to be established in a way that makes it convenient and essential for top managers to be fully involved.

In other words, management review is linked directly to some elements of the management system (such as measurement, corrective action and audit). In some organizations, it also is indirectly linked to other key processes of the QMS, such as design and development.

More importantly, management review is linked even less directly to other elements of the overall system of the organization. These indirect links might include things like the calendars of key executives or the organization’s strategic planning process.

So, depending on the type of business and the way other parts of the management system are structured, management review might need to be a near daily activity, an infrequent event or something in between.

Highly prescriptive guidance on such activities as management review would be a mistake because organizations need the flexibility to fit the requirement within their own systems.

If the standard were to prescribe how management review must be structured, it is certain some organizations would find the required method to be ineffective for their circumstances.¹

Customer Requirements Links

Many such linkages are apparent from a study of only ISO 9001. A good example is the apparent linkage among the requisites related to meeting customer requirements.

ISO 9001 contains many requirements that, taken together, should provide reasonable assurance that a system’s output will meet customer requirements:

• An organization’s quality policy must include commitments to meeting customer requirements and continually improving its QMS.
• Product designs must be validated to ensure they will meet requirements for given applications.
• A product must be verified to ensure it meets requirements.

Identifying and meeting customer requirements is a consistent theme throughout ISO 9001. For example, one of the expected outputs of a management review is a decision regarding product that doesn’t meet customer requirements.²

All the customer requirements are obviously linked by using the words “customer requirements,” but many other requirements of ISO 9001 can also have a positive effect on the need to meet customer requirements. For example:

• In some cases, having competent people (clause 6.2.2) or appropriate infrastructure (6.3) can be the critical element in meeting customer requirements.
• Internal audits (8.2.2) can contribute to the consistency with which customer requirements are met by leading to correction of system problems that could cause nonconformities.

In fact, similar logic can be applied to almost all ISO 9001 clauses. They fit together to form a systematic ap-proach to meeting customer requirements.

Doing the Minimum vs. Gaining Competitive Advantage

Standards like ISO 9001 provide a minimum set of requirements that, if implemented in an organized and integrated way, should result in a management system capable of achieving its objectives.

On the other hand, ISO 9001 does not require organizations to carry out the required activities in an efficient manner. Also, the requirements of standards like ISO 9001 can never include all the things an organization will want to do to achieve competitive advantage.

This is because the things critical for one organization’s circumstances might well be irrelevant for others. Standards, for example, might prescribe requirements to ensure that workers are competent at what they are required to do, but they are unlikely to mandate organizations to have specific cultural models, such as empowerment or teamwork.

A system in which the customer contact employees are fully empowered to satisfy customers is very different from one with tightly controlled employee boundaries of action.

In actual practice, customers might seldom notice the difference, particularly in cases in which employees with tight boundaries have instant access to computer databases that clearly tell what action they should take in a given circumstance.

Cultural Differences

A self-managed team environment in which the team members must work together to schedule production, approve the hiring of members, measure their own performance and solve problems is very different from a team environment in which most of these activities are done by supervisors and engineers. Furthermore, systems that promote teamwork are not common at all in some parts of the world.

So standards like ISO 9001 and ISO 14001 are, by intent, required to be culturally neutral. If there is a culture in which workers are pushed to work fast, the organization will need to compensate for any errors this might cause, perhaps with additional verification. But, additional verification might not be needed where employees are expected to do their work very carefully.

Under ISO 9001 and ISO 14001, organizations can choose from many techniques and cultural models, and use whatever combination of techniques works—it’s their choice. Organizations need to find the right set of interrelated elements so the overall system achieves objectives.

All organizations can meet the standard, but they might not all yield the same overall results. For example, an empowered workforce, in which care is exercised with little independent verification, likely will produce better results (equally good or better product and lower cost simultaneously) than an organization with harried workers and a lot of verification.

The workforce culture could have an impact on many other parts of the system. For example, selection of the most effective management review process may be dependent, in part at least, on the workforce culture.

Currently, the International Organ-ization for Standardization committee responsible for ISO 9001 and ISO 9004 is in the process of amending ISO 9001. The changes expected for ISO 9001 are minor. The committee also is preparing a major revision to its companion ISO 9004. Both are expected to be issued in 2009.

Revising ISO 9004

ISO 9004 already contains a lot of good material, and its simple assessment technique, given in Annex A, guidelines for self-assessment, can be very useful for organizations wanting to improve their management systems.

Although useful as is, the 2000 revision of ISO 9004 did not fully develop some things needed for sustainable success of an organization. The new version is expected to deal more thoroughly with areas such as ethics and social responsibility, organizational mission and vision, adaptability and agility, knowledge management, alignment with other management systems, and linking objectives and actions to results.

Of course, getting ideas for robust processes to cover an individual system element is only one step in developing an excellent management system. A good system also should be designed so the system is much better than the sum of its individual parts.

The new version will be very similar to the current ISO 9004. It will not contain any requirements. It is not an implementation guide for ISO 9001. It will not be a business excellence model like the Malcolm Baldrige National Quality Award criteria. It will not include untried approaches.

The revision is intended to facilitate improvement in users’ QMSs—to help organizations build on their management systems so that the systems create more value for customers and other stakeholders.

Primarily, ISO 9004 is intended to help new and current users of ISO 9001 who want to develop QMSs that will help their organization sustain successful performance.

Developing such a document has proven quite a challenge. The early working drafts read more like a textbook than a standard. Progress is being made, but it will take a lot of work to get it right.

What to Do Now

In the meantime, what should organizations do? Here are some simple ideas:

• Take the time to think about the big picture of your management system. Look at the interactions. Study the system to determine what can be done to make the interacting elements work together better.
• Use the flexibility built into the major management systems standards like ISO 9001 and ISO 14001. That flexibility is not accidental. Good people spent a lot of time to ensure it exists.
• Use the Annex A assessment tool of ISO 9004 to find areas for improvement.
• Use other documents such as the Baldrige criteria to discover new techniques.

The focus of early work in the 2009 revision to ISO 9004 is on developing guidelines for QMSs that support organizational sustainability. This is proving very difficult because the new document must address the concepts needed to make the system as a whole much stronger than the sum of its processes and resources.

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NOTE AND REFERENCE

1. I recognize that this is a controversial example. Some consultants take quite a different approach and have a management review structure that they consider the right way. That way may work for some organizations, but I prefer the flexibility provided in the standards.
2. John E. West,“Output Matters,” Quality Digest, July 2006.

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JOHN E. “JACK” WEST is a management consultant and business advisor. He served on the board of examiners for the Malcolm Baldrige National Quality Award from 1990 to 1993 and is past chair of the U.S. technical advisory group to ISO technical committee 176 and lead delegate to the committee responsible for the ISO 9000 family of quality management standards. He is an ASQ fellow and co-author of several ASQ Quality Press books.