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How Can You Move From QS-9000 to TS 16949:2000?

Key Challenges of the QS-9000 to TS 16949:2002 Transition


By Chad Kymal and David Watkins
Publishers Note: This article has been reprinted with permission from THE INFORMED OUTLOOK Newsletter, November 2001 issue. DaimlerChrysler, Fiat, Ford, GM, Pugeot, Renault, Volkswagen) beyond what TS 16949 requires. OEMs requiring use of TS 16949 and customerspecific requirements may eventually include Japanese and South Korean OEMs. Most QS-9000-registered suppliers will transition their quality systems to TS 16949:2002 by December 15, 2003, when ISO 9001/2:1994 and TS 16949:1999 certificates of registration will no longer be recognized. There are two reasons why most suppliers will make the transition: 1. Customers will soon be mandating TS 16949:2002 registration by Decem-

he final draft of ISO Technical Specification (TS) 16949:2002 is now available. Although its circulation is limited to a small group within the international quality management standards community, it is a sign that ISO/TS 16949:2002, Quality management systemsAutomotive suppliersParticular requirements for the application of ISO 9001:2000, will be soon released to the larger public. Voting on TS 16949:2002 will conclude in December 2002, with the second editions release expected by March 1, 2002. What is still missing are the customer-specific requirements of the original equipment manufacturers (OEMs) for the use of TS 16949:2002. These requirements, usually available on an OEMs web site and accessible by its suppliers, must be used by a supplier to achieve quality management system (QMS) conformance with TS 16949:2002 so as to satisfy the requirements of a particular existing or potential OEM customer (e.g., BMW,

ber 2003 as a contractual requirement (for the latest on the Big Threes registration requirements, see the box below). 2. Suppliers will want an ISO 9001:2000-registered QMS to gain the improvements in the 2000 edition and satisfy requirements of nonautomotive customers. As we stated in A Plan for the Transition From QS-9000 to TS 16949:2002 (THE OUTLOOK, August 2001), the second in our series of guidance articles on preparing for and making the transition, TS 16949:2002 is more influenced by ISO 9001:2000s new structure than any new automotive-based requirements change. For the most part, the first edition of TS 16949 has been faithfully mapped into the ISO 9001:2000 framework to create TS 16949:2002 (for more information, see The Impact of ISO 9001:2000 on QS-9000 and ISO/TS 16949, THE OUTLOOK, May 2001, the first article in this series).

What Are the Big Three Requiring Now?

umors have it that DaimlerChrysler, Ford and GM will require their tier 1 suppliers to become registered to TS 16949, preferably the second edition. Also, QS-9000 is expected to be extended to 2005 for those suppliers that have contracts only with domestic US facilities of the Big Three. Suppliers that are not tier 1 and do not want the ISO 9001:2000/TS 16949:2002 registration could technically stay QS-9000-registered for the time being. In other words, QS-9000 will not be revised to align with ISO 9001:2000. Also, per the International Accreditation Forum (IAF), all certificates of registration to ISO 9001/2/3:1994including sector-specific ones involving QS-9000 (and thus ISO 9001/2:1994) will have to be upgraded to ISO 9001:2000 by December 15, 2003. 1994-based certificates will not be considered valid after that date (except by the Big Three, as noted).

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The biggest challenge for QS-9000registered companies will be the customer focus and process focus contained in this Technical Specification. What we consider the most significant changes that organizations transitioning from QS-9000 to TS 16949:2002 will face are contained in 15 clauses and subclauses of ISO 9001:2000/TS 16949:2002 that are summarized in Table 1 below. In this article, we will explore three

Reprint: November 2001


of these clauses4.1, Quality Management SystemGeneral Requirements, 7.3, Design and Development, and 7.4, Purchasing.

4.1, Quality Management SystemGeneral Requirements


This clause in ISO 9001:2000 and TS 16949:2002 will require an organization to go beyond QS-9000 and identify the processes within its hierarchical organizational structure. The organizational structure and the chain of command follow Fredrick Winslow Taylors theory of specializationwhat is known in the automotive industry as organizational silos or chimneys, as shown in Figure 1 on page 3. In TS 16949:2002 terms, products are realized by processes, which would thus require a QS-9000-registered organization to identify the product realization processes and the support processes. These processes provide not just for the product, but are also responsible for satisfying the customer. Two ISO 9001:1994 paradigms need to be discarded at this stage. One is that the organization can exclude processes not specified in the requirements of TS 16949:2002. Clause 1.2, Application, in ISO 9001:2000 and TS 16949:2002 is careful to point out that only processes that do not affect the organizations ability, or responsibility, to provide product that meets customer and applicable regulatory requirements can be excluded from the QMSs scope. A requirement is defined in 3.1.2 of ISO 9000:2000, Quality management systemsFundamentals and vocabulary, as a need and expectation. In other words, an organizational entity or a process can only be scoped out from the QMS if it does not affect customer needs or expectations. Now, it is questionable if organizations can scope out research and development (R&D) centers or sales offices, because customer needs cannot be met without them if your organization has

Table 1. The 15 Transition Challenges for QS-9000 Organizations


Clause/Subclause Influenced by Challenges Requirements for process map (or equivalent) and process management Decision on customers vs. interested parties. Need for process to gather needs and expectations of customer/ interested parties 4.1, Quality Management ISO 9001:2000 SystemGeneral Requirements 5.2, Management Responsibility Customer Focus 5.4.1, Planning Quality Objectives 5.5.3, Internal Communication ISO 9001:2000

ISO 9001:2000 & Deployed Objectives addressing TS 16949:1999 customer expectations ISO 9001:2000 Creation of internal communication processes suitable to organization

5.6, Management Review ISO 9001:2000 & Revision of previous management TS16949:1999 review process (TS adds additional items to be reviewed) 6.1, Resource Management ISO 9001:2000 Provision of Resources 6.2, Human Resources (particularly 6.2.2.3 on empowerment) 7.0, Product Realization 7.1.4, Change Control 7.3, Design and Development 7.4, Purchasing Establishment of a resource allocation process

ISO 9001:2000 & Provision of job competency, on-the-job TS 16949:1999 training and employee motivation (6.2.2.3 and 6.2.2.4) ISO 9001:2000 New (actually Fords Q-101) New Documents for effective control of all processes in process map Minor change for most suppliers Inclusion of design and development of processes, not just product (note required development and use of FMEAs) Inclusion of service suppliers in coverage; ISO 9001:2000 registration of suppliers Customer rating for quality and delivery insufficient; monitoring of customer perceptions of quality Manufacturing process and product audits

New

8.2.1, Monitoring and ISO 9001:2000 MeasurementCustomer Satisfaction 8.2.2, Internal Audit TS 16949:1999

8.2.3, Monitoring and ISO 9001:2000 & Process studies on manufacturing proMeasurement of Processes TS 16949:1999 cesses. Measurement of all processes in process map 8.4, Analysis of Data ISO 9001:2000 Increased scope from QS-9000

Reprinted with permission from THE INFORMED OUTLOOK November 2001 issues

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them. Furthermore, TS 16949 has expanded the applicability of Clause 7.3, Design and Development, to both product and process design by including 7.3.2.2, Manufacturing Process Design Input, and 7.3.3.2, Manufacturing Process Design Output. No organization implementing TS 16949:2002 can exclude 7.3, Design and Development, because every product and service parts supplier has production processes that need to be designed and developed using the QMS. The other paradigm is that an organization does not have to control its suppliers processes unless the customer requires it. The last paragraph of 4.1 in ISO 9001:2000 and TS 16949:2002 clearly states that, when the organization chooses to outsource any process that affects product conformity with requirements, the organization shall ensure control over such processes. Subclause 4.6.2, Evaluation of Subcontractors, in ISO 9001:1994 and QS-9000 does require an organization to exercise control over its suppliers, but only to meet customer requirements for subcontractors and to the extent necessary to ensure supplier-provided product meets specifications relative to the organizations product. With TS 16949:2002, an organization will need to include outsourced processes within its process map and QMS whenever a supplier can affect the organizations product, including heat treating or plating or any component of an assembly manufactured by that supplier. A process map is a flowchart that maps out all the processes and their elements that define what your organization does, including all its key activities and more. When creating a process map, an organization will need to go beyond the clauses and subclauses of TS 16949:2002 to truly meet its requirements for an effective QMS. Telltale signs to auditors that a QMS is not truly effective is a process map that only includes QMS elements related to the standard being audited against. Inherently, a process focus is different from a departmental focus in that a process may move through every department within an organization. The antithesis of the process approach promoted by ISO 9001:2000 and TS 16949:2002 is the compliancedriven approach of many organizations, which implemented quality system procedures based solely upon elements of QS-9000 without any thought to creating systems that actually support and enhance the processes within their operations. Our organization recommends that your organization study four types of processes for inclusion in the process map: q TS 16949 Processes q Product Realization Processes q Support Processes q Business Processes. TS 16949:2002 processes are those that inherently fulfill the requirements of the TS. Product Realization Processes include product ideation, R&D, marketing, design and development all the way through to delivery of product and post-delivery services. Support Processes aid the overall organization, including operations such as training, purchasing and document control. Business Processes are those that differentiate your organization from its competitor and help fulfill customer needs and expectations. Business Processes are the most important for the success of a business. Of course, there is overlap in the four types of processes, as shown in Figure 2 on page 4. By definition, Product Realization and Support Processes are exclusive. In other words, a process can either be a support process or a product realization

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process, while TS 16949 Processes and Business Processes can be both product realization and support processes. After studying the different processes, your organization can create a process map that identifies its processes. The process map also can show the sequence and interaction of these processes. Two diagrams presenting complete process maps appeared as Figure 1 in both previous articles in this series.

7.3, Product Realization Design and Development


The two most significant changes in Clause 7.3 of TS 16949:2002 are the exclusion of advanced product quality planning (APQP) as a requirement and the inclusion of manufacturing process design as a new requirement. APQP was excluded because most OEM representatives to the International Automotive Task Force (IATF) do not support the Big Threes approach of requiring APQP, which is expected to become a customerspecific requirement of DaimlerChrysler Corporation, Ford and GM. The inclusion of manufacturing process design input and output requirements (7.3.2.2 and 7.3.3.2) by the IATF is significant. QS-9000-compliant organizations will need to carefully study the requirements in 7.3 for process design and make the necessary changes to their APQP process. The real challenge comes when an organization actually has to implement these changes. In some QS9000-registered organizations, the pro-

Figure 1. Process Focus: Theory of Specialization

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cess-engineering group is only one or two people who will be responsible for conformance. However, QS-9000-registered organizations should not view this change as a negative. When the first edition of QS9000 was released in August 1994, the payback to design-responsible organizations was a systematic design process. Many organizations went from chaotic product design to systematic design development. With TS 16949:2002, one payback will be a systematic process for manufacturing process design. What are the challenges of incorporating manufacturing process design into a QMS? Although TS 16949:2002 only specifies design input and output requirements, to satisfy the TSs requirements effectively an organization will, in actuality, need to carefully create a design and development plan that covers all phases of process design, including: q Manufacturing process design input q Manufacturing process design output q Design and development reviews q Monitoring of process design q Design and development verification q Validation of the manufacturing process. Organizations can decide whether to include process failure mode and effects analysis (PFMEA) as a verification process and/or machine runoff as a validation process. One opportunity is to build Mean Time to Repair (MTTR) and Mean Time to Failure (MTBF) into the process design, while another is to build in the entire Reliability and Maintainability (R&M) methodology. Leading-edge organizations are already practicing these processes and methodologies. An organization interested in the up-front involvement of its tooling and equipment (TE) suppliers can use the TE Supplement to QS-9000, which offers guidelines and specifies methodologies for PFMEA, machine runoff, R&M, MTTR and MTBF for the entire life cycle of the manufacturing process. Process design has been elevated to the same importance as product design in TS 16949:2002. Now both design and product have the same type of expectations for inputs, outputs, verification and validation. Tools such as design FMEA, special characteristics, Design Verification Plan and Report (DVP&R) on the product design side and tools such as process flow, PFMEA and control plans on the process design side need to be linked. This is the effectiveness in practice or the results that can be derived from implementing good product and process design practices. Think of it as preparing to take advantage of the coming economic upturn, when the bestrun operations will win. Another requirement closely aligned with Clause 7.3 is TS 16949:2002s 8.2.3.1, Monitoring and Measurement of Manufacturing Processes, which requires all new processes to be statistically studied. The closest point of comparison is QS-9000s Pro-

Reprint: November 2001


duction Part Approval Process (PPAP) manual, which requires processes with only special characteristics to be studied. Many organizations will implement this requirement as the last step of the Manufacturing Process Design and Development process. The change in design and developments scope with Clause 7.3 to include process design will require both new documentation and subsequent implementation. But, if implemented properly, this new requirement will result in profits for organizations.

7.4, Purchasing
The purchasing requirements have not changed very much from QS-9000. Organizations will need to continue following their purchase order process (7.4.2, Purchasing Information), supplier development process (7.4.1.2, Supplier Quality Management System Development) and receiving inspection process (7.4.3, Verification of Purchased Product). What has changed is the scope of supplier development and the new requirement for supplier development that involves a registration deadline. With TS 16949:2002, there will also be no leeway on what constitutes a purchased product. NOTE 1 to 7.4.1, Purchasing Process, defines purchased products as all products and services that affect customer requirements. Organizations will be required to carefully study their supplier lists and add in all suppliers that affect customer needs and expectations, per the previously mentioned ISO 9000:2000 definition of requirement. As for registration requirements, 7.4.1.2, Supplier Quality Management System Development, requires an organization conforming to TS 16949:2002 to require its suppliers to register to ISO 9001:2000 by an accredited third-party certification body. NOTE 1 to 7.4.1.2 requires that suppliers comply with ISO 9001:2000 by December 15, 2003the IAFs date for termination of the transition to ISO 9001:2000. This, of course, is the first step in the ultimate OEM goal of driving the manufacturing supply base to TS 16949, Second Edition. Although NOTE 2 indicates that a customer may mandate alternative requirements for subcontractors, this registration requirement is causing conWeb Site: HTTP :// WWW .INFORM INTL . COM

Figure 2. Relationship Among Processes in a TS 16949Based Organization


Business and ISO/TS 16949 Processes

Product Realization Processes

Support Processes

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cern among QS-9000-registered organizations, many of which do not feel they have the clout to impose registration requirements on their supply base. Our organization has seen the effects of quality system requirements on client supply bases since Fords Q-101 and GMs Targets for Excellence. Nevertheless, we encourage your organization to move forward as follows: 1. Determine your product and service supply base (i.e., expand your key supplier lists). 2. Determine the criteria and deadlines for supplier development requirements, including ISO 9001:2000 (December 15, 2003) and TS 16949:2002 (subsequently). 3. Announce the requirements and criteria to your supply base. 4. Have evidence that you are trying to comply with TS 16949:2002s intent. Organizations typically mention all the exceptions in justifying why they cannot implement supplier development (i.e., suppliers are unwilling, too small or strategic). However, our organization recommends that its clients formulate their strategies around the 95% of their supply base that is likely to cooperate, rather than around the exceptions. If you follow this strategy, both your customer and your registrars auditor(s) are likely to understand the odd exceptions. Since no one is indispensable, the odd exceptions will lose out in the long-term by failing to adopt an effective way to manage their operations. We have just explored 3 of the 15 significant challenges we believe will face QS-9000-registered organizations transitioning to TS 16949:2002. There is a lot of work ahead for companies that likely have only a little more than two years remaining before an OEM will be expecting registration to this second edition. Organizations need to make their plans to transition to the second edition of TS 16949 today. How much work your organization has ahead of it depends on the quality of its QS-9000-registered quality system. To help you gain a better understanding of what the transition will likely involve for your organization, we have identified an anonymous organization willing to serve as a case study for transitioning to TS 16949:2000.

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Case Study of an International Tier 1 Supplier


QSTS had a contract with an accredited registrar qualified to conduct QS-9000 registration assessments, but the registrar was not on the International Automotive Oversight Bureau (IAOB) list of registrars qualified to conduct TS 16949 assessments. At the end of the registrars contract for QS9000, QSTS decided to switch to a registrar included on the IAOB list because it planned to transition to TS 16949:2002, thereby obtaining ISO 9001:2000 registration as well. QSTS was confident it could very easily transition to both ISO 9001:2000 and TS 16949, since it had already been working for more than five years on meeting excellence standards such as the Malcolm Baldrige National Quality Award. The new registrars initial audit provided for a QMS assessment that would permit a registration transition from ISO 9001:1994 and the third edition of QS-9000 to ISO 9001:2000 and TS 16949:1999. However, the audit was a wake-up call instead. The assessment of QSTS ended up identifying several major nonconformances, including one that required the organization to align itself with a site since it was technically a remote location, despite the fact that QSTS had a design center, sales, purchasing and some senior management located in the US. Some of the nonconformances resulted from the lack of preparation by the registrars auditors. In fact, they had not completed a document review (desktop audit) prior to the on-site audit. The other nonconformances existed because the organization was not prepared for conformance to both ISO 9001:2000 and TS 16949:1999. QSTS has a few special circumstances that need to be mentioned (even though they do not excuse legitimate nonconformances), including that it has 10-15 product lines located in the United States, while several of the business units they report to are located in

Europe. What then is the definition of top management? After the poor showing on the audit, QSTS contacted our organization. We collectively decided that it did not make sense for them to pursue ISO 9001:2000 and TS 16949:1999, but that they should instead pursue ISO 9001:2000 and TS 16949:2002, which had just become available in final draft form. The implementation is in its infancy, and the scoping of the implementation is the first challenge. The second challenge will be the requirements of ISO 9001:2000 and TS 16949:2002, especially Management Review, linkage of processes and purchasing. This case study will be expanded in upcoming articles that will explore the remaining 12 challenges of TS 16949:2002 and their impact on QSTS. For now, any organization would be wise to focus on the three clauses of TS 16949:2002 discussed above, since they are the starting point for effective conformance with ISO 9001:2000 and the second edition of TS 16949. ### Chad Kymal is Chief Executive Officer of Omnex, Inc., an international consulting, training and software organization specializing in business quality improvement methodologies. Omnex has worked with hundreds of organizations to meet the requirements of ISO 9001/2/3, QS-9000 and ISO/TS 16949 worldwide and obtain registration. He assists organizations worldwide in his capacity as a consultant and trainer. Mr. Kymal recently served on the Malcolm Baldrige National Quality Award Board of Examiners, has a BSME from General Motors Institute and has an MS in Industrial Operations Engineering and an MBA from the University of Michigan. He can be contacted by e-mail (ckymal@omnex.com).For more information, visit www.omnex.com. David Watkins is President of Omnex, Inc., and is a senior trainer/consultant. He has a wide range of international experience focused on enhancing the ability of organizations to create value for their customers and stockholders and integrating QMSs and other management systems to enhance performance. Mr. Watkins can be contacted by email (dwatkins@omecconsultants.com).

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ABOUT OMNEX
MNEX Inc., along with its affiliates is an international consulting, training and software organization, which from the outset has specialized in business quality improvement methodologies. Among our family of companies are OMNEX-which provides training, OMNEX Management and Engineering Consultants for quality systems implementations and OMNEX Systems, LLC. OMNEX, as a leader in Quality Systems consulting, training and software, is uniquely qualified to assist companies in increasing their market share. We provide leading Quality focused consulting and training to the automotive, truck, semiconductor and service industries. Headquartered in Ann Arbor, Michigan, OMNEX & its affiliates also operate in: q Shanghai, China q Bangkok, Thailand q Malaysia q Toronto, Canada q Philippines q Sao Paulo, Brazil q Europe q Argentina and we have targeted Korea and Japan q Mexico for future expansions. q Venezuela q Chennai, India The OMNEX Mission The OMNEX mission has been to transfer our extensive knowledge and experience in the industry to the advantage of our clients who can utilize quality systems in their work environment. OMNEX offers unparalleled commitment to meeting the quality related training and consulting requirements of our global customers.

OMNEX implements quality improvement methodologies not only for manufacturing organizations but also for improving quality of service for organizations like hospitals, transportation companies & construction companies. It is encouraging for us that the service quality for these organizations has improved their performance indices over their competitors dramatically. OMNEX in the Competitive World Thousands of companies worldwide who have aggressively sought a competitive advantage have implemented the OMNEX approach to quality systems and reaped the benefits. OMNEX typically conducts an initial assessment which culminates in an improvement plan. Implementation can begin after the companys executive team evaluates and finetunes this plan. We then use business and quality systems methodologies and tools to implement the plan. Close to 15 % of waste reduction, reductions in customer complaints, internal and external rejections etc are not unusual in an Omnex quality improvement project. OMNEX not only improves the client's product quality but also facilitates cost savings in improvements to business processes, while meeting and exceeding customer expectations. This enables our clients to maintain and expand their existing business in the face of ever-increasing competition. We are interested in demonstrating to your top management how our capabilities in Quality management systems world wide can be combined with your resourceful business system, to successfully penetrate and sustain in the competitive global market.

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