One Size Fits All... Until It Doesn’t

Custom auditing solutions to meet custom business objectives

Published: Monday, October 19, 2015 - 14:12

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‘My small business has landed a few very lucrative contracts and we’re growing. Honestly, we’re now struggling with quality control. We have management systems in place, and that’s helping, but we’re still having issues. I don’t know where to begin to get a handle on this.” —John Q. CEO.

Sound familiar? If so, you’re not alone. Many business owners and CEOs make the effort to implement business management and supply chain systems. It’s a worthwhile investment. Naturally, those systems must be periodically audited to ensure compliance. What do you do when your company passes all the audits and still develops issues, however? All the boxes are checked, but the number of widgets being rejected by your quality control department is getting worrisome. You don’t want to even think about warranty issues with that new contract you just landed. Blaming your system may be the natural thing to do, but it may be that customizing the audit, rather than criticizing the system, is the ticket to getting your operations back on track.

Typical compliance-based audit approach

In the past, organizations have relied on an audit approach that addresses compliance; typically, that there is a procedure in place and it is being followed. “It can be a very scripted and binary approach. The questions asked during these types of audits are to demonstrate compliance to a set of criteria,” says Charles A. Clark, Jr., program manager for global customized audit solutions for Intertek Business Assurance.

This approach can be effective for some organizations, but often a more comprehensive approach is needed. Anyone who has spent time in manufacturing has witnessed the shortcomings of the checklist approach in production. Additionally, there is the issue of ensuring that your supply chain is compliant not only to industry standards, but that these suppliers are also in compliance with your own standards.

“Taking an approach that only seeks compliance to ‘yes’ or ‘no’ questions violates the principle of the process approach, which is the basis of any effective management system audit,” explains Clark. “It’s often said that many companies don’t know what they don’t know. When you take a process approach, you’re addressing risk, effectiveness, and suitability of the process in question.”

Custom audit approach

“Customizing adds value. For example, if a major food processing company with an international supply chain is dealing with high incidences of warranty claims, we can customize a solution for them, not only regarding the supply assessment criteria, but also the principles and controls that will measure the improvement around the warranty claims over time,” says Clark. “Our custom audit solutions take a holistic, value-based approach that improves upon a company’s known deficiency, with a plan to see improvement in subsequent audits.”

The concern, of course, is that even manufacturers who are registered to ISO standards can ship defective product, an issue that automotive OEMs addressed with their own QS9000 standard. The ISO organization responded with ISO 9001:2000, emphasizing a process approach, and today, the 2015 version of the standard further defines this need and seeks to raise the bar.

“Another example of the custom audit approach is when a company provides a site summary of suppliers, including performance. Intertek then audits and evaluates whether there’s been any product quality issues that should be further investigated,” says Clark. “There is an emphasis upon sampling suppliers who are registered to ISO standards to evaluate how well the management system is working for a supplier specific to our client."

Auditing on a scored scale for performance

Using a Likert scale, a tool that differentiates compliance with management system maturity and best-in-class performance, as opposed to simple “yes” or “no” answers, is one way to add value and effectiveness to audits. In a typical Likert audit score, zero would represent a “critical” issue, 1 would be a “major” issue, 2 would be a “minor” issue, and a score of 3 would represent “conformance,” in which requirements are being met.

“By using a Likert scale to evaluate specific assessment questions and criteria, you end up with a report that can demonstrate improvement over time,” explains Clark. “The company uses a custom audit solution across the globe with its suppliers. The benefits include reduced risk to the brand, support for corporate social responsibility, and better insight into supplier quality and overall product quality. This approach has proven itself effective in production, warehousing, logistics, and laboratory accreditation.”

Boots on the ground

For companies with multiple locations and international suppliers, internal audits can be costly and ineffective, especially where risk management is concerned. Partnering with an objective global partner can reduce travel costs and add greater value with auditors who speak the local language.

“From a cost perspective, it’s pretty hard to know what your risks are without boots on the ground, especially in regions of the world that have had certification claims disputed,” states Clark. “The results of a process-based custom audit quickly prove or disprove the claims of a suitable, adequate, and effective management system.”

About The Author

Quality Digest

For 39 years Quality Digest has been the go-to source for all things quality. Our newsletter, Quality Digest, shares expert commentary and relevant industry resources to assist our readers in their quest for continuous improvement. Our website includes every column and article from the newsletter since May 2009 as well as back issues of Quality Digest magazine to August 1995. We are committed to promoting a view wherein quality is not a niche, but an integral part of every phase of manufacturing and services.