ISO Implementations and Internal Auditing

You can never excel in internal audit unless you have a clear knowledge of what the process entails. This why we pay close attention to making sure that our clients have a clear knowledge of the audit process. You can never audit a process that you are not familiar with. You should know how the process should be working, what it should be doing, the controls, resources, activities, outputs, and inputs. If you are not sure of any of these items in your business, we will help you to identify it. The expectations actually vary from one organization to another. It all depends with the nature of your business or industry.

The initial step could be creating a turtle diagram for your process. Some organization may already have done this for you as part of the documentation process or in the past audits. The turtle diagram will look at the customers, outputs, resources, controls, activities, inputs and suppliers. If you don’t have this in place already, there is no need to worry. We have a team that will help you to put everything in place.

While laying out a turtle diagram, the process activity is usually a box in the middle. The inputs will come in through the left and exits from the right side of the box. List the customer in the upper right corner and the supplier in the upper left corner. You place the controls above the process activity while the resources will be below the process activity. Feedback is an arrow that flows from the output to the input.

The input are the things that the process required for the activity. This could be in the form of product or activity. Input include things like demand, quantity, specifications and requirements, type, budget and due date. We will help you to identify the inputs depending on the type of business that you are running.

The supplier is the one who supplies the inputs to the process. They can either supply material product or information. The process activity is the actual process. There are so many associated tasks that contribute to the process. The process also varies depending on the nature of your industry.

The output reflects the results of the process. It could be material, energy, or even information. In most cases, it can be the delivered service or desired product. For instance, a product like a piece of test equipment or computer would be the output. It can also be information like manual or book, training materials, and failure analysis. Examples of services include processing the payroll, doing laundry, or mowing the grass.

Controls are those items that regulate the rate of converting into outputs. These could be requirements for materials, planning software, inventory analysis, or the purchase requisition approval process. As we said earlier the exact items differ from one organization to another. We have a team that will help you in identifying and categorizing each item.

Resources are the items that are consumed or used in the process activity. It can be money, machine time, or people’s time. To be precise, resources may include the company representative who supplies the product or service, money, purchasing agent, the buyer, or the other support functions that have input for the purchase. The additional resources would include the office space, fax, phones, material planning software, and computers. All of them have a critical role to play during ISO implementation and internal audit.

The customer is the group that takes the output and uses it. If they reject your product, then you are doomed to fail. Therefore, we cannot avoid them in the audit process. These people will compare your output to that of your suppliers and look for the items that maximize your utility. The output can also be used as a resource or an input for another process.

The last thing will help you when it comes to leaning the process is the feedback loop. It is the mechanism that is used in monitoring the process. Look at the metrics that the process owner uses to know if the process is performing or when there is a need to take a corrective action. For suppliers, it could include on-time delivery, dollars spent, supplier performance, or inspection information. Our consultants will make sure that you are getting every step right from the on-set.

Interfaces are those points where the business process intersects the standard. In simple terms, it is the point at which the ISO 9001:2000 standards are applicable to the process that you are auditing. The easiest way to do this is using a matrix with the standard elements on one axis and the business process name of the other axis.

To discern the interfaces of the process to the standards better, you can break down the elements into the various sub elements. For instance, 7.2 Customer Related Processes comprises of 7.2.1 Determining the requirements that are related to your products, 7.2.2 reviewing the requirements that are related to your product, and 7.2.3 which encompasses customer communication. The left-hand side of the matrix may become larger but you will end up with a more definite intersection of the standard and process. The activity will give you the understanding of the areas where the standard applies to the process. You will develop questions to make sure that there is compliance to the standard and it will inform you the areas of the standard that you need to focus on. If you are not sure of how to handle this process, don’t worry because our consultants will guide you through the process.

The section for document review needs you to read and understand all the documentations that are associated to the process of auditing. You should begin with the level one document which is the quality manual. This manual will give you an overview of the process and describe how this process fits in your overall quality system. It explains the processes that feed the process that you are auditing and the processes that it supports. It has to describe the interrelationship and interaction of the processes that are within the quality system. After reviewing the quality manual, the main output will be understanding the processes that build the quality system and how it interacts. A good quality manual should describe how the processes work.

Next, review the procedures or level 2 documentation. Procedures normally describe the processes in a more detailed manner than the quality manual. There may be several procedures that outline the quality system and there may also be a minimum that is required by the ISO 9001:2000, six. The six procedures that are required include preventive action, corrective action, control of the nonconforming product, internal audits, control of records, and control of documents.

Because ISO 9001:2000 needs less documentation than the previous versions of ISO 9000, you may not have so many procedures to assess. The implication is that the document review section will be reduced. During document review of the procedures and manual, you will be trying to understand the system and process and make sure you meet the requirements of the standard. Our team will also guide you in implementing this step during internal auditing.

Process interfaces refer to the ‘hands off’ points from a process to the next. It is the point at which the previous process provides its input to the audited process and the audited process also provides input to another process. Process interfaces are different from the outputs and inputs in certain ways. Inputs are the deliverables that the process utilizes and the process interface will describe when and how the deliverables are achieved. For instance, an input in the purchasing process is the requirement for a purchased item. When you look at the process interface, you will want to understand how the requirements are delivered and who does the delivery. In real sense, we are not conforming whether the requirements exist by they are clearly understood and defined by the process using them. You will be investigating all the requirements that have been delivered timely and whether they are accurate.

On the side of the output, you need to look at the things that the purchasing process provides to the other processes. One output is the purchased product on time, in the right quantity, and to the specification. The other consideration is how it moves from purchasing to receiving and then inventory. Other processes have other outputs that they use. One can be the supplier selection for the purchased item. Quality or engineer may have to interface with supplier and in case there is a delay in the selection process, it may affect the ability, design, and quality of the product. When you understand the process interfaces, it may lead to some audit questions on hoe sooth the hand off exists between the processes.

The other tool we recommend to use is the process failure modes and effects analysis (pFMEA). You may or may not have some background on the FMEA’s. It is alright either way because the FMEA process is complex and we will not go in-depth on the same. The pFMEA method identifies potential problems with any process before its implementation. It is a preventive measure which aims to resolve problems before they can even occur. You need to look at the failure mode and the causes of the failure mode. If you are not sure about what this step entails, there is no need to worry. We have a team that will help you in executing the plan from the beginning to the end.

The pFMEA approach is exhaustive and develops large quantities of potential audit directions. When you evaluate the prospective issues that are associated with the process, it will help you develop the audit approach and audit questions to make sure that you address the potential problems. It may result into findings that my have a positive effect on the quality of the management system.

If you really wish to energize the efficiency factor of the internal audit, you need to carry out a value stream map. Value stream map refers to a manufacturing tool that helps in identifying the activities in your process that are not value added. Like the pFMEA example, it is hard to us to go into detail about this tool. However, it explains the flowchart that a lean project may require. Some of the lean initiatives may include inventory, take time, etc. You need to look at the processes that you can reduce or eliminate. It all depends with your organizational structure and size. We have a highly skilled team of experts that will also guide you through this process. Just come to NXT LVL ROI Business Consulting Services and we will help you out.

Reviewing the old audits is a critical source of information when developing your audit strategy. We will help you to review both the external and internal audits that are available. Observe the weakness areas or anywhere findings were noted and check whether any action has been taken and whether it is effective. When reviewing the old audit, you may discover that there was nonconformity on the product requirements. Based on the insights that you get; you may wish to gear some of your audits to check the effectiveness of the process at conveying the supplier’s requirements. Our team will also suggest the best approach to use in reviewing the old audits for your firm.

Based on the insights that you get from the first seven steps; you should not develop audit questions. The first set of questions will be generated by the Turtle diagram. It could include things like how the requirements for the output are communicated and documented. You can also check on who specified and monitors the budget so that it is not exceeded. Check on the trainings carried out and what are under schedule. You also need a question on the monitoring of the inventory to make the correct and timely purchases. The other thing to understand is the measure of the process and who monitors it. Get to understand the planned results and what will happen if you don’t achieve them among other relevant questions.

The next set are the interface questions that are standard generate. Check whether the work instructions or procedure describe the process. For quality manual should cover the process and check whether the current process reflects what has been documented. Ask yourself whether the various agents understand their authorities and responsibilities. These people should understand and know the quality objectives and quality policy and what does it mean to them.

Check how the suppliers are rated and selected and whether it is effective. How does the firm evaluate the purchased items after receipt? What takes place if the purchased item does not meet the laid down criteria. Who reviews the purchasing process data and does it show any improvements? As we said, the exact audit questions depend on the nature of your business. Our team of business consultants will help you to come up with the most relevant audit questions that will add value to your business.

By now, you should be having a clear understanding of the business process you will be auditing. You have also utilized various tools to develop your audit questions and path. It is time to take it a step higher by developing the audit plan. The audit plan basically refers to the playbook of your audit. As the saying goes, failing to plan is planning to fail. It is a statement that is highly applicable to the audit process. You need to develop your audit plan using the questions and who you will be auditing. Our team will also help you in developing the audit plan.

The same process can help you to develop both a small or large audit plan. You can develop the questions and expected replies from people like material controls, manufacturers, quality assurance, engineers etc. It all depends with the scope of operations for your firm. If you still have some doubts with this process, feel free to get in touch with NXT LVL ROI Business Consulting Services. We have a highly qualified team of consultants who will make sure that your internal auditing process adds value to your organization. The most important thing is to make sure that all your processes comply with the set regulations. You should also meet the expectations of the customer if you want to gain a competitive edge in the region. Therefore, internal audit is an important function for any organization and you cannot take it for granted.