Quality Auditing:for the Boss

An Executive Overview by

Dennis R. Arter

Short history of auditing• To audit is to hear (cargo being unloaded)• Financial auditing for the Industrial Age• Quality auditing for military and nuclear• Quality auditing for all organizations• Integration with other management systems

There are only 4 rules!

First rule of auditing:1. Audits provide information

about the futurefor those who can control the future

General model for auditing

Compare

Good & Bad Facts

AnalyzeFindings Conclusions

Analyze

Requirements

ExternalManuals

ProceduresSpecifications

Evidence

PhysicalThe senses

InterviewsPaperwork

The patterns

Problem or Cause/effect Executive Summary

Second rule of auditing:2. Auditors must be capable of doing their job.

(qualified)

Qualification means:• Lack of vested interest (see)

• Ownership• Can't audit your own job• Able to see strengths and weaknesses

• Technical knowledge of processes (understand)• Read material, receive instruction, visit area• Must be able to flowchart operations

• Knowledge of audit practices (perform)• Read a good book• Attend a class• On-the-job training

The audit team• Team leader (lead auditor)

• Greater amount of training• Qualified by audit boss

• Team members (auditors)• Helpers drawn from other departments• Qualified by team leader

• Typical times• System audit: 2 to 6 people for 1 to five days• Process audit: 1 person for 2 hours

Auditor certification• Local Requirements

• Your own standards• Auditing, Technical, Communicators

• Professional Society• ASQ Certified Quality Auditor

• Conformity Assessment

All auditors should have papers

Third rule of auditing:3. Audits measure to agreed criteria

Performance criteria

External to the auditeeInternal to the auditee

External

Manual

Procedures

Specifications

Fourth rule of auditing:4. Conclusions are based on facts

General model for auditing

Compare

Good & Bad Facts

AnalyzeFindings Conclusions

Analyze

Requirements

ExternalManuals

ProceduresSpecifications

Evidence

PhysicalThe senses

InterviewsPaperwork

The patterns

Problem or Cause/effect Executive Summary

Dump the data

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Sort the data

Fact

Fact

Fact

Fact

Problem

Fact

Fact

Problem

Fact

Fact

Fact

Problem

Fact

Fact

Fact

Fact

Fact

Fact

Fact

Fact

Data Chunking

Analyze the data• Identify the problem

• The missing control• subjective by nature

• Identify the pain• business issues• also subjective

Write the finding• Write cause and effect statement

• reason and pain• Support the judgement

• Bad facts from your list

Finding• Inability to identify nonconformances throughout the

company is resulting in higher internal costs and lost sales.

• Only receiving inspection is presently using the NCR Form (#278).

• Operators filling boxes often have to bend pigtails to get the components to fit in the box. Average time spent for this is 3 minutes per box.

• Pigtail variance on line 3 averaged 1/2 inch on Tuesday.• Zoom Co. has cut orders by 1/4 due to quality variation (mainly

pigtail breaks) in product we ship to them.

Focus on the system• System: grouping of interrelated processes

designed to achieve a common objective.• To have lasting effect (improvement),

stakeholders must have a desire to change the system

Business values

• Cost• Production• Risk

Whether for cable companies or tennis teams, driving forces will always be:

Questions

Summary: Value of the audit

• Audits provide confidence:• Controls are present• Controls are used• Controls really work• Controls will continue

Summary: Rules for the auditor

• Auditors must be prepared• Auditors analyze systems• Auditors look for cause and effect• Auditors support the business

(cost, production, risk)

Summary: Rules for the audit

1. Audits provide information2. Auditors must be qualified3. Audits measure to agreed criteria4. Conclusions are based on facts

Improved performance

Thank you for your attention!

Dennis R. Arter, CQA• Columbia Audit Resources• Kennewick, WA• (509) 783-0377• E-Mail: Dennis@auditguy.net• Web: http://auditguy.net• Blog: http://auditguy.blogspot.com

July 2007