Manufacturing Industry Case Study

A good example of lack of oversight or control associated with the absence of an effective ISO 9001 program is the faulty ignition switch debacle at GM. A rogue engineer re-designed an ignition switch to reduce cost and got it approved even though the new design did not meet GM own’s specifications. After receiving input that the ignition switch was indeed faulty, the switch was again re-designed but was given the same part number to cover up the previous faulty design. If you familiarize yourself with requirements of ISO 9001:2008 section 7.3 “Design and development” and many others concerning “product realization” (including identification and traceability) and “monitoring and measurements”, you will observe that GM QMS ignored just about every requirement in the standard.

A competent internal audit team could have found several major non-conformities by interviewing the people involved and examining records. In ISO 9001, the burden of proof for compliance is always on the auditee, not the auditor, and absence of proof is considered a non-conformity. In the case that an internal audit team would have missed all non-conformities, which is very unlikely, an external auditor could simply not have missed the breakdowns in the quality management system. In fact, the infractions were so severed, that any competent auditor would have stopped the audit in emergency and notify Top management which would have triggered a series of actions for recall and a complete review of the QMS.

Very little was written about the lack of control and oversight in the QMS which made this debacle possible, because, let’s face it, it is not very sexy to discuss processes and procedures. But look at the chain reaction of not following the standard.

aluminum company

Understanding the organization and its context (section 4.1) / Planning to address risks and opportunities (section 6.1) / Plan of action for risks and opportunities (section 4.4.1)

Example:
In section 4.1, an aluminum company determines the following external and internal issues through a SWOT analysis and environmental scan.
In section 6.1, an organization identifies these risks and opportunities:

External / internal issues (4.1) Risks and opportunities (6.1) Plan of action to address risks and opportunities (6.1)
Rapid development in technology and automation - Risk that the company becomes not as productive as competitors, if it does not keep up with technology
- Risk of loosing market share, if it does not keep up with technology
- Financial risk for capital investment in re-tooling
- Opportunity to be at the forefront of technology and beat existing competitors
- Analyse possible conversion of existing plant with new technology
- Review company’s expansion plan in view of maintaining flexibility and quick turn-around for production methods
- Analyse financial risk of conversion and re-tooling
- Check to see if the company qualifies for government subsidies and capital investment deductions
- Analyse business intelligence on competitors to determine if opportunity exists to be at forefront of technology
Training of persons doing work to keep up with technology and automation
- Risk of ending up with manpower with not enough qualifications and skills for new technology
- Opportunity to look at attrition to hire new employees with proper qualifications and skills
- Review qualifications and skills of existing employees and provide gap-analysis with new technology
- Set up plan to bridge the gap in qualifications and skills
- Opportunity to review HR plan and hire new employees with adequate qualifications and skills through attrition

In section 4.4.1, an organization identifies these risks and opportunities at the process level.

Process Risks and opportunities Plan of action
Hiring – human resources (4.4.1) - Not hiring people with adequate qualifications and skills for future needs
- Consult with top management and review work instructions for hiring – change qualifications and skills required
- Research in-house or external training opportunities for existing employees to fill gap analysis in skills and qualifications
- Perform measurements of training effectiveness
Understanding the needs and expectations of interested parties (section 4.2) / Planning to address risks and opportunities (section 6.1) / Plan of action for risks and opportunities (section 4.4.1)

Example:
In section 4.2, an aluminum company’s top management determines the interested parties, their constraints, risks and opportunities, as well as a plan to address them.
In section 6.1, an organization identifies these risks and opportunities:

Interested parties (4.2) Constraints / expectations (4.2) Risks and opportunities (6.1) Plan of action to address risks and opportunities (6.1)
Levels of Government / regulators Environmental, health and safety standards - Damage to the community / brand if not met
- Liability and fines if not met
- To be at the forefront in terms of reducing environmental impact
- Verify if existing environmental controls are sufficient. If not, increase monitoring controls and performance measurements (short term solution)
- Check feasibility and cost to comply to ISO 14001 environmental standard and seek certification (long term and more comprehensive solution)
- Feasibility study of being carbon neutral, ways to offset emissions (long term opportunity)
Shareholders - Fiduciary responsibility for profitability
- Brand recognition
- Expanding to new markets and growing products lines
- Loss of market share and profitability
- Lack of coherency between quality policy / objectives and product conformity
- Opportunity for research and design of new products for new applications
- Review core processes for efficiency
- Feasibility study for new products
- Review core processes for quality control, product design and specifications to make sure they are aligned with quality policy and objectives
- Feasibility study to team up with new partners for manufacturing new products

In section 4.4.1, an organization identifies these risks and opportunities at the process level.

Core process manufacturing (4.4.1) -Not complying to environmental emissions regulations - Improve monitoring equipment for emissions
- Modify existing work instructions to include monitoring emissions
- Set up calibration log for equipment
- Provide training to operators if necessary