Crisis of Credibility

Quality system certification worldwide

The ISO 9001 series of standards is the most widely used in the world and specifies requirements for an organization’s quality management system (QMS). The standard is designed to enable the organization to have a customer orientation, a people (staff) orientation, and a business orientation. Lately, the process of registration to this standard has caused some to question its credibility

Globalization and World Trade Organization agreements have made marketing goods and services across international borders easier. Organizations get access to the world market and face competition in domestic markets in other parts of the world. Trade within a country, as well as across borders, requires a mechanism to ensure that the quality of goods and services being traded is acceptable. Conformity assessment and related international standards that cover product quality, management systems, environmental systems, etc., can provide such mechanisms.

The effect of conformity assessment on domestic and international trade was recognized in the 1994 Agreement on Technical Barriers to Trade (TBT) of the international general agreement on tariffs and trade of the WTO. The TBT agreement recognized that conformity assessment activities could expedite or hinder the free flow of goods in international commerce. To ensure that nontariff barriers to trade don’t hamper world trade, article 6 of the TBT agreement refers to the mechanism of recognition of conformity assessment schemes. The TBT agreement emphasizes that the technical competence of a body undertaking conformity assessment needs to be ensured through the process of accreditation. Accreditation is the formal recognition of the technical competence of an organization to carry out conformity assessment activities in the specified areas.

International recognition and equivalence of accreditation
In view of the TBT requirements, appropriate mechanisms for mutual recognition of conformity assessments have been established by the International Accreditation Forum. The IAF is open to all accreditation bodies and other stakeholders, such as associations of certification bodies (CBs) and industry representatives. The IAF has also prepared documents for uniform interpretations of the international standards and has established a process of multilateral arrangement (MLA) of mutual recognition, through which the certificates issued get global recognition and multiple accreditation is avoided. To be a member of the IAF and part of the MLA, all members are required to give assurance that they will comply with the applicable international standards and guidance documents issued from time to time by the IAF. It also makes it mandatory for members of the IAF to recognize accreditation granted by other MLA signatories as equivalent.

The process of becoming a MLA signatory requires that the member accreditation body (AB) make a formal application to the IAF MLA management committee and confirm its compliance with the international standards and IAF guidance documents. After the application is accepted, the IAF sends a team of expert assessors from ABs of two different countries to carry out a peer assessment, which involves assessment at the office of the applicant accreditation body and the observation of the assessors of the applicant body during an assessment of the CB by the applicant.

Role of a certification body 
A CB that’s accredited by one or multiple ABs based on its compliance to the applicable standards and the competence of their managerial and technical resources can issue certificates with the logo of the accreditation body. These certificates are issued after physical verification that the organization is complying with the requirements of ISO 9001 or other applicable standards, and that the scope of the certificate is part of their scope of accreditation. After the initial audit and verification for their initial compliance to ISO 9001, the CBs have to carry out surveillance audits at regular intervals (not more than one year) to ensure continuing compliance.

At the time of the initial audit, if any organization is found not to be complying with the standard, specific nonconformities are communicated to it, and it’s allowed time to complete the corrective and preventive action. On satisfactory completion of the corrective actions, the certificate is issued. In the event that the nonconformities are observed during a surveillance audit, then, depending on the severity of the noncompliance, suitable actions are taken by the certification body that could allow time for corrective action, follow-up audit, suspension, or withdrawal of the certificate.

Certification in developing countries
ISO 9000, based on the British standard BS 5750, was first issued in 1987. Certification to BS 5750 began in the United Kingdom, and subsequently the standard was adopted as ISO 9001 by the international community. The certification activity was mainly led by the organizations that were involved in third-party certification, such as ship registrars and third-party inspection bodies. Later, CBs in the United Kingdom and Europe realized that it would be easier to operate through branch offices in the developing countries.

As awareness spread that ISO 9001 certification would help improve exports, some organizations started looking at the ISO 9001 series of standards as a business opportunity and began to consider various options to expand their operations, including partnerships with appropriate agencies in the developing countries. Simultaneously, local CBs began seeking accreditation from overseas ABs in developed countries because most didn’t have their own. Proliferation in certification brought in competition, inadequate control of accreditation, and considerable dilution of the certification process.

The controls on the organizations that get certified to ISO standards, the CBs, and the ABs that accredit the CBs are graphically represented in the chart below.

It’s mandatory for ABs to carry out a surveillance assessment of the CBs at least once a year. Similarly, CBs carry out an audit at least once a year on the certified organizations. A main reason for dilution of the standards of certification process is inadequate control of the CBs operating through branch offices, a franchisee, or through a representative.

The CBs operating in most developing countries fall into three categories:

Category A:  CBs having direct accreditation from a national AB

Category B:  CBs operating under foreign ABs

Category C:  CBs operating through branch offices, a franchisee, or a representative of foreign CBs

The CBs in the categories A and B undergo mandatory annual surveillance by their ABs, as provided in the IAF guidelines. This ensures regular monitoring and control over the functioning of CBs.

The CBs in category C have largely been responsible for the dilution of the certification process, mainly because of poor monitoring and control. Many CBs in this category have never been subjected to surveillance by the concerned ABs. 

Crises of credibility
The ISO 9001 series of quality standards work from the premise that customers require products with characteristics that satisfy their needs and expectations, collectively referred to as customer requirements or product specifications. The QMS approach encourages organizations to analyze their customers’ requirements, to define the process that contributes to the creation of a product acceptable to the customer, and to keep those processes under control. Some organizations have used ISO 9001 to develop QMSs that are integrated into the way they do business, are useful in helping them achieve their strategic business objectives, and that add value for the organization. Other organizations have created a set of bureaucratic procedures and records that don’t reflect the way the organization actually works. Setting up such elaborate procedures adds costs without adding value to the product or process.

Many companies have benefited from ISO standards certification, primarily from well-defined documentation of work processes, examination of data, and maintenance of records. Many such companies also recognize that certification hasn’t added value through improvements in efficiency, cost reduction, and the like. Most audit schedules focus on determining whether documented procedures are being implemented in practice. Few procedures define what the processes are designed to achieve or how these are to be measured. In many cases, audits fail to ascertain whether the process is suitable to deliver products that meet requirements and whether the process achieves the quality objective of the organization. Consequently, most audit efforts reinforce the status quo and do little to improve the business. Many consider such audits merely bureaucratic, of little value to the company, and necessary only to retain certification.

Possible malpractices in management system certification
The effectiveness of QMS certification is based on the credibility of the certification process. Commercial considerations and incompetence or indifference on the part of a CB result in poor-quality certification and the eventual lack of credibility of the whole process. Following are some noteworthy issues:

• Many CBs violate the requirements of man-days as specified by the IAF. Guidelines on “Manpower requirements of auditor time for initial and surveillance audits” are unambiguous and the man-days are worked out on the basis of the organization’s manpower strength and the scope of certification. The strength includes permanent, seasonal, temporary, and subcontracted manpower. The starting point for determining the audit time is the total number of employees for all shifts. For example, one company had 20 regular and 30 subcontracted employees, which called for five audit man-days. Based on the 20 regular employees, the CB involved actually put in only three man-days. In another case, a company had 400 employees, of whom 50 were in quality assurance. Based on the 50 quality-assurance employees, the audit team put in five man-days.

• CBs often accept contracts for certification without having technically qualified auditors, for example, an electrical engineer auditing a manufacturer of electrical bulbs where the major process is glass blowing. In another instance, a commerce graduate audited an IT company specializing in data warehousing.

• Defining the scope of QMS certification and consequently the exclusions from clause 7 of the standard is found to be another serious concern. There is widespread exclusion of subclauses 7.3 (design) and 7.5.2 (validation of process). Design and development in ISO 9001 is a set of processes that transform requirements into the specification of a product, process, or system, and they can be excluded only when the customer is responsible for design. However, the general observation has been that there’s indiscrete exclusion of subclause 7.3. The exclusion of subclause 7.5.2 (validation of processes for production and service provision) weakens the very concept of a process-based QMS.

• ISO 9001 is based on a process approach. A process is a set of interrelated or interacting activities that transforms inputs into outputs. In many cases, neither the auditee nor the consultant understands that a process must have defined objectives, inputs, outputs, activities, and resources. Processes are to be analyzed, monitored and/or measured, and improved, and the absence of substantial records amounts to nonconformance. CBs usually ignore this.

• A new trend is emerging. CBs now often have a marketing department to sell the concept of ISO 9001 certification. In most such cases, contract review is completed first by the CB and the client is then referred to consultants, although sometimes it works the other way around. What is worrisome is that the connection between consultants and CBs, coupled with commercial considerations, diminishes the quality of certification.

Yet another new trend is outsourcing the maintenance of the QMS. Small-scale industries invariably engage consultants for conducting internal audits and even management reviews. Consultants can also play the role of auditee during the initial and surveillance audits. The certification process can go on and on this way, without ownership by the organization.

The silver lining
The credibility of QMS certification has been at center stage at the IAF and ISO. As a result of ISO 9001, an auditing practice group consisting of QMS experts, auditors, and practitioners drawn from ISO technical committee 176 and the IAF has been set up. This group has developed guidance papers with ideas, examples, and explanations about the auditing of a QMS. These reflect the process-based approach that’s essential for auditing ISO 9001 QMS requirements. The documents are available at no cost at www.iso.org/tc176. CBs are encouraged to use these documents to increase the effectiveness of the QMS registration process.

The IAF issued guidelines for international accreditation that came into effect in May 2004. These guidelines clearly specify the conditions under which the ABs would audit the foreign CBs. The documents provide that ABs should have an assessment that covers all the critical locations of its accredited CBs. The guidelines require foreign ABs to accept assessors from the local AB provided that the AB is member of the IAF-MLA. This guideline aims to give the local market confidence in the activities of a foreign IAF-MLA signatory AB. Once the policy is implemented by all ABs, the control on CBs, particularly those operating as a branch office, a franchisee, or through representation of foreign CBs will significantly improve.

Conclusion
ISO 9001 is an excellent document that can help organizations to develop an effective QMS. With the proliferation of CBs and the absence of adequate control by ABs, the certification process in general has been discredited, especially in developing economies. Industries don’t see value addition in the certification, and some of them have lost faith in the standard itself. ISO and the IAF recognize the problem and have initiated corrective measures. It is hoped that, in time, industries will begin to look upon QMS certification as a value-added exercise and the ISO 9001 certification process will regain some of its lost glory.

About The Author

Girdhar J. Gyani

Girdhar J. Gyani is Secretary General of the Quality Council of India and has more than 35 years in quality management, research and development, and human resource development. He’s a senior member of the American Society for Quality and a member of the National Productivity Council, the Governing Bodies of the National Accreditation Board for Test and Calibration Laboratories, the Institute of Quality Assurance UK, and the All India Management Association. He’s a life member of the Computer Society of India, the HRD Network Forum, and the Fellow Institute of Engineers of India. Gyani also received the 16th Lal C Verman Award for 2002 and the Rotary Centenary Award for 2004 for Excellence in the Field of Quality.