Smart companies investing time
and effort into upgrading their quality management systems
to ISO 9001:2000 will also switch their standards-based
systems to process-based ones while they’re at it.
Perhaps the most valuable benefit of a process-based QMS
is its clear demonstration of how real processes affect
quality. With such a system, management can understand—and
more important, support—procedures that make sense,
and they can effectively drive the QMS as a “real”
management system. In addition, a process-based QMS is more
easily measured, audited and improved. It represents a truly
useful management tool instead of a nonvalue-added appendage.
How does the process approach differ from the more prevalent
standards-based approach? In the latter case, companies
comply with ISO 9001 requirements by structuring their documentation
according to the standard. This practice is also known as
the “20 element” approach, named for the 1994
standard’s 20 elements.
In contrast, the process-based approach views a QMS as
a system of processes that affect the quality of the product
or service supplied to the customer. With this method, system
documentation is structured around the company’s processes
themselves—not around the standard.
According to ISO 9000:2000 (clause 3.4.1), a process is
a “set of interrelated or interacting activities that
transforms inputs into outputs.” For example, a sales
process might operate upon three inputs:
Requests for pricing and availability
Requests for quotations
Purchase orders from customers
The sales process transforms these inputs into their respective
Pricing and availability information
Accepted sales orders
What happens between receiving input and delivering output
is the process—a set of interrelated or interacting
activities that transform inputs into outputs.
Activities associated with producing pricing and availability
information might include determining inventory levels or
accessing standard price lists or catalogs. Activities associated
with producing a quotation might entail completing an estimating
sheet to compute labor, materials and other items before
developing a quotation based on that information. Activities
associated with accepting a sales order might include reviewing
the order against an associated quotation, ensuring that
the order is clear and complete, and checking work-in-progress
to determine whether the company has the capacity to meet
the delivery date. All of these activities might be included
in a typical sales process.
ISO 9000:2000’s clause 3.4.5 defines a procedure
as a “specified way to carry out an activity or process.”
Before ISO 9000 came along, companies that wanted to stay
in business had to have some kind of procedure to conduct
its sales process, and it might or might not have been documented.
Whatever the case, it’s important to keep in mind
that a procedure describes how a process is performed.
In its introduction, ISO 9001:2000 explicitly endorses
the process approach. It also states that the standard’s
intention isn’t to compel uniformity of QMSs or QMS
documentation. In other words, ISO 9001 is (very politely)
saying: “Don’t structure your QMS around the
elements of a standard intended to assess QMSs. Instead,
structure it around your own business processes.”
Were the standard’s authors not so polite, they might
have added: “The standard-based approach is, and always
was, a bad idea—it’s confusing and counterproductive.
Furthermore, it has given ISO 9000 a bad reputation!”
In order to ensure the quality of the product or service
provided, a company’s QMS documentation should first
reflect the normal flow of processes and provisions that
are in force. For example, Bob’s Widgets Co. employs
50 people. The processes affecting quality, according to
Bob, are sales, purchasing, receiving and production. The
following list summarizes the sequence and interaction of
Sales. A customer submits a purchase order. This
constitutes an input to the sales process. One process output
is an approved sales order, which represents an input into
the production process. Bob’s sales orders therefore
contain processing steps and serve as routers for production.)
Another output of the sales process is a purchase requisition
to buy the goods needed to realize a product that meets
the customer’s requirements.
Purchasing. The above purchase requisition is an
input to the purchasing process. One output of the purchasing
process is an approved purchase order, which is submitted
to approved suppliers for fulfillment. Another output is
a dock copy purchase order, against which incoming product
will be verified. This document serves as an input to the
Receiving. Incoming product from suppliers is another
input to the receiving process. One process output is accepted
product, which is staged for use in production and also
constitutes an input to the production process. Records
of verification (e.g., signed packing lists) represent another
output of the receiving process.
Production. According to the requirements of accepted
sales orders and using product accepted through receiving,
the output of the production process is finished, verified
and labeled product. Another output is the set of verification
records at appropriate stages of realization (e.g., completed
routers). Finished product is placed into finished goods
inventory, where it awaits packaging and shipping according
to the customer’s delivery requirements (these are
specified on the sales order).
If Bob’s QMS is designed using the 20-element approach,
the company will write 18 procedures. (The organization
isn’t design-responsible and doesn’t service
its product, so the design and servicing procedures have
been excluded.) Of these 18 procedures, 10 will cover the
company’s primary processes—those directly affecting
quality: sales, purchasing, receiving and production.
Thus, Bob’s 10 procedures covering its four primary
processes would be:
Product identification and traceability
Inspection and testing
Inspection and test status
Control of nonconforming product
Handling, storage, packaging, preservation and delivery
These procedures don’t reflect the company’s
processes but rather the standard’s requirements.
Although the contract review procedure covers the sales
process and the purchasing procedure covers the purchasing
process, the remaining eight procedures cover only two primary
processes: receiving and production. This is confusing to
many people, yet some organizations proceed in this fashion
because they mistakenly believe that the standard requires
procedures be structured in that way. Unfortunately, many
practitioners of ISO 9001 ascribe to and promote this mistaken
Using the process approach, Bob’s will develop only
10 or 11 procedures in all.
Of these, four will cover the primary processes: sales,
purchasing, receiving and production. These procedures actually
reflect the company’s normal operations.
Bob’s receiving procedure, for example, should describe
the usual processing steps for receiving activities. Then,
it might be modified to reflect precisely how the quality
assurance provisions already in place satisfy standard requirements.
Where they fail to meet the requirements, solutions are
planned, appropriate controls are added to the process and
the procedure is revised to reflect the addition of new
Using the process approach, standard requirements might
be addressed through a combination of general statements
and procedural provisions. For example, Bob’s receiving
procedure might include the following statements and provisions:
General. Customer property will be received, verified,
stored and processed in the same manner as purchased product.
Such property will be labeled with the customer’s
name upon receipt, if not already labeled appropriately.
If customer property becomes lost or damaged, it will be
brought to the attention of the quality manager, who will
record the incident and notify the customer.
Incoming product will be identified by part numbers and
by accompanying packing lists. Accepted product will be
labeled with a blue dot or an “accept” stamp.
Finished product will be identified by product labels.
Nonconforming product will be identified by its accompanying
packing slip, which will indicate the nonconforming condition.
Such product will be segregated to the reject shelf. The
appropriate purchasing personnel will disposition nonconforming
product, contacting the supplier as necessary to resolve
the issue. Disposition will be recorded on the associated
pack list, and the product will be processed accordingly.
A corrective action will be requested of the supplier, as
Employees will handle and store product in a safe manner
and in such a fashion as to prevent product damage and deterioration.
Appropriate handling and transport equipment will be used
at all times. Product that is sensitive to electrostatic
discharge will remain in its protective packaging pending
its use in production.
Components subject to acceptable quality-level sampling
inspection (per the dock copy purchase order) will be sampled
and inspected accordingly, and results will be recorded
on the associated packing list.
Receiving procedure. When a shipment arrives, receiving
personnel will verify that the incoming goods agree in quantity
and part number with their accompanying packing lists.
Product passing this verification will be further verified
against the associated dock copy purchase order. If further
inspection is required, per the dock copy purchase order,
the product will be submitted to quality control for incoming
Product passing the above verifications will be stamped
“accepted” or it will be labeled with a blue
dot. The person verifying the product will sign and date
the packing list, which will be submitted to accounting
personnel. Accepted product will be staged for production.
Product failing the above verifications will be identified
by its packing lists and placed on the reject shelf while
awaiting disposition. The nature of the nonconformity or
discrepancy will be noted on the packing list(s).
This procedure addresses the standard’s applicable
requirements while describing how the process flows.
Using the process approach, Bob’s will create only
four procedures to cover the company’s four processes.
Not only will the process approach benefit Bob’s by
documenting processes that make sense and that are easily
viewed and measured, it will also save the company money.
At the very least it will save the resources associated
with administrating eight extra procedures (e.g., time spent
reviewing, approving and controlling unnecessary or nonvalue-added
Money is also saved in internal audit time. For example,
Bob’s internal auditors earn an average of $10 per
hour and spend about two hours on each internal audit. It
costs a lot less to audit four well-written procedures than
10 confusing ones.
Furthermore, when the standard is revised in the future,
Bob’s process-based procedures won’t change
dramatically. After all, the company’s processes operate
independently of the standard’s requirements. The
QMS’s structure and operation doesn’t depend
on the standard’s requirements—it complies with
them. Organizations with standards-based documentation will
have to change their QMS’s structure and documentation
to fit each new revision. Or they will have to bridge their
1994 20-element system to meet future requirements, just
as they did for the 2000 requirements. Sooner or later,
smart companies will adopt the process approach.
Dan Nelson has worked with ISO 9000 for 10 years.
He learned the process approach from quality management
consulting firm Cavendish Scott and has used it to assist
dozens of organizations through certification. Nelson is
a QMS 2000 Principal Auditor (IRCA), and has an MA in business
administration from the University of Iowa. He consults
under the name Quality Crossroads. Letters to the editor
regarding this article can be sent to email@example.com.