Quality Management – Prof.

Schmitt Exercise 03

Exercise Quality Management

03 Implementation of a QM system

Dipl.-Ing. Bastian Quattelbaum

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Dipl.-Ing. Bastian Quattelbaum

Group Perceived Quality and Product Development
Department Quality Management
Chair of Metrology and Quality Management
Steinbachstr. 25 (ADITEC), D-52074 Aachen,
Tel.: +49 (0)241 80-26341
Fax: +49 (0)241 80-22293
Email: b.quattelbaum@wzl.rwth-aachen.de
URL: http://www.wzl.rwth-aachen.de

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Structure

„ Quality Management principles

„ Case study: Implementation of QM systems

„ Case study: Purchasing

„ Process Structure Matrix

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Quality Management principles

Orientation client

Leadership

Involvement of people

Process approach

System approach to management

Continual improvement

Factual approach to decision making

Mutually beneficial supplier relationships

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According to the ISO 9000ff eight Quality management principles have been identified that can be used by
top management in order to lead the organization towards improved performance.

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DIN EN ISO 9001:2000 process model

Continuous improvement or the
quality management system

Person in

(and other interested parties)

(and other interested parties)

charge
Management
Requirements

Satisfaction

Customers
Customers

Measurement,
Resource
analysis and
management
improvement

Realization of
Product
Input product Output
information
value added Source: ISO 9000

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The norm DIN EN ISO 9001:2000 is based on a process model, which demonstrates the structural
interrelationship between the components of a QM system.
The most important quality control loop in the QM process model extends beyond the organisation and
includes the customer and all stakeholders or other interested parties (thin arrows). Management specifies
which group of customers should be served by the company's output. The requirements of the target
groups subsequently defined are the basis for the main specifications for the company-specific (core)
processes. The quality of these processes essentially determines the level of satisfaction of the
stakeholders. This satisfaction is systematically and continuously recorded by the analysis processes of the
QM system and corresponding reports are submitted to management.
The resultant corrective actions taken in order to improve customer satisfaction and to increase the
effectiveness of the QM system trigger the operation of the quality control loop. The result is continuous
improvement.
The inner quality control loop (thicken arrows) symbolizes the correlation of the demands for QM systems.

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Structure

„ Quality Management principles

„ Case study: Implementation of QM systems

„ Case study: Purchasing

„ Process Structure Matrix

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The adoption of an enterprise specific quality management system, that fulfils the internal needs as well as
the requirements of the DIN EN ISO 9001, is a difficult task for the responsibles. There are often conflicts
between two different central objectives, the request to achieve the maximum expressiveness and
dependability on the one hand and the requirement for easy solutions to create a transparent and
economical acceptable system on the other hand. The solutions must be coordinated to the peculiarities of
the own organization to optimize the business processes and to ensure long-term competitiveness.

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Exemplary approach to implement a QM system

Establish direction Manage transition Strengthen advantages

1 2 3 4 5 6
Management Aims and Identify Structure Quality oriented Continuous
decision visions requirements system reorganization improvement

Top-down approach preponderates Bottom-up approach preponderates

Project planning
Preplanning Rough planning Detailed planning

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Adoption of quality management systems

The adoption of a quality management system is a complex project, involving changes to the whole
organization for each employees. That‘s why the adoption should be figured out and planned well. Specific
objectives, tasks and products of the organization must be accounted.
The risk that the quality management system is not accepted or does not work should kept as small as
possible. In this context the adoption strategy is important.
The adoption strategy is described by the three stages „establish direction“, „manage transition“ and
„strengthen advantages“. Furthermore the tasks are divided in top-down approach managing tasks and
tasks consisting of self dependent partial results and therefore need a bottom-up approach.
The presented approach of the adoption of a quality management system is divided in six clauses, which
can be divided in further single steps.

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GETAG organization chart

Management

Sales Research & Purchasing Production

Development ...
Head: Mr. Klein Head: Mr. Miller Head: Mr. Miller Head: Mr. Stone

QM
EK 1 EK 2 EK 3 EK 4 Mr. Schmidt
representative

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The Top-Management of the medium-sized manufacturing company GETAG aspire to an ISO 9001
Certificate, since the customers are increasingly demanding that their suppliers have one. The Sales
Manager – Mr. Klein – is particularly convinced of the importance since he has got the opinion that this
Certificate has become a decisive competitive factor. The Production Manager – Mr. Stone – is less
enthusiastic, citing the comprehensive testing program already in place in your company. He does,
however accept, that these will not be enough to meet the requirements of ISO 9001.
You have been appointed at the GETAG as the Quality Management representative and your main task is
to introduce a Quality Management System conform to the ISO 9001. Your Line Manager is Mr. Stone, the
Production Manager.

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General information about the GETAG

Number of
350 employees
employees

Sales volume 100 – 300 gears per month

Main customers Machine tool and commercial vehicle manufacturers

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Due to falling demand, the company has had to undergo a massive down-sizing program. This has led to
radical restructuring which is currently being completed. The current workforce of 350 is regarded as viable
in the long-term. The company manufactures transmission systems in quantities of 100 - 300 per month.
The main customers are in the machine tool manufacturing sector and commercial vehicle manufacturers.
In order to adopt the Quality System, you conduct an analysis of the actual situation for each of the
elements contained in the ISO 9001. On the basis of this, you want to develop a concept and structure for
the quality system which will ensure that the requirements of the standard are fulfilled. Therefore you will
develop QM manual chapters and procedures, which will then be presented to the department concerned
and implemented in practice by the departments concerned.

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Task

Task 1
ƒ Which problems can you identify in the approach of introducing a
Quality System? How could the procedure have been improved?

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Structure

„ Quality Management principles

„ Case study: Implementation of QM system

„ Case study: Purchasing

„ Process Structure Matrix

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Purchasing department
This approach, guides you into the „Purchasing“
Department. You will now be studying this QM element in
detail. The department consists of five older, more
experienced purchasers, each of whom has one
purchasing clerk and one secretarial assistant. The
Purchasing Manager, Mr. Miller, is known for his
assertiveness and forcefulness. His management style is
authoritarian. However, he is held in respect by his
employees. His hard and, at the same time, very
successful price negotiations with suppliers have earned
him the name “Killer-Miller” and have ensured that he has
a very positive relationship with company management.
In a discussion with you, you notice that he is already
informed about the plans for the introduction of a Quality
System. He expects you to provide him with the fully
developed documents and suggestions required in order
to gain the certificate in the field of „Purchasing“.

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Mr. Miller named his young employee, Mr. Schmidt, as an additional contact in the Purchasing Department.
Mr. Schmidt pointed out to you, that the company has an above average number of suppliers. This is a
result of the strategy of terminating contracts and awarding new ones as soon as any given product is
offered cheaper by another supplier. This has resulted in very favourable purchase prices. Since the
company intends to reduce the vertical integration in your company from 70 % to 30 %, the importance of
the Purchasing Department is set to increase significantly. Eastern European countries are regarded as
having great potential. Mr. Schmidt reports very positively on the company visits he has made. The
companies have very modern machinery and are offering products at very low prices. There have been
some problems with the initial deliveries in connection with dimensional accuracy. However, past
experience shows that this will sort itself out in the future.
The incoming inspection is very well organised in your company. All faulty deliveries are followed up and
notices of complaint are sent to the supplier in order to ensure that all costs incurred for any rework
required or rejects, can be claimed from the supplier. When the Purchaser feels that a supplier is causing
too many problems, the contract is terminated.

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Meeting with the production manager

Discussions with the Production Manager reveal,
however that faulty components are frequently
responsible for breakdowns in manufacturing operations.
He is aggrieved that the costs thereby incurred, are
charged to his department. When any major problems
arise, he reacts flexibly and orders directly from suppliers
whom he knows to be good. This may be more expensive
but it has avoided a number of outages. He also reports
that wrong quantities are frequently supplied or parts
which exceed the tolerance limits. He is dissatisfied with
the performance of the Purchasing Department. Suppliers
often complain to him about the incomplete and
erroneous information they receive from Purchasing
Department. The Production Manager expects you to
address this problem when you adopt the Quality System.

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Tasks

Task 2
ƒ Investigate the demands of DIN EN ISO 9001 relating to the area
of purchasing. Summarize briefly, the requirements of ISO 9001.
ƒ Analyze the area of purchasing in relation to the requirements of
DIN EN ISO 9001 for this case study. Indicate the weaknesses of
the regarded company and formulate the improvements needed in
the purchasing department.

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You are aware that Purchasing is a very important and very complex area. You will also analyse the area of
activity of the Purchasing Department, taking account of the requirements of DIN EN ISO 9001.

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Structure

„ Quality Management principles

„ Case study: Implementation of QM systems

„ Case study: Purchasing

„ Process Structure Matrix

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Interface problems
Question: Where are the most critical conflicts in the company?
(440 interview partners in an industrial company with 5.500 employees)

Cooperation with Department

direct superior internal
cooperation
25% Cooperation between 12%
different departments

63%

Quelle: Servatius 1994, S. 46

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Over 60 per cent of all problems in the product being as well as service process chains develop at the
interfaces of the enterprises. Work-sharing structured enterprises operate thus due to rising wrong
achievements increasingly in the interfaces ineffectively and inefficiently.
Interfaces as delivery scores between two units of power or areas of responsibility are characterized by
communication and cooperation requirement. Frequently they are defined as problems in the cooperation of
persons. Causes for this are for example:
- insufficient interface definitions,
- different technical language and way of thinking,
- insufficient information passing on,
- insufficient mutual cooperation,
- Lack of content coordination as well as
- unclear request of the rendered performance.
In the context of process orientated planning, control and coordination communication of the coworkers
becomes ever more the critical factor of a necessary accompanying information flow, since departments
are crossed, area and even increasingly enterprise boundaries during the creation of value process.

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Thinking in business processes

Function oriented Process oriented
structure structure

Product development

Process objectives
Processing of orders
Purchasing

Production

Purchasing

Production
Sales

R&D

Sales

R&D
Strategic planning

Area objectives R&D: Research and development

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In principle, a process describes a procedure and pursues a higher-order objective. According to this
definition, a process is additionally characterised by the fact that it oversteps functional, organisational or
human resource boundaries.
The processes “product development”, “processing of orders” (from the customer inquiry to the dispatch of
the product) or the process of “strategic planning” are examples of processes.
One factor which these processes have in common, is that they include functions such as sales, research
and development, purchasing, production, etc. in the course of the process

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From the function view to the process view

Function view Process view

2 3

1 4 6

SP1 SP2 SP3 SP4 SP5 SP6

Legend:
SP = Sub-process
= Information deficit at interfaces
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When a customer order placed by a company is followed through, it becomes clear that this order has to
overcome a number of departmental and area boundaries, given modern typical company structures. There
is a change in the personnel with authority and responsibility at each interface and a certain amount of
information gets lost at each interface.
The process chain is therefore characterised by queries, non-conformities and rework. Undiscovered non-
conformities accumulate in the remainder of the chain and result in increased faults and consequential fault
costs.
The shift from a function to a process view is achieved by stretching the “thread” of the customer order
processing and by looking at the sequentially following process steps in isolation from their functional
classifications. The function-oriented sub-tasks then become a process chain of sub-processes (SP1-SP7).
When a matrix is used to form dependencies between the individual sub-processes, a “roof” is created over
the processes. This “roof” represents the communications interfaces between all of the process participants
involved in the value creation process. This view permits the customer-supplier relationships between all
sub-processes to be recorded systematically.

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Process-Structure-Matrix (PSM)
„ Rotate „Process view“ clockwise by 45°
→ Sub-processes diagonally
„ Represent all communication interfaces

„ Requirements of posterior sub-processes

are represented above the diagonal
SP1 SP2 SP3 SP4 SP5 SP6 „ Requirements of anterior sub-processes
are represented under the diagonal
45°

SP 1

SP 2

SP 3

SP 4

SP 5

SP 6

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Figuratively speaking, we move from a process-based view to the Process-Structure-Matrix by “rotating”

the process view clockwise by 45 degrees. The process chain now appears diagonally from the top left to
the bottom right.

The fields in the matrix symbolize the internal customer-supplier-relation and contain the internal demands
of the further sub-processes. The producer of information is called supplier, and the receptor is the
customer. A field which connect two sub-processes shows an interface.

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PSM approach
SP 1 Step 1:
SP 2 Identify sub-processes and involved staff
SP 3 Step 2:
SP 4
Work out internal customer requirements
to internal supplier
SP 5
Step 3:
SP 6
Detect communication deficiencies and
weaknesses
Step 4:
Implement improvement measures
Step 5:
Audit success of the implemented
measures continuously

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The boxes represent the interface between two sub-processes, this means one sub-process delivers the
information and the other one gets it. The number of information exchanged is filled in each box. This
number can be different for each interface and it is also possible, that some boxes are not filled in at all. For
the number of information exchanged within a process a circle can be used.

The comparison of the evaluation shows the weak points. The colors of a traffic light can be used to
symbolize the necessity for action: green means no need for action, yellow a middle need and red an
urgent need for action.

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Five reasons for occurence of nonconformities

SP 1 1. Customer‘s expectations are unknown
SP 2
2. Wrong input of the process chain
SP 3
3. Wrong „tools“ are used
SP 4
4. Employee doesn‘t want
SP 5
5. Employee is not allowed
SP 6

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There are mostly only five reasons for the appearance of faults in interfaces.

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Step 1: Identify sub-process and involved staff

Advise Enter customer Purchase

customer order vendor parts
Marketing Marketing Purchasing

Customer

Pack Produce Check

product order vendor parts
Logistics Production Stock receipt

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Step 2: Work out internal customer requirements to internal supplier

External
customer

Advise
customer

Enter
customer order

Purchase
vendor parts

Check
vendor parts

Produce
order

Pack
product

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Step 3: Detect communication deficiencies and weaknesses

Check vendor
parts C

Relevance
important
Produce
order P A P

B C

unimportant
D

1 2 3 4 5
very good unsatisfactory
Quality
No need for actions Need for actions High need for actions

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Customer and Supplier of an intersection evaluate independently the quality of the information they get and
the relevance for the work of the customer. Therefore an unified assessment system is used. The quality of
the information goes from „very good provided“ (grade 1) to „unsatisfactory provided“ (grade 5). The
importance of the information is indicated by the ranking from A to D (important to unimportant).
The need for actions of an intersection results out of the analysis of the customer and supplier evaluation.
For the establishment of priorities all results concerning to their importance, evaluation and their deviation
are considered. Actions should be taken if the deviations are high. The colours of a traffic light can help to
visualize where the highest need for action is: green means no need for action, yellow means need for
action and red higher need for action.
Appropriate actions are generated to remove deficits. Therefore prioritized weak points are analyzed with
the employees concerned. They work out in consensus improvement actions und define responsible,
objective values and schedule. In that way the implementation of the actions can be tracked in personal
meetings.

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