AUDIT REPORT

VEER STEEL MILLS

PREPARED BY

Karnagie Govender

THE BIG 5 GURU CC

0837906213

06, 07 AUGUST 2019

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 EXECUTIVE SUMMARY

Auditor: Karnagie Govender

Date of audit: 6 and 7 August 2019

Processes audited: Quality Management System; Sales, Order processing, planning,

Procurement, receiving, stores; melt shop, rolling mill; Dispatch

Scope: ISO 9001 :2015

Auditee: The following people were interviewed:

Name Position

Mike SHEQ Manager

Sixolile Quality Administrator
Senamile Ndaba SHEQ Administrator
Varun Buyer
Sonje Terblanche Sales Manager
Jasper

Abbreviations:

CAR: Corrective action report

COA; Certificate of Analysis
COC: Certificate of conformance
OFI: Opportunity for improvement
QMS: Quality management system
SWOT: Strengths, Weakness, Opportunities, Threats

Positives:

• Housekeeping throughout the factory has improved but needs more work.

Summary of findings:

No. of findings Classification of findings

3 Observations

0 OFI

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 12 Minor

3 MAJOR

15 TOTAL

CONCLUSION:

Veer Steel Mills needs to focus on rolling out the systems to all departments, as well establishing
monitoring, analysing and improving objectives SMART objectives. Objectives such as repeat business
and number of customer complaints to monitor customer satisfaction should be considered.

AUDIT FINDING REPORT

1. How does the company ensure customer satisfaction?

Minor # 1: 5.1.2 The company does not have a system to ensure customer satisfaction.

1.1 How are customer requirements communicated?

Customer requirements are communicated via email to the melt shop.

MAJOR # 1: 4.2 The requirements of interested party – customer was not met

a) Laboratory administrator had difficulty matching the customer requirements to COA for
heat no 597 / Kamal group. Three emailed specifications were supplied for cross
reference: 26.05.19; 02.04.19; 12.04.19 (evidence was produced to match the last email
with the COA.)

b) The analysis report for heat No 597 did not match the results reported on COA. Results
for Carbon (C %) averaged at 0,154 on test report but was reported as 0.16% on report
dated 12.07.19. Although this was within the customer specification of 0.14 to 0.23 %, it
was not a true reflection of the analysis.

c) Customer specified requirements for Copper, Nickel and Chrome. These were tested but
not reported on COA.

1.2 How are customer complaints managed?

Minor # 2: 10.2.1 Customer complaints are required to be logged and investigated via the
Correction action system, However, this is not the case

a) Customer complaint received for incorrect invoicing from various customers were not
logged on CAR system and the cause of non-conformance was not established.

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2. What is Company’s vision and mission?

The company’s vision is to obtain SANS 17025 and ISO 14001

2.1 How is the vision and mission communicated to management and staff?

Veer Steel Mills’ vision is documented in the quality policy. Quality Policy has been
communicated to management during the management review held in 30.04.19.

Minor # 3: 5.2.1 The quality policy did not demonstrate the strategic direction of the
organisation.
a) New visions, such as obtaining SANS 17025 and ISO 14001, were not captured in the
quality Policy
b) The Quality Policy, PR 2.1-01 rev 0, was last reviewed on 1.02.18. Policy still states
“obtaining ISO 9001:2015”. This has been achieved.

2.2 How does the company ensure that its vision and mission are achieved?

Management has set objectives with target dates to achieve the vision of the company.

MAJOR # 2: 6.2 Objectives for 2018 were not reviewed to establish if the targets were met.
Objectives for 2019 were not established.

a). S/ OBJ 002/18 to “Obtain ISO 9001:2015 certification” is still on the objectives table PR
2.3-01, rev 0, 13.03.18, although this objective has been achieved.
b) There was no evidence of collation of data and data analysis to establish if Objective 003 /
18 Increase sales to 1500 tons of finished goods / month, was met.

c) Company’s objective for 2019 is to increase sales target to 4000 – 5000 tons per month –
this is not captured as an objective for 2019.

d) Production rate / hour is trended but this has not been identified as an objective for 2018/
2019.

3. What steps have the company taken to address the risks and opportunities?

Risks, opportunities, internal and external issues were identified on SWOT analysis. SWOT
analysis was reviewed for 2019. Some new opportunities identified as obtaining SANS 17025;
ISO 14001. Some threats include skills poaching, instability in market. Internal issue is not
measuring customer satisfaction and external issue is penalties due to non-compliance.

minor # 4: 6.1.2 The company could not demonstrate how risk and opportunities are addressed.

a) The effectiveness of actions taken to address previous risk was not reviewed.

b) There is no plan to address current risk and opportunities.

4. Is the working environmental suitable to ensure safety and quality is maintained?

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 Cylinders are caged. Steel is stacked in a safe manner.

Minor # 5: 4.2 Housekeeping is not adequate

a) Steel rods that are used to clean furnace, were kept on walk way. This caused a near miss
during the audit.

5. Is there a program in place to maintain machines and how effective is it?

A preventive maintenance schedule is in place.

Minor # 6: 7.1.3 Maintenance schedule is not adequate.

a) The serial numbers of equipment are not recorded on Maintenance Schedule e.g. overhead
crane C 2849

b) Legal requirements of crane e.g. load testing annually is not scheduled on maintenance
schedule.

c) All the cranes are not listed on Maintenance schedule

d) Cranes were not loaded tested for 2019. Last load test expired on 10.04.19.

6. How effective is the calibration program

Calibration verification schedule, PR 4.1-01, 0, 01.03.18 is available and has been updated for
2019. All equipment has been calibrated. Tape measures issued to Sansar Singh and Amar
Khan are verified weekly. Calibration status was depicted on spectrometer.

OBS # 1

a) The weighbridge is not on the calibration schedule.

7. What steps have the company taken to ensure that the Quality Management system is
current, effective and continually improves?

The company has established and implemented a detailed quality management system with
procedures; work instructions; acceptance criteria at various points e,g meltshop, rolling mill,
dispatch; roles, responsibilities and authorities are defined in procedures and work instructions;

7.1 How are changes to machines, methods, personnel etc handled?

Minor # 7: 7.5.1 Procedure on Document management is available PR 5.1, rev 0, 1.03.18

has been established, however this is not adhered to.
a) The maintenance schedule was not controlled by means of revision number and issue
date.
b) Rolling mills quality checks are recorded on an uncontrolled book.
c) Revision number on internal audit schedule PR 5.2-01 should be 0, as no changes to
template was made.

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 d) Company Organogram was not produced during audit.
e) COA used by melt shop is not a controlled document.
f) Records retrieval was not adequate – electronic copy of quarantine register could not be
located.

7.2 How does the company verify the effectiveness of the quality management system?

An internal audit program is in place to audit the QMS. Internal audit schedule was available
for 2019. Management review is in place to discuss the effectiveness of the quality
management system.

Minor # 8: 9.2.2. findings from gap analysis was not adequately addressed.

a) Findings from gap analysis was not addressed according to internal audit procedure PR
5.2, rev 0, 1.03.18. It was also not clear if all findings were addressed and closed.

Minor # 9: 9.3.1 Management review was not conducted for 2019.

7.3 How are non-conformances handled?

A corrective action program is in place. Quarantine area is available. All nonconforming

material is moved to quarantine area and logged on quarantine register.

Minor # 10: 8.7 quarantine register did not reflect all items in quarantine area.

a) Flat bar with Heat number 270219/502 produced on 27.02.19 was in quarantine area but
not on quarantine register.

b) Quarantine area is not labelled.

c) There were no CARs raised for 2019.

7.4 How does the company maintain identification and traceability?

Heat numbers are used to identify batches. Each bundle is tagged with the heat numbers. A
monthly dispatch report is retained for all deliveries. Information such as delivery number,
customer and order number, product description, vehicle registration is recorded. COAs are
also issued for every batch.

Minor # 11: 8.5.2

a) Heat numbers are not recorded on COA or dispatch register for Tradecore, dispatched on
2.08.19 order no PO 503205

b) COA from Melt shop did not have any traceability to link the COA with order or batch.
There were no heat numbers, Customers or customer order nos. TC ser No or container no
were not filled in (Heat n0. 597)

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 7.5 How does the company manage stock with regards to stock issue, stock rotation and stock
take?

Incoming scrap metal quantities are retained by buyer of scrap metal. Finished good stock
sheets are retained by plant manager. Randoms are entered onto quarantine register.

8. How is quality maintained at different points in the operation?

Quality checks are performed during the melting process and during the rolling process.
Quality check is performed before goods are dispatched.

Result for 01.08.19 was checked. Flat bar 20mm x 3 mm thick x 6 meter long was checked and
adjusted until the product came into specification.

9. How are training needs established?

Training matrix, PR 7.2-01, rev 0, 1.03.18 is available for Training scheduled. Training matrix for
Health and safety training was scheduled and conducted as per schedule. Training attendance
registers were available for Botandwa Mazala for first aid level 1 training attended on 26.06.19.

Training matrix for refresher training was available for Samkelo Qwaba and Selby Mahloho was
scheduled for training on Re-heating furnace; training was conducted in June by Atma Singh and
training attendance register was available.

Skills matrix is available. In most cases there are more than one person skilled per task eg
tongsman and gas cutter.

OBS # 2: there are more than one forklift driver trained but the skills matrix only depicts one
skilled forklift driver.

OBS # 3: incorrect documents used

a) Incorrect document, meeting attendance register, PR 2.4-01 rev 0, 1.03.18, was used to
record earlier training, instead of training attendance register. This has since been corrected.

b) Incorrect document was used for induction of new employees – Raymond Sibiya, Mankosi
Qude and Awata Lwazi. The company has since implemented the quality induction record PR
7.1-06, rev 0, 1.03.18

MAJOR # 3: 7.2 On the job training has not been scheduled or conducted for new employees -
Raymond Sibiya, Mankosi Qude, Awata Lwazi and Sonje Terblanche.

10. How are suppliers evaluated, monitored and re-evaluated?

Suppliers are evaluated by completing a questionnaire with weighting. Suppliers that score 80%
or above are approved to supplier Veer Steel Mills and are entered on the approved supplier list.
Suppliers are re-evaluated annually, as per Procurement procedure, PR 8.1, rev 0, 1.03.18.
Suppliers were re-evaluated for 2019

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Minor # 12: 8.4 Approved supplier list was not adequate

a) Approved supplier list does not include training providers

b) Sidermet who is a service provider for calibration was listed as an approved supplier for
consumables.

c) Revaluation calculation needs to be re-visited. Calculation for Bearing Belts and Seals should
be 83.33% and not 75%.

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