LAYERED AUIDT

A Process based Approach to Internal Audit

By : Magnifico Training and Consultancy Services

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CONTENT
• What are Layered Process Audits?
• Who Performs the Audits?
• Benefits of the LPA Approach?
• Phases of LPA Implementation
• Summary
• Key Takeaway

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Magnifying Performance Through Innovative Mentoring 3
Kamishibai

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Kamishibai Board

Step 3
Step positive
• Participant offers 1
• Participant
feedback removes
to those cardarea
observed, in
order
owner, 1-2-3….
process owner
• Reviews criteria
immediately after observation.
• Prepares
• Offers coachingforwhen
observation
necessary
• Participant then returns to
Kamishibai Post

Step 2
• Participant travels to location where
observation will occur
• Performs observation to criteria on card
• Observer audits area process to a
known standard completes card takes
additional notes when required

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Kamishibai Board

Step 6
Kamishibai Post
End ofStep
week4 Re-Loading
• Theplaces
Participant completed
LAST card (Fridaycard inthe
#5) is INCOMING
signal for
Completed container
post reload/restore.
• Participant who selects last card is
responsible for reload
• All Cards in INCOMING COMPLETED box
are shuffled and placed at random to
restoreStep
the 5
• board creates
Participant to starting condition.
Condition
Report for findings of
observation/audit and any coaching
that was provided, closes CR.
REPEAT…Until Post contains 1 card
(#5 Friday)

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What are the Layered Process Audit?

• Layered Process Audit ( LPA) is a program for

performance of internal audit

• Audits are performed by multiple levels of the

organizations personnel instead of performed by
small team of auditors

• LPA includes all levels of the organization from top

Management to the operation functions.

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What are the Layered Process Audit?

• Once Fully implemented, LPA will allow for the

auditing of key characteristics of product and
process at higher frequency than traditional audits

• Process performance is verified close to “Real Time”

than with traditional audits

• Correction and improvement efforts will be applied

much closer to the triggering event

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What are the Layered Process Audit?

• LPA includes Quality Management System, Product

and Process audit in one format

• The need for repeated audits to address all these

area is eliminated

• The Goal of LPA is to ensure continuous

performance of the QMS, Processes and Products

• This will in turn, improve process stability and first

time through capability

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What are the Layered Process Audit?

• In most implementations, two types of audit formats

are utilized for LPA,
• Process control audits
• Inspection, Error and Mistake Proofing Verification Audits

• Process Control Audits will address conformance to the

Procedures and instructions that make up the management
and process control aspects of the QMS.

• Verification Audits will ensures that the product conformity

checks in place are working as planned

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Who Performs the Audits?

• Actually, anyone in an organization can be an

LPA auditor
• Top Management owns the process and may
play a role in the performance of the audits
• Top Management will take responsibility for:
• The allocation of resources
• Conformation of the audit results
• Ensuring action is taken when indicated and
• The over all effectiveness of the LPA process

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Who Performs the Audits?

• In most implementation Manufacturing

Management performs the management level of the
LPA

• The process control level is normally performed by

Supervisor, Lead Workers and Quality Auditors

• The process control level is normally performed by

Supervisors, Lead workers and Quality Auditors

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Who Performs the Audits?

• It is recommended practice to have all managers

participate in LPA
• The indicates “Buy in” to the organization and
enhances the perception of the value for the LPA
process.
• This practice also ensures that feed back to top
Management is not filtered through manufacturing
or quality but comes from a cross section of the
organization management

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Who Performs the Audits?

• The leadership role of management in the LPA

process can be over emphasized
• Leadership will find LPA a useful tool in their
efforts to
• Fix system problems
• Instill discipline in the organization
• Encourage improvement of effectiveness

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Who Performs the Audits?

• LPA represents a commitment of time and of effort

for the organization however that efforts has been
shown to pay real dividends

• Early phase audits will find problems and offer the

opportunity or correction on the system
• In later phases audits will find improvement and
opportunities to fix issues before they become
problems.

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Benefits of the LPA approach
• The initial benefits the organization will realize from
the implementation of LPA include
• Identification of variation in the processes
• Identification of high risk in the performance of
manufacturing processes
• Identification of potential or actual process steps
where operator errors can easily occur
• As these become evident from the findings of the LPA
process management of the affected areas and process
owners will become aware of the problems and
effective corrective actions can be applied

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Benefits of the LPA approach
• As the LPA process continues and matures the
organization will begin to see benefits such as:
• Reduction of variation in processes
• Preventive of errors and mistakes in operations
• Reduced rework and scrap
• As these benefits are realized the organization will
find that wastes that were inherent in the processes
will begin to yield to correction and improvements
efforts. The organization will begin to experience
measures reduction in costs.

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Benefits of the LPA approach
• In a fully mature LPA process the organization will be
experiencing benefits like
• Improved communication
• Improved discipline
• Continuous Improvement achieve
• Standardization

• The over all efficiency of the processes and

effectiveness of the QMS is a proven result from a well
organized and maintained LPA process. One classic
example found a 95% increase in first-time through
capability and a 60% reduction in scrap and rework
costs

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Phases of LPA implementation

• A properly implemented LPA process will begin to show

improvement and cost benefit very quickly

• To implement an effective LPA process it has been

shown that a structured approach if the best approach

• The structure present here is based on a four phase

implementation plan

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Phases of LPA implementation
Phase I
• Implementation of LPA should begin with those
processes or manufacturing areas where the most
potential for improvement exist
• A “Shot Gun” approach to LPA in which all of the
processes of the organization are schedule right at the
start usually does not work as well as step by step
approach
• The step by step also gives personnel the opportunity
to develop and improve auditing techniques and skill

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Phases of LPA implementation
Phase I
• The areas of highest risk should be the first ones
exposed to LPA
• Determining which areas these are will involve review
of data regarding
• Customer complaints
• First time through capability
• High RPN values on FMEA
• Large number of complex inspection / error proofing
• Operator, supervisor, Manufacturing and Quality input

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Phases of LPA implementation
Phase I
• Some organization may not have sufficient data for a
good decision making process in all of the areas
noted
• The areas where sufficient data is available should be
used to make the determine of which processes to
apply LPA to first
• The organization will want to look at implementation
of measurement to collect data for all of the items
listed at some point in time

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Phases of LPA implementation
Phase I
• To complete the implementation of LPA an Audit plan
will need to be developed
• As noted the LPA process will first apply to those
processes or areas with the highest risk
• Eventually all processes and areas will be included in
most implemented this is within 6 months of the
starting point.
• It is important to keep ongoing record of “Lesson
Learned: from each expansion of the LPA process so
that improvements are not lost.

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Phases of LPA Implementation

1. Form a LPA team with responsibility for

implementation of the process
2. Develop a procedure for the LPA process
3. Based on the Key process element to be audited
develop an audit checklist for other suitable tool
4. Determine assignment for audits
5. Determine frequency of audit
6. Develop measurement of the LPA process and begin
monitoring the process and collecting the data
7. Report to Top Management at agreed upon frequency

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Phases of LPA Implementation

PHASE I
• The LPA team should be made up of
representation from all of the discipline in the
organization . This is called a “ Cross Functional
Team”

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Phases of LPA Implementation
PHASE I
• Audit checklist or tools should make sense to the
organization with respect to
• The size of the organization
• The scope of the processes to be audited
• The complexity of the processes and products
• The level of competency of the auditors
• In some instance a formal checklist structure will
be the best tools. Other tools might include
process flow charts. Process Turtle and /or
Control plans

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Phases of LPA Implementation

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Phases of LPA Implementation

Phase II
• Once the plan has been development and the LPA
team is satisfied with the results of the planning
phases, the plan will need to be approved

• Approval is normally supported by a formal

presentation to Top Management at which the LPA
team present the output from phase I

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Phases of LPA Implementation
• Top Management will be requested to approve the plan in
order to kick odd implementation
• This approval should take into consideration
• Resources required to accomplish implementation
• Time commitment to accomplish the audit plan
• Acceptance of the checklist or tools that will be used
• Commitment to repeat the process once the first LPA cycle has
been completed
• Top Management is site dependent but always represents
those individual with the responsibility and authority to
direct the efforts of the organization. Examples might
includes a Plant Manager, a Vice President, COO, CEO
and/or the Owner.

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Phases of LPA Implementation
PHASE II
• Remember, the LPA process and Audit Plan only
apply to the completion of LPA for those processes
identified as high risk in phase I
• As this cycle of audits is completed the entire process
will revert back to phase I and the selection of new
processes will take place
• The former processes will remain on the LPA and will
be schedule d along with the new ones
• This is how the LPA process expands to encompass
the entire organization
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Phases of LPA Implementation
PHASE III
• After approval has been achieved there needs to be a formal “ Roll
Out” of the LPA process to the organization
• In most implementations this is done at all employee meetings
• It is important that
• Top Management is involved in the roll out
• The timing plan and methods that will be used in the LPA process are clearly
presented
• The reasons and benefits for adopting the LPA process are discussed
• The fact that all processes will eventually be included is made clear

• It is always a good idea to have a Q& A session as part of the roll

out to let everyone have their questions and concerns heard. There
will always be some resistance to any change and this is a good
point in the implementation to address that as well

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Phases of LPA Implementation
PHASE III
• As issues and problems are identified it is crucial that the following
steps are taken
• Notify the management and supervision of the area or process
• Ensure that a corrective action process is in place, supported by a
form and a detailed procedure, that is followed in addressing the
problem
• Have the auditor(s) review the results of the corrective action with
those who developed it:
• Confirm that correction of the immediate problem has occurred
• Confirm that a good root cause evaluation has been accomplished
• Confirm that the corrective action plan addresses the root cause and
establishes a systemic correction

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Phases of LPA Implementation

PHASE IV
• As the first cycle of LPA is completed the LPA team
will review the result looking for improvement to the
process
• The LPA team will look for:
• How well the LPA has preformed in identification of
opportunity for improvement
• How valid the findings have been
• Lessons Learned from the audits
• Effectiveness of corrective actions

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Phases of LPA Implementation
PHASE IV
• The team should also seek feedback from the personnel
involved in the processes being audited and the audited
and the auditors
• The LPA team will make any adjustments that the review
would indicate are needed
• Once the changes are agreed upon and place the LPA
process will be cascade into the rest of the organization
following the same phased approach until all processes
have been included

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SUMMARY

• LPA is an audit of the processes in an organization

• The LPA checklist or other tools should be “Living Documents”
that are reviewed and changed as the need arises
• Top Management must remain involved and must continue to
show support for the LPA process
• Involvement of the customer in the LPA process is always a
good idea
• Expansion of the LPA process to non- manufacturing areas is
recommended

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Advantages of LPA Implementation

• More proactive than most traditional, sample- oriented

approaches
• Engage Management at all levels- demonstrating commitment
to quality and compliance programs
• Put more, varying eyes on processes, marking it both less
likely for failures to go unnoticed and harder to “ Self- Pass” or
“ buddy pass” issues
• Foster a culture of quality and keep every more informed
about how things are supposed to work – even in the face of
constant change

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Key Takeaways
• Faster cycle times mean detects are making it out the door,
where the costs to correct are much higher
• Traditional audits are reactive, focusing on specifications
and sampling white largely blind to process failures
• Layered process audits address these gaps, but they can
create over thread or fall to address ‘ Check the Box’
behaviors
• World-class LPA systems can virtual eliminate the over
thread with LPA and secure the best overall results
• These LPA systems are extremely cost effective with
payback period in weeks or months
• Using a successful LPA system can improve an organization’s
culture of quality by focusing on verification and prevention

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 THANKS

From : Magnifico Training and Consulting

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