Student Handout

Nonconformance Reports Bureau Veritas Training

NONCONFORMANCE REPORTS
Student Handout

Purpose of the Exercise

The purpose of this exercise is to:

 develop the ability to assess the available information to determine if sufficient
evidence of compliance or non compliance has been gathered;
 develop the ability to identify the missing information and the ways to establish this
information (audit trail);
 develop the ability to prepare correct and accurate nonconformance reports.

NONCONFORMANCE REPORTS

The following are description of incidents observed by an auditor during the course of
an audit.

They contain description of situations where nonconformity report may be required. The
students should read the descriptions of all incidents. The teams are then required to
examine carefully the incidents allocated by the instructor then take one of the two
following actions:

a) If you think that there is sufficient objective evidence of nonconformity then you
should complete a nonconformity report.

b) If you do not think that there is sufficient objective evidence of nonconformity then
you should state your reasons in the space below the report. You should also state
what the auditor should do next i.e. identify what must be checked before it can be
determined whether there is sufficient evidence of conformance or whether there is
evidence of a non conformance.

The reports should then be prepared using NCR forms at the end of this handout and
additional NCR forms provided by the instructor if needed.

Version 1.0 IATF 16949 Process Auditing Page 1 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Incident 1

The Trane organization produces powdered metal gears used in braking and steering
systems. They are also responsible for the design of many of the products they
produce. While reviewing the company level quality objectives with top management
the auditor observes that warranty claims and field failures have steadily increased over
the past 2 years. The auditor asks what has been causing this and they explain that
there have been many product and process design issues on newly introduced
products. The auditor asks if any of these issues were identified during their APQP
activities, specifically Design Reviews, and they say, “No, they were overlooked.”
During further conversation with the members of top management the auditor is told
that most of the design activity is subcontracted out to an engineering firm. The auditor
asks to see the agreement that Trane has with the engineering firm that defines the
controls necessary to ensure conformance with IATF 16949. The management
representative replies that there is no such agreement since they have been working
with the engineering firm for many years and they have been grandfathered in.

Incident 2

XYZ, Inc. is a manufacturer of injection molded plastic parts. While conducting an audit
in the production area the auditor observes the injection molding press on line #5 in
operation. The pressure gauge shows 100PSI. The temperature gauge shows 350 o F.
Injection speed shows 1.2 ft/min. All instruments have valid calibration stickers. The
auditor asks to see Process Control Plan for this station. The operator shows the
current version of Control Plan CP02 that stipulates the following process parameters:

Pressure: 90 +/- 2 PSI

Temperature: 385 +/- 10o F
Flow: 1.5 – 1.7 ft/min

The auditor asks the operator how often the parameters are checked. The operator
explains that this normally is done every hour and recorded in process chart per CP02.
The auditor checks the charts for past few days and notices that the parameters have
not been recorded since last shift changeover four hours ago. The operator explains
that he was busy cleaning a molding machine on another line and did not have time to
take the readings. Further investigation showed that the whole batch produced on that
shift was found to be nonconforming for 3 critical characteristics.

Incident 3

In the Quality Manager’s office the auditor reviewed a number of internal audit and
manufacturing process audit reports. The auditor noted that in all audit rounds for the
past two years, some 70% of nonconformances were noted in the heat treating
department. The procedure for internal audits required auditing all departments at six
month intervals and this was followed strictly ever since implementation of the system.

Version 1.0 IATF 16949 Process Auditing Page 2 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training
Incident 4

While auditing the sales marketing/order entry process of a tire manufacturer, the
auditor interviewed 6 out of the 20 people working in the process. The auditor
previously reviewed the process objectives, which included:

1. All orders reviewed and processed within 2 days of receipt from the customer.
2. Overall 98% on time delivery to customer promise date.
3. Actual production within 2 % of quoted production time.

The six people interviewed all shared a different approach to processing and reviewing
an order received from the customer. When the auditor asked if there were any
instructions or procedures that defined the execution of the process, the process owner
stated that there was not any such document since the standard did not require one. All
people interviewed were aware of the status towards the objectives which were not
being met or showing positive trends, orders reviewed was at an average of 6.2 days
and getting worse, on time delivery was holding steady the last several months at 88%
and production time to quote was at 11 %.

Incident 5

At the audit team liaison meeting at the last day of the audit the team discussed the
sampling of the operational personnel answer to the quality policy question. Of the 30
people sampled, 27 knew the policy topics and that measurable objectives existed, but
only 3 people actually knew what the measurable was and what progress was being
made to the objective.

Incident 6

Before an audit in the Design Department in XYZ, Inc., the auditor reviewed the Design
and Development Manual and noticed that it did not contain procedures for design
validation. During the audit, the auditor reviewed the documentation pertinent to a
selection of ten completed projects # 99/007, 99/010, 99/020, 99/025, 99/031, 99/042,
99/051, 99/054, 99/062 and 99/070 and was unable to find any records of design
validation activity. The Design Director explained that every design was unique and the
requirement for design validation was not applicable to the products they were
designing.

Incident 7

In the receiving inspection area of a plant assembling automotive fuel systems the
auditor noticed that there were many rejections over the past 6 months for purchased
fuel lines that were damaged or defective. The auditor asked all 6 receiving inspectors
what could happen if defective fuel lines were not noticed and were used in production.
None of the inspectors knew the consequences of this happening. There was also no
PFMEA covering the receiving inspection activity.

Version 1.0 IATF 16949 Process Auditing Page 3 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training
The auditor had previously reviewed the DFMEA for the fuel systems and the PFMEA
for assembly operations and noted that the effect of a fuel line failure was “potential
fire” and the severity ranking was a 10. The auditor also noticed that the only controls
in place to detect nonconforming fuel lines were receiving inspection.

Incident 8

In a screw machine shop the auditor was asking all the operators what the plan was to
achieve the documented quality objectives. The operators were all aware that the main
objective of production was to have no more than 2% scrap, which would be an
improvement over last year’s performance, which was 4.4%. All operators had very
similar answers to the planning questions, which was that every other Monday they
meet and review the top 2 reasons why product was scrapped, formed a cross
functional team and reported the progress on actions at the next meeting. The auditor
asked to see the results and action items of the meeting and the operators stated that
they did not keep meeting minutes, also there was no procedure or instruction defining
this planning activity. The auditor asked how they knew if the plan was working and the
operators stated that the reasons for scrap were being reduced or eliminated and they
were making progress towards the goal.

Incident 9

An auditor is trying to verify if there is a process in place to motivate employees to

achieve the company quality objectives. When the President and owner of the
company was asked how the process worked he stated, “They are lucky to have jobs!
That is their motivation.” The auditor then asked 20 of the 30 employees on the
production line what their motivation was to achieve the quality objectives. Every
employee stated that the goals to increase productivity by 50% and reduce scrap by
25% were impossible to achieve since they were already working too much overtime,
the production equipment was old and rarely made it through a shift without breaking
down and there were no plans laid out on how to actually achieve the goals.

Incident 10

ABC, Inc. manufactures various metal stampings. In the shipping area the auditor was
reviewing the products released for shipment and noticed that the quantity of engine
mounts (P#16949 - Production Order Number 99/6802) which was kept on three pallets
and was marked ‘ready for shipment’, did not have the following marked on the boxes:

 Heat number.
 Run number.
 Shift.

Procedure FP 001, clause 7.8 requires that the above-mentioned information must be
printed on the boxes for all engine mounts.

Version 1.0 IATF 16949 Process Auditing Page 4 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 5 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 6 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 7 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 8 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 9 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 10 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 11 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 12 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 13 of 9

 Student Handout
Nonconformance Reports Bureau Veritas Training

Company: Incident Number:

Process / Area: IATF 16949 Clause Number:

Finding:

Objective evidence

IATF 16949 Requirement:

Auditor

If you do not think that there is sufficient evidence of nonconformity, state the reason(s) for your decision and
state also what further actions (or audit trails) the auditor should take.

REASON(s):

FURTHER AUDIT TRAILS:

Version 1.0 IATF 16949 Process Auditing Page 14 of 9