BUSD2027 QualityMgmt Module3 CrsePack 14sep17

BUSD 2027 Module 3: What is a Quality Management System?
Module 3: What is a Quality Management

System?
Evolution of Quality Management
Since the beginning of commerce, quality has been an important consideration in completing a
sale. Consider the medieval fruit stand. The customer could inspect an apple for colour, ripeness,
and the presence of any imperfections. If the apple was satisfactory, the customer would buy it.
This represents a method of inspecting 100 percent of the product, and it was done by the
customer. Sometimes the customer only inspected a sample of the product, such as a few grains of
wheat, by opening a sack and inspecting the top grains that were visible or by stabbing the middle
of a bag and inspecting what fell through the hole. In either case, the customer made the
purchasing decision for the cartload based on a small sample.
Although the customer could inspect the characteristics of the product that were visible on its
surface, the customer could only infer the characteristics of the inside of the product from its
external characteristics. The flavour of the apple or the amount of protein in the grain could not be
tested without destroying the product, to which the vendor would object, but these additional
characteristics needed to meet customer requirements if the vendor hoped for repeat sales. The
vendor needed to know that the product would meet the customer’s requirements before the
product was carried from the farm to the village market. After all, what could be done with the
product if the customer rejected it? Hence, the evolution from quality control to quality
management strategies.
Quality control methods are based on inspection of the finished product. Some or all of the product
is inspected, and certain characteristics are measured to determine if the product meets the
specifications for “release.” In some cases, a portion of the product is destroyed in the process of
inspection to measure the characteristics of the product that cannot be inferred by observation. If
the sample fails to meet requirements, the entire lot from which the sample was taken is reworked,
discarded, or sold at a lower price. Sampling plans, lot definitions, and inspection and testing
methods related to finished products are all aspects of quality control.
Quality control is a misnomer. Inspection of a finished product is the least efficient way to control
its quality. The quality is “baked in” by the time production is finished. Quality defects discovered
at final inspection result in lost profit and increased waste. There is no “control” knob that can be
turned to improve the quality of the product once it is finished.
Quality assurance, then, refers to the notion of assuring the quality of a product by controlling the
manufacturing process from whence the product emerges. By ensuring that the production process
is held to the required standards and the raw materials are of good quality, the customer can be
assured that the product will meet the requirements. Unlike quality control, which is the purview of
a handful of employees in a separate department, quality assurance relies on all the employees
who have a hand in production to remain alert to any shifts or changes in raw materials or process
conditions that might affect quality.
Quality assurance has evolved into quality management. Quality management, which was called
total quality management (TQM) in its infancy, is “a company-wide approach to quality, with
Business Administration Diploma Page 1 of 34 NorQuest College

Quality Management V1.17
improvements undertaken on a continuous basis by everyone in the organization” (Dale, Bamford,

& Van Der Wiele, 2016, p. 21). It is a system-oriented approach, and there is more emphasis on
leadership, people, and training. This system of interrelated processes, which includes partnerships
with suppliers and customers, is built on many of the ideas developed by the quality leaders
discussed in Module 1.
Everyone in an organization is involved in a quality management system (QMS)—from the

executive office through all levels of management and supervision to each employee. Quality is
planned. It is built into every process of a company from marketing and sales to the collection of
revenue, from the requisitioning of raw materials and utilities to the payment of expenses, and
involves every aspect of production. In fact, it is hard to distinguish an effective quality
management system—that is, the system for the management of quality within an organization—
from the systems used to manage the organization in general. Such is the level of integration of
quality into everything that a successful organization does.
Quality is reviewed routinely to confirm the effectiveness of each process within the enterprise, and
the effectiveness of the system as a whole, in meeting the requirements of customers, interested
parties, and regulators effectively and efficiently.
Consider a Generic Business Model

Organizations of all types share basic operations processes. The following is a description of those
processes, which will serve as a basis for understanding the requirements for a system to manage
their quality.
For the remainder of this module, we will consider the example of ABC Corporation. ABC
Corporation is a fictitious Canadian company that offers proprietary technology in the form of
products and services for the construction of electrical transmission lines and pipelines. This limits
the impact of construction activity on the local environment. ABC Corporation’s executives are
about to embark on a quality management journey. They feel that their unique technology will be
in great demand to support companies committed to satisfying Canada’s growing thirst for energy
and environmental sustainability. They know that this increasing demand will place substantial
pressure on their business operations, and they want to reinforce those processes with solid quality
management fundamentals to ensure that their dream of unparalleled commercial success doesn’t
turn into their worst nightmare.
Let’s take a closer look at ABC Corporation’s business processes. These processes are present in
every organization. As we describe each process, think about businesses you’ve worked in or know
of and ask yourself whether you recognize these processes in their operations.
From Sales to Cash

To generate revenue and earn a profit, ABC Corporation must obtain and fulfill orders. This involves
the following steps:
1. A sales order is created that documents ABC’s customer’s requirements and how they will be
filled by products and services from the company’s catalogue.
2. A work order is created from the sales order. Must the product first be manufactured? Does the
order include the provision of service? Each line from the sales order is expanded upon in the

work order to ensure that the specifications for products and services are clearly articulated to
ABC Corporation’s employees in language they understand.
3. If the sales order includes products that have been manufactured, a pick list is created that
instructs employees which products to pull to fill the order.
4. A packing slip is created and the products are packaged for shipment or pickup.
5. A shipping label is created and shipping arrangements are made, if required.
6. The customer is invoiced for the shipment as soon as it leaves ABC’s property.
7. ABC receives payment from the customer for the product on time. If not, then ABC will have to
use its collection process to track outstanding invoices and collect payment.
Different companies have different processes for handling these steps. Some companies take
payment in full or in part when an order is placed. Retail outlets expect the customer to pick up the
goods rather than have them shipped. Not all companies produce goods, and not all companies
provide service outside their own facilities.
Not-for-profit organizations have the same need to record the requirements of their clients as
for-profit companies. They must also track the delivery of service to ensure that their resources are
being used effectively to meet the needs of their clients.
From Requisition to Payment

Whether they are for-profit or not-for-profit, organizations need to spend money to get supplies.
ABC Corporation follows these common steps to acquire supplies:
1. Requisition. Someone has to ask for something and be able to describe it sufficiently so that
it can be sourced. There is a strong relationship between what ABC Corporation needs to buy
and what its customers want to purchase. A requisition is a way of tracing the customer’s
requirements to a company’s requirements.
2. Create a purchase order. In most organizations, only a small number of individuals are
authorized to spend the company’s money. Anyone may be able to requisition a purchase, but
only a small number of employees can act as purchasers and create a contract with a supplier
on behalf of the company.
3. Acknowledgement. This is an important step. The supplier is likely to describe the item in
different terms than the person who filled out the requisition. It is critical for the purchaser to
confirm that the vendor understands the requirements laid out in the purchase order and
responds with the right product to meet the company’s needs.
4. Pre-receiving. In larger organizations, it is a helpful practice to plan the receipt of goods so
that the receiving department is prepared for the volume of goods expected each day. They
should also be ready with any special preparations that might be needed to receive the goods,
such as knowing how to unload the truck or where to store the goods until they can be
checked. ABC Corporation often sets up lay-down yards close to where their customers are
installing a new line, so they want to be sure an ABC rep is on hand at the lay-down yard when
the shipment arrives from the vendor.
5. Receiving. There are often three parties to a shipment: the vendor, the customer, and the
carrier. Each has different responsibilities with respect to the shipment. When a shipment
arrives, the receiver will confirm the piece count and the condition of the goods as they are

unloaded from the truck and will sign the carrier’s bill of lading. The receiver’s role is very
important because their signature effectively transfers ownership of the goods from the carrier
to the customer, releasing the carrier of further obligation unless the receiver catches any
defects at the time of delivery.
6. Three-way match. Another critical step in the receiving process is confirming that the vendor
sent the items and quantities that they said they shipped (comparing the goods received with
the accompanying packing slip), and that the goods that were shipped actually match the
goods and quantities that the company ordered (comparing the goods that were shipped to the
purchase order). If there is a discrepancy with respect to item, quantity, or condition, the
receiver will need to notify the purchaser to inform the vendor of the discrepancy within a
limited time.
7. Put-away. Once everything checks out, the receiver will need to deliver the goods to where
they are needed or put them into storage so that they can be found when needed.
These steps are important for both for-profit and not-for-profit organizations alike. Even if the
purchaser goes to the vendor to pick up the goods, they still need to know what is needed by the
company, where to get it from, and what quantity is needed. The condition of the goods also has to
be checked at the vendor’s sales counter before they are signed for. When the goods arrive at the
company, they will need to be stored in a known location before they are used—a place where they
can be protected from damage or deterioration—so they can be found in good condition when they
are required.
Transforming Raw Materials into Finished Goods

Not all companies make things. For those that do, the methods and procedures for converting raw
materials into finished goods—the recipe, if you will—must be followed consistently to ensure a
quality product and sustainable business success. Converting raw materials into finished goods
often requires tools and equipment that have to work consistently. These tools and equipment
have to be maintained, so maintenance procedures need to be followed and specialized technicians
trained to perform maintenance and repairs according to manufacturers’ specifications.
For every production process, there are characteristics to monitor and measurements to take.
Therefore, there must be a measurement process as well as a process for maintaining the
measuring devices, just like the processes that must be followed to operate and maintain the
manufacturing equipment.
Each company must define these processes and document them so that new employees can be
trained, the process can be monitored, and modifications can be controlled.
Finally, the products and equipment must carry identifying marks to distinguish them and relate
them to maintenance records, calibration records, test results, inspection reports, and shipping
orders, and to trace their progression through or inclusion in the process for creating other
products and services.
Even if the organization is only engaged in the provision of a service, such as consulting, it is
necessary to record the consumption of labour (for example, on a timesheet detailing the time
spent on different phases of the engagement) and the consumption or provision of materials (such
as an expense account detailing any costs incurred during the engagement) to support the
preparation of an invoice.

Supporting Operations
In addition to the processes focused directly or indirectly on product and service provision, there
are processes focused on the organization’s strategy.
Strategic and operational planning. To the extent necessary, every organization engages in
some level of planning. Any time we ask ourselves what the future holds and how we should
prepare for it, we’re engaged in planning, even if we never write anything down. If the organization
needs to set up an operating line of credit or obtain a bank loan, it will need a formal business plan
to show how it intends to use the money and subsequently pay back the loan.
The strategy of an organization can be defined as the collection of choices that determine the
nature and direction of the business of the organization. Even if it is not articulated, the strategy of
an organization can be discerned by looking at the decisions and actions taken by the organization.
Sometimes, an organization can be surprised by the differences that emerge between what was
intended as a strategy and what was actually done through the decisions and actions of the various
levels of leadership within the organization.
The process of strategic and operational planning that ABC Corporation uses includes the following
general steps (based on Bodley-Scott, 2010):
1. The executives of ABC Corporation will record the basic beliefs and values of the organization—
the vision, mission, and values statements that they hoped will guide their decision making
throughout the life of their company. These statements will serve to remind them what the
company intended to stand for, should they have to make tough choices in the future.
2. Then the executive team will assess the business environment in which they hope to compete.
Exploring and analyzing their external context allows them to identify risks and opportunities
related to factors such as the following:
a. Political: The government is moving toward phasing out coal-fired power plants. This
means that new sources of sustainable power will have to be built, and these new sources
will require power lines to link them to the province’s electrical grid.
b. Economic: The price for crude oil out of the U.S. southern states, known as West Texas
Intermediate, has decreased substantially and there is no expectation of a return to $100-
a-barrel oil in the foreseeable future. It costs money to ship provincial oil to the U.S., so
the local price has also tanked. However, the price for crude from the Middle East trades at
a premium over West Texas Intermediate. If the province’s oil could be shipped to
refineries in Eastern Canada, which depend on Middle Eastern supply, oil companies could
earn greater revenue than shipping the product south. This means that more pipelines
needed to be built in Canada.
c. Competitive: ABC Corporation’s proprietary technology is considered a competitive
advantage, but it isn’t easy to explain the benefits to customers. ABC needs to develop a
marketing program that will engage pipeline and transmission line companies and
encourage them to buy from ABC Corporation rather than use conventional means
available from a multitude of local and national suppliers.
d. Social: Social media has created a whole new dynamic in the marketplace, and ABC needs
to understand it and get in front of it to be sure that environmentally conscious citizens
will support their technology and carry their message to their customers.

e. Technical: Having proprietary technology doesn’t create a competitive advantage unless

ABC Corporation can protect it and use it effectively. That means having a strategy to
defend their intellectual property and trade secrets.
f. Environmental: The wave of interest in protecting the environment will favour ABC
Corporation as companies and society will want environmentally appropriate methods for
constructing power and transmission lines through environmentally sensitive areas.
g. Legal: ABC will be engaging customers across Canada, so they will need to know and
understand the legal and legislative landscape across many jurisdictions, as both energy
and construction safety are provincially regulated. Operating in many provinces might also
have ramifications regarding the registration of the corporation. ABC will need a legal
strategy that may require outside help to navigate the complexities that the company will
face.
h. Cultural: As Canada enjoys a broad diversity of regional and ethnic cultures, it also has
broad diversity in workplace cultures, including both unionized and non-unionized
workforces. ABC Corporation will need to understand what lies ahead in terms of meeting
the challenges of such diversity while striving to provide an optimal work environment for
its employees.
3. In addition to looking outward at the external context of the marketplace, ABC Corporation will
need to take stock of its internal strengths and weaknesses, including adherence to the
organization’s values, the underlying culture of the organization, knowledge retention, and
operational performance.
4. Next, ABC Corporation will determine the timeframe for executing the strategy and achieving
the results they envision. Typically, organizations work on a five-year plan, but three-year and
ten-year plans are also common.
5. Having identified a number of issues for consideration and establishing the time horizon for
achieving results, the next step for ABC Corporation is to determine the driving force behind
the strategy, such as
a. Introducing new products and services to existing markets to gain a greater share of
existing customers’ “wallets”
b. Introducing existing products and services to new markets
c. Introducing new uses for existing technology
d. Capitalizing on new intellectual property
e. Developing new natural resources
f. Utilizing a strength in operations capability—for example, manufacturing, distribution, or
sales—to take market share from competitors
g. Becoming the low-cost supplier as a means of taking market share from competitors
h. Strategic investments, acquisitions, and mergers to improve profitability and return on
investment.

6. ABC Corporation is now faced with some decisions to narrow the scope of their strategy.
Starting with choosing the scope of business activity in terms of
a. Products and services to offer
b. Markets to enter, defined by
i. Geography
ii. Customer characteristics
iii. Industries
iv. Other considerations
7. ABC Corporation will then prioritize product offerings and markets within this scope,
determining the products, services, and markets that represent the greatest potential.
8. For these products, services, and markets, ABC will determine what capabilities need to be
developed relative to their internal strengths and weaknesses in order for their strategy to be
successful (e.g., training, investment in equipment, facilities, IT, etc.).
9. ABC Corporation will then define the financial and non-financial goals for the strategy so that
the company can develop metrics to monitor progress toward those goals.
10. Lastly, and most importantly, ABC Corporation will define the initiatives that need to be
completed in the first year of their plan in order to
a. Build the necessary capability
b. Achieve its stated financial and non-financial goals.
The business plan for ABC Corporation, then, is comprised of the following parts, as a minimum:
1. Marketing and sales plans to generate revenue, based on maintaining and improving ongoing
business activity as well as completing the strategic initiatives
2. Operating plans that define the operating expenses required to maintain and improve ongoing
operations and complete the strategic initiatives
3. The budget, showing monthly and cumulative cash flow and utilization of resources, the
summary of sales and operations activities through the timeframe of the strategy
4. Plans for capital expenditure and changes in the equity of the business as a result of the
successful execution of the strategy.
As stated earlier, an important factor that sets quality management apart from quality assurance is
the consideration of quality when planning. To achieve quality, an organization such as ABC
Corporation must plan for quality in every aspect of its strategy.
Resource provision and allocation. Organizations will utilize resources in many forms to achieve
their goals, including
• Human resources
• Financial and material resources
• Infrastructure and work environment
• Monitoring and measurement resources
• Corporate knowledge resources.
These resources must be available and of good quality to ensure that the operating processes can
thrive. The processes for providing resources must be of good quality so that they can in turn

provide resources of good quality when and where they are needed. As the saying goes, “garbage
in, garbage out.”
Marketing and customer feedback. The integrity of an organization is a significant component

of quality. Organizations must be able to back up the claims made in their marketing material.
Monitoring customer satisfaction is an important part of validating those claims.
Research, design, and development. As new products and services, or enhancements to

existing products and services, are contemplated in the organization’s strategy, the process by
which they are created and the learnings that are achieved in the process should be recorded to
ensure that the developments achieve their intended purpose and the knowledge is retained.
Performance evaluation and continual improvement. All processes involved in the business of
the organization, including those directly involved in product and service provision, the planning
processes, and the monitoring processes should be analyzed to determine their effectiveness. By
measuring, recording, analyzing, and evaluating products, services, and processes, opportunities
for improvement are identified and actions taken for continual improvement.
The ISO 9001:2015 Standard

The International Organization for Standardization (ISO) has established requirements for quality
management systems to ensure supplier conformance and to facilitate trade. The standards can be
applied to all types of organizations, including manufacturing, design, retail, wholesale,
construction, procurement and distribution, and service.
ISO 9001:2015 is the most current version of the organization’s ISO 9000 standard. This standard
catalogues all the processes of an enterprise, laying out the requirements of a system for
managing those processes to maintain and improve quality. It embodies eight key principles:
1. Customer focus
2. Leadership
3. Involvement of people
4. Process approach
5. Systems approach to management
6. Continuous improvement
7. Evidence-based decision making
8. Relationship management
How ISO 9001:2015 Groups the Generic Processes of

an Organization
The ISO 9001:2015 Standard lists requirements for quality management that should be
incorporated into the processes of an organization. The table below lists the processes grouped by
area of focus. Note how the elements of the ISO standard align with Deming’s PDSA cycle.

PDSA Cycle ISO 9001:2015

Processes
Elements
4 Context 1. Understanding the organization and its context
2. Understanding the needs and expectations of interested
parties
3. Determining the scope of the quality management system
4. Defining the quality management system and its
processes
5 Leadership 1. Leadership and commitment
2. Policy
3. Organizational roles, responsibilities, and authorities
Plan 6 Planning 1. Taking action to address risks and opportunities
2. Establishing and operationalizing quality objectives
Do 7 Support 1. Resource provision
2. Competency
3. Awareness
4. Communication
5. Documented information
8 Operation 1. Operational planning and control
2. Requirements for products and services
3. Design and development of products and services
4. Control of externally provided processes, products, and
services
5. Product and service provision
6. Release of products and services
7. Control of nonconforming outputs
Study 9 Performance 1. Monitoring, measurement, analysis, and evaluation
Evaluation 2. Internal audit
3. Management review
Act 10 Improvement 1. General approach to addressing opportunities for
improvement and making corrections
2. Nonconformity and corrective action
3. Continual improvement
The ISO 9001:2015 Elements in Detail

Although the ISO 9001 standard is limited to laying out the requirements for a system for
managing quality within an organization, in practice, these requirements can be more broadly
interpreted as guidelines for managing the business itself to achieve the desired outcomes of the
organization. That broader interpretation is left to the individual organization. ISO 9001 can be

applied to any organization, whether it is public, private, for-profit, or not-for-profit. Let’s see how
ABC Corporation, a privately held, for-profit organization, interprets the standard.
The following is a general description of the requirements of the ISO 9001:2015 version of the
standard (which we will refer to as “the Standard”) as they pertain specifically to managing quality.
There are some key terms that are used repeatedly in the Standard, including the following:
• Top management: The senior leadership of the company, responsible for setting strategy and
representing the organization to the public. For ABC Corporation, the three owner-partners
represent the top management of the company.
• Organization: The collective body, including top management and all of its employees engaged
in a common purpose. An organization can be structured as public, private, for-profit, or not-for-
profit.
Think About It: How is ABC Corporation structured?
• Business: Those activities that are core to the purposes of an organization’s existence.
Think About It: What is ABC Corporation’s main business?
• Interested parties: Those parties, other than suppliers, customers, and competitors, “that can
have an effect or potential effect on the organization’s ability to consistently provide products
and services that meet customer and applicable statutory and regulatory requirements” (ISO
Copyright Office, 2015). Interested parties can include associations, lobby groups, unions, and
political affiliations operating at the municipal, provincial, and federal levels of government.
Think About It: Knowing what we know about ABC Corporation, who might be some
interested parties that ABC’s top management should get to know?
• Requirements: The broad collective of needs and interests of customers, interested parties,
and regulatory bodies. Requirements can be
 Stated, either verbally or in writing
 Implied, from the intended use of the product or service, or from what is commonly offered in
the market by competitors
 Obligatory, to meet the terms contained in regulations, codes, or statutes.
• Products: Physical, tangible objects that can be shipped by the organization and received by
the customer.
• Services: “The output of an organization with at least one activity necessarily performed
between the organization and the customer, some portion of which is intangible. It occurs
generally at the customer interface, to establish requirements, as well as upon delivery of the
service, and can involve a continuing relationship” (ISO Copyright Office, 2015).
• Customer property: Can include materials, components, tools and equipment, premises,
intellectual property, and personal data.
• Risks: “The (usually negative) effects of uncertainty that come from a deficiency of information
related to, understanding, or knowledge of an event, its consequence, or likelihood” (ISO
Copyright Office, 2015). Risk is often expressed in terms of seriousness and probability.
• Documented information: Formerly “documents and records,” this is the retained information
(in any medium, electronic or hard copy) that an organization relies on for proof of conformity
with the Standard or storage of the “recipe” for product and service provision, or is the retained
knowledge and experience of the company. Some documented information, such as documents
that describe how processes work, are allowed to be changed as a process is improved. Some

documented information, such as employee records, test results, sales orders, and invoices, are
snapshots in time, intended to provide evidence of specific conditions, and should not be
changed.
Element 4: Context
Element 4 of the Standard outlines the quality management requirements related to the
organization’s strategic planning activities. To satisfy these requirements, an organization would
demonstrate that it has undertaken the following activities at least annually, and as required, given
changes in the world in which the organization lives:
• Consider the external and internal influences of the organization (see points 2 and 3 of
Strategic and operational planning, pp. 5–6), identify the risks and opportunities facing the
organization in the timeframe of the plan, and lay out a plan to monitor and review these
circumstances for the duration of the plan.
• List the interested parties relative to the organization and its business, determine their
requirements, and lay out a method for monitoring and reviewing information about these
interested parties and their requirements over the duration of the plan.
Think About It: Knowing what we know about ABC Corporation, for the interested parties
that were previously identified, what methods would you suggest for monitoring the
requirements of these interested parties?
• Define the boundaries and applicability of the organization’s quality management system (QMS),
taking into consideration the purpose and strategic direction of the business, the previously
identified risks and opportunities, the previously identified requirements of interested parties,
and the products and services of the organization. In the case of ABC Corporation, top
management could have limited their QMS to the activities of one province or one division, but
they chose to include all of the company’s activities to be within scope for their QMS.
• Confirm the requirements of the Standard that are necessary to ensure the conformity of
products and services and the enhancement of customer satisfaction within the boundaries
defined for the QMS; maintain as documented information the list of products and services of
the organization and justification for any requirements of the Standard deemed not to apply
(document products, services, and exceptions to requirements). Top management reviewed the
Standard and concluded that there would be no products or services of ABC Corporation that
would not be governed by the Standard. They also concluded that there were no sections of the
Standard that would not apply, and made a note of this conclusion in the preface to their
“quality manual.”
• Establish or review the QMS and its processes in accordance with the applicable requirements of
the standard. ABC Corporation proceeded to
 Document each of their processes, including the following:
♦ Inputs and outputs of the process
♦ The responsibilities and authorities of ABC Corporation’s personnel in charge of these
processes
♦ The relationship between the process and the risks and opportunities, and the
requirements of customers and external parties (as a statement of the purpose of the
process)

♦ The criteria and methods (including monitoring activities and measurements and their
related performance indicators) needed to ensure the effective operation and control of
these processes.
 Include a document in their quality manual showing the sequence and interaction of the
processes that make up the QMS.
 Lay out plans for determining and ensuring the availability of resources for these processes.
Think About It: Knowing what we know about ABC Corporation, in general terms, list the
categories of resources and suggest plans for making them available.
 Maintain documented information (documents) to support the operation of the processes of
the QMS.
 Retain documented information (records) to have confidence that the processes have been
carried out as planned.
 Evaluate the processes (including maintenance processes) and implement any changes
needed to ensure that these processes continue to achieve their intended results.
 Continually improve the processes and the QMS beyond maintenance to take advantage of
opportunities and minimize risk. ABC Corporation’s top management rely heavily on the
elements of performance measurement and improvement in the Standard to guide them in
meeting this requirement.
Element 5: Leadership
Leadership plays a key role in quality management and the Standard holds leadership to the
highest level of accountability. Top management is expected to demonstrate leadership and
commitment with respect to the QMS by
• Holding themselves accountable for its effectiveness
• Promoting the use of a process approach and risk-based thinking
• Communicating the importance of effective quality management and of conforming to the
requirements of the QMS
• Engaging, directing, and supporting employees to contribute to the effectiveness of the QMS
• Promoting improvement
• Supporting relevant management roles to demonstrate leadership as it applies to their areas of
responsibility.
Top management is also expected to support the QMS operationally by

• Establishing a quality policy for the organization that supports the strategic direction of the
organization, including
 A commitment to the effectiveness of the QMS
 A framework for setting quality objectives
 Promoting a process approach and risk-based thinking
 A commitment to meeting customer requirements and enhancing customer satisfaction while
satisfying the applicable requirements of interested parties
 A commitment to providing the necessary resources for the QMS
 Communicating the importance of quality management
 Engaging, directing, and supporting employees to contribute to maintaining and continually
improving the effectiveness of the QMS.

• Ensuring that the quality policy is

 Posted and available for viewing by all employees
 Communicated and understood by all employees
 Applied within the organization
 Provided to interested parties as appropriate.
• Assigning specific responsibility and authority to a QMS representative for
 Ensuring that the QMS and its processes meet the requirements of the Standard
 Reporting the performance of the QMS and its processes to top management, including
improvement opportunities
 Maintaining the integrity of the QMS when changes are made.
• Assigning general responsibility and authority for relevant roles (such as process owners), and
ensuring that those responsibilities are communicated and understood within the organization
• Setting quality objectives that address the risks and opportunities identified when developing
the organization’s strategy
• Ensuring the integration of the requirements of the QMS into the processes that are core to the
business of the organization
• Providing resources to support QMS processes
• Reviewing QMS processes and taking action as necessary to ensure that they achieve their
intended results.
Of particular interest to the Standard is the demonstration of leadership and commitment to

customer focus. Top management is held accountable and must demonstrate how it maintains a
focus on customer satisfaction through the life cycle of a transaction with the customer, including
• Understanding customer requirements and the applicable statutory and regulatory requirements
at the outset of the transaction
• Identifying the risks and opportunities that can affect conformity of products and services and
addressing them to maintain or enhance customer satisfaction when planning the fulfillment of
the transaction
• Maintaining a priority among all employees to focus on customer satisfaction in all activities
related to the transaction
• Meeting the customer and applicable statutory and regulatory requirements as a result of the
transaction
• Measuring the level of customer satisfaction achieved, reviewing customer satisfaction data, and
taking action to ensure that customer satisfaction is maintained.
ABC Corporation’s top management embraced the intention of the leadership requirements of the
Standard. At every opportunity, the owner-partners reinforced the importance of monitoring and
managing the quality of everything that ABC does with their employees. In addition to posting the
quality policy and encouraging regular meetings at all levels in the company to review quality
metrics, the partners promoted the following two general themes.
Firstly, top management promoted the value of the ABC brand and the corporate values it stood
for, and how those values were supported by a strong commitment to quality management and
customer focus. They talked about how, if left to individual employees, it might seem acceptable to
rationalize slight deviations from accepted standards. However, they determined that the brand

would not tolerate such rationalization—the brand would remain strong in its conviction not to
venture down that slippery slope.
Secondly, top management promoted the concept that employees hold themselves 100%
accountable for business results and their impact on each other. Acceptance of this mindset meant
that each employee would be vigilant in monitoring quality and would reach out to help fellow
workers if they identified a deviation. It also meant that, although aiding fellow staff was
encouraged, employees had to offer their assistance in a way that did not have a negative or
unintended impact on their colleagues. In this way, cooperation and commitment to quality and
customer service would be fostered in a work environment of respect and collaboration.
Element 6: Planning
Just as leadership is a key element of quality management, so is planning.
In our general overview of strategic and operational planning, we identified 10 steps. The final step
of that process was defining strategic initiatives to build capability and achieve the stated financial
and non-financial goals of the organization in the timeframe of the strategy. The Standard is
particularly interested in the initiatives related to maintaining or enhancing products and services,
customer satisfaction, and the QMS and its processes.
Specifically, the requirements of the Standard include planning initiatives to reduce risks and
capitalize on opportunities uncovered during strategic planning in a way that
• Is consistent with the quality policy
• Maintains the integrity of the QMS and allows the processes to achieve their intended results
• Achieves overall improvement in the QMS, its processes, and business results.
When addressing risks, there is no absolute response expected; rather, given that risks vary in
seriousness and probability, it is only necessary to demonstrate that the plans to address risk are
proportionate to their potential impact on the conformity of products and services.
The initiatives should be reasonably well defined, including

• What actions will be taken
• What resources will be required
• Who will be responsible for completing the actions
• When they will be completed
• How their effectiveness will be measured.
The objectives of these initiatives should be

• Measurable
• Relevant to the conformity of the products and services and the enhancement of customer
satisfaction
• Monitored, communicated, and updated across relevant functions, levels, and processes within
the organization (for example, posted so that all employees can see both the results and trends)
• Saved as documented information (records) of the performance and the results of the initiative.

In addition to planning for the success of these quality initiatives, the Standard looks for evidence
of the management of changes to the QMS and its processes such that the requirements and
quality expectations of customers and external parties are not negatively impacted during the
execution of the changes. Evidence might include a documented plan to review the effectiveness of
a process, identify gaps, suggest and approve changes, communicate the changes through
training, and monitor the performance of the new process, as well as test results that demonstrate
that the new process achieves expected outcomes.
Planning in ABC Corporation was executed at several levels, including the following:
• Annually, initiatives were selected, following the 10-step process.
• Each of these initiatives was then communicated to division managers and process owners to
develop tasks and sub-tasks to support implementation of each initiative.
• Plans were created to ensure the completion of the tasks and sub-tasks, and to review the
results of this work to ensure alignment and support to advancing the overall initiative.
• Progress was reviewed monthly and quarterly by top management to confirm that progress was
being made and that there were no unintended consequences that might impact the QMS.
Records of each review meeting were maintained by the QMS representative.
Element 7: Support
We’ve all heard the expression “Garbage in, garbage out.” It is as true for quality management as
it is for data analysis.
Quality management holds as a fundamental premise that resources of sufficient quantity and
quality must be available for use to ensure quality products and services. This is true for the raw
materials to be consumed into finished goods, and it is also true for all other resources. Since
quality includes on-time delivery, and resources (both external and internal) are finite, the
availability of resources must be planned. The following are aspects of resource provision that are
the focus of the Standard.
Infrastructure and Work Environment
Throughout the activities of the business, raw materials, work in process, finished goods,
equipment, and people all need to be protected and preserved. Hence, environmental factors need
to be controlled to ensure that people, equipment, and processes can work effectively and the
materials are protected from damaging elements such as dirt, water, cold or hot temperatures,
UV radiation, and direct sunlight.
Infrastructure can include the following:

• Buildings, complete with heating, lighting, ventilation, and their associated utilities
• Equipment, including hardware and software
• Transportation resources, such as pallet jacks, forklifts, trucks, cars, vans, carts, and dollies
• Information and communication technology, like telephones, fax machines, printers and
photocopiers, and the equipment and wiring to connect them into networks

The work environment can include a combination of human and physical factors, such as the
following:
• Psychosocial – A calm, safe, supportive work environment with a culture that discourages
discrimination and unproductive confrontation, and addresses factors that contribute to stress
and burnout
• Physical – Temperature, humidity, light, airflow, dust control, noise, ergonomics, etc.
To support quality, the organization must determine, provide, and maintain its infrastructure and
work environment to the extent necessary to ensure that QMS processes can provide products and
services that are consistent and meet requirements.
ABC Corporation’s building manager is responsible for maintaining infrastructure and the work
environment. If major renovations or additions are contemplated in support of business initiatives,
top management would include the building manager in the design and construction to ensure that
the company’s principles are applied to the new facilities. Employees understand and follow ABC
Corporation’s process for identifying issues or concerns with infrastructure or the work
environment, and alert the building manager or supervision to take action.
Monitoring and Measurement Resources
When monitoring (assessing the status of a process or product) and measuring (assessing the
value of a characteristic) is used to verify the conformity of products and services to requirements,
the organization will
• Provide the resources needed to ensure valid and reliable results
• Ensure that the resources are suitable for the specific type of monitoring and measurement
activities being undertaken
• Maintain the resources to ensure their continuing fitness for use
• Retain documented information (records) as evidence of the fitness for use of monitoring and
measurement resources.
When measurement traceability is a requirement or is considered by the organization to be an

essential part of providing confidence in the validity of measurement results, measurement
equipment will be
• Calibrated, verified, or both
 At specific intervals or prior to use
 Against measurement standards traceable to national or international measurement
standards; when no such standards exist, the basis for calibration or verification shall be
retained as documented information.
• Identified to track its status (useable, damaged, in need of calibration, etc.)
• Safeguarded from adjustments, damage, or deterioration that would invalidate the calibration
and subsequent measurement results.
When measuring equipment is found to be unfit for its intended purpose, the organization will
• Determine the validity of previous measurement results
• Take appropriate action as necessary to ensure the conformity of products or services relying on
those previous results.

ABC Corporation ensures that each process includes identification of key characteristics that will
indicate the quality of the product and the process. These characteristics are routinely measured
and reported to top management for review. The measurement equipment is recalibrated routinely
according to manufacturers’ instructions and maintained in good working order. Maintenance and
calibration records are controlled as documented information. Supervision monitors processes and
products, and corrective action is taken promptly as required.
Organizational Knowledge
Determine the organizational knowledge necessary for the operation of QMS processes and to
achieve conformity of products and services:
• Maintain organizational knowledge and experience from
 Internal sources, such as
♦ Intellectual property
♦ Knowledge gained from experience
♦ Lessons learned from failures and successful projects
♦ Capturing and sharing undocumented knowledge and experience
♦ The results of improvements in processes, products, and services
 External sources, including
♦ Standards
♦ Academia
♦ Conferences
♦ Gathered knowledge from customers or external providers
• Make the knowledge available, to the extent necessary
• Address changing needs and trends by acquiring or accessing any necessary additional
knowledge and required updates.
Because their technology is central to business success, ABC Corporation ensures that all
employees sign a confidentiality agreement protecting the company from loss of intellectual
property. ABC maintains an online library available to authorized employees, based on their needs
and the nature of their work. The library includes all process documents and the records of past
performance of each process. Product design projects and client histories are also available from
online resources. Regular meetings are held between operators and process owners to identify
issues and opportunities for improvement. These are documented and stored in the library for easy
retrieval when needed. Trip reports to conferences, courses, and client visits are also filed by
employees who travel on company business.
People
An organization’s people are its most valuable asset. Their collective memory, abilities, knowledge,
and experience allow the organization to expand and flex to meet the daily challenges of the
business and to build relationships with customers, suppliers, and partners. But, like all resources,
people are finite. They can’t be everywhere at once or work endlessly to perform the necessary
tasks. It is the organization’s responsibility to determine and provide enough people to
• Implement the QMS
• Operate and control QMS processes.

Competence
To enable people to do work that ensures the performance and effectiveness of the QMS, the
organization will
• Determine the competence that is necessary
• Provide a means of measuring and confirming the competence, and retain records as evidence
of that competence
• Ensure that people are competent based on appropriate education, training, and/or experience
• Take actions to acquire the necessary competence and evaluate the effectiveness of the actions
taken when it is necessary to expand the capability of people beyond the means of the
organization to do so.
Each position in the organization chart for ABC Corporation has a job description that aligns with
the responsibilities of that position with respect to the processes in which it is involved. The job
description also includes the skills, knowledge, and experience required to carry out those
responsibilities. When vacancies are identified, potential new hires are evaluated relative to the
requirements listed in the job description to confirm qualifications and permit hiring. Routinely,
employees’ competence is evaluated relative to those requirements. Training and retraining,
including training courses sourced off-site, are recommended as required to maintain employee
competence. The HR department maintains employee training records and evaluations.
Awareness
In addition to competence, which comes from training and experience, organizations need to
ensure that employees are aware of key pieces of organizational information that affect their
approach and attitude toward quality, including
• The quality policy
• Relevant quality objectives
• The value of their contribution toward the effectiveness of the QMS, including
 The benefits of improved performance
 The implications of not conforming to the QMS requirements.
Further to supporting general awareness, the organization will determine the internal and external
communication relevant to the QMS, such as
• What to communicate, including
 The quality policy
 Quality objectives
 Customer requirements
 The requirements of interested parties
• When and where to communicate
• The target audience (with whom to communicate)
• How to communicate (format, media, etc.)
• Who will do the communicating.
On their first day on the job, employees of ABC Corporation go through a detailed onboarding
process to ensure that they are aware of their responsibilities to the company, the brand, the QMS,

and each process in which they will be engaged. Employees are also informed of the quality policy
and all the employment policies and benefits that will govern their relationship with the company
and fellow employees. Annually and quarterly, employees receive updates from top management
on company performance relative to quality, safety, and business success.
As a privately held company, ABC Corporation is not required to issue annual reports to
shareholders. However, top management does issue regular newsletters to customers as part of
their marketing program.
Documented Information
To the extent necessary, the organization must

• Maintain documented information (documents) to support the operation of its processes
• Retain documented information (records) to have confidence that the processes are being
carried out as planned.
As a minimum, the Standard suggests the preparation and retention of documented information for
the following elements:
• Physical leadership
 The scope of the QMS
 The needs and expectations of interested parties
 Risks and opportunities
 The quality policy
 Quality objectives
• Monitoring and measurement
 Evidence of the fitness for purpose (maintenance and calibration records) of monitoring and
measurement resources (methods and equipment)
 The basis for the calibration and verification of measurement equipment when no national or
international standards exist
• Competence
 Evidence of employee competence collected by observation of the employee on the job
• Document control
 Knowledge and information determined by the organization to be necessary for the
effectiveness of the QMS, including information of external origin
 Methods of identification to know which documents are current
 Protection and preservation of documented information that serves as evidence of conformity
to the Standard
• Operations
 Customer requirements
• Design and development
 Design and development inputs and outputs
 Evidence of review, verification, and validation activities related to design and development,
including changes, authorizations, and actions taken to prevent adverse impacts
 Evidence that design and development requirements have been met
 Evaluation and control of design and development activities that have been outsourced

• Product and service provision

 The characteristics of products to be produced, services to be provided, or activities to be
performed
 Identification and traceability of outputs and inputs as necessary when traceability is a
requirement
• Customer property
 What occurs if customer property is lost, damaged, or otherwise unsuitable for use
• Managing change
 The results of the review of changes for production or service provision to ensure continuing
conformity with requirements, the person authorizing the change, and any necessary actions
arising from the review
• Release
 The release of products or services, including
♦ Evidence of conformity with acceptable criteria
♦ Traceability to the person authorizing the release
• Control of nonconformance
 Nonconformity, including
♦ Description of the nonconformity
♦ Actions taken
♦ Corrective actions taken to eliminate the cause if deemed necessary
♦ Concessions obtained
♦ The authority who decides the actions with respect to the nonconformity
• Performance evaluation
 The results of the evaluation of performance and the effectiveness of the QMS
 Evidence of an audit program and audit results
 Evidence of the results of management review
When creating and updating documented information, ensure that there is an appropriate
• Method for identification and description (e.g., title, date, author, or reference number)
• Format and medium
• Method for the review and approval of the suitability and adequacy of the communication.
The organization will need to control and trace documented information (including version control)
to ensure that it is
• Available and suitable for use, including
 Distribution
 Access (either no access, access to view, or access to view and change)
 Retrieval
 Use
 Retention
 Distribution
• Adequately protected from loss of confidentiality, improper use, loss of integrity, and unintended
alteration (storage and preservation, including preservation of legibility).

The organization will apply the same method of control to documents of external origin that are
necessary for the planning and operation of the QMS, as if they originated within the organization.
Element 8: Operations
Operational Planning and Control
It is said that quality is 80% communication and 20% planning. This is particularly true of
operations. Each operations process must include a method for operational planning to ensure that
resources, equipment, and personnel are available and prepared to deliver quality, including
• Planning, implementing, and controlling the processes needed
 To meet the requirements of customers and interested parties for the provision of products
and services
 To implement the actions determined to support quality objectives
• In developing the plan,
 Determining the requirements for products and services
 Establishing criteria for
♦ Process control
♦ The acceptance of products and services
 Determining the resources needed to achieve conformity to product and service requirements
 Implementing control of the processes in accordance with the criteria for process control
 Determining the nature of, maintaining, and retaining documented information to the extent
necessary
♦ To have confidence that the processes have been carried out as planned
♦ To demonstrate that the products and services conformed to their requirements
 Documenting the plan in a manner suitable to the organization’s operations
• When changing the plan,
 Reviewing the consequences of unintended outcomes
 Including plans to mitigate any adverse effects, as necessary
• Ensuring that outsourced processes are controlled in accordance with the same criteria as if they
were being carried out internally to the organization.
ABC Corporation’s sales and operations leadership (managers and supervisors) meet monthly to
review the previous month’s deliveries and the forecast for the coming three months. They then
confirm whether any changes need to be made to operating processes, personnel numbers, or
purchases to meet the new forecast. Such changes are implemented following ABC’s process for
change management, including whether the actions taken have produced the necessary changes.
The operations team then meets daily to review production numbers and quality data to confirm
that all orders are on track for delivery and all processes are operating as intended.
Requirements for Products and Services
Central to the management of quality is recognizing that quality is measured from the perspective
of the customer as to the extent that requirements have been met and satisfaction enhanced.
Therefore, to have a fighting chance to meet those requirements, the organization must first

determine what they are, and then manage the customer’s expectations regarding them, including
the following:
• Customer communication
 Communicating with customers by
♦ Providing information related to products and services, including marketing materials such
as pamphlets and advertisements (print or media), and technical documents such as
bulletins
♦ Handling enquiries, including quotes, contracts, or orders, including changes
♦ Obtaining customer feedback related to products and services, including complaints
♦ Confirming how to handle or control materials and information that are the property of the
customer
♦ Establishing with the customer any specific requirements for contingency actions, when
relevant (including warranty programs)
• Determining requirements for products and services
 Ensuring that the requirements for the products and services to be offered to customers are
defined, including
♦ Any statutory and regulatory requirements
♦ Any requirements considered necessary by your organization
♦ Any implied requirements; that is, requirements that are not stated by the customer but
are considered necessary for the specified or intended use, when known, and features that
have been supplied in general by the competition and have come into common use, thus
contributing to customer expectations
 Ensuring that the organization can meet its claims for the products or services being offered
• Reviewing requirements
 Ensuring that the organization has the ability to meet the requirements for the products or
services it offers by conducting a review before committing to supplying products and
services to a customer, including
♦ Requirements specified by the customer, including delivery and post-delivery activities
♦ Implied requirements
♦ Any requirements considered necessary by your organization
♦ Any statutory and regulatory requirements applicable to the products and services (and
the requirements of interested parties)
♦ Contract or order requirements specified by the customer but different from those
previously expressed in earlier stages of the transaction (such as changes in requirements
from the quoting stage to the selling stage)
• Resolving any contract or order requirements that differ from customer requirements previously
expressed, including any new requirements that are introduced during the selling process
• Confirming the customer’s requirements before acceptance when the customer does not provide
a documented statement of their requirements (such as a PO); for example, when receiving an
order over the phone, an organization might send a quote to the customer detailing the
information received over the phone and how the organization intends to fulfill them, along with
price and delivery, and requesting that the customer acknowledge the quote with a signature
and date

• Documenting information about requirements

 Retaining as documented information (records)
♦ The results of the review
♦ Any new requirements for products and services
• Making changes to requirements
 When requirements for products or services are changed,
♦ Amending any documented information
♦ Ensuring that relevant people are made aware of the altered requirements
ABC Corporation’s marketing materials are reviewed by top management to ensure alignment with
the values and mission of the company and to ensure that the company can deliver on promises
implied in the literature. The sales process (including how to conduct a successful sales call) is
documented, and the quote and order forms used by the sale force include fields for every
conceivable variation and special requirement that each customer might have. The sales team is
trained to ensure that the quote forms are filled out in detail and reviewed with both sales and
operations supervision to confirm that customer requirements can be met, including product mix,
price, and delivery date, as well as any special requests. Quotes are not transferred into sales
orders until both the customer and sales management have signed the documents. Copies of
quotes, including any revisions, are retained as documented information.
Design and Development of Products and Services
In the very beginning for each organization, as it was with ABC Corporation, when deciding what
products and services it would provide, the organization did research and made choices. Since
then, new and replacement products and services have likely been introduced. In the earliest
stages, quality must have been considered in the process of making selections, including the
following:
• General
 Establishing, implementing, and maintaining an appropriate design and development process
to ensure that the subsequent provision of products and services could be carried out as it
had been in the earliest stages of development, with the same or better results
• Planning
 Determining and planning the stages and controls for design and development, including
♦ The level of control of the process expected by customers and other relevant interested
parties
♦ The nature, duration, and complexity of design and development activities
♦ Required process stages, including design and development review
♦ Required design and development verification and validation activities
♦ The responsibilities and authorities of people involved in the process
♦ Internal and external resources required
♦ The need for and degree of control of interfaces between the many parties involved in the
process
♦ The need for the involvement of customers and users in the process, including the review
stages
♦ The requirements for subsequent, routine, or “commercial” provision of products and
services

♦ Documented information needed to demonstrate that design and development

requirements have been met
• Design and development inputs
 Determining and retaining as documented information the requirements that are deemed
essential for the specific types of products and services to be designed and developed,
including
♦ Functional and performance requirements
♦ Statutory and regulatory requirements
♦ Standards or codes of practice that the organization has committed to implementing
♦ Information derived from previous similar design and development activities
♦ Potential consequences of failure due to the nature of the products and services
 Ensuring that inputs such as design specifications are
♦ Adequate for design and development purposes
♦ Complete
♦ Unambiguous
 Resolving any conflicting design and development inputs
• Design and development controls
 Controlling the design and development process to ensure that
♦ The results to be achieved are defined
♦ The results are reviewed (by a broad audience of relevant persons beyond the design and
development team, including customers and users where possible) to evaluate their ability
to meet requirements
♦ The results are verified to ensure that outputs meet requirements as specified
♦ The results are validated to ensure that outputs are appropriate for the specified
application or intended use
♦ Any necessary actions are taken on problems determined during the review, verification,
or validation activities, and the effectiveness of these actions are both verified and
validated
♦ Documented information of these activities is retained
• Design and development outputs
 Ensuring, by reviewing the work done and the products produced, that design and
development outputs
♦ Meet the input requirements
♦ Are adequate for the subsequent (routine or commercial) processes for the provision of
products and services
♦ Include or reference monitoring and measurement requirements as appropriate, along with
acceptance criteria
♦ Specify the characteristics of the products and services that are essential for their intended
purpose and their safe and proper provision
 Retaining documented information on design and development outputs
• Design and development changes
 To the extent necessary, identifying, reviewing, and controlling changes that are made during
or after the design and development of products and services to ensure that there is no
adverse impact on conformity to the current requirements

 Retaining documented information on

♦ The results of any reviews
♦ Design and development changes, including their authorization
♦ Actions taken to address issues identified in the reviews and to prevent adverse impacts of
any changes
Think About It: Knowing what we know about ABC Corporation, in general terms,
create a checklist of steps to be employed by the Research and Development
Department when undertaking the development of a new product.
Control of Externally Provided Processes, Products, and Services
An important distinction between quality assurance and quality management is the importance of
mutually beneficial supplier relationships. Suppliers are our partners, just as we are partners with
our customers. To that end, suppliers are considered part of the QMS because planning,
monitoring, and controlling activities extend to the activities of suppliers, including the following:
• General
 Ensuring that externally provided processes, products, and services from our suppliers
conform to requirements
 Determining the controls to be carried out by suppliers for externally provided processes,
products, and services when
♦ Products and services from suppliers are intended to be incorporated into our own
products and services (manufacturing)
♦ Products and services are provided directly to the customer by suppliers on behalf of our
organization (drop-shipped)
♦ A process or part of a process is provided by a supplier (outsourced) because of a decision
to outsource rather than do the work in-house
 Determining and applying criteria for the evaluation and selection of suppliers to provide the
necessary processes, products, and services to meet requirements
 Monitoring, evaluating, and re-evaluating a supplier’s performance, retaining as documented
information the results of these evaluations and any necessary actions arising from them
(vendor evaluation)
• Type and extent of control
 Ensuring that externally provided products, services, and processes do not adversely affect
our ability to deliver conforming products and services consistently to our customers
 Ensuring that externally provided processes remain within the control of our QMS
 Defining both the controls that are applied to the supplier and those that apply to the
resulting output, taking into consideration
♦ The potential impact of the externally provided processes, products, and services on our
ability to meet customer and applicable statutory and regulatory requirements consistently
♦ The effectiveness of the controls applied by the supplier
 Determining the verification or other activities necessary to ensure that the externally
provided processes, products, and services meet requirements
• Information for external providers
 Ensuring the adequacy of the requirements prior to communicating them to the supplier
(reviewing the requirements before issuing the purchase order)

 Communicating to the supplier the requirements for

♦ The processes, products, and services to be provided
♦ Approval of
 Products and services
 Methods, processes, and equipment
 The release of products and services
♦ The competence of supplier personnel involved in providing the process, product, or
service, including any required qualifications
♦ The supplier’s interaction with the organization (communication plan, designated contacts,
method of communicating updates and changes)
♦ Control and monitoring of the supplier’s performance that will be applied by the
organization
♦ Verification or validation activities that the organization or its customer intends to perform
at the supplier’s premises
The top management of ABC Corporation recognizes that although they might delegate the
responsibility to provide products and services to suppliers, they cannot delegate the responsibility
for quality. In that light, purchasers are trained to provide clear instructions to vendors regarding
the requirements placed on them to deliver products and services either to ABC or directly to
customers. They are to include drawings and process documentation that spells out exactly how
the vendor should comply with ABC’s expectations. Purchasers visit vendors at least annually and
review vendor performance data, including percent on time and complete, and details of any issues
that need to be resolved. Receivers inspect deliveries and record any discrepancies. Drop
shipments are inspected by ABC personnel at the customer’s site to ensure a complete record of
the delivery and its quality.
Production and Service Provision
Managing the quality of the processes for product and service provision are very familiar, including
the following:
• Control of production and service provision
 Undertaking production and service provision under controlled conditions, including
♦ The availability of documented information that defines
 The characteristics of
 The products to be produced
 The services to be provided
 The activities to be performed
 The results to be achieved
♦ The availability and use of suitable monitoring and measurement resources
♦ The implementation of monitoring and measurement activities at appropriate stages to
verify that the following have been met:
 Criteria for control of processes or outputs
 Acceptance criteria for products and services
♦ The use of suitable infrastructure and environment for the operation of processes
♦ The appointment of competent employees, including any required qualifications

♦ The validation and periodic revalidation of the ability of (special) processes for production
and service provision to achieve planned results where the resulting output cannot be
verified by subsequent monitoring and measurement
♦ The implementation of actions to prevent human error
♦ The implementation of release, delivery, and post-delivery activities
• Identification and traceability
 Employing suitable means to identify process outputs when it is necessary to ensure the
conformity of products and services
 Identifying the status of process outputs with respect to monitoring and measurement
requirements throughout production and service provision
 Controlling the unique identification of inputs and outputs when traceability is a requirement
 Retaining the documented information necessary to enable traceability
• Property belonging to customers and suppliers
 Recognizing that the property of customers or suppliers may include
♦ Materials
♦ Components
♦ Tools and equipment
♦ Premises
♦ Intellectual property
♦ Personal data—The organization will exercise care with property belonging to customers or
suppliers while it is under their control, including identifying (labelling), verifying,
protecting, and safeguarding the property of customers or suppliers that is provided for
use or incorporation into the organization’s products or services
 If the property of customers or suppliers is lost, damaged, or otherwise found to be
unsuitable for use, the organization will report this to the customer or supplier, retaining
documented information about what has occurred
• Preservation
 To the extent necessary, the organization will preserve the outputs during production and
service provision to ensure conformity to requirements, including
♦ Identification
♦ Handling
♦ Contamination control
♦ Packaging
♦ Storage
♦ Transmission or transportation
♦ Protection
• Post-delivery activities
 Meeting requirements for post-delivery activities associated with the products and services,
considering
♦ Statutory and regulatory requirements
♦ The requirements of interested parties
♦ Potential undesired consequences associated with the products and services
♦ The nature, use, and intended lifetime of the products and services
♦ Customer requirements

♦ Customer feedback
• Control of changes
 To the extent necessary, reviewing and controlling changes for production or service
provision to ensure conformity with requirements
 Retaining documented information describing
♦ The results from the review of changes
♦ The person(s) authorizing the changes
♦ Any necessary actions arising from the review
Release of Products and Services
As the last person to influence the quality of the product or service before it reaches the customer,
the person who releases the product has significant responsibility. This is true of quality control and
quality assurance, as well as quality management. The organization will want to control all aspects
of product and service release, including
• Planning at appropriate stages of production or service delivery to verify that the product and
service requirements have been met
• Preventing the release of products and services to the customer until the planned release
activities have been satisfactorily completed, unless otherwise approved by a relevant authority
and, as applicable, by the customer
• Retaining documented information on the release of products and services, including
 Evidence of conformity with the acceptance criteria
 Traceability to the person(s) authorizing the release
ABC Corporation’s field supervisors monitor and document each product delivery and installation.
At the end of each job, and at least daily, the work is reviewed with the customer’s site
representative for compliance. Both the field supervisor and the customer’s representative sign the
daily work orders, acknowledging acceptance of the quality and completion of the work for that
day, including any repairs and adjustments requested by the customer. The signed work orders are
then transmitted to head office to support ABC’s invoicing process.
Control of Nonconforming Output
Occasionally, a product or service does not meet the customer’s requirements. These occasions are
valuable opportunities to learn about what can go wrong and take action to improve. The
organization will want to address issues, whether they occur before or after delivery, as follows:
• During production or service delivery, the organization will ensure that outputs that do not
conform to their requirements are identified and controlled to prevent their unintended use
or delivery.
• For nonconforming products and services detected after the delivery of products or during or
after the provision of services, the organization will take appropriate action based on the nature
of the nonconformity and its effect on the conformity of products and services.
• The organization will deal with nonconforming outputs in one or more of the following ways:
 Correction, including verification of conformity to the requirements
 Segregation, containment, return, or suspension of provision of products and services
 Informing the customer

 Obtaining authorization for acceptance of products and services as-is with concessions (such
as price reductions or extension of services).
The daily work orders are reviewed at ABC’s head office before invoicing, and any corrective
actions taken to meet customer requirements are recorded. These corrective actions are analyzed
to determine how frequently they are required, what aspect of the process is allowing the
nonconformity, and whether corrective action is necessary to eliminate the root cause or whether
correction on site is satisfactory. Documentation of the review of these nonconformities is retained
for future reference.
Element 9: Performance Evaluation

Monitoring, Measurement, Analysis, and Evaluation
Monitoring and measurement, and the subsequent analysis and evaluation of the data arising from
monitoring and measurement, have been part of quality since the earliest days. The following
definitions are worthy of note:
• Monitoring: Determining the status of a product or process
• Measuring: Determining the value of a characteristic
• Analysis: Reviewing the results of monitoring and measurement, including manipulating the
format of the data (plotting and charting the results) or including the data in formulae to
calculate metrics
• Evaluation: Drawing conclusions from the analysis of data, identifying cause-effect relationships,
making predictions about the future based on trends observed in the analysis phase, and
ultimately making recommendations for corrective or preventive action
An effective QMS includes the following:

• Determining
 What needs to be monitored and measured, including customer satisfaction
 The methods (how) for monitoring and measurement, including the methods for obtaining,
monitoring, and reviewing customer feedback information (e.g., customer satisfaction
surveys, customer feedback on delivered products and services, meetings with customers,
market-share analysis, compliments, warranty claims, and dealer reports)
 The timing and frequency for monitoring and measurement activities
 The timing for analyzing and evaluating the results
 The methods for analyzing and evaluating the data consistently to ensure valid conclusions
• Evaluating the performance of the processes, outputs, products, and services of the organization
• Employing consistent methods to analyze data, including statistical techniques
• Using the results of analysis to evaluate
 The conformity of products and services
 Customers’ perceptions of the degree to which their needs and expectations have been
fulfilled
 Whether planning has been implemented effectively
 The effectiveness of actions taken to address risks and opportunities
 The performance of external providers

 The performance and effectiveness of the QMS

 The need for improvements to the QMS
• Analyzing and evaluating appropriate data and information arising from monitoring and
measurement
• Evaluating the monitoring and measurement processes to ensure that the results may be
relied upon
• Evaluating the performance and effectiveness of the QMS as a whole (for instance, how effective
the QMS is in achieving its purpose of supporting the organization in its goals)
• Retaining appropriate documented information as evidence of the results of monitoring,
measurement, analysis, and evaluation.
Internal Audit
Internal audits are conducted at planned intervals to provide information on whether the QMS
• Conforms to
 The organization’s own requirements for its QMS
 The requirements of the ISO 9001:2015 Standard
• Is effectively implemented and maintained.
To this end, organizations such as ABC Corporation engage in activities to plan, establish, and
maintain an audit program, including
• Audit frequency
• Methods
• Responsibilities for maintaining the program
• Planning requirements
• Reporting requirements and methods
• Considering the following in planning the audit program:
 The importance of the processes concerned
 Changes affecting the organization
 The results of previous audits.
For each audit, the organization

• Establishes the audit criteria and scope
• Selects auditors and conducts audits in a way that ensures the objectivity and impartiality of the
audit process
• Reports the results of the audit to relevant management.
Following management review of the results, the organization makes appropriate corrections and
takes corrective actions as quickly as possible. They retain documented information as evidence of
the implementation of the audit program, audit results, and the results of the corrections and
corrective actions.

Management Review
Management review is an extremely valuable part of quality management. Through an effective,

consistent, and regular management review process, the organization remains informed of the
effectiveness of the QMS and the successes related to identifying and correcting process issues.
Management review is a key ingredient to continual improvement.
An effective management review process engages top management at planned intervals, with the
goal of ensuring the process’s continuing
• Suitability
• Adequacy
• Effectiveness
• Alignment with the strategic direction of the organization
Management Review Inputs
Management review inputs include the following data and evidence:

• The status of actions from previous management reviews
• Changes in external and internal issues, risks, and opportunities that are relevant to the QMS
• Information on the performance and effectiveness of the QMS, including trends in
 Customer satisfaction
 Feedback from relevant interested parties
 The extent to which quality objectives have been met
 Process performance
 The conformity of products and services
 Nonconformities
 Corrective actions and their current status
 The results of the analysis and evaluation of monitoring and measurement information
 Audit results
 The performance of suppliers (vendor evaluation results)
• The adequacy of resources
• The effectiveness of actions taken to address risks and opportunities
• Opportunities for improvement.
Management Review Outputs
The outputs of management review include decisions and actions related to

• Opportunities for improvement
• Addressing risks and opportunities
• Addressing the root cause of nonconformity in processes, products, or services
• Any need for changes to the QMS
• Resource needs
• Documented information as evidence of the results of management reviews.

Think About It: Knowing what we know about ABC Corporation, in general terms, create
a standing agenda for the monthly management review meeting. For each agenda item,
reference the corresponding element of the Standard that is being monitored and explain
the purpose of that specific agenda item in meeting the requirements of the Standard for
management review.
Element 10: Improvement

A foundational principle of quality management is continual improvement. Quality management is
not stagnant. It’s not about achieving a level of performance and then controlling the operation to
maintain that level of performance. Competitors are constantly improving and technology is
continually evolving, so customer expectations are constantly increasing.
To meet these continually increasing demands, the organization must assess risks and
opportunities for improvement, prioritize them, and implement any necessary actions, to
• Meet customer requirements and enhance customer satisfaction, including
 Improving products and services to meet requirements as well as to address future needs
and expectations
 Correcting, preventing, or reducing undesired effects
• Improve the performance and effectiveness of the QMS
The organization may undertake a variety of actions as needed, including the following, in
increasing order of magnitude:
• Correction
• Corrective action
• Incremental (operational) change or breakthrough change (process re-engineering)
• Innovation
• Reorganization
As the organization improves performance, and as its QMS becomes more effective, the number of
defects and nonconformities encountered is reduced. Nonconformities are extremely valuable and
rare occurrences can present new insight into process performance. As such, nonconformities must
be addressed promptly for the organization to benefit from the lessons they provide.
When a nonconformity occurs, including any that arise from complaints, it is critical that the
organization
• React to the nonconformity and, as applicable,
 Act (correction) to control and correct it
 Deal with the consequences
• Evaluate the need for action to eliminate the cause(s) of the nonconformity (corrective action)
so that it does not recur or occur elsewhere by
 Reviewing and analyzing the nonconformity
 Determining the cause(s) of the nonconformity
 Determining whether similar nonconformities exist or could potentially occur
• Plan corrective actions appropriate to the effects of the nonconformities encountered, including
identifying risks and opportunities

• Implement any corrective actions needed

• Review the effectiveness of any corrective actions taken
• Make changes to the QMS or its processes if necessary
• Retain documented information as evidence of
 The nature of the nonconformity
 Any subsequent actions taken
 The result of the actions taken
 Any learnings from the nonconformity that will inform future improvement efforts
Continual improvement doesn’t happen by accident, but by continually improving the suitability,
adequacy, and effectiveness of the QMS. It involves considering the results of analysis, evaluation,
and the outputs from management reviews to determine if there are needs or opportunities that
can be addressed.
ABC Corporation’s top management recognizes the benefits they have received by implementing
a simple process for recording nonconformities. Whenever an employee must pause in the middle
of a process because the characteristics of the situation are not addressed in the process
documentation or the employee’s training, the first thing they do is pull the Nonconformity Record
form and record what they were doing at the time they had to pause and what they did to correct
the situation and resume their work. Perhaps they needed to get advice from the supervisor or
another employee. Perhaps they needed to contact the customer. Whatever they did, they record
their actions on the form. They then pass the form on to their supervisor for review. As these
Nonconformity Records accumulate, they are reviewed for trends and costs to see if corrective
action is required or whether process documents and training should be updated to provide a
consistent response for “next time.” In this way, process documents and training are continually
improved as new opportunities for improvement are identified.

Works Cited
Bodley-Scott, S. (2010). Strategic thinking in a post-recessionary world [Webcast]. Retrieved from
http://www.kepner-tregoe.com/knowledge-center/webcasts/strategic-thinking-in-a-post-
recessionary-world/
Dale, B. G., Bamford, D., & Van Der Wiele, T. (2016). Managing quality: An essential guide and
resource gateway (6th ed.). Hoboken, NJ: John Wiley & Sons.
International Organization for Standardization. (2015). ISO 9000:2015: Quality management

systems—Fundamentals and vocabulary (4th ed.). Geneva, Switzerland: ISO Copyright
Office.

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BUSD 2027 Module 3: What is a Quality Management System?

Module 3: What is a Quality Management

Business Administration Diploma Page 1 of 34 NorQuest College

improvements undertaken on a continuous basis by everyone in the organization” (Dale, Bamford,

Everyone in an organization is involved in a quality management system (QMS)—from the

Consider a Generic Business Model

From Sales to Cash

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From Requisition to Payment

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Transforming Raw Materials into Finished Goods

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e. Technical: Having proprietary technology doesn’t create a competitive advantage unless

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Marketing and customer feedback. The integrity of an organization is a significant component

Research, design, and development. As new products and services, or enhancements to

The ISO 9001:2015 Standard

How ISO 9001:2015 Groups the Generic Processes of

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PDSA Cycle ISO 9001:2015

The ISO 9001:2015 Elements in Detail

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Top management is also expected to support the QMS operationally by

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• Ensuring that the quality policy is

Of particular interest to the Standard is the demonstration of leadership and commitment to

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The initiatives should be reasonably well defined, including

The objectives of these initiatives should be

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Infrastructure and Work Environment

Infrastructure can include the following:

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Monitoring and Measurement Resources

When measurement traceability is a requirement or is considered by the organization to be an

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To the extent necessary, the organization must

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• Product and service provision

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Requirements for Products and Services

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• Documenting information about requirements

Design and Development of Products and Services

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♦ Documented information needed to demonstrate that design and development

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 Retaining documented information on

Control of Externally Provided Processes, Products, and Services

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 Communicating to the supplier the requirements for

Production and Service Provision

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Release of Products and Services

Control of Nonconforming Output