1. Driving
Process
Excellence
Enterprise Audit
Management
Process driven combining
audits on quality and
environmental management
systems
ISO 19011 supports new approaches in auditing
This presentation has made for
International Assessor/Auditor Conference
Indonesia, November 2008
Copyright 2008© dw

2. Presented by :
Danang Widoyoko
IATF Auditor No.: 3UK-07-01-285
IRCA Lead Auditor No.: 1185731
2003 until Present join with SGS Indonesia
1995-2003 : Astra Daihatsu Motor Engine Plant
QA Mgr
Black Belt
Engineering
1992-1995 : IPTN
Stress Analysis
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3. A walk through the final frontier : topics cover
Re-think about
Quality Audit
Next door Stories
Shift to the next
gear
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4. Re-think about Quality Audit :
Auditing and being audited
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5. “If we change the way we think about quality, we will imagine
that it is not about following procedures, inspection, rules and
regulations. It is about establishing the needs and expectations
of those we choose to serve, setting goals for satisfying these
needs, devising a system of processes to fulfil these goals,
measuring performance and continually improving capability
to satisfy the needs of all interested parties.”
Customer value proposition
Strategic Planning
Function Mission &
Vision
Resources,
Customer Budget, action
needs plan
Operation/Delivery
Strategic
result &
Regulation business
strategic
Input-process-output
Image Strategic
initiaves
Relationship
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6. Stake holder’s
comments during
audit process :
Frequently
confirmed satisfy
But the main
Stake holder’s
idea of the
system : show
the money…!
PDCA audits are an
excellent way to determine
whether investments in
processes are actually
performing as expected
.
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7. Next Door
Stories of
Quality Audit :
Untold stories of quality audit
that shown looks like
no added value given
by quality audit
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8. Why it
doesn’t
work very
well.?
• Lack of objectives and resources
• Poor Preparation
• Broken Close-loop
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9. Lack of objectives and resources
Lost objectives of the
quality audit
Quality audits, both
internal and external
should be cited as part of
the organization preventive
action program. They are
part meant to detect
problems early. Identified
non conformances
typically should trigger an
investigation. Audits should
be also cited as part of
the organization to seen
any opportunities to
enhance their system
Worse Resources for big
result
Quality audits, both
internal and external
should be planned with
appropriate objectives
to deliver best result
for the organization
performance

10. Poor Preparation
Poor Qualification
• Competence building
takes not more than
simple training
• Knowledge system and
process as vital things
not defined properly
• Monkey sees monkey does
• Poor mentoring and tutor
including continues
improvement plan
• Checklist mentality
Poor Audit Plan
• Not base on Risk, and
actual process
performance
• Un-wise resources
regular plan
• Wrong selection team,
ever see new comers
going to production
line..?

11. Poor Preparation
Comfort Zone
They will be known better than 3rd. party
auditors. For them mostly left
unchecked for their comfort zone. An
auditor that is totally unfamiliar with
(for example) product design process-
according to poor qualification above-
might shy away from performing
thorough investigation, allowing, this
way, for ineffective processes to go
unchallenged.
Side Jobs
The planning also not consider
according to the complexity of the
process, covering of the process etc.
Meanwhile the activities only confirm
as side jobs. You can imagine how the
audit would be execute.

12. Broken Close Loops
Comfort Zone
They will be known better than 3rd.
party auditors. For them mostly left
unchecked for their comfort zone.
An auditor that is totally unfamiliar
with (for example) product design
process-according to poor
qualification above-might shy away
from performing thorough
investigation, allowing, this way, for
ineffective processes to go
unchallenged.
Side Jobs
The planning also not consider
according to the complexity of the
process, covering of the process etc.
Meanwhile the activities only confirm
as side jobs. You can imagine how the
audit would be execute.

13. Back to the future
SHIFT TO THE NEXT GEAR
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14. • The quality audit
• Process Approach
• Compliance against PDCA Approach
GENERATE ADDED VALUE BY
QUALITY AUDIT
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15. “Systematic, independent and documented
process for obtaining audit evidence and
evaluating it objectively to determine the extent
to which audit criteria are fulfilled.”
Audit criteria is a “set of policies, procedures,
or other requirements against which collected
audit evidence is compared.”
Audit evidence consists of “records, statements
of fact or other information, relevant to the
audit and which are verified.”
“Internal auditing is an independent, objective assurance and consulting activity designed
to add value and improve an organization's operations. It helps an organization
accomplish its objectives by bringing a systematic, disciplined approach to evaluate and
improve the effectiveness of risk management, control, and governance processes.”[i]
[i] “About Internal Auditing,” IIA Web Site, 2000.
THE QUALITY AUDIT
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16. An audit does not only provide
information to determine
conformity, but also information
that can be used to direct an
organization and improve its
activities. This added value of
auditing – compared to control or
inspection activities – is, amongst
others, related to the in-depth type
of investigations and analysis and
the search into the causes of any
shortcomings or non-conformities
that form the basis of all audits
Systematic, independent, and documented process for obtaining audit evidence
and evaluating it objectively to determine the extent to which the audit criteria are
fulfilled.i]
[i] “ISO 19011:2002
THE QUALITY AUDIT
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17. Role of auditor :
• Catalyst
• Reporter
• Improvement Agent
• Innovator
• Motivator
• Interface between linkage
An organization will need to:
•Identify what competencies are required
• Identify which personnel already are
competent
• Decide what additional competencies are
required.
• Decide how these are to be obtained
• Train, hire or reassign personnel
• review competence of personnel
Auditing 'competence' and 'effectiveness of actions taken'
THE QUALITY AUDIT
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18. •Identify business objectives
•Identify high risk processes
•Flowchart processes
•Identify process measures
•Evaluate process performance against measures
•Recommend improvements
Improvement base on actual process
PROCESS APPROACH
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19. An advantage of the process approach is
the ongoing control that it provides over the
linkage between the individual processes
within the system of processes, as well as
over their combination and interaction.
When used within a quality management
system, such an approach emphasizes the
importance of
• understanding and meeting requirements,
• the need to consider processes in terms of
added value,
• obtaining results of process performance
and effectiveness, and
• continual improvement of processes
based on objective measurement.
Improvement base on actual process
PROCESS APPROACH
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20. •Efficiency
•Effectiveness
•Cost reduction
•Waste elimination
•Risk management
•Controls
Value Added Audit Objectives
PROCESS APPROACH
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21. Compliance against PDCA Approach
EFFECTIVENESS & EFFICIENT
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22. EFFECTIVENESS AND EFFICIENT
IMPROVEMENT AND EFFECTIVENESS
There are many examples and requirements in ISO 9001:2000 that require the organization to address the effectiveness of its
quality management system.
Further requirements specify the need for continual improvements to the quality management system – not just sporadic
quality campaigns.
• Extent to which planned activities are realized and planned
results achieved. - ISO 9000:2000 3.2.14
• ISO 9001 specifies requirements for a quality management
system that can be used for internal application by
organizations, or for certification, or for contractual purposes. It
focuses on the effectiveness of the quality management system
in meeting customer requirements
- ISO 9001: 2000 0.3
• Top Management shall ensure that the quality policy includes a
commitment to comply with requirements and continually
improve the effectiveness of the quality management system.
- ISO 9001: 2000 5.3
• The organization shall continually improve the effectiveness of
the quality management system through the use of the quality
policy, quality objectives, audit results, analysis of data,
corrective and preventive actions and management review.
- ISO 9001: 2000 8.5 Copyright 2008© dw

23. EFFECTIVENESS AND EFFICIENT
Measuring QMS effectiveness
and improvements
Effectiveness : Planned result achieved for customer satisfaction driven
Efficiency : Result achieved against resources used
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24. Analysis of Data
Organizational
Objectives
Customer requirements
Statutory & regulatory
requirements
Examples of
Defect rate and objectives set by the
customer returns Organization
QMS controls
Purchasing
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25. Analysis of Data
Organizational Organizational
Objectives Results
Customer requirements
Customer satisfaction
Statutory & regulatory
requirements
Statutory & regulatory
compliance
Examples of results Quality system metrics
Defect rate and recorded by the
customer returns Organization
Inspection and test
QMS controls
Supplier performance
Purchasing
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26. Effectiveness of the QMS
100 100
Organizational Organizational
Objectives Results
0 0
The gap measures the lack of effectiveness of
the quality management system.
The narrower the gap, the more effective the
QMS.
Things are looking good!
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27. Effectiveness of the QMS
100 100
Organizational Organizational
Objectives Results
0 0
The gap measures the lack of effectiveness of
the quality management system.
Management should get a wake up
warning!
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28. Effectiveness of the QMS
100 100
Organizational Organizational
Objectives Results
0 0
The gap measures the lack of effectiveness
of the quality management system.
The Organization is in trouble!
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29. Improvement in the QMS
Organizational Organizational
Objectives Results
Improvement in the QMS
% 100 75 50 25 0
Improvement can also be measured
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30. Improvement in the QMS
Organizational Organizational
Objectives Results
Improvement What actions are taken when
Initiatives gaps are identified?
Customer Focus
Corrective Action
In this example, the organization
These actions may identified three key areas for
cause the organization improvement.
to revise its objectives. Procurement
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31. Management Review
100 100
Organizational Organizational
Objectives Results
0 0
Improvement
Initiatives
The improvement processes
Customer Focus are also evaluated during
Management management review meetings
Review and appropriate action taken.
Corrective
Action
Which may cause
the organization to Procurement
again revise its
objectives. Copyright 2008© dw

32. EFFECTIVENESS AND EFFICIENT
ISO 9004:2000 & The consistent pair
Top management should therefore define methods for measurement of the
organization's performance in order to determine whether planned objectives have been
achieved.
Methods include
• financial measurement,
• measurement of process performance
throughout the organization,
• external measurement, such as
benchmarking and third-party evaluation,
• assessment of the perceptions of customers
and other interested parties of performance
of products provided, measurement of other
success factors identified by management.
• assessment of the satisfaction of customers,
people in the organization and other
interested parties,
- ISO 9004:2000 5.1.1
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33. The Effectiveness of the
Organization
After analyzing the data and reaching a conclusion on the
effectiveness of the QMS, the same process is then used to
determine if the quality management system has had an effect
on the Organization’s business and/or financial results.
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34. Effectiveness of the Organization
100 100
QMS Organizational
Results Business Results
0 0
The gap now measures the lack of business
effectiveness of the organization. The narrower
the gap, the more effective the organization.
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35. Business Improvement in the
Organization
Organizational Organizational
Objectives Results
Improvement in the
organization
% 100 75 50 25 0
And again, the improvements in the
organization can be measured and managed.
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36. Analysis of Data
100 100
Organizational Organizational
Objectives Results
0 0
QMS Results
Improvement
Initiatives
Business The Sydney Model is cyclical and
Results can be used as often as
required by an Organization.
Management
Review
Continual
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Improvement

37. Conforming Zone 3 Zone 4
Maturity of “QMS”
Non Conforming
Zone 1 Zone 2
Maturity of “quality culture”
Low High
“Value-added” quality management systems with Value-added auditing
MEET THE CUSTOMER
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38. VISION
Planning Re-align
ENGINEER Audit RESPOND
Cycle
Analysis
Data Gathering
OPERATE
“Value-added” quality management systems
Value-added auditing
Compliance against PDCA Approach
MEET THE CUSTOMER
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39. Visibility Collaboration
• Auditors team
• Audit observations • Operations Team
• Prioritized Risks • External Auditors
• Internal Controls • Best Practices
• Process performance • Knowledgebase
• Cost of Audit • Dashboard
• Attention Areas • Documents Attachment
Control Leverage Audit Data
• Audit Schedule • Cost Leaders
• Process Improvements • Time Leaders
• Compliance Efforts • Unified View of Risks
• Team Accountability • Compliance Breach Alerts
• Metrics Collection • Business Impact
• Task Milestones • Initiatives
• Competitive Benefits
“Value-added” quality management systems
Value-added auditing
MEET THE CUSTOMER Copyright 2008© dw

40. Process Owner Operations Team Customer
Internal Management External Auditor
Auditor
+
Multi-Location Audit Multi-LOB Audit Audit Data Multiple Audit Compliance
Integration Standards Templates
“Value-added” quality management systems
Value-added auditing
Meet the customer Copyright 2008© dw

41. Standards Driven Compliance
Full-Cycle Audit
Management
Assurance
Automation
Common tools and
+
process, integrated
with other Audit Data Risk
Sources Mitigation
Dynamic link
+
between customer
compliance needs
and
Lower costs
Best practices Open standards Documents
Business Benefits
Meet the customer Copyright 2008© dw

42. Process Adherence
Process Performance
Quality of Decisions
Audit Cost
Audit Time
Reporting Gaps
Business Benefits
Meet the customer Copyright 2008© dw

43. Conclusion
The effectiveness of the quality management
system in meeting both quality and/or business
objectives is likely to be the key attribute that
ensures the on-going support and resource
allocation to maintain the ISO 9001:2000 quality
management system within the corporate
environment.
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44. “Another challenge is to make sure we don’t cross the line between helping
management and our role as the independent, objective audit function,” he says.
“This is a constant challenge, because the more management perceives us as adding
value, the more they call on us to participate in the process. When that involves
decision making, we must be careful to maintain our independence and objectivity.”
“Finally, as a global company, we have to be sensitive and aware that we are not
living in one culture, but a multicultural world. What is good for the United States is not
always good for the rest of the world, from both a business and an audit perspective.”
Chet Watson, general auditor, and Angie Chin, GM’s Audit Leadership Board executive for Business
Risk Management, Sarbanes-Oxley 404 Support and Special Investigation
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45. “The more that audit can be viewed as adding value beyond traditional
compliance and operational auditing, the further the function will get.”
“My goal is significant reduction of total hours by leveraging existing documentation
and automation, increasing control awareness and improving training of control
ownership,”
“We want to be free to expand the work IA is doing in traditional audit areas. So far,
we are well on our way to achieving our goal.”
Rob Gould, director of internal audit, Harley-Davidson
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46. “When I was brought on board, my initial challenge was to find out from all the senior
executives what kept them up at night. We still try to stay on top of business and
process risk to make sure we are addressing the high-risk and high-payback
opportunities.”
“One thing I’ve learned is that I am here to make the business better - by collaborating
and listening, we can provide better service and meet the needs of management.”
Phil Bertram, director of internal audit, Komatsu
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47. “We need empowerment, not only in terms of responsibility, but also in terms of the
human resources assigned to the different offices, where these professionals will be
autonomous as they perform different types of audits.”
“All of this is based on one concept - and that is, in order to create a good auditor, a
company must spend a great deal of money, both in formal development and in on-
the-job training. Our goal is to keep talented people within the Fiat Group so that we
can recover our investment of resources.”
– Mauro Di Gennaro, chief audit executive and compliance officer, Fiat.
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48. I would like to say a lot of thanks following all
valuable discussion and brain-stroming and
supporting during preparation of this seminar
and paper to :
• Mr. Santoso Catur Yugo, Head of Astra Daihatsu Motor
Casting Plant
• Mr. Budi Agung P., Director Secretary Astra Daihatsu Motor
• Management of PT Asmo Indonesia : Mr. Okumura
(Director), Mr. Satrio S. (GM) and Mr. Joko Isworo
(Management Representative)
• Mr. Nyoman – Management representative GS Battery
Indonesia – and his staff : Mr. Ricky
• Management of PT Hamaden Indonesia : Mr. Denny
Thamrin (Management Representative), Mr. Tri Harjanto
(GM).
• Management of PT Denso Indonesia : Mr. Supriatna
(Management Representative), Eko Widodo (QA)
• Mr. Sugeng – QA : PT Suzuki Indomobil International
• Mr. Muh. Sadewo Head of Inti Pantja Press Indonesia and
executive director of Fuji technica Indonesia.
• All my colleagues at SGS Indonesia
All picture copy right confirmed by sxc.hu; Flickr.com
Reference presentation copy right confirmed by slideshare, ASQ,
www.theiia.org/Quality
Copyright 2008© dw

49. REFERENCE List
ISO 9001 Auditing Practices Group Guidance on: How to add value during the audit process, Date: 14 October 2004,
International Organization for Standardization and International Accreditation Forum
ISO 9001 Auditing Practices Group Guidance on: The role and value of the audit checklist
, Date: 14 October 2004, International Organization for Standardization and International Accreditation Forum
Mills., Charles A., Quality Audit, A Management Evaluation Tool, © 1989 by Mc-Graw-Hill Inc.
ISO/TS 16949, IATF Auditor Training- 2007
Risk based assessment applied to QA GLP audits - Alain Piton Galderma R&D, Sophia-Antipolis, France
RISK MANAGEMENT IN THE SUPPLY CHAIN, April 5, 2005 Los Angeles Convention Center Los Angeles, CA, Copyright ©
2005 –QPE –800.COMPETE
Palmes., Paul C-Process Driven Comprehensive Auditing A New Way to Conduct ISO 9001:2000 Internal Audits,
American Society for Quality, Quality Press, Milwaukee 53203 © 2005 by American Society for Quality
Hortensius., Dick, ISO develops unique standard for auditing ISO 9000 and ISO 14000 systems, NEN,P.O. Box 5059, NL-
2600 GB Delft, Netherlands.
Dick Hortensius and Annemarie de Jong, Co-secretaries of the ISO Joint Working Group on Auditing, Netherlands
Standardization Institute, NENCombining audits on quality and environmental management systems
Mills., Charles A., Quality Audit, A Management Evaluation Tool, © 1989 by Mc-Graw-Hill Inc.
Copyright 2008© dw

51. Thank
you
See u
next
time
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