Specialty Heat Treating, Inc. Internal Auditor Training An Audit of the SYSTEM, Not the PEOPLE NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Agenda Basic review of QS9000 Ground Rules for Auditors Planning ahead for an effective audit Performing an audit Objective Evidence Reporting Closing out Corrective Actions/Follow-up NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

QS9000 Quality System Requirement QS9000 was developed by Chrysler/Ford/General Motors Supplier Quality Requirements Task Force. The Goal of QS9000 is the development of fundamental quality systems that provide for continuous improvement, emphasizing defect prevention and the reduction of variation and waste in the supply chain. NOTES: . .. . What does that mean to us? 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program That Means... We will have the structured tools to improve our quality. Which in turn will improve our business. Which in-turn means a bright future? NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Quality System Structure NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Elements of QS9000 4.1 - Management Responsibility 4.2 - Quality System 4.3 - Contract Review 4.4 - Design Control 4.5 - Document & Data Control 4.6 - Purchasing 4.7 - Control of Customer Supplied Product 4.8 - Product Identification and Traceability 4.9 - Process Control 4.10 - Inspection and Testing 4.11 - Control of Inspection, Measuring and Test Equipment 4.12 - Inspection and Test Status 4.13 - Control of Nonconforming Product 4.14 - Corrective and Preventive Action 4.15 - Handling, Storage, Packaging, Preservation and Delivery 4.16 - Control of Quality Records 4.17 - Internal Quality Audits 4.18 - Training 4.19 - Servicing 4.20 - Statistical Techniques NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program What is an Audit? A planned, independent and documented assessment to determine whether agreed-upon requirements are being met. -- ASQC Quality Auditing Technical Committee NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Why Conduct an Audit? Typically, audits are done: To tell if the quality system elements comply with set requirements; QS9000. To ensure we strive for continuous improvement. To measure and evaluate ourselves as a company. Audits are not done to: Get a department or an employee into trouble. Point fingers. Revenge. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Types of Audits 1st Party - This is an internal audit in which we audit our own system. 2nd Party - This is an external audit in which a customer assesses our quality system, or we assess one of our suppliers quality system. 3rd Party - This is an independent body (called a registrar) assessing our quality system to determine compliance to a specific requirement. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Other Types of Audits... System Audit - (Desk Audit) A review of the quality manual or other quality documents to ensure outside quality requirements, such as QS9000, are being met on paper. Process Audit - An audit of the processes to ensure that the organization is following established policies, procedure and work instructions. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Audit objectives... To determine compliance or noncompliance of the quality system to the requirements. Determine the effectiveness of the quality system. Discover opportunities to improve the quality system. Meet the requirements of 4.17 Internal Quality Audits. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

What an auditor should be... Prepared Professional Honest Observant Impartial Unbiased Thick skinned NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

What an auditor should not be... Augmentative Unprofessional Dishonest Lazy Biased Unobservant Thin Skinned NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Independence of the Auditor The auditor must be directly independent of the area being audited. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program The Audit Steps... Schedule the Audit - Corporate Review the Documentation - All Auditors Conduct an opening meeting - All Auditors Conduct the Audit - All Auditors Conduct a closing meeting - All Auditors Prepare and distribute the Audit Report Corrective Action Follow-up NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Observations and Objective Evidence The auditor’s task is to gather objective evidence through: Observations. Interviews. Tours of departments / Areas. Inspections of documents, product, processes, etc. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program When Interviewing… Who? What? Where? When? Why? How? NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Ask Questions... Show me how… Show me where… Show me what and when... NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Listening Listen to what is being said and look for your answers as well as the next question. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Checklists... The use of checklists is a great way to stay on target and to ensure you ask the important questions. Checklists can be prepared or already exist. Procedures and work instructions are a type of checklist. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Nonconformities... Major A total breakdown of one or more elements of the quality system or the combination of several minors for the same element Minor A small discrepancy or “hick-up” in the quality system that could lead to further problems or an isolated problem. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

When documenting a nonconformity... Establish and document the facts Collect all the available objective evidence State when, where, what, why and who NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Observations... An observation is an area that you feel could be improved. If left alone could result in a nonconformity. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Audit Report... Complete all findings of noncompliance and compliance on the audit report forms. Be sure to sign the reports and check them for completion. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Don’t Forget... Document objective evidence of compliance as well as noncompliance. Don’t be negative, try to point out as many or more positive things you found. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Corrective Action... Following the Procedure QP-17.1 and the work instruction WI-0205 for internal auditing, the corrective actions must be proposed then accepted prior to being implemented. Once accepted, the plant may implement the corrective action. Which leads the auditor into follow-up. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Follow-up... Follow-up activities are scheduled according to the established time frames in the procedure / work instruction. Follow-ups must be done and the auditor must feel that the finding has been corrected to close out the nonconformity report. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Close out... Once all of the follow-up is complete and the auditor is satisfied with the corrective action, he or she may close out the audit and submit it to the Corporate Lead Auditor for filling. Copies should go to: the auditor, the auditee and the lead auditor. NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program That’s it... NOTES: . .. . 06/02 Specialty Heat Treating, Inc. Internal Auditor Training Program