ISO/TS 16949:2002

Expiration of QS-9000 ISO (Geneva, Switzerland) has stated that QS-9000 has been extended by 3 years, and will expire on 14 December, 2006 ISO has indicated that there is virtually no chance of additional extensions, nominally, the ISO 9000:1994 standard embedded within QS-9000 will expire 15 December, 2003.

Two Key Organizations International Automotive Task Force International Automotive Oversight Bureau

Purpose of the IATF Develop consensus for international quality system requirements (automotive) Develop policy & procedure for registration Provide appropriate training Serve as formal liaison

IATF Members Authoring Organization of ISO/TS 16949 includes: Vehicle manufacturers: BMW, DaimlerChrysler, FIAT, Ford Motor, GM, PSA, Renault, Volkswagen Industry trade organizations: AIAG, ANFIA, FIEV, SMMT, VDA Guest members: JAMA Here’s the main players of IATF! IATF has 13 voting members. OEM car makers include: BMW, DaimlerChrysler, FIAT, Ford Motor, General Motors, Renault, PSA(PeugeotCitroen), Volkswagen…. National Trade assoc. include: AIAG (North America), ANFIA(ITALY), FIEV(FRANCE), SMMT(UK), and VDA(GER).

IATF Oversight ANFIA, IAOB, IATF-France, SMMT, VDA-QMC Implementation of IATF registration scheme and rules via a common process Witness audits Auditor qualification training and exam Monitor CB/auditor performance Apply and implement IATF policy and decisions Coordinate special projects and work teams Develop sanctioned interpretations and recommendations for improvement Database management Oversight – 5 regional offices covering the global automotive scheme. READ MAIN Bullets. -Oversight through a common process approach has operations management and implementation responsibility of ISO/TS 16949.

Purpose of IAOB Implement and manage 16949 registrations Manage and coordinate with IATF Europe Support further global consistency Develop and maintain central database

Which Car Manufacturers Will Accept ISO / TS 16949? The users of - QS-9000 - US Big 3 VDA 6.1 - German AVSQ - Italian EAQF - French

Why Upgrade to TS? From the OEM subscriber’s view: TS 2nd is based on the current ISO 9001:2000 Includes Customer Specifics to achieve conformity Improved control of the auditing process Reduced audit variation Better control of certification and its value From the OEM perspective. In addition to the revised req’ts doc., only certain CBs have been selected to participate in this program. And as mentioned earlier auditor qualification has been strengthened. As a result there is better control and audit variation should be reduced. /OEM's have customer-specific requirements, either written or in the purchase agreement, which, if applicable become part of the basis for the audit along with TS requirements. These Customer Specifics are as essential requirements as the standards catalog itself. In addition, some of the issues the IATF also needed to address included: poor-performing suppliers still certified, suppliers having on-going open findings existing over extended periods of time and still certified / lack of evidence of supplier organization improvement over time.

Why Upgrade to TS? From the supplier’s point of view: Reciprocal recognition (one size fits all) Vocabulary is consistent with ISO 9001:2000 Process audit is aligned with the way the automotive business is run Continual improvement from earlier requirements documents (e.g., TS 1st, QS-9000, EAQF, AVSQ, VDA 6.1) Closer oversight – greater value in certification Organizations should understand that if they become certified, they could be acceptable suppliers to any OEM participating in the ISO/TS 16949, IATF recognized scheme. Organizations should understand that a special auditor qualification program exists, and they have every right to demand to see valid credentials. After all, it's their money. Consistent with ISO 9001:2000, the documentation requirements are less prescriptive. As mentioned previously in the discussion of “Scope”, organizations should also recognize that there are some QS-9000 certified companies who do not meet the scope definition of ISO/TS 16949, despite what a CB or auditors might tell them.

ISO/TS 16949:2002 Addresses Significant QS-9000 issues The Oversight process Tighter registrar control than with QS-9000 Accreditation Body method, and higher quality auditors International recognition of ISO/TS 16949:2002 The Multinational OEM authoring group reduces the number of certification requirements in Europe, and therefore cost ISO/TS 16949:2002 is based on and includes ISO 9001:2000 ISO 9001:2000 includes strengthened management reporting, continuous improvement and customer satisfaction metrics (aligned with Q1 2002) Are there implementation strategies? What is the strategic direction of the IATF and OEM’s who subscribe to this document and participate in recognition? These are some of the general issues we will also address. Note we will use the term “supplier” in generic terms not in the strict definition of ISO 9001:2000, (i.e.“organization”, which is the site seeking compliance or certification)

Eight Principles Customer focus Leadership Involvement of people Process approach System approach to management Continual Improvement Factual approach to decision making Mutually beneficial supplier relationships

Introduction The goal of this Technical Specification: development of a quality management system provide for continuous improvement emphasize defect prevention reduction of variation and waste in the supply chain

Through industry standards - ISO9001:2000 & ISO/TS16949:2002. “The intent of this international standard is to encourage the adoption of the process approach to manage an organization.” Process approach - “for organizations to function effectively, they have to identify and manage numerous interrelated and interacting processes. The systematic identification and management of the processes employed within an organization and particularly between such processes is referred to as process management.

How Will the Audit Change? Process audit approach Automotive application Line of sight from the organization to the customer Audit plan Identification of key processes impacting the customer Based on the processes as defined by the organization Performance Linked to common metrics for Organization Supplier Oversight Adherence to the “Rules” and Common Global Process The process approach means an audit focusing on the Customer-Oriented-Processes within the organization, and also on the support processes that feed them, whether on-site or not. Process inputs and outputs should be defined by the organization, as part of their system description. /Without this information, an audit cannot be planned properly. /The automotive business is about product realization and market distribution. ISO/TS is focused on quality system capability for achieving product realization goals with the customer - Performance is critical!!!! Organizations should also understand that they have every right (as a matter of fact, it's their job) to ensure that the auditors have a plan and present clear, well written findings. If they don't, the organization should challenge the audit team, and if not resolved advise OVERSIGHT!

Continual Improvement Cycle Management Responsibility R E Q U I M N T S S A T I F C O N C U S T O M E R C U S T O M E R Resource Management Measurement, Analysis & Improvement C.I. Product Realization Inputs Outputs Product

Scope and Applicability ISO / TS 16949 Scope and Applicability Applicable to production and service part supplier sites that are providing: Parts or materials Heat treating, painting, plating, other finishing services Other customer specific products May also be applied throughout supply chain

What’s New (and Different) Based on ISO 9001:2000 not ISO 9001:1994 Greater focus on the customer and customer satisfaction New focus on the “Process” approach vs. the “elemental” approach Clarification of requirements for continual improvement

New and Different (Cont.) Greater emphasis upon the role of top management Measurable quality objectives Reduced emphasis on documented procedures

New and Diff. (Cont.) Modification in the purpose of internal audits Use the “Deming Cycle” of Plan, Do, Check, and Act as a basic methodology Process Conrol and improvement is expanded from product to include all activities of the organization.

ISO 9001 Supply Chain Terms Was Subcontractor in QS-9000 Was Supplier in QS-9000

Automotive Specific Terminology Adds sector terminology Control plan Design responsible org. Error proofing Laboratory Laboratory scope Outsourcing Predictive maintenance Premium freight Remote location & “site” Special characteristics Modifies ISO terms Continual improvement Manufacturing

4.0 Quality Management System ISO 9001 Core Sections 4.0 Quality Management System 5.0 Management Responsibility 6.0 Resource Management 7.0 Product Realization 8.0 Measurement, Analysis & Improvement

Permissible Exclusions ISO / TS 16949 Permissible Exclusions The only permitted exclusions may be in 7.3 Where the organization is not responsible for product design and development Permitted exclusions do NOT include manufacturing process design Justified with details in the quality manual Conformity should not be claimed otherwise Only IATF will prescribe authorized exclusions for vehicle assembly plants

Mandatory Procedures ISO 9001:2000 ISO/TS 16949:2002 Control of Documents Control of Records Internal Audit Control of Nonconforming Product Corrective Action Preventive Action ISO/TS 16949:2002 Laboratory Field Service (i.e. Warranty) Training

Key Differences between QS-9000 & TS16949 TS16949 focuses on the business processes required to satisfy customer requirements (The “Process Approach”). QS-9000 follows the 20 elements (The “Conformity Approach”) Process audit (TS16949) vs. documentation audit (QS-9000)

Contrast between QS-9000 & TS-16949:2002 (Procedure Based) TS-16949:2002 (Process Based) Procedures Are: Driven by task completion Issued May be completed by different departments with different objectives Are segmented Satisfy the standard Define the sequence of steps to perform a task Static Processes Are: Driven by desired output Managed May be completed by different departments with the same objectives Flow to conclusion Satisfy the stakeholders Transform inputs into outputs Dynamic

Management of Processes 1 2 3 4 Functional Goals Process 2 1 2 3 4 Process 1 Process 3 Process 4 Process goals A FUNCTIONAL ORGANIZATION WITH PROCESS OVERLAYS…

approach to management? So what is the process approach to management? Recognizes: All work is performed to achieve some objectives The objective is achieved more efficiently when related resources and activities are managed as a process Objectives of the organization which serve to meet its mission will be met more effectively when the organization is managed as a system of interrelated processes.

The Process Approach Purpose Objectives Risks Inputs Process Outputs Stakeholder Wants & Needs Specifications Schedule/Timing Market Data Industry Trends Economic Conditions Products Information Results

Process Mapping

Process Mapping How do I get started mapping???? First map out our processes at your location at the macro level Identify the process owner Map out your processes at the micro level that support the processes at the macro level

Process Mapping You will need to identify The inputs to your processes The outputs of your processes And then map out the activities in between that define the processes You might find sub processes Identify metrics to measure the effectiveness of your processes (must tie to the process objective)

Process Mapping Identify your customers and your process objectives/outputs (TS16949 section 4.2.2.c) Internal (other processes) and External customers Show interactions between the various processes

Process Mapping Identify your customers and your process outputs (TS16949 section 4.2.2.c) Physical products Documents Information Services Decisions On time to schedule Meet profit margins

Process Mapping Identify suppliers to your process (internal and external) (TS 16949 section 4.2.2.c) What are their inputs to your process Other processes Labor Material Ideas Information Environment Procedures, Forms, Documents, Records

Process Mapping Identify support to your processes (TS16949 section 4.2.2.c) Human Resources Training Purchasing Finance Quality Assurance Etc.

Process Mapping Establish a goal against which to measure your metrics You will need to monitor your metrics and implement corrective actions if you don’t meet your goal Look for opportunities of continual improvement to improve your processes

Process Mapping Identify risks to the process and the objectives Compressed Timing Failure to meet schedule timing Incomplete customer requirements Test/performance failures Rejected approvals (appearance, PPAP) Underestimated costs Premium freight

Process Mapping Flow chart the process. Note: Indicating forms/records to be filled out at each step of the process can eliminate or reduce the need for procedures to document activities at each step. A well done flow chart can eliminate the need for a procedure to describe the process.

Questions to Help with Mapping Purpose Why does this process exist? What is the purpose of this process? What is the outcome? Outputs What product does this process make? What are the outputs of this process? At what point does this process end? Customers Who uses the products from this process? Who are the customers of this process? Inputs/Suppliers Where does the information or material you work on come from? Who are your suppliers? What do they supply? Where do they affect the process flow? What effect do they have on the process and on the outcome? Process steps What happens to each input? What conversion activities take place?

What About the AIAG Reference Manuals? The AIAG reference manuals (PPAP, FMEA, MSA, APQP & SPC are still viable documents. References to these manuals will be included in DCX, Ford and GM’s respective customer specifics for TS16949. Certification to TS16949 also includes the requirements defined in the AIAG reference manuals.

Questions?