Question

Explain how quality audits contribute to performance improvement. (1000 words)

Answer 1

Management systems include a variety of important business processes, and "Audit" is one of them. Earlier the term audit was mostly associated with the financial audits or inspections that were carried out internally, externally (through third-parties), or by the regulatory agencies. With time, the importance of quality and Quality Management Systems (QMS) has increased manifold. The Quality audits include the processes and methodologies through which the quality management system of an organization is examined systematically. This examination may be conducted internally or through an external or third-party quality team/auditor. Audits are a very important part of QMS of any organization and are also an important element of the ISO 9001 standard. Apart from ISO, Quality audits can also be conducted according to other standards including Six Sigma, ASQ (American Society of Quality), and ANSI (American National Standard Institute).

Organizations develop and implement a quality management system audit as a tool that can assist it in improving quality performance, among other objectives. The audit of the system will not only diagnose the deficit areas but also improve the system while maintaining it in requisite areas.

Purpose of QMS Audit

A QMS audit may be carried out for inspecting conformance to the benchmarks or the audit criteria, an important aspect of performance measurement. The management practices may also be examined to ensure that the opportunities and process activities are actually being improved so that organizational goals can be met. ISO 19011 defines an audit as “referring to guidelines, specifications, or requirements”. Regulatory audits, tax audits, and financial audits are often included in conformance audits. The process and product audits, manufacturing audits, and the improvement audits are included in the management audits. While the management and the conformance audits can be integrated, the latter is often carried out separately based on the audit criteria that are followed by a company (for instance compliance to the ISO 9001 guidelines). Once the audit is accomplished, the auditor moves on to audit criteria lying outside of conformance.

Quality audits are the QMS certifications. These audits are a combination of Management audit and compliance audit, and hence inspect many different processes and practices that affect performance directly or indirectly. For these audits, the auditor focuses on the many different conformance and management practices of an organization against the set of audit criteria. These criteria may include both QMS ISO 19011 as well as ISO 9001 standards. Improved performance of the organization may be evident in the form of better productivity, customer satisfaction, and in other areas as well. The QMS is designed for assisting organizations to better achieve customer satisfaction. Organizations that are certified to standard QMS certifications improve on their quality management processes continually to ensure improvement in customer satisfaction, with time. The audit may also provide for a competitive edge and help the organization sustain its business even in the face of stiff competition, by ensuring customer satisfaction and continual improvement in performance in key areas. The audits are run by the certification body. An organization is also required to re-certify after a span of regular intervals (for instance three years for the QMS ISO certification). Certified organizations stick to their contractual obligations and requirements, and fulfill the management system requirements and resource requirements. Hence inspecting key areas regularly that errors, deficits, and wastages do not reduce performance or cause losses.

The quality audits and frameworks include inspection and reporting on all the important aspects related to product quality, including product design, the policymaking process, management, and other areas and practices. A quality audit includes:

A. Process audits- to verify that the documented processes meet the quality standards. The processes can be the service processes or manufacturing processes. Hence the audit improves process performance directly by revealing the deficit areas.

B. Product Audit: it verifies that the products meet the design and safety criteria, among other quality measurements.

C. System Audit: a quality audit will also review the quality systems adopted by a company, and inspect how the standards are being implemented, measured, and achieved by a company. The audit will verify how the defects are being located and recorded, how the product’s quality is being measured, and how a company ensures that only defect less or errorless products or services are being provided.

Hence a quality audit may inspect many important areas, an improvement in which directly impacts and improves performance.

Benefits of Quality Audits

With time, organizations evolved from audits to continual improvement processes and business management practices, which shows how fruitful QMS audits have been in improving the performance and revenues of businesses. Effective auditing also provides for a learning environment, which can strengthen the foundations of the culture of a business organization, and be a key initiative to improve performance. Audit processes, whether carried out internally on externally, help employees and managers know more about the important quality management and improvement practices, and provide for the monitoring structures and frameworks. It ensures that the performance and results always match the aspirations. The quality improvement and monitoring procedures provide for effective actions, ensure compliance, and also result in a gradual shift from procedural adherence to the measurement of the actual effectiveness of a quality management process or system.

In the absence of audits, the management and employees would not be adequately informed of the extent to which the systems/performance has deteriorated over time. Therefore, they would not be able to undertake improvement measures. An audit may also improve on stakeholder confidence, investor trust, reputation in the market, and others. Quality audits can be used to evaluate the performance of certain other systems as well (for instance occupational health and safety). Apart from performance, the quality audit framework and system can also be modified to focus on the more specific needs of an organization including:

a.fitness towards usage.
c.costs.
d.safety.
e.preparedness towards emergency.
f.business continuity.
g.fiances/financial performance, etc.

There is less least ambiguity and uncertainty and the accuracy of results is maintained because of the following of auditing principles. The quality audit principles include:

- evidence-based approach
- risk-based approach
- independence
- confidentiality
- the due professional care
- fair-representation etc.

The auditors work along a checklist to ensure that all the important aspects are covered and ask a variety of questions including open and closed-ended questions to ensure that a proper probe is made in all areas. When the statements of the auditee are cross-examined, the real effectiveness of the processes and the status of performance is revealed. Audits are devoid of degradation and the auditors solely focus on the audit matter.

A quality audit should not merely be seen as an expenditure but is a measure that can also provide for improved performance. An audit of a quality management system can focus on many aspects including performance improvement, waste reduction, improvement in product quality, service delivery, and cost reduction.