Qual­ity Man­age­ment Sys­tem Im­proves Or­ga­ni­za­tional Per­for­mance

Economic Challenger - - CONTENTS - −Dr. Jy­ot­sana Kul­shreshtha, Dr. Mani Bha­tia


Qual­ity of prod­ucts plays a vi­tal role in the fu­ture of an or­ga­ni­za­tion and its per­for­mance. The qual­ity man­age­ment sys­tem is a strat­egy em­ployed by the top man­age­ment of an or­ga­ni­za­tion. The de­sign and the im­ple­men­ta­tion of this sys­tem is in­flu­enced by vary­ing needs, par­tic­u­lar ob­jec­tives, the prod­ucts pro­vided, the process em­ployed and the size and the struc­ture of the or­ga­ni­za­tion. This is an In­ter­na­tional Stan­dard, based on eight Qual­ity man­age­ment prin­ci­ples. How­ever, this stan­dard does not seek to im­ply uni­for­mity in the struc­ture of qual­ity man­age­ment sys­tems or uni­for­mity of doc­u­men­ta­tion.

The pur­pose of an or­ga­ni­za­tion is to iden­tify and meet the needs of ex­pec­ta­tions of its cus­tomers and other in­ter­ested par­ties, to achieve com­pet­i­tive ad­van­tage, and to do this in an ef­fec­tive and ef­fi­cient man­ner, and to achieve, main­tain, and im­prove over­all or­ga­ni­za­tional per­for­mance and ca­pa­bil­i­ties. The ap­pli­ca­tion of qual­ity man­age­ment prin­ci­ples not only pro­vides di­rect ben­e­fits but also makes an im­por­tant con­tri­bu­tion to man­ag­ing costs and risk man­age­ment con­sid­er­a­tions are im­por­tant for the or­ga­ni­za­tion, its cus­tomers and other in­ter­ested par­ties. Th­ese con­sid­er­a­tions which may im­pact over­all per­for­mance of the or­ga­ni­za­tion are fol­low­ing: Cus­tomer loy­alty with re­peat busi­ness and re­fer­ral, Op­er­a­tional re­sults such as rev­enue and mar­ket share, Flex­i­ble and fast re­sponses to mar­ket op­por­tu­ni­ties, Costs and cy­cle times through ef­fec­tive and ef­fi­cient use of re­sources, Align­ment of pro­cesses which will best achieve de­sired re­sults, Com­pet­i­tive ad­van­tage through im­proved or­ga­ni­za­tional ca­pa­bil­i­ties, Un­der­stand­ing and mo­ti­vat­ing em­ploy­ees to­wards the or­ga­ni­za­tion’s goals and ob­jec­tives, as well as par­tic­i­pa­tion in con­tin­ual im­prove­ment. Con­fi­dence of in­ter­ested par­ties in the ef­fec­tive­ness and ef­fi­ciency of the or­ga­ni­za­tion as demon­strated by the fi­nan­cial and so­cial ben­e­fits from the or­ga­ni­za­tion’s per­for­mance, prod­uct life cy­cle, and rep­u­ta­tion. Abil­ity to cre­ate value for both the or­ga­ni­za­tion and its sup­pli­ers by op­ti­miza­tion of costs and re­sources as well as flex­i­bil­ity and speed to join re­sponses to chang­ing mar­kets.


The success of an or­ga­ni­za­tion should re­sult from im­ple­ment­ing and main­tain­ing a man­age­ment sys­tem that is de­signed to con­tin­u­ally im­prove the ef­fec­tive­ness and ef­fi­ciency of the or­ga­ni­za­tions´ per­for­mance by con­sid­er­ing the needs of in­ter­ested par­ties. Man­ag­ing an or­ga­ni­za­tion in­cludes qual­ity man­age­ment, among other man­age­ment dis­ci­plines.

Top man­age­ment should es­tab­lish a cus­tomer−ori­ented or­ga­ni­za­tion: a) By defin­ing sys­tems and pro­cesses that can be clearly un­der­stood, man­aged and im­proved in ef­fec­tive­ness as well as ef­fi­ciency, and b) By en­sur­ing ef­fec­tive and ef­fi­cient op­er­a­tion and con­trol of pro­cesses and the mea­sures and data used to de­ter­mine sat­is­fac­tory per­for­mance of the or­ga­ni­za­tion. Ex­am­ples of ac­tiv­i­ties to es­tab­lish a cus­tomer ori­ented or­ga­ni­za­tion in­clude: Defin­ing and pro­mot­ing pro­cesses that lead to im­proved or­ga­ni­za­tional per­for­mance, Ac­quir­ing and us­ing process data and in­for­ma­tion on a con­tin­u­ing ba­sis, Di­rect­ing progress to­wards con­tin­ual im­prove­ment, and Us­ing suit­able meth­ods to eval­u­ate process im­prove­ment, such as self−as­sess­ments and man­age­ments and man­age­ment re­view.


Man­age­ment should de­fine the doc­u­men­ta­tion, in­clud­ing the rel­e­vant records, needed to es­tab­lish, im­ple­ment and main­tain the qual­ity man­age­ment sys­tem and to sup­port an ef­fec­tive and ef­fi­cient op­er­a­tion of the or­ga­ni­za­tion’s pro­cesses.

The na­ture and ex­tent of the doc­u­men­ta­tion should sat­isfy the needs and ex­pec­ta­tions of in­ter­ested par­ties. Man­age­ment should con­sider: Con­trac­tual re­quire­ments from the cus­tomer and other in­ter­ested par­ties, Ac­cep­tance of in­ter­na­tional, na­tional, re­gional and in­dus­try sec­tor stan­dards, Rel­e­vant statu­tory reg­u­la­tory re­quire­ments, De­ci­sion by the or­ga­ni­za­tion, Sources of ex­ter­nal in­for­ma­tion rel­e­vant for the devel­op­ment of the or­ga­ni­za­tion’s com­pe­ten­cies, and in­for­ma­tion about the need and ex­pec­ta­tions of in­ter­ested par­ties. The gen­er­a­tion, use and con­trol of doc­u­men­ta­tion should be eval­u­ated with re­spect to the ef­fec­tive­ness and ef­fi­ciency of the or­ga­ni­za­tion against cri­te­ria such as: Func­tion­al­ity ( such as speed of pro­cess­ing), User friend­li­ness, Re­sources needed, Poli­cies and ob­jec­tives, Cur­rent and fu­ture re­quire­ments re­lated to man­ag­ing knowl­edge, Bench­mark­ing of doc­u­men­ta­tion sys­tems, and In­ter­faces used by or­ga­ni­za­tion’s cus­tomers, sup­pli­ers and other in­ter­ested par­ties. Ac­cess to doc­u­men­ta­tion should be en­sured to peo­ple in the or­ga­ni­za­tion and to other in­ter­ested par­ties, based on the or­ga­ni­za­tion’s com­mu­ni­ca­tion pol­icy.


To lead and op­er­ate an or­ga­ni­za­tion suc­cess­fully, it is nec­es­sary to man­age it in a sys­tem­atic and vis­i­ble man­ner. The guid­ance to man­age­ment of­fered in this in­ter­na­tional stan­dard is based on eight qual­ity man­age­ment prin­ci­ples.

Th­ese prin­ci­ples have been devel­oped for use by top man­age­ment in or­der to lead the or­ga­ni­za­tion to­ward im­proved per­for­mance. Th­ese qual­ity man­age­ment prin­ci­ples are in­te­grated in the con­tents of this in­ter­na­tional stan­dard and are listed be­low: a) Cus­tomer fo­cus: Or­ga­ni­za­tions de­pend on their cus­tomers and there­fore should un­der­stand cur­rent and fu­ture cus­tomer needs. It should meet cus­tomer re­quire­ments and strive to ex­ceed cus­tomer ex­pec­ta­tions. b) Lead­er­ship: Lead­ers es­tab­lish unity of pur­pose and di­rec­tion of the or­ga­ni­za­tion. They should cre­ate and main­tain the in­ter­nal en­vi­ron­ment in which peo­ple can be­come fully in­volved in achiev­ing the or­ga­ni­za­tion’s ob­jec­tives. c) Involvement of Peo­ple: Peo­ple at all lev­els are the essence of an or­ga­ni­za­tion and their full involvement en­ables their abil­i­ties to be used for the or­ga­ni­za­tion’s ben­e­fit.

d) Process ap­proach: A de­sired re­sult is achieved more ef­fi­ciently when ac­tiv­i­ties and re­lated re­sources are man­aged as a process. e) Sys­tem ap­proach to Man­age­ment: Iden­ti­fy­ing, un­der­stand­ing and man­ag­ing the in­ter­re­lated pro­cesses as a sys­tem, con­trib­utes to the or­ga­ni­za­tion’s ef­fec­tive­ness and ef­fi­ciency in achiev­ing its ob­jec­tives. f) Con­tin­ual Im­prove­ment: Con­tin­ual im­prove­ment of the or­ga­ni­za­tion’s over­all per­for­mance should be a per­ma­nent ob­jec­tives of any or­ga­ni­za­tion. g) Fac­tual ap­proach to man­age­ment: Ef­fec­tive de­ci­sions are based on the anal­y­sis of data and in­for­ma­tion. h) Mu­tu­ally ben­e­fi­cial sup­plier re­la­tion­ships: An or­ga­ni­za­tion and its sup­pli­ers are in­ter­de­pen­dent and a mu­tu­ally ben­e­fi­cial re­la­tion­ship en­hances the abil­ity of both to cre­ate value. Suc­cess­ful use of the eight man­age­ment prin­ci­ples by an or­ga­ni­za­tion will re­sult in ben­e­fits to in­ter­ested par­ties, such as im­proved mon­e­tary re­turns, the cre­ation of value and in­creased sta­bil­ity.


Ev­ery or­ga­ni­za­tion has in­ter­ested par­ties, each party hav­ing needs and ex­pec­ta­tions. Some of th­ese in­ter­ested par­ties of or­ga­ni­za­tions in­clude: Cus­tomers and end − users Peo­ple in the or­ga­ni­za­tion Own­ers/in­vestors (such as share­hold­ers, in­di­vid­u­als or groups, in­clud­ing the pub­lic sec­tor, that have a spe­cific in­ter­est in the or­ga­ni­za­tion) Sup­pli­ers and part­ners, and So­ci­ety in terms of the com­mu­nity and the pub­lic af­fected by the or­ga­ni­za­tion or its prod­ucts. The success of the or­ga­ni­za­tion de­pends on un­der­stand­ing and sat­is­fy­ing the cur­rent and fu­ture needs and ex­pec­ta­tions of present and po­ten­tial cus­tomers and end−users, as well as un­der­stand­ing and con­sid­er­ing those of other in­ter­ested par­ties.

In or­der to un­der­stand and meet the needs and ex­pec­ta­tions of in­ter­ested par­ties, an or­ga­ni­za­tion should Iden­tify its in­ter­ested par­ties and main­tain a balanced re­sponse to their needs and ex­pec­ta­tions, Trans­late iden­ti­fied needs and ex­pec­ta­tions into re­quire­ments, Com­mu­ni­cate the re­quire­ments through­out the or­ga­ni­za­tion, and Fo­cus on process im­prove­ment to en­sure value for the iden­ti­fied in­ter­ested par­ties. To sat­isfy cus­tomer and end−user needs and ex­pec­ta­tions, the man­age­ment of an or­ga­ni­za­tion should: Un­der­stand the needs and ex­pec­ta­tions of its cus­tomers, in­clud­ing those of po­ten­tial cus­tomers De­ter­mine key prod­uct char­ac­ter­is­tics for its cus­tomers and end−users, Iden­tify as­sess com­pe­ti­tion in its mar­ket, and Iden­tify mar­ket op­por­tu­ni­ties, weak­nesses and fu­ture com­pet­i­tive ad­van­tage, Ex­am­ples of cus­tomer and end−user needs and ex­pec­ta­tions, as re­lated to the or­ga­ni­za­tion’s prod­ucts, in­clude: Con­form­ity, De­pend­abil­ity, Avail­abil­ity, De­liv­ery, Post −re­al­iza­tion ac­tiv­i­ties, Price and life−cy­cle costs, Prod­uct safety, Prod­uct li­a­bil­ity, and En­vi­ron­ment im­pact


Top man­age­ment should use the qual­ity pol­icy as a means of lead­ing the or­ga­ni­za­tion to­ward im­prove­ment of its per­for­mance.

An or­ga­ni­za­tion’s qual­ity pol­icy should be an equal and con­sis­tent part of the or­ga­ni­za­tion’s over­all poli­cies and strat­egy.

In es­tab­lish­ing the qual­ity pol­icy, top man­age­ment should con­sider: the level and type of fu­ture im­prove­ment needed for the or­ga­ni­za­tion to be suc­cess­ful,

the ex­pected or de­sired de­gree of cus­tomer sat­is­fac­tion, the devel­op­ment of peo­ple in the or­ga­ni­za­tion, the needs and ex­pec­ta­tions of other in­ter­ested par­ties, the re­sources needed to go be­yond ISO 9001 re­quire­ments, and the po­ten­tial con­tri­bu­tions of sup­pli­ers and part­ners. The qual­ity pol­icy can be used for im­prove­ment pro­vided that: it is con­sis­tent with top man­age­ment’s vi­sion and strat­egy for the or­ga­ni­za­tion’s fu­ture, it per­mits qual­ity ob­jec­tives to be un­der­stood and pur­sued through­out the or­ga­ni­za­tion, it demon­strates top man­age­ment’s com­mit­ment to qual­ity and the pro­vi­sion of ad­e­quate re­sources of achieve­ment of ob­jec­tives, it aids in pro­mot­ing a com­mit­ment to qual­ity through­out the or­ga­ni­za­tion, with clear lead­er­ship by top man­age­ment. It in­cludes con­tin­ual im­prove­ment as re­lated to sat­is­fac­tion of the needs ad ex­pec­ta­tions of cus­tomers and other in­ter­ested par­ties, and it is ef­fec­tively for­mu­lated and ef­fi­ciently com­mu­ni­cated.

PLAN­NING Qual­ity ob­jec­tives

The or­ga­ni­za­tion’s strate­gic plan­ning and the qual­ity pol­icy pro­vide a frame­work for the set­ting of qual­ity ob­jec­tives. Top man­age­ment should es­tab­lish th­ese ob­jec­tives, lead­ing to im­prove­ment of the or­ga­ni­za­tion’s per­for­mance The ob­jec­tives should be ca­pa­ble of be­ing mea­sured in or­der to fa­cil­i­tate an ef­fec­tive and ef­fi­cient re­view by man­age­ment. When es­tab­lish­ing th­ese ob­jec­tives, man­age­ment should also con­sider: cur­rent and fu­ture needs of the or­ga­ni­za­tion and the mar­kets served, rel­e­vant find­ings from man­age­ment re­views, cur­rent prod­uct and process per­for­mance, lev­els of sat­is­fac­tion of in­ter­ested par­ties, self−as­sess­ment re­sults, bench­mark­ing, com­peti­tor anal­y­sis, op­por­tu­ni­ties for im­prove­ment, and re­sources needed to meet the ob­jec­tives. The qual­ity ob­jec­tives should be com­mu­ni­cated in such a way that peo­ple in the or­ga­ni­za­tion can con­trib­ute to their achieve­ment. Re­spon­si­bil­ity for de­ploy­ment of qual­ity ob­jec­tives should be de­fined. Ob­jec­tives should be sys­tem­at­i­cally re­viewed and re­vised as nec­es­sary.

Qual­ity plan­ning

Man­age­ment should take re­spon­si­bil­ity for the qual­ity plan­ning of the or­ga­ni­za­tion. The plan­ning should fo­cus on defin­ing the pro­cesses needed to meet ef­fec­tively and ef­fi­ciently the or­ga­ni­za­tion’s qual­ity ob­jec­tives and re­quire­ments con­sis­tent with the strat­egy of the or­ga­ni­za­tion.

In­puts for ef­fec­tive and ef­fi­cient plan­ning in­clude

strate­gies of the or­ga­ni­za­tion, de­fined or­ga­ni­za­tional ob­jec­tives de­fined needs and ex­pec­ta­tions of the cus­tomers and other in­ter­ested par­ties, eval­u­a­tion of statu­tory and reg­u­la­tory re­quire­ments, eval­u­a­tion of per­for­mance data of the prod­ucts, eval­u­a­tion of per­for­mance data of pro­cesses, lessons learned from pre­vi­ous ex­pe­ri­ence, in­di­cated op­por­tu­ni­ties for im­prove­ment, and re­lated risk as­sess­ment and mit­i­ga­tion data. Out­puts of qual­ity plan­ning for the or­ga­ni­za­tion should de­fine the prod­uct re­al­iza­tion and sup­port pro­cesses needed in terms such as skills and knowl­edge needed by the or­ga­ni­za­tion re­spon­si­bil­ity and author­ity for im­ple­men­ta­tion of process im­prove­ment plans,

re­sources needed, such as fi­nan­cial and in­fra­struc­ture, met­rics for eval­u­at­ing the achieve­ment of the or­ga­ni­za­tion’s per­for­mance im­prove­ment needs for im­prove­ment in­clud­ing meth­ods and tools, and needs for doc­u­men­ta­tion, in­clud­ing records.

Re­spon­si­bil­ity, Author­ity and Com­mu­ni­ca­tion

Top man­age­ment should de­fine and then com­mu­ni­cate the re­spon­si­bil­ity and author­ity in or­der to im­ple­ment and main­tain an ef­fec­tive and ef­fi­cient qual­ity man­age­ment sys­tem.

Peo­ple through­out the or­ga­ni­za­tion should be given re­spon­si­bil­ity and author­ity to en­able them to con­trib­ute to the achieve­ment of the qual­ity ob­jec­tives and to es­tab­lish their involvement, mo­ti­va­tion and com­mit­ment.

Man­age­ment rep­re­sen­ta­tives

A man­age­ment rep­re­sen­ta­tive should be ap­pointed and given author­ity by top man­age­ment to man­age, mon­i­tor, eval­u­ate and co­or­di­nate the qual­ity man­age­ment sys­tem. This ap­point­ment is to en­hance ef­fec­tive and ef­fi­cient op­er­a­tion and im­prove­ment of the qual­ity man­age­ment sys­tem. The rep­re­sen­ta­tive should report to top man­age­ment and com­mu­ni­cate with cus­tomers and other in­ter­ested par­ties on mat­ter per­tain­ing to the qual­ity man­age­ment sys­tem.

In­ter­nal com­mu­ni­ca­tion

The man­age­ment of the or­ga­ni­za­tion should de­fine and im­ple­ment an ef­fec­tive and ef­fi­cient process for com­mu­ni­cat­ing the qual­ity pol­icy, re­quire­ments, ob­jec­tives and ac­com­plish­ments. Pro­vid­ing such in­for­ma­tion can aid in the or­ga­ni­za­tion’s per­for­mance im­prove­ment and di­rectly in­volve its peo­ple in the achieve­ment of qual­ity ob­jec­tives. Man­age­ment should ac­tively en­cour­age feed­back and com­mu­ni­ca­tion from peo­ple in the or­ga­ni­za­tion as a means of in­volv­ing them. Ac­tiv­i­ties for com­mu­ni­cat­ing in­clude: man­age­ment−led com­mu­ni­ca­tion in work ar­eas, team brief­ings and other meet­ings, such as for recog­ni­tion of achieve­ment no­tice−boards, in−house jour­nals/ mag­a­zines, au­dio−vis­ual and elec­tric me­dia, such as email and web­sites, and em­ployee sur­veys and sug­ges­tion schemes.


Top man­age­ment should de­velop the man­age­ment re­view ac­tiv­ity be­yond ver­i­fi­ca­tion of the ef­fec­tive­ness and ef­fi­ciency of the qual­ity man­age­ment sys­tem into a process that ex­tends to the whole or­ga­ni­za­tion, and which also eval­u­ates the ef­fi­ciency of the sys­tem. Man­age­ment re­views should be plat­forms for the ex­change of new ideas, with open dis­cus­sion and eval­u­a­tion of the in­puts be­ing stim­u­lated by the lead­er­ship of top man­age­ment.

To add value to the or­ga­ni­za­tion from man­age­ment re­view, top man­age­ment should con­trol the per­for­mance of re­al­iza­tion and sup­port pro­cesses by sys­tem­atic re­view based on the qual­ity man­age­ment prin­ci­ples. The fre­quency of re­view should be de­ter­mined by the needs of the or­ga­ni­za­tion. In­puts of the re­view process should re­sult in out­puts that ex­tend be­yond the ef­fec­tive­ness and ef­fi­ciency of the qual­ity man­age­ment sys­tem. Out­puts from re­views should pro­vide data for use in plan­ning for per­for­mance im­prove­ment of the or­ga­ni­za­tion.

Re­view In­put

In­puts to eval­u­ate ef­fi­ciency as well as the ef­fec­tive­ness of the qual­ity man­age­ment sys­tem should con­sider the cus­tomer and other in­ter­ested par­ties and should in­clude: sta­tus and re­sults of qual­ity ob­jec­tives and im­prove­ment ac­tiv­i­ties, sta­tus of man­age­ment re­view ac­tion items, re­sults of au­dits and self−as­sess­ment of the or­ga­ni­za­tion, feed­back on the sat­is­fac­tion of in­ter­ested par­ties, per­haps even to the point of their par­tic­i­pa­tion, mar­ket−re­lated fac­tors such as tech­nol­ogy, re­search and devel­op­ment, and com­pet­i­tive per­for­mance,

re­sults from bench­mark­ing ac­tiv­i­ties per­for­mance of sup­pli­ers, new op­por­tu­ni­ties for im­prove­ment con­trol of process and prod­uct non− con­for­mi­ties, mar­ket place eval­u­a­tion and strate­gies, sta­tus of strate­gic part­ner­ship ac­tiv­i­ties, fi­nan­cial ef­fects of qual­ity re­lated ac­tiv­i­ties, and other fac­tors which may im­pact the or­ga­ni­za­tion, such as fi­nan­cial, so­cial or en­vi­ron­men­tal con­di­tions, and rel­e­vant statu­tory and reg­u­la­tory changes.

Re­view out­put

By ex­tend­ing man­age­ment re­view be­yond ver­i­fi­ca­tion of the qual­ity man­age­ment sys­tem, the out­put of man­age­ment re­view can be used by top man­age­ment as in­puts to im­prove­ment pro­cesses. Top man­age­ment can use this re­view process as a pow­er­ful tool in the iden­ti­fi­ca­tion of op­por­tu­ni­ties for per­for­mance im­prove­ment of the or­ga­ni­za­tion. The sched­ule of re­views should fa­cil­i­tate the timely pro­vi­sion of data in the con­text of strate­gic plan­ning for the or­ga­ni­za­tion. Se­lected out­put should be com­mu­ni­cated to demon­strate to the peo­ple in the or­ga­ni­za­tion how the man­age­ment re­view process leads to new ob­jec­tives that will ben­e­fit the or­ga­ni­za­tion. Ad­di­tional out­puts to en­hance ef­fi­ciency in­clude, for ex­am­ple per­for­mance ob­jec­tives for prod­ucts and pro­cesses, per­for­mance im­prove­ment ob­jec­tives for the or­ga­ni­za­tion, ap­praisal of the suit­abil­ity of the or­ga­ni­za­tion’s struc­ture and re­sources. strate­gies and ini­tia­tives for mar­ket­ing, prod­ucts and sat­is­fac­tion of cos­tumers and other in­ter­ested par­ties, loss preven­tion and mit­i­ga­tion plans for iden­ti­fied risks, and in­for­ma­tion for strate­gic plan­ning for fu­ture needs of the or­ga­ni­za­tion. Records should be suf­fi­cient to pro­vide for trace­abil­ity and to fa­cil­i­tate eval­u­a­tion of the man­age­ment re­view process it­self, in or­der to en­sure its con­tin­ued ef­fec­tive­ness and added value to the or­ga­ni­za­tion.

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