#40 – INTERNATIONAL QUALITY AND RISK MANAGEMENT – JULIUS HEIN

Posted on by

Julius HeinThe age old struggle is on again ‘Risk Management vs Quality.’

All customers want to buy and own ‘quality products.’  The manufacturers want to make a profit.

To design and build a product, certain ‘Risks’ have to be acceptable by the manufacturer.  There is no specific formula for ‘Acceptable Risk.’.

The manufacturer can calculate his costs for design, testing, producing, packaging and advertising.  Based on this calculated cost, he decides on an acceptable profit and offers his product to the public.

The public evaluates the different advertisements, product reviews, and cost. The manufacturer very carefully evaluates the feedback from his customers.  The manufacturer tries to keep the quality up and the price down.  If that approach is not appealing to the public, the price of the product is lowered.

By lowering the price, the manufacturer is reducing the reliability, maintainability and supportability. It is a Risk the manufacturer is taking and it may affect the reputation of his product or his organization. The big question for the manufacturer is: “What affect does that have on the customer and his organization?”

The manufacturer and the purchaser are taking a Risk on ‘Success or Failure.’

The International Quality Management System Standards, i.e. ISO 9001; ISO 14001; AS9100; and more, do not seriously consider the Risk taking by either party.  The ‘Third Party Auditor’ audits a registered company to compliance with the Standard.  For example: Clause 8.2.1covers customer satisfaction.  The auditor would verify that the organization has a method for obtaining/using customer perception data.  Risk to the company is not the  Auditor’s concern.

KEY ISO QUESTION
Should Risk be covered in more detail?  The answer is: It must be covered.

How can a manufacturer make a definite statement that his Process or Product is effective or efficient if he did not evaluate the Risks to customers, the environment and the reliability of his product?

If Risk Management is a viable concern to the designer and manufacturer of a product, then it must be considered as a key characteristic in the International Quality Management System Standards.

The Technical Committee (ISO/TC 176/SC 2/WG 23 N065) has addressed the topic of ‘Risk’ for the future ISO 9001:2015 Standard.  Risk Management is not addressed, in detail, in the ISO/TC 176/SC 2/N1147.

Bio:

Dr Hein was a RABQSA certified Lead Auditor for ISO 9001:2004 and ISO 13485:2004 and  an Aerospace Experienced Auditor for AS901, Rev B, AS9110 and AS9120. He is RABQSA certified Instructor for AS9100, Rev B, AS9110 and AS9120. He designed and is teaching courses in ISO 9001:2008, ISO 13485:2003, Internal Auditor courses in AS9101, Rev C, AS9110,Rev A and Dietary Supplements based on 21CFR111.
Dr Hein established the Educational Concepts, Inc. (ECI) in 1996. He retired from the Federal Government as a Professor and Director  of the DOD Defense System Management College, Defense University. The vision of ECI is to teach, consult and assist private businesses, state and local Governments, Community Colleges and Universities.
Dr Hein has 54 years of experience in industry and academia.  He is helping businesses to develop effective strategic and business plans, which are based on Quality Management System in design, development, testing, marketing and lean manufacturing principles. Process Management and process auditing have become the leading management tools for Continuous Improvement. Dr. Hein presents classes and workshops at Registrars, in industries and for internal auditors anyplace USA or around the world.

Leave a Reply

Your email address will not be published. Required fields are marked *