An Audit of the SYSTEM, Not the PEOPLE Specialty Heat Treating, Inc. Internal Auditor Training ISO/TS 16949:2003 An Audit of the SYSTEM, Not the PEOPLE NOTES: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Agenda Basic review of ISO/TS 16949:2002 Ground Rules for Auditors Planning ahead for an effective audit Performing an audit Objective Evidence Reporting Closing out Corrective Actions/Follow-up NOTES: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

ISO/TS-16949:2002 Quality System Requirement ISO/TS 16949:2002 was developed utilizing the ISO9001:2000 standard as a starting point and is based on a process approach. The International Automotive Task Force, which includes USA, Italy, France, UK, and Germany; along with Japan Automobile Manufacturers Association, Inc. developed IOS/TS 16949:2002 in conjunction with guidance from ISO. The Goal of ISO/TS 16949:2002 is the development of fundamental quality systems that provide for process control, continual improvement, emphasizing defect prevention and the reduction of variation and waste in the supply chain. NOTES: . .. . What does that mean to us? 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program That Means... The Process Approach of ISO/TS 16949:2002 will enable us to pin-point areas for continual improvement and improve our comprehensive quality system. Which in turn will improve our business. Which in-turn means a bright future for all of us. NOTES: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Process Approach ISO 9001:2002 states: “For an organization to function effectively, it has to identify and manage numerous linked activities. An activity using resources, and managed in order to enable the transformation of inputs into outputs, can be considered as a process. Often the outputs form one process directly forms the inputs to the next process. The application of a system or processes within an organization, together with the identification and interactions of these processes, and their management, can be referred to as the ‘Process Approach’. An advantage of the process approach is the ongoing control that it provides over the linkage between the individual processes within the system of processes, as well as over their combination and interaction. When used within a quality management system, such an approach emphasizes the importance of Understanding and meeting requirements, the need to consider processes in terms of added value, Obtaining results of process performance and effectiveness, and Continual improvement of processes based on objective measurement.” 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

Quality System Structure NOTES: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program ISO/TS-16949:2002 Clauses 1 Scope 2 Normative reference\ 3 Terms and definitions 4 Quality Management System 5 Management responsibility 6 Resource management 7 Product realization 8 Measurement, analysis and improvement Clauses 4 through 8 are the “meat and potatoes” of the requirements. They are the ones that are auditable. FR-0219 Shalls matrix. NOTES: . .. . 07/03 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. -- ASQ Quality Auditing Technical Committee NOTES: . .. . 07/03 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; ISO/TS 16949:2002, Customer Requirements. To ensure we strive for continual 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: . .. . 07/03 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 supplier’s quality system. 3rd Party - This is an independent body (called a registrar) assessing our quality system to determine compliance to a specific requirement. NOTES: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Other Types of Audits... Documentation/System Audit - (Desk Audit) A review of the quality manual or other quality documents to ensure outside quality requirements, such as ISO/TS 16949:2002, 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; obtaining the desired results, or taking effective actions to improve. NOTES: . .. . 07/03 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 established requirements. Determine the effectiveness of the quality system (measurable). Discover opportunities to improve the quality system. Meet the requirements of ISO/TS 16949:2002 (8.2.2). NOTES: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

What an auditor should be... Ethical Open-minded Diplomatic Observant Perceptive Versatile Tenacious Decisive Prepared Professional Honest Impartial Unbiased Thick skinned NOTES: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

What an auditor should not be... Augmentative Unprofessional Dishonest Lazy Biased Unobservant Thin Skinned NOTES: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

Independence of the Auditor The auditor must be directly independent of the area being audited. NOTES: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program The Audit Steps... Schedule the Audit Plan and Prepare for the audit Review the Documentation Conduct an opening meeting Conduct the Audit Conduct a closing meeting Prepare and distribute the Audit Report Corrective Action Follow-up Audit Close-out NOTES: . .. . 07/03 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. Review of documents, product, processes, etc. NOTES: . .. . 07/03 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: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

Specialty Heat Treating, Inc. Internal Auditor Training Program Ask Questions... Tell / Show me how… Tell / Show me where… Tell / Show me what and when... NOTES: . .. . 07/03 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: . .. . 07/03 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: . .. . 07/03 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: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

When documenting a nonconformity... Establish and document the facts Collect all the available objective evidence State the facts relating to what, where, and why. Never point fingers at the people, state the requirement and the nonconformance. NOTES: . .. . 07/03 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: . .. . 07/03 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 correct completion. NOTES: . .. . 07/03 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: . .. . 07/03 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: . .. . 07/03 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: . .. . 07/03 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: . .. . 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program

That’s it... Let’s discuss and practice! 07/03 NOTES: . .. . Let’s discuss and practice! 07/03 Specialty Heat Treating, Inc. Internal Auditor Training Program