Acceptable QMS Scope Exclusions in a Multi-National Setting

[Martijn]

Dear fellow Covers,

I've got a question about "scope exclusion" on a bit more abstract level. I work for an EMEA (Europe, Middle-East and Africa) division of a multinational as quality manager, and I'm trying to work towards a more global (or at least EMEA) approach to our management system. For this question, let's focus on EMEA.

There are multiple divisions in our EMEA region, and all of them have both plants and sales organizations present in several countries. Their QMS's mostly only have manufacturing in their scope per plant location, and not sales. Our divisional QMS has both sales and manufacturing in the scope of course and is set up on an EMEA level .

If I want to create an EMEA QMS that covers all of our EMEA divisions, I need to talk to divisional management that only have their plants certified (and in my vision, an EMEA QMS should contain both plants and commercial activities). Even before talking to them I know what will happen. "If it aint broken, we're not fixing it". "Our customers accept our ISO 9001 certificate, even though sales is not certified. We won't do more than we need to, etc. etc. etc.".

I bet all of you have seen ISO 9001 certificates only written for plants, and well, we have loads of those. You can see my dilemma: the current situation gives no need whatsoever to change their local QMS's. Registrats buy it, customers buy it, so what's the point. My question now is, are these "manufacturing only certificates" acceptable, given the fact that the sales organization is not part of the QMS?

I've read ISO's Guidance on ISO 9001:2000 Sub-clause 1.2 'Application', and they say the following:

When an organization is evaluating whether it can exclude requirements from its QMS, it should carefully evaluate the impact of such exclusions from the viewpoint of its customer. If there is an impact on the customer, the exclusion would not be justified, since ensuring the conformity of delivered products to customer requirements is a key element of ISO 9001:2000.

To sum it up I feel that a big part of our organization is "dodging the bullet" by having only their plants certified. The plant certificates do NOT mention the exclusion of sales and R&D, it just describes what happens on the plant, and not a bit more. Sales and R&D is of course vital for customers, but is not certified in anyway at the moment.

Can any of you shine a light on this situation? Is this a recognizable situation, and more importantly, is this acceptable from a certification point of view?

 

[Martijn]

bump!

Come on folks, anyone? Am I rambling? Shortsighted? Overcomplicating things? Correct? Is this a question too stupid to answer, or is there no good answer?

Randy, Sidney, anyone?

 

[Sidney Vianna]

Can any of you shine a light on this situation? Is this a recognizable situation, and more importantly, is this acceptable from a certification point of view?

Grasshopper, the light might be too bright. The path to knowledge is twisted and full of bifurcations. Your dilemma might be partially resolved by thoroughly understanding example # 10. Realize, however, that not all rules are followed all the time. Especially when rules are unclear and oversight is flimsy.

 

[Randy]

bump!

Come on folks, anyone? Am I rambling? Shortsighted? Overcomplicating things? Correct? Is this a question too stupid to answer, or is there no good answer?

Randy, Sidney, anyone?

I will strive to be careful to avoid chastisement.

I may have read your post wrong so correct me if I'm in error.

1. There isn't a current customer demand for "certified" sales and/or maybe R&D.

2. Your "leadership" see's no need and has expressed no interest in "certified" sales or a universal QMS approach for your facilities.

3. You are not an "owner" of the system, just a component and therefore can't "say", but only "do".

4. You have not done the financial background research to support your desires and as such there are no current and bankable expectations.

5. If your desires are achieved it'll be your "feather"?

6. Lastly, the organization goal is to only do that which is necessary so "improvement" is OK if it doesn't get in the way.

There are many organizations that only have certification for the manufacturing sites and exclude R&D as well or claim any other exclusion that can be justified. There are endless solutions to your problem.

 

[Martijn]

Grasshopper, the light might be too bright. The path to knowledge is twisted and full of bifurcations. Your dilemma might be partially resolved by thoroughly understanding example # 10. Realize, however, that not all rules are followed all the time. Especially when rules are unclear and oversight is flimsy.

Thanks, that helped.

I've studied the example, and this is the basic answer I was looking for:

Any complex organization (such as Global TV) must be careful of its claim that its quality management system conforms to ISO 9001:2000. The organization has responsibility for all ISO 9001:2000 requirements that can affect the organization’s ability to provide products that meet its customer and regulatory requirements. Therefore, in order to claim conformity to ISO 9001:2000 at the corporate level, it has to ensure that all its relevant facilities are conforming to ISO 9001:2000.

For further clarification, the example describes a situation where a Global organization has ISO 9001 certification, and thus needs to certify all of its parts. This is not the situation I'm in at the moment. In my situation we HAD such a situation for my own little "Global TV", but now several of such larger complex organizations have been reorganized. Basically all of the supply chain organization of all these organizations has been centralized, leaving only sales and R&D under the original organizations.

This situation seriously messes up the picture, since now we have a global manufacturing management for example, which is completely seperate from the commercial units.

I'm preparing myself for discussions on a global level, where the future of ISO 9001 certification will be discussed. My guess is that our supply chain organization will want to maintain their ISO 9001 certificates without the commercial and R&D tagging along. Currently we do NOT claim any global certificate, I'm trying to figure out the consequenses if we decide to do so.

And basically, if I understand it correctly, there is no such thing as a supply chain organization certification WITHOUT the commercial sides and R&D taking part, since, as described in example 10:

The certificates of conformity referencing internal customers are of no direct value to the external customers of the organization.

I guess you can certify only your plant, but since that QMS will only have an internal customer, there's no direct value to external customers.

-to be continued in my answer to Randy's questions -

 

[Martijn]

I will strive to be careful to avoid chastisement.

I may have read your post wrong so correct me if I'm in error.

1. There isn't a current customer demand for "certified" sales and/or maybe R&D.

Indeed I believe there is no explicit demand. Not just for our business, but in general. Everybody seems to play this game of certificate ping-pong, sending away yours, demanding certificates from others, but I dare say no-one ever reads what is on them. Exclusions are always in fine print it seems, and there is no mention whatsoever about "for internal customers only" as described in my email above.

2. Your "leadership" see's no need and has expressed no interest in "certified" sales or a universal QMS approach for your facilities.

While yet to be officialy discussed, this might very well be their vision. Production facilities everyone agrees on, the broader picture including R&D and sales might be a step too far.

3. You are not an "owner" of the system, just a component and therefore can't "say", but only "do".

I'm owner of a system for one complex multinational organization, including sales, manufacturing, R&D, etc. There are 5 other organizations of similar size and complexity, and only a few have a central quality organization.

4. You have not done the financial background research to support your desires and as such there are no current and bankable expectations.

Correct. As said before, this is not really my problem (yet ), so am preparing a case so to say. I believe the financial approach might be a next step.

5. If your desires are achieved it'll be your "feather"?

As in my problem? Not sure what you mean there. And if so, yes, this issue becoming my problem is definitely a possibility.

6. Lastly, the organization goal is to only do that which is necessary so "improvement" is OK if it doesn't get in the way.

Quite correct I believe, albeit it a tat cynical . There's a big difference in how people look at quality management in my organization, especially between the US and Europe. Quality in the US is more a QC thing it seems, while quality in Europe is more related to overall management.

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So to sum it up, leaving out sales & RD can be done, but your certificate is only for "internal customers". Problem is that our external customers don't recognize this subtle difference, so the real need to change is absent.

Thanks so far, I'd be more than happy discuss further / hear more opinions.

 

[Peter Fraser]

The example, and Martijn's situation, both remind me of my ongoing confusion over "who is the customer", especially "the one referred to within the standard".

The Example says that "Global TV’s ultimate customer is the end user who purchases the product from a retail distributor." Turning it round, if you or I am the "end user", who do we see as the "supplier"? If the product doesn't work, who do we complain to? I reckon that I would go straight back to the retail store. They then sort it out with their supplier, ie GTV.

"The manufacturing centre properly justified the exclusion by specifying that its customer is Global TV Headquarters."

So if only the MC is certified, it needs to satisfy Global TV Headquarters' requirements (which would include what they believe the end user wants, as well as other production and cost targets etc), but if the entire organisation is certified it then has to show how it satisfies the "external customers" requirements?

And are the requirements of the retail outlet (eg meeting delivery schedules) incidental? Where do you stop the chain? If a hotel buys from the retail outlet, is a hotel guest not the "end user"?

Would it help (both internal staff and third parties) if every QMS had to define who the "customer" is? It makes a big difference to how you interpret the standard.

 

[Helmut Jilling]

The example, and Martijn's situation, both remind me of my ongoing confusion over "who is the customer", especially "the one referred to within the standard".

The Example says that "Global TV’s ultimate customer is the end user who purchases the product from a retail distributor." Turning it round, if you or I am the "end user", who do we see as the "supplier"? If the product doesn't work, who do we complain to? I reckon that I would go straight back to the retail store. They then sort it out with their supplier, ie GTV.

"The manufacturing centre properly justified the exclusion by specifying that its customer is Global TV Headquarters."

So if only the MC is certified, it needs to satisfy Global TV Headquarters' requirements (which would include what they believe the end user wants, as well as other production and cost targets etc), but if the entire organisation is certified it then has to show how it satisfies the "external customers" requirements?

And are the requirements of the retail outlet (eg meeting delivery schedules) incidental? Where do you stop the chain? If a hotel buys from the retail outlet, is a hotel guest not the "end user"?

Would it help (both internal staff and third parties) if every QMS had to define who the "customer" is? It makes a big difference to how you interpret the standard.

I would suggest simply, your customer is the one who paid your invoice. I, the end user, did not pay your invoice, Best Buy or Circuit City did.

 

[Martijn]

OK, one final question about this issue:

The "Guidance on 1.2 Application" says:

Any complex organization (such as Global TV) must be careful of its claim that its quality management system conforms to ISO 9001:2000. The organization has responsibility for all ISO 9001:2000 requirements that can affect the organization’s ability to provide products that meet its customer and regulatory requirements. Therefore, in order to claim conformity to ISO 9001:2000 at the corporate level, it has to ensure that all its relevant facilities are conforming to ISO 9001:2000. The organization’s individual facilities may exclude requirements within Clause 7 based on a justification making it clear that their customer is another division of the corporation, and not the end-user. The certificates of conformity referencing internal customers are of no direct value to the external customers of the organization.

I've underlined the thing that bugs me.

Does this mean that it's ok for a manufacturing site to certify ISO 9001 and only have their manufacturing process certified. They're ok to exclude Design because it does not happen in that plant, but in another location? Can they exclude sales, since that is a different (non-certified) part of the organization?

When reading the explanation above, my guess is yes, you're allowed to do so, since you don't claim corporate certification, but just local (and leaving out all the dificult bits). Any opinions?

 

[Helmut Jilling]

OK, one final question about this issue:

The "Guidance on 1.2 Application" says:



I've underlined the thing that bugs me.

Does this mean that it's ok for a manufacturing site to certify ISO 9001 and only have their manufacturing process certified. They're ok to exclude Design because it does not happen in that plant, but in another location? Can they exclude sales, since that is a different (non-certified) part of the organization?

When reading the explanation above, my guess is yes, you're allowed to do so, since you don't claim corporate certification, but just local (and leaving out all the dificult bits). Any opinions?

No. Generally, if Design is performed by the organization, or for you by a sister facility, you folks would be design responsible. It would need to be audited.