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Include cost of quality (and other wastes) in an ISO 9001 system?

Bill Levinson

Involved In Discussions
Understanding How Management Involvement Impacts the Risk of Quality Cost by Roderick Munro raises the point

"The ISO community has, to date, not created a standard around quality costs: for those who are registered or seeking registration to the ISO 9001:2015, the word cost does not appear in the auditable requirements; however, managers are required to understand the risks to the business and ensure that resources are being utilized effectively."

Jessen Yeoh adds, Why you should integrate lean principles and practices into management systems (a concept touched upon by IATF 16949 in a couple of clauses). I myself put together an unofficial lean management system (LMS) standard to piggyback onto ISO 9001:2008 much as IATF 16949 piggybacks onto ISO 9001:2015 back in 2012 or so, and Yeoh offers an add-on for ISO 9001:2015.

I think ISO 9001:2015 has the potential to deliver much more value to users if users expand on it to attack all forms of waste as opposed to just poor quality. Risks and opportunities can include not only those related to quality but also those related to any unnecessary cost or inefficiency (waste or muda). It is to be remembered that poor quality is only one of the Toyota production system's Seven Wastes, and the only one that announces its presence by causing trouble. The others are invisible to cost accounting systems and are often present 100% of the time because they are built into the job. There is even a crossover into ISO 14001 and ISO 50001 if we recognize that any material or energy (not just environmental aspects) input that does not come out as a saleable product is waste.


Bill Levinson

Involved In Discussions
Unfortunately BSi withdrew BS 6143:

BS 6143-1:1992

BS 6143-2:1990

Along with Phil Crosby and Bill Conway, these standards helped me and many clients to recognize and eliminate waste.
BS 6143-1:1992 - Guide to the economics of quality. Process cost model – BSI British Standards looks like it addresses cost of poor quality (for which AIAG released a much more recent manual) so it looks like there is a need to address invisible costs--the kind not recognized by the cost accounting system. There is a huge opportunity to improve performance by recognizing and addressing these wastes. Even the TPS Seven Wastes are not all-inclusive; Henry Ford's four wastes are. Ford said you can waste time, material and energy, and not much else.

(1) Waste of the time of things (cycle time) <==> Inventory and overproduction, also waiting and transportation (all will be reflected by higher cycle time; inventory may be the cause or the effect, per Little's Law)
(2) Waste of the time of people (waste motion)
(3) Waste of material ==> ISO 14001 (plus attention to non-environmental aspects)
(4) Waste of energy ==> ISO 50001

Also, waste of the time of things could include waste of the time of assets for which paying work is available, such as a train, truck, ship, or aircraft remaining idle when it could be working.
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