Sunday, October 4, 2009

Outsourcing Internal Quality Audits

The other day I was asked what I thought about outsourcing internal quality audits. I think it is worth sharing my view on this with everyone.

Internal auditing is an important tool which measures the effectiveness of the Quality Management System. A good Quality Management System (QMS) contains various reviews and checks to ensure that the QMS is working properly and achieving desired results. One well known independent check is the internal audit.

The internal audit is a requirement of the ISO 9001:2003 Standard under the section titled measurement, analysis and improvement. The standard states that internal audits are used to determine if the QMS:

· Meets the planned activities from product realization planning

· Complies to this ISO Standard

· Meets organizational requirements

· Is implemented effectively

· Is maintained effectively

While the standard spells out the need and reason for internal audits it does not indicate who can perform this function. This is not a mistake. The standard is basically a minimum set of requirements to meet. It does not tell you how to run your business. Fortunately, you have that latitude and therefore could use external services to support your business if you wish.

A recent consulting organization described their internal audit service by the following:

The Company’s Internal Quality Auditing Program allows you to focus on running your business while qualified consultants perform your internal auditing. Concentrate on your work, we'll do the rest.

My aversion to outsourcing internal quality audits comes from this notion that internal audits are not the company’s responsibility. An organization’s priorities must always be Safety, Quality, and then Productivity. Companies that recognize that good products and services come from a good QMS recognize the importance of monitoring and measuring its effectiveness. It is imperative that organizations take an active role in their QMS since it is really the foundation of their business system. Many organizations would not let others come in and run their business so why let them do so with your QMS.

With this said it can be valuable for organizations to use external expertise. Organizations often can’t be experts in everything. Many companies outsource various aspects of their business or use consultants for Lean, management practices, and other improvement initiatives. Quality and the QMS will also benefit from other expertise like auditing your QMS.

Many companies also have other reviews of their QMS from other sources. A common example of an independent review of your QMS is that done by the registrar to the standard. Another method of review of your QMS is from customer quality audits. These voice of the customer audits can be some of the most important. Companies also benchmark themselves against other companies and industries as well.

The benefit of outsourcing the internal quality audits of your QMS are not clear. It could be used to teach a company about internal audits or QMS best practices. However, in the long run this activity must be something that can be transitioned back to the company. If you are not doing the outsourcing as a way to learn new skills or knowledge then anything else is just a short term cost savings activity at the risk of long term quality management. The organization can benefit more by directly being involved in ensuring their QMS is providing the results they desire from their customers point of view.

Organizations should make it a priority to measure and monitor their QMS effectiveness from those who must use the system. Failure to do so can result in not meeting your customer’s expectations. This is where companies many find they lose customers to their competitors.

I am interested to hear what others think about outsourcing internal quality audits. Share your experience and thoughts by leaving a comment.

1 comment:

  1. I think it's great that a lot of specific business functions today are outsourced with an aim of developing a company's core competency. With this, we will see healthy competition among the outsourcing companies which will open venues for improvement of service standards. Internal auditing is a critical task but no worries about outsourcing that service in that there are a lot of choices for a competitive outsource accounting service.

    In the manufacturing industry especially, outsourcing product development is an easy way to speed up the process of marketing and mass production of your product. We just have to be wise in choosing which prototyping manufacturer will give us the satisfactory work.

    Lastly, doing an outsource product development, one need's to be realistic in demands and be specific in contract terms and details with the contracting third party to avoid miscommunication.