Last December at the Public Service Award of Excellence at the Georgetown Chamber of Commerce and Industry’s (GCCI) Annual Dinner and Awards ceremony, the Hon. President Donald Ramotar identified as a priority the promotion of operational standards that will raise the levels of efficiency and effectiveness in government agencies.
Over the past two weeks, it was reported through various media that former Speaker Ralph Ramkarran had affirmed that corruption in government was pervasive while Mr. Gino Persaud, President of the Transparency Institute of Guyana Inc. (TIGI) referred to corruption as a scourge that “must be confronted head on.” Resignations by Mohammed Sattaur, CEO of NCN, and YogMahadeo, CEO of GT&T, following investigations into financial irregularities at their respective companies, added to concerns about venalities within both corporate and government agencies.
The implementation of the ISO 9001 quality management system should be the corporate and government response to these scandals. In reforming disclosure procedures and organization governance, the various sections of ISO 9001 define management responsibilities, reports required, the process/system control environment, and monitoring and measurement control activities.
What is the ISO 9001Quality Management System standard?
This International Standard specifies requirements for a quality management system where an organization
a) needs to demonstrate its ability to consistently provide product that meets customer and applicable statutory and regulatory requirements, and
b) aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer and applicable statutory and regulatory requirements.
Eight quality management principles have been identified as a framework toward improving an organization’s performance and form the basis for the standard; these areCustomer Focus, Leadership, Involvement of People, Process Approach, System Approach, Continual Improvement, Factual Approach to Decision Making, and Mutually Beneficial Supplier Relationships. These principles are the building blocks for the five clauses of ISO 9001. These are:
Clause 4.0: Quality management system
Clause 5.0: Management responsibility
Clause 6.0: Resource management
Clause 7.0: Product realization
Clause 8.0: Measurement, analysis, and improvement
Why ISO 9001?
An existing ISO 9000 structure lends itself to integration with any organization’s financial system. One of its major assets is the documentation requirement that provides a trail of records and internal controls which, from a legal perspective, assumes significant importance during audits and legal challenges.
Organizations that are ISO 9001 certified/registered, have a single and complete set of managed and applied procedures that are distributed where needed, regularly updated and audited. There is also oversight by the ANSI-ASQ National Accreditation Board (ANAB), generally known as the Registrar Accreditation Board (RAB). ANAB or RAB commission resources, reports and has the authority to administer the quality audits of ISO 9001 certified organizations.
Under the management review of Clause 5.1 and the internal audit requirements of clause 8.2.2, top management is required to establish an independent audit committee and has responsibility for the outcome of the audit. ISO 9001requires respect for auditor independence and prohibits executive management from improper influence of an auditor.
ISO 9001, clause 4.1, assigns responsibility of process controls to top management. They are required to assess whether internal controls are effective, certify compliance to the organization’s quality manual and be accountable for conformance to its quality system.
ISO 9004, clause 5.1.1, which is not contractual, has a code of ethics that is an intrinsic part of professional conduct and is within the purview of ISO 9001, clause 5.0.
Material operational changes may affect performance resulting in significant delays in meeting the needs of customers. ISO 9001 clauses 4.1.f or 7.5.1.f would provide visibility via real time disclosures, to customers and stakeholders.
ISO 9001 clause 7.2 puts customers’ interest first. CEOs and managers are prevented from making recommendations in their own interest rather than in the interest of the customer.
Always of concern to the public is fraud accountability. ISO 9001 clauses 4.2.3, 4.2.4 and 8.0 encourage honesty in records, empower employees and enhance pride in workmanship. It empowers employees by protecting them from fear, being forced to do bad work, and retaliation.
Cost of Quality
One factor that can quickly catch the attention of auditors is the cost of quality.
Joseph Juran, considered one of the quality gurus, advocated a cost of quality accounting system that expressed production and service failures in terms of money. He classified the types of costs as failure, appraisal and prevention. When the cost of quality is expressed in terms related to the organization’s profitability e.g. as a percent of net income, operating expenses, or return on total assets, it becomes a powerful metric that easily identifies fraud when misstatements are made.
In reforming disclosure procedures and corporate governance, both corporate and government leaders should consider using the ISO 9001 quality management structure that includes cost-of-quality metrics to achieve:
1. the paper trails and controls necessary to identify evidence of fraud
2. continual improvements in the effectiveness of their processes,
3. enhanced levels of profitability when combined with Lean Six Sigma
The ISO 9001 governance structure, in keeping with the intent of clause 5.0, should specify the distribution of responsibilities and rights among different participants in the organization. The structure should spell out the rules and procedures for making decisions on the organization’s affairs. By doing this, the organization’s top management will provide the structure through which the organization’s objectives are set, and the means of attaining those objectives defined along with the method and metrics to monitor performance and venalities.
Owen Ramsay, B.Ch.E, MSEE, RABQSA-LA, CQA, CQE, CMQ-OE, CSSBB
Lean Six Sigma & ISO 9001 QMS Consultant
Jun 05, 2020By Sean Devers Guyana and West Indies leftarm-spinner Veersammy Permaul is disappointed with his non-selection in a 25-member touring party selected to tour England for a Three-Test series next month...
Jun 04, 2020
Jun 04, 2020
Jun 04, 2020
Jun 03, 2020
Jun 03, 2020
Editor’s Note, If your sent letter was not published and you felt its contents were valid and devoid of libel or personal attacks, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]