Those of us involved in quality audits know the pain of receiving a non-conformance. We know it’s part of the process of continuous improvement, it’s good to get a fresh set of eyes helping us to identify improvements, blah blah blah, it hurts.
Business dictionary defines non-conformance costs as ‘costs incurred from failure to meet product quality requirements’. Six Sigma consider that the cost of quality represents ‘the total cost to the organisation of failure to achieve a good quality product.’ Did I already say blah blah blah?
Often the only measures of our quality management system are the cost of certification (costs can range anywhere from $7,000 to over $50,000 every three years depending on the size of the organisation[1]) the salary of our quality manager (if we have one), and how many non-conformances we get at audit. But what is the true cost of these non-conformance? There are three contributing factors which determine how expensive non-conformance are to your organisation:
The expertise of your external auditor
I was once audited in a day procedure hospital by an auditor whose experience was in mining. He insisted on giving us a non-conformance because we did not ask patients their CJD status[2]. Regardless of our protests that this was not relevant to our practice we were forced to redesign our intake forms, our consent processes and our patient information to advise people about CJD. This cost us time and a lot of money (approximately $20,000) which we just didn’t need to spend.
I was told by the quality manager of a large private hospital that they implemented a records management system the auditor told them they had to have (over $150,000) only to be told by the next auditor one year later it didn’t conform to ISO 9001.
The experience of your quality team
I have a client who was recently audited and advised that they must implement a supervision process for staff which should include monthly supervision and be separate from the appraisal and performance management processes they currently have. My client has a very new quality officer who took this to be an absolute requirement. Once we talked about the actual cost of designing and implementing such a big process compared to the expected results she agreed that it wasn’t feasible and was in fact an unreasonable non-conformance. The size of the organisation meant that such a formal and prescriptive process was just not going to fit with the organisations budget, philosophy or culture.
My tip to all quality managers, if you’re not sure, ask the auditor “Can you show me in the Standards where it says we have to have that?”.
The flexibility of your certification body
Have you ever tried to have a non-conformance overturned by the certification body? I have and it can be a lengthy and demoralising experience. I have also been lucky to work with certification bodies who are flexible and will work with you to come to a satisfactory agreement. Regardless, these conversations take time and energy, costing you valuable resources whilst you find evidence to support your argument. Time and money, you could be spending improving your own systems.
Non-conformance which aren’t appropriate stop you being proactive and keep you reactive. Being reactive is expensive. Every time an external auditor raises a non-conformance you must evaluate the non-conformance, determine what the plan of action will be, develop the system, implement, communicate and evaluate the new process to see whether it is effective. All of this has a high cost on time and resources. There is little time left to improve your business.
Organisations who have fewer non-conformance spend their resources on improving their business, giving them a competitive advantage over those struggling to close out non-conformance.
Which organisation are you? Reactive or proactive?
Are you audit ready
If you need help getting audit ready contact me to see how I can help with your systems health check, support your quality manager to gain skills on my 12 month mentor program and working with you to find a certification body who can meet your needs.