Quality Responsibility - 5G of Quality Audit

It is very true that software has undoubtedly dominated the market. There are building information modeling (BIM) systems that help with the design and development of constructing a bridge or a skyscraper. The anti-lock breaking systems (ABS) that everyone is familiar with is having software controls. It is increasingly becoming common for even a medical implant to include software with secured over-the-air (OTA) update capabilities. While all these functions of software are needed and great for the society, it has also reduced the notions of quality to be frequently limited to testing. This was apparent to me when I was moderating the Northeastern University's Third Global Symposium on Leadership and Project Management when I saw attendees ask the question, "Who is responsible for Quality?" 

Simply put, I responded, "Quality is everyone's responsibility!" It is not the responsibility of project manager, program manager, product manager, or product owner or most importantly the quality manager or tester. Despite the predominance of software, there are still physical products and ancillary services that have non-software components. In the raw materials received at a facility that are either assembled (nuts and bolts) or somehow used (cement, chemicals) within the manufacturing facilities or drug manufacturing, there are quality control inspections. Quality audits apply to walking around the facilities observing how people are using their safety goggles, helmets, protective gloves, or safety harness and understanding the reasons for their misusing or abusing them. So, I thought I will discuss what a quality audit is and the lean's 5G contribution to this domain of knowledge.

Quality Audit is a broader domain that involves the verification activity to validate quality of the products and processes. While quality control is often reactive controls (corrective actions) within the context of a product, quality audit extends to quality assurance monitoring (preventive actions) within context of a process. Together, these product audit and process audit also evaluate the system audit ensuring that the systems used in both these product and process controls work as expected. Such an audit is done at three levels:

• First Level Audit: Periodical evaluation by the teams supported by the auditors internal to the organization. In plan driven approaches, the project manager is accountable for this activity but the teams are responsible for this activity themselves. In change driven approaches, the self-governing team is responsible for this activity and the scrum master or the agile coach is responsible for ensuring that this is happening not only in the reviews and retrospectives but also in the subsequent iterations.   
• Second Level Audit: This is the first external audit. The focus is on the suppliers and vendors providing raw materials as well as on the knowledge workers (e.g.: consultants) providing expertise. The contracting organization performs this function on the suppliers used. This external audit is subject to the terms and conditions listed in the contractual documents. As a result, it could be the procurement department, PMO, or a combination of stakeholder groups internal to the contracting organization. These audits ae facilitated by the auditors, mandatory, and formal evaluation of the goods and services provided by the third party providers. Examples of security assessments such as penetration tests and proof of skills and talent management such as professional development certification are the starting points of the numerous procedures evaluated to uphold quality.
• Third Level Audit: This is the second external audit. This audit is more formal, more extensive, and more time consuming because these audits are conducted by a third party independent of the contracting or the contracted organization. Such a rigorous and robust evaluation looks at people, processes, and technology among many things to ensure compliance with a specific government regulation or industry certification. For instance, an organization may perform such an audit to confirm with ISO 9001 or SOC2 standard and/or GDPR or HIPAA regulation. Frequently, such a quality audit is done as part of a program component (project or subprogram) or portfolio component (operations) and so responsibility is multifold with the portfolio or program manager being the accountable owner. 

Understanding the 5G's proposed by Lean Manufacturing is paramount in understanding this quality audit. While these concepts apply to manufacturing mainly (Azzaouri, Yousfi, and Bouamrani, 2022), I believe these concepts are extensible to any domain or industry . These audits focus on five key elements:

1. Gemba: Actual place where the work is performed. Often called Gemba walks, the management terminology is called "Management by Walking Around" (MBWA) to perform "inspection" (observing behavior rather than what is told) and gather data as part of "non-verbal communication."
2. Gembutsu: Actual events that transpired. These are the issues that happened as documented in the issues log, defects, or the voice of customer or voice of business. It is important to note that this could also be things that didn't happen.
3. Genjitsu: Actual situation that contributed to the problem. This engages why the "Gembutsu" happened. This is the root cause analysis that can be evaluated by anyone of the seven quality control techniques and can also be superseded by the force-field analysis.  Examples include: no backlog refinement prior to planning, lack of a clear DoD, not using risks to prioritize, etc.
4. Genri: Actual hypothesis of the scientifically or universally accepted principles and frameworks with a factual correlation of observations. The Genjitsu analysis may involve some hypothesis such as "If we had a tool to perform X, we would not have seen this problem!" or "If we had enough capability, competency, or capacity, we would have avoided this from happening!" While these may be true, these observations may be based on universal facts and understanding the factual correlation is important (How much are we trained on the tool or why are not we using an alternative tool that works well with our processes?) is also important.   
5. Gensoku: Actual verification based on adopted operational standards and practices. Extending the corrective and preventive actions, alternative thinking, and risk driven development (Rajagopalan, 2023a), these thoughts are work done after the audit findings to correct the observations. These observations may be controls implemented are effective or are not relevant (green), observed gaps that needs improvement (yellow), implemented controls with material concerns (orange), and immediate remedial actions required to address ineffective or material issues (red). 

By examining these five 5G elements, quality professionals can gain a deeper understanding of the root causes of quality problems and develop more effective solutions. For example, in the case of a manufacturing defect, a quality control engineer might conduct a Gemba walk to observe the production process firsthand and identify any potential issues. They might also collect and analyze Gembutsu data, such as machine settings and operator logs, to determine the exact sequence of events that led to the defect. This information can then be used to analyze for Genjitsu such as missed maintenance schedule contributing machine calibration errors. When developing such corrective or preventive actions, we can build Genri driven hypothesis such as documenting clear processes and procedures or giving frequent training to build quality into the processes. Subsequently, processes can be audited per Gensoku thoughts to evaluate how controls are working to address the risks and issues. These observations may further lead one to look at Muda, Mura, and Muri contributing to the management debt (Rajagopalan, 2016).

As you can see from these discussions, quality is a function of risks (Rajagopalan, 2023b). Everyone contributes to risk and subsequently therefore to quality. 

What do you think?

References

Azzaouri, K., Yousfi, S., Bouamrani, M.L. (2022). Combining digitalisation with 5G lean tool for quality and competitiveness in automotive electrical wiring systems manufacturing. Moroccan Association for Applied Sciences and Innovation, 1-9. In Proceedings of 4th International Conference on Quantitative and Qualitative Methods for Economics, Management and Social Sciences, Istanbul, Turkey.

Rajagopalan, S. (2016). Management Debt: Cost of non-delivery and non-conformance. Retrieved from https://agilesriram.blogspot.com/2016/10/management-debt-costs-of-non-delivery.html

Rajagopalan, S. (2023a). Risk driven prioritization: Challenges to prioritization techniques. Retrieved from https://agilesriram.blogspot.com/2023/02/risk-driven-prioritization-challenges.html

Rajagopalan, S. (2023b). Quality is a function of risk. Retrieved from https://agilesriram.blogspot.com/2023/03/quality-is-function-of-risk.html

Management Debt: Costs of Non-delivery and Non-conformance

The principles of lean have always focused on maximizing the value delivery. In fact, the Japanese term Muda (Arnheiter & Maleyeff, 2005) refers to the seven different types of wastes that one should remove. Expanding on this, practitioners have added the non-utilization of talents introducing the mnemonic or memory aid, DOWNTIME, to capture these eight types of waste an organization or project should closely monitor to increase efficiency. These eight types of wastes are:

1. Defects
2. Over-production
3. Waiting
4. Non-utilized Resources
5. Transportation
6. Inventory
7. Motion
8. Excess Processing

It should be noted that the non-utilization of resources was not part of the original Lean Manufacturing concepts that were formulated based on Toyota Production Systems value chain thinking (Sutherland and Bennett, 2007). However, as the ways of working emerged shifting the focus towards value creation applicable from all levels of the organizational hierarchy such as the open systems thinking (Scott, 1981), non-utilization of resources was added as the eight types of waste! In my opinion, this is applicable in any industry as resources can be both human resources (people's time, skills, talent, experience, competency, etc.) but also non-human resources (facilities, equipment, materials, infrastructure, supplies, etc.)

Often, these eight principles are considered an academic exercise and practitioners have lost connection with these principles. Unless these principles are related in terms of the management language, money, these principles don’t gain the limelight. In this blog article, I would like to synthesize some of these principles in terms of two types of costs as follows that relate to the cost of poor quality. When these two costs are not managed appropriately, it is management debt to the project.

Cost of non-delivery

This principle refers to the “…measure of the costs associated with preventing, testing for, or correcting defective items,” according to Carr (1992, p. 72). The cost of poor quality comes from both the internal and external failure costs where poor-quality costs are associated with rework, redesign, retesting, failure in or shortage of specifications in requirements, bugs arising from poor development practices or myopic understanding of or inaccuracies in requirements or design, or unplanned delays in monitoring the dependencies. All these relate to elements mentioned in the DOWNTIME factors and could lead delivered work that is still not production ready unacceptable for customers. Say, if any of the above factors contributed to a schedule slip of 10% on a project that cost $100,000. At a minimum level, this slip means $10,000 (10% of $100,000) is now an additional cost to the project that could have been effectively controlled.

Cost of non-conformance

Non-conformance means the rules of engagement for a specific development or management methodology are not completely adhered to. For example, not following the integrated change control mechanism to use a tool that is not approved by the organizational policies, not adequately preparing for the specific meetings increasing the cost of a meeting, taking missteps that lead to the escaped defects increasing customer’s bad will, or over-engineering a feature beyond the fitness for use. When these things happen, it often involves more time spent in corrective actions introducing increased testing, executing recalls and incurring expenses on the performing company’s time and money, or attempts at various levels to restore customer satisfaction. The cost of non-conformance retraces its roots to the cost of quality examples on lack of adherence to existing policies.

Summary

Therefore, middle management focusing on delivering products or projects, whether they operate through traditional or agile approaches, should evaluate the cost of non-delivery and cost of non-conformance to ensure that all these waste producing efforts are eliminated. Management is obligated to monitor these patterns that lead to the management debt like the technical debt. Only when this management debt is controlled, does the concept of efficiency grow with the seeds of cost of good quality. 

References

Arnheiter, E.D. and Maleyeff, J. (2005) ‘The integration of lean management and Six Sigma’, The TQM Magazine, 17(1), pp. 5–18. 

Carr, L. P. (1992, Summer). Applying cost of quality to a service business. Sloan Management Review, 33(4), 72.

Scott, R.W. (1981). Organizations: Rational, Natural, and Open Systems. Englewood Cliffs, New Jersey: Prentice Hall.

Sutherland, J., & Bennett, B. (2007). The seven deadly wastes of logistics: applying Toyota Production System principles to create logistics value. White paper, 701, 40-50.