Performing Quality Audits

Quality audits are controlled reviews of quality management activities for a project. They are useful for establishing any inconsistencies between actual performances and preferred standards. You can use them to examine a small portion of a process or look at a complete organization. As a general rule, there are four forms of quality audits.

• Product audit. Product audits reexamine a finished product. This process is usually performed before the purchaser accepts the finished product. These inspections involve verifying that physical attributes conform with standards.
• Process audit. Process audits generally take a short period of time to perform, as they examine only a selected portion of the total process. They verify that processes, operators, and equipment conform to distinct requirements. They prove that a process is being used.
• System audit. System audits examine the overall organization. When they are completed internally, they examine the management practices within a company. This type of audit evaluates a system to prove that a company is following it properly.
• Vendor survey. Vendor surveys are often part of an external system audit. They involve looking at a vendor's management of quality efforts in relation to the expected contractual requirements.

Quality audits verify conformance to specifications and procedures. They provide necessary information about performance, products, and areas for improvement. They also help companies to survive, help companies conform to regulations, and help counteract the actions of others.

Quality is a vital factor for surviving in a competitive market. Companies that provide products or services more efficiently will usually win business over their competitors. It is imperative that you know how well, or how poorly, your company is performing. Quality audits offer this much-needed information.

Another reason to perform quality audits is to implement and maintain the regulations that are necessary for you to operate a business. Many of these regulations are in the form of licenses or certifications for meeting quality standards and maintenance of preferred supplier status with customers.

Quality audits also are helpful for counteracting the organizations that are looking for your mistakes. Audits show that you are monitoring your company's performance. The purpose of a quality audit is to discover problems when they are relatively small. When outside organizations can see that you have a sound quality system, they are more likely to leave your company alone.

When should audits be scheduled? Most times, they are part of a contract agreement with a customer or initiated from government regulations. Sometimes quality audits are scheduled and other times they are performed randomly. When audits are scheduled, they should be at times when activities can actually be observed, rather than times when only the documentation on those activities can be examined.

It's important that audits be unbiased and objective. The audit team can consist of members of the quality assurance department, the management team, or outside organizations. Audits should never be carried out by the performer of the audited activity.

Audit teams should be comprised of two to six individuals. The ideal quality audit team is comprised of members of all departments within an organization.

Audit teams should be polite and professional. They should ensure projects meet their quality requirements and follow quality procedures and policies. An effective audit team will perform the audit process in four sequential phases, which are described below.

• Preparation. In the preparation phase, the audit team is selected. Auditors define the purpose and scope of the audit and pinpoint the performance standards and resources. They contact the auditee and develop checklists. They also become familiar with the control systems.
• Performance. In the performance phase, the auditors meet with the auditee. They gather and analyze information by conducting interviews and examining records. They verify the control system in this phase.
• Reporting. In the reporting phase of an audit, an exit meeting is held with the auditee. Also, the formal audit report, containing the conclusions of the audit, is written at this time.
• Closure. The closure phase is sometimes referred to as corrective action. This phase is characterized by actions resulting from the audit observations. Follow-up actions are monitored and evaluated at this time.

Remember, scheduling quality audits can help you learn important information about your organization. It will also help your company stand the test of time.

Developing a Quality Management Plan

Implementing effective quality management for your project takes a great deal of organization. Developing a quality management plan and applying it to a project will help ensure that effective quality management has taken place.

A quality management plan is a document that details the quality practices and activities of a product or service. It is a part of an organization's quality system and should include the responsibilities, procedures, processes, organizational structure, and resources required to implement effective quality management.

Created by the project manager and the project team members, it should describe how a quality policy will be carried out and detail the project objectives by breaking down the project activities into lower-level activities. It should also identify specific quality actions.

Quality management plans can take on many forms. They can be formal, informal, detailed, or general, depending on the needs of each particular project. They can also be represented in many ways visually. For example, a plan can be displayed as a tree-like diagram.

A new plan should be developed, or old plans should be changed to reflect the different activities of each unique project. A quality management plan does not stand completely alone—it becomes a part of the overall project plan.

Project quality can be described as meeting or exceeding customer requirements. This means customers should have input into the quality of the project. Remember, the bottom line to any project is satisfying the customers. Without them, there are no future projects.

Effective quality management plans play an important role in this process of satisfying customers. The characteristics of good quality management plans are as follows.

• They should identify customers.
• They should prove that goals and objectives are being met.
• They should affect the design of a process that meets the ever-changing needs of customers.
• They should enable the company to bring in suppliers early in the process.

It is the responsibility of the project manager to make certain that the project's quality actions are thoroughly documented. This process will enable the company to prove that it has the right processes in place to meet the needs of its customers.

Sustaining a quality system and creating a quality management plan requires a great deal of effort, planning, and organization. The following is a list of the high-level steps in the process of creating a quality management plan.

1. State all measurable features of the project's product.

2. Identify how the product will be produced and its quality measured against specifications.

3. Determine how the project approach will be measured.

4. Conduct a quality risk assessment and develop non-conformance procedures.

5. State the method for quality reporting and monitoring.

6. Outline the formal acceptance criteria and document the project's final product.

In summary, quality management plans are documents that describe the quality practices, resources, and sequence of activities related to a specific service or product. They act as a guide for satisfying the customers' needs.

Outputs of Project Quality Planning

The project quality planning process results in a number of outputs, in the form of actual documents or documented items. Operational definitions, checklists, and inputs to other processes are three important outputs of the quality planning process. Details about these three outputs are provided below.

1. Operational definition
An operational definition, also called a metric in some application areas, is a description of what something is and how it is measured by the quality control process. Operational definitions are quality planning outputs project management teams can use to indicate the specifics about the quality of their projects.

For example, an operational definition that describes meeting schedule deadlines must also include details such as start and finish times for every activity.

2. Checklists
Quality planning, and any other activity involving steps to a process, use checklists. Checklists are structured tools for confirming that all steps to a process have been performed. They can be specific to particular activities and industries. Checklists are not always complicated. They can be as simple as a brief list phrased, "Do this!"

Checklists are important for quality planning because they help you verify a project's quality. You can use information from quality planning inputs, as well as quality planning tools and techniques, to develop the checklists for a project.

Some organizations have standardized checklists that ensure frequently performed activities are carried out with consistency. Alternatively, sometimes checklists are purchased from commercial service providers or professional associations.

3. Inputs to other processes
Sometimes the process of quality planning detects a need for activity in another project management area. These quality planning outputs are usually not anticipated at the onset of a project. These unanticipated outputs are called inputs to other processes.

In summary, inputs to quality planning, as well as quality planning tools and techniques, result in a number of outputs. These quality planning outputs help management teams stay focused on the quality details of a project.

The Project Cost Management Plan

Besides the cost estimates themselves, the most important output from estimating project costs is the cost management plan. This is the document that outlines how project costs will be kept on track.

As excellent as your cost estimates may be, you must have an adequate plan for managing cost variances and dealing with problems. A good cost management plan (CMP) clearly outlines how to implement corrective action in order to reduce or eliminate cost variances.

The main purpose of a cost management plan is to provide direction to project management teams. It must contain guidelines to follow, outlining what to do when positive or negative cost variances occur. Cost problems are usually handled according to their severity. Variances that pose no real threat to overall cost performance may require no action at all.

Cost management plans can be structured differently depending on the performing organization and the needs of the project stakeholders. The points below describe a broadly-based plan and a detailed plan.

• In a broadly-based plan, costs are estimated, monitored, and reported at the high-level work breakdown structure (WBS) elements. Tasks are not complex.
• A detailed plan will deal with costs at the lowest level of the WBS, making it easier to obtain timely and accurate information.

You also must decide whether your cost management plan will have a formal or informal structure. Bureaucratic structures are much more formal than project-based companies. Design a CMP that is consistent with the organizational culture of your company and with the authority that project managers hold. More details are provided below.

• Bureaucratic. Does your company have a bureaucratic and inflexible structure? If so, you likely will require formal forms, processes, approvals, and reviews for every step of the cost management process.
• Mixed. Your project team may work within a formally structured organization that answers to upper management but has the authority to manage project costs at its own discretion and without all the red tape.
• Project-based. The cost management plans of small, entrepreneurial companies typically reflect the increase in decision-making authority held by project managers. Processes are flexible, depending on particular projects and situations.

With the four options available—broad-based and detailed, bureaucratic (or formal) and project-based (or informal)—for structuring cost management plans, a type of matrix is formed from the combinations.

• Formal-detailed. This type of plan would be appropriate for a large institution with rigid accounting procedures.
• Formal-broad. The processes are vigorous but costing categories are general.
• Informal-detailed. The cost of every team activity is outlined but loosely monitored.
• Informal-broad. Costs aren't closely monitored or very detailed.

The two extreme situations are easy to identify. For the others, you need to look at organizational structure, level of detail, degree of decision-making authority, and the important of auditability.

How will you know if your project's cost management plan is a good one? Assess whether or not it meets the needs of the project stakeholders. Stakeholders are the people involved in producing the project or who are affected by the project's end result. They include the project team, investors, and the customer. Stakeholder needs may vary from one project to another.

Remember, as you develop cost estimates for your project, keep in mind that your project also needs a cost management plan to help you manage project costs after the budget is developed and project activities are under way.