auditing evidence

Improve Supplier Assessments by Incorporating Risk-Based Thinking

by Afaq Ahmed

 Chemical and petroleum plants require complex equipment, such as high-pressure and temperature-pressure vessels. Selecting suppliers of such critical equipment requires careful planning and a thorough assessment by a team of subject matter experts in areas including pressure vessel fabrication, welding, and nondestructive testing (NDT).

One of the steps in preparing for such an assessment is to develop a checklist that considers the risks in the fabrication process. There’s a technique to prepare a methodical and thorough checklist by following process steps. I will explain this technique using a case study of a pressure-vessel fabrication process. This approach can be applied to assess suppliers that contribute to any manufacturing or service process.

The fabrication process

The first step is to understand the pressure vessel fabrication process. The process flow diagram in figure 1 shows major steps of fabricating a pressure vessel.

figure 1 afaq


Step A—Identify process characteristics.
ISO 9001:2015 clause 6.1.1a requires “to give assurance that quality management system can achieve its intended results.” It requires you need to identify the characteristics of the process that can assure that intended results can be achieved. In this case study, the first activity shown in figure 1 is the storage of welding consumables. A characteristic of this process step is the proper storage of welding consumables. This can be easily implemented by following the welding consumables manufacturer’s recommendations. See table 1 below.

Process step Assurance that process can achieve the intended results (ISO 9001 clause 6.1.1)
Storage

Welding consumables

Welding consumables shall be stored according to the manufacturer recommendations.

Step B—Identify risk. In this step you need to identify potential risks if the required process characteristic is not met. One of the characteristics of the receiving inspection process (step two in figure 1) is to verify that the correct material has been procured and used for pressure vessel fabrication. The risk here is what if the material test certificates are not legible? Look for fake material test certificates and ask to see the original mill test certificate or an attested true copy. If in doubt, contact the mill to verify the identity of the material. See table 2 below.

Process step Assurance that process can achieve the intended results (ISO 9001 clause 6.1.1) Potential risk
Receiving inspection

Pressure vessel material verification

Verify correct material is used for PV fabrication with the mill test certificate (MTC). Mill test certificates are not legible.

Step C—Identify undesirable effects. Now you need to identify the undesirable effect on intended results due to potential risk. In this case study, the third step in figure 1 is cutting off the steel plate into pieces. These pieces are subsequently rolled by a rolling machine to make shells of the pressure vessel. One of the required characteristics of the cutting step is the capability of the cutting machine. For example, if the machine can only cut plates that are three inches thick and the pressure vessel order requires a four-inch shell, the machine will fail. Here the undesirable effect is a delay in the order and possibly cancellation, which in some cases can lead to costly bottleneck in commissioning of the petrochemical plant and damage to the contractor’s reputation.  See table 3 below.

Process step Assurance that process can achieve intended results

(ISO 9001 clause 6.1.1)

Potential risk Undesirable effect on intended results
Cutting machine capacity The machine should be capable of cutting at least four-inch thick steel plate. Machine can cut up to three-inch thick steel plate. Delay or even cancellation of order.

Step D—Identify controls. ISO 9001:2015, clause 6.1c requires to “prevent or reduce undesired effect.” This step requires you to identify controls to prevent or reduce any undesired effects. For example, the cut pieces of steel plates are assembled using a welding process, as shown in step five of figure 1. One of the characteristics of this process is to ensure proper setting of the welding machine. The welding procedure specification (WPS) usually states the voltage and current requirements. The risk is that if the welding machine is not properly set up, the weld quality may suffer. The assessor needs to the identify controls in place to prevent undesired effects of not setting up the welding machine according to the WPS requirements.  See table 4 below.

Process step Assurance that process can achieve the intended results (ISO 9001 clause 6.1.1) Potential risk Undesirable effect on intended results Controls to prevent or reduced undesired effect (ISO 9001

clause 6.1.1)

Assembly

 

Welding of cut pieces

The welding parameters voltage setting, current, and polarity shall be controlled as per WPS. Welding parameters were not controlled. Weld quality cannot be assured. What control is in place to assure that welding parameters are controlled?

 

Step E—Identify interaction of process with other functions. An organization consists of a chain of processes that interact with one another to transform input into meaningful output. These processes are linked to achieve certain objectives. Assessment results can be more effective if the assessor can identify the interdependencies of the processes and tests them during the assessment. This technique allows an assessor to perform interdepartmental assessment by identifying the interaction of the process steps with other functions of the organization. This way the identification of risk to prevent or reduce undesired effects of not meeting process characteristics can be spread to all functions of the organization.

For example, in this case study one of the potential identified risks associated with the qualifications of the NDT inspectors. The last column of table 5 has identified NDT inspector’s qualification and the laboratory as an interacting function. During the assessment of the laboratory function, the auditor doesn’t observe that there are controls in place to assure that only qualified NDT inspectors are used to perform the inspection, then this may require more in-depth assessment.

Process step Assurance that process can achieve the intended results (ISO 9001 clause 6.1.1) Potential risk Effect on intended results Controls to prevent or reduced undesired effect (ISO clause 6.1.1) Interaction of process with other functions?
Qualification of NDT inspectors NDT inspectors shall be qualified. NDT inspectors aren’t qualified. NDT results may be doubtful Are there controls are to assure that NDT is done by qualified inspectors? Laboratory

Step F—Expand the checklist. In this step, the list of assessment questions can be expanded further to include the following process steps:

  • Storage condition
    • Coating material
  • Receiving inspection
    • Steel plate procurement
  • Cutting
    • Material traceability during fabrication
    • Maintenance plan
    • Maintenance
    • Operator training records
  • Assembly
    • Flanges traceability
    • Welders qualification
  • Hardness testing
    • Hardness testing machine calibration

 

If all steps of this technique are adhered to, the final checklist may look something like table 6. Note that the list below is not exhaustive.

Process step Assurance that process can achieve intended results (ISO 9001 clause 6.1.1) Potential risk Effect on intended results Controls to prevent or reduced undesired effect (ISO clause 6.1.1) Interaction of process steps with other functions
Storage

 

Welding consumables

Welding consumables shall be stored according to the manufacturer’s recs. Welding consumables not stored according to manufacturer’s rec. Defective welds Which controls assure that welding consumables are stored according to the manufacturer recommendations? Warehouse function
Storage

 

Coating material

Coating material (primer and finishing paint) shall be stored in a protected ventilated environment. Coating material was not stored in a ventilated environment. Health and fire hazard What control is in place to assure that coating materials are stored in a protected and well-ventilated environment? Health, safety, and environment function
Receiving inspection

 

Pressure vessel material verification

Verify correct material is used for PV fabrication with the mill test certificate (MTC). Mill test certificates are not legible. Use of correct material cannot be assured. What controls are in place to assure that the mill test certificate is legible? Quality function
Receiving inspection

 

Steel plates procurement

Verify steel plates were purchased from an approved supplier. Steel plates were not purchased from an approved supplier. Potential for unforeseen problems during build. What control is in place to assure that steel plates are purchased from an approved source? Purchasing function
Cutting

 

Material

traceability

during

fabrication

Transfer the heat number from the MTC to the material prior to cutting Heat number was not transferred to cut pieces of material Loss of traceability of material What controls are in place to assure that heat number is transferred to the material prior to cutting? Production function
Cutting machine capacity The machine should be capable of cutting at least four-inch thick steel plates. Machine cutting thickness is limited to three-inch thick steel plates only. Delay or cancellation of order What controls are in place to assure that the manufacturer does not accept orders of more than three-inch thick pressure vessels? Sales and manufacturing engineering functions
Cutting maintenance plan Documented preventive maintenance plan No preventive maintenance plan was available Delay in orders due to unexpected breakdowns What controls are in place to assure preventive maintenance plan is documented? Maintenance function

Making checklists more valuable 

Checklists are useful as long as the temptation to merely check off bullet points on the list is avoided. Checklists reduce the time for preparing assessment documents. This assessment technique can make assessing suppliers of critical and complex equipment more valuable by adding risk-based thinking (RBT). It allows an assessor to carefully examine important process characteristics, potential risks, undesirable effects on process output due to risk, controls in place to prevent or minimize risk factors and interaction of process with other functions of the organization.

It should be acknowledged that organizations deliver products and services through a network of interdependent and interlinked processes. Through the use of this technique, a simple checklist can be expanded and reorganized along the lines of the process. This allows for more efficient assessments. The assessor can ask department personnel all pertinent questions in one visit. If the assessment is conducted using a checklist based on a sequence of ISO 9001:2015 clauses, an assessor may need to make several trips to the different functions.

Another advantage of this technique is that it allows an assessor to identify links among different processes of the organization to perform interdepartmental assessment, thus revealing deficiencies in the system that may occur due to the standalone nature of departments. These deficiencies may be caused by miscommunication, misinterpretation, inadequate information exchange, or the lack of training of the personnel.

 

About the author

Afaq Ahmed is an operational excellence and management systems trainer, course developer, speaker, and consultant. He earned a Master’s degree in mechanical engineering from the University of  California, Los Angeles. Ahmed is a senior member of ASQ, an ASQ-certified manager of quality/organizational excellence, quality engineer and quality auditor, an Exemplar Global-certified skill examiner and quality management systems lead assessor. Contact him at  fayzeeahmed@hotmail.com.

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