ISO 9001:2015 External Issues

What is the new requirement?

Clause 4.1 of ISO 9001:2015 requires the organisation to;

“determine external and internal issues that are relevant to its purpose and its strategic direction and that affect its ability to achieve the intended result(s) of its quality management system”

and that the organisation shall;

“monitor and review information about these external and internal issues”

In this post I will explore what that actually means and offer some suggestions and examples of how an organisation might demonstrate conformance to this requirement, focussing in this post specifically on external issues. For more background information on the wider requirement and on internal issues, you might find some useful guidance in this earlier post.

Determining and Reviewing External Issues Systematically

Let’s face it, most organisations will have a fairly intuitive grasp of the most pertinent external factors that affect the success and operation of its processes. You learn that by trial, error and often bitter experience. The challenge that management system conformance and certification throws at you is to be able to demonstrate that this important dynamic is processed somehow systematically and in an auditable way. It’s all very well simply “knowing” what they are and “naturally taking them into account on an ongoing basis” but that’s not really systematic or auditable, and therefore, for certification purposes, not much of a response. So what are the alternatives?

PEST Analysis

Some organisations I work with use a periodic PEST analysis to apply a framework to this exact process. Like a SWOT analysis (Strengths-Weaknesses-Opportunities-Threats) its an acronym, and works in exactly the same way – to add structure to the review process, forcing management to revisit specific areas. So what is PEST?

I’ll have a “P” please, Bob

P is for POLITICAL. The P in PEST encourages the organisation to consider the political issues that can have a positive or negative affect on how the organisation works, so what could that include? Well, the recent decision of the UK to exit the EU is a massive and (at the time of writing) a major political event that could have significant effects on how an organisation operates. It will probably affect trade relationships (for better or worse we don’t yet know!), it may well also affect the organisations ability to recruit and employ non-UK citizens. Additionally, if the organisation receives a lot of its income via projects funded by, say, the European Social Fund (ESF), then the Brexit implications could well be severe. Other examples could include trade sanctions status. If the organisation has significant trade interests with, say, Iran or Russia, it would certainly need to keep in view the current nature of sanctions relevant to their operations which, at various points in time, may even become illegal. There are also ongoing domestic political issues that affect organisations. Public Sector bodies are always affected by current Government Policy, which sets both Public Sector policy and provides (or doesn’t) funding.

Gimme an “E”

E is for ECONOMIC. Economic factors affect virtually every organisation, but they aren’t the same for everyone and the scale is different for everyone, so what are the common examples? Well, the price of commodities is often a big issue. Oil prices on the world market have been depressed for some time. For some companies (for example those directly involved in the extraction of oil from the ground, and providing support for companies that do), the effects lately have been adverse and significant. Rates of pay have been cut, operations have been scaled back and people have lost their jobs. All these trends may of course be reversed as and when the oil price returns to a certain value, but clearly the oil companies need to monitor this very carefully, as the entire viability of their operation is reliant on that issue. However the fall in oil prices have not been bad for everyone. Organisations that produce chemicals that are derived from oil have seen the fall in price work in their favour – their costs have reduced. Transportation costs have also reduced as a consequence of falling fuel prices. However it’s not all about the price of commodities. Other economic factors that can affect the viability of the operation are trading conditions (often as a result of political issues), the availability of alternative options for customers and the price of alternatives (cheap imports, for example), or simply the liquidity of an organisation at a point in time and how much cash on hand it has.

“S” is for …

SOCIAL. Some organisations are affected significantly by social factors. Some products are massively affected by social trends. What may be the pinnacle of fashion one week, may be the least desirable thing to possess one month later (selfie sticks, shell suits, Gary Glitter CDs …). In understanding social trends, it is clearly important that the organisation understands the things that influence trends. For example, the ingredients used by TV chefs in their recipes significantly affect demand for that ingredient almost overnight, while a food scare (processed meat, saturated fat in fast foods) might affect consumer behaviour, for a time, in a very negative way. Obviously many large fast food, beverage and cosmetics companies actively seek to affect, manipulate or even dictate trends, and invest very heavily in doing it, so important a factor that it is. The demand for other products and services can be very seasonable or weather dependent (ice cream, lawn mowers, outdoor equipment …). This will obviously have an impact on production levels and also recruitment, which itself may be very seasonal. Bear in mind that what may be out of fashion in one market, may be the height of fashion in another (apparently in some countries they still LOVE Old Spice!). Companies that provide products and support of a medical nature will be affected also by world events such as outbreaks of diseases such as SARS or Ebola, so naturally they would need contingency plans to be able to move quickly whenever the World Health Organisation puts up a red flag.

“T” is for ….

Technological. Some companies are heavily impacted by technology, and will need to work hard to stay up to date with developments. Technology has a habit of (very quickly) creating new markets, drastically changing others and, at the same time, wiping others out in the blink of an eye. On a less dramatic level organisations may simply keep an eye on technological advances to see if better ways of working are being made possible (new machinery or ways of communicating, for instance) or even offering more user friendly options for maintaining a management system! This can include the use to a greater or lesser degree of cloud based storage systems, software and dashboard applications to replace documented procedures, using tablets with integrated templates to write up your audits and so on.

Anyway, I hope this post has given you some food and direction for your thought processes as you face your transitions. Done correctly, it is a review process that can add significant value to the efficiency of the organisation’s strategic processes.

Shaun Sayers

This entry was posted in 9001 Lead Auditor Study Group, Auditing, ISO 9000, ISO 9001:2015 and tagged , , , , , , . Bookmark the permalink.

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