The House of High Quality Articles for Everyone in the World

Jun 29, 2010

10 Steps For Managing Change

Managing change is very complex process. It can feel as if you are the person who has to juggle all the balls in the air, take all the flak when things go wrong and still be smiling, calm, confident and a shining example of just how change can be a positive and a force for good within a company! However, as everyone knows, the reality can be somewhat different; so when times get tough, simply remember the top 10 tips for managing change

1. Set your goals. Some advocates of change management say that you need to start with the workforce within an organisation and convert them ‘hearts and minds’ to the coming changes. But in reality, before you look to anyone else, you need to be clear about what change will bring about. Set your key performance indicators and then be clear about what they are; now you can win hearts and minds!
2. Ensure that those who are at the highest level are fully committed to change and will provide you with all the resources required to make change happen. Changes do incur costs and those who pay the bills will need to be 100% behind you or you will find that the process is quite a painful one.
3. Convert anyone and everyone. All organisations have people who are resistant to change. The worst offenders are those who verbally agree or at least nod, when asked if they think change is a good thing; they are the ones who will attempt to undermine your efforts, so make sure that you get people onboard and that they understand the negative impact that no change will have; at least they have been warned…..
4. Plan, plan and when you have every conceivable plan in place, then plan some more. Change does not happen, no magic dust will be sprinkled on your organisation; you have to make the changes happen and this must be well planned, or you will fail.
5. Although you may think that communication is simply trying to convert people to change, there is more communication required than the conversion. You need to ensure that you communicate effectively, with all levels of the organisation and that your change is implemented with everyone aware of what is happening.
6. Establish clear and well defined roles and responsibilities for all those involved in the change process; it may be tempting to try and do everything yourself, but this will only lead to problems further down the line, so delegate, but ensure that everyone is clear about what they are doing, why they are doing it and when they have to do it.
7. Create the framework for change. You need to ensure that all the systems and tools are (or will be) available to ensure that change can happen and that it will be supported.
8. Use project management software to make sure that a systematic approach is taken to change and that you can keep everyone aware of what is happening, without time spent on endless meetings.
9. Keep abreast of how you are progressing towards your key performance indicators regularly and review progress on a really regular basis. You can almost guarantee that if you do not do this, the one indicator you fail to check will be the one that causes a huge blip in the process.
10. After change has been implemented and the review of key performance indicators has taken place, it may be tempting to sit back and rest on your laurels. But the sensible thing to do is to actually use the experience and review it objectively so that next time you can make it even more of a success!

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Jun 28, 2010

Lead time

Value stream mapping is commonly used in organizations looking to reduce the lead time of their process – so what is lead time.

Lead time is the period of time between the initiation of any process and the completion of that process.

So for example if an order is received for a Widget on the 1st of January and the item is shipped to the customer on the 31st of January – The lead time could be said to be 31 days.

Lead time is important to many organizations as it often has associations of cost – for example – buffer stock is often held to counteract long leadtimes (buffer stock has an associated cost of extra material and associated resources e.g. storage).

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Jun 26, 2010

Different Types of Six Sigma Certification

Six sigma is a business management process that enables companies to decrease process variation and then improve profitability.
Every day businesses have a method of achieving their daily work schedule. However, the chances are that there is a better way of doing it more quickly and efficiently. Speed and efficiency mean a better product or service and higher profits for your company. Imagine all the possible improvements that can be made. From the proprietor to the point of sale, there are a myriad of processes waiting to be improved.

Six Sigma is a highly controlled method. It stipulates that you choose only the very best ventures that meet your company's goals, and once they are decided it calls for the proper resources to be dedicated to it. It requires that the project be put through a process called DMAIC (Define, Measure, Analyze, Improve, & Control).

Six Sigma has both management and technical components. The management area focuses on applying the management system to assemble the right projects and fit them with the right persons. Management also concentrates on having the right goals and process metrics to ensure that projects are successfully completed and that the gains made can be sustained. The technical side concentrates on improving the performance of process using process data, statistical tools, and other methods. This process improvement has five key stages: Define, Measure, Analyze, Improve and Control, (DMAIC).

Six Sigma Process & Levels

It can take time, and does! but the six sigma process, with the right level of commitment, can prove to be the tool needed to vastly improve profitability.

With real commitment a company can move from 3 Sigma to 4 Sigma within 1 year. Generally, though, the higher your Sigma level is, the longer it will take you to reach the next Sigma level - so time and tenacity will pay the best.

Six sigma certification is that which is achieved as you move on to higher and higher levels of training and these are graded in the manner of green belt, black belt and so forth.

After an individual completes two weeks of training and passes the qualifying exam, they achieve the first level certification in Six Sigma, a Green Belt certification.

All the basic methods are covered in this level, including DMAIC and its usage. The Green Belts cover project management and quality management tools as well as implementing quality control tools.

Students are also trained on problem solving and data analysis methods the execution of deployment procedures. They are also made aware of the need and ways in which to maintain adjustments that have been implemented within the project.

Most of the time, trainees commencing Black Belt certification are technically-oriented professionals. Trainees are required to complete four weeks or about 160 hours of training.

Certification is awarded after appropriate tests have been cleared. The curriculum generally includes the Green Belt certification agenda as well usage of statistical analysis software and simulation tools.

Master Black Belts are usually Six Sigma Black Belts who do four weeks of Black Belt training and then employ it as program managers. They have to have had vast experience in handling projects from beginning to end.

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Jun 24, 2010

kano model

In the first, the Kano model means that the customer will adopt a neutral attitude towards the product or service. This means that customers are unlikely to become regular customers and can easily switch to any other brand that satisfies the same needs.

In the second scenario, it means that customers may become loyal to a certain extent but the chances of customers shifting to other Competitor cannot be completely denied. In the third scenario, the Kano model implies that customer satisfaction levels are at their highest and it is highly unlikely that they will opt for other brands in the near future until and unless there is a drastic change in the quality and consistency of the product or service that they are currently using.

Importance Of The Kano Model

Using the Kano model as a basis for assessing the effectiveness of a product or service has become quite commonplace, especially by Six Sigma teams that are entrusted with the responsibility of making the best quality products or services available to customers at reasonable rates. Doing a Kano analysis has now become a necessity for most businesses because competition has increased manifold in today's globalized world where customers have become more demanding and more critical of the quality and prices offered to them.

Businesses can no longer hope to survive for long just by satisfying the basic needs of customers; and as such, they need to be constantly on their toes for making newer products and services available to customers that not only satisfy their basic needs but also exceed their expectations. By offering something that is much more than what the customers expect, businesses can hope to gain the competitive edge that is necessary for the long-term success of any business enterprise.

Use Of The Kano Model

Six Sigma teams use the Kano model for making changes to an existing product or service or designing and developing a new product or service from scratch. For making changes in an existing product or service, these professionals first analyze the efficacy of the product or service in terms of customer satisfaction levels. After this powerful simulation tools are used for studying the likely effects that the changes will have on customer satisfaction levels.

Changes that offer maximum benefits are then selected and implemented using standard Six Sigm tools and techniques. If the objective is to develop a completely new product or service, these professionals use advanced simulation tools that indicate the likely effects of the suggested product features with the help of Kano graph models.

The Kano model is an effective Six Sigma tool, but it has its limitations. It can only be used for analyzing the effects and certainly not for suggesting new product features, something that is quite difficult to achieve. The limitations, however, have not affected the use of the Kano model, as its advantages are far greater than its limitations

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Jun 21, 2010

Kaizen Methodology

All the companies have to deal with waste on a regular basis. Waste It has been revealed by research that most of the manufacturing companies waste about 70% of the resources. On the other hand, it has also been revealed that a company which has implemented Lean Manufacturing has been able to cut the percentage of wastage by half.

Kaizen Methodology has to do with change as it is a principle of continuous change that is meant for the environment. Kaizen methodology requires involvement from employees of the organization as well as from the management. It requires willingness from the staff to adopt the change and do things differently.

When all the employees of an organization are involved, it leads to a better work environment. However, methods need to be set up so that ideas and suggestion can be acquired, analyzed and finally implemented. The process needs to be standardized and guidelines need to be followed. It is essential to think about a number of methods of operation rather than limiting yourself to only one method of operation. This will help you find a better process which can lead to change in the standard of the operation and the environment of work overall.

A short and to the point housekeeping policy needs to be adopted. Being organized helps reduce the amount of time needed to find materials. A clean area needs to be maintained all the time as it is not only efficient, but safe as well.

There are 3 principles that need to be implemented so that the Kaizen methodology works properly.

1. Consider all processes with their results
2. Analytical thinking of all the process instead of the immediate problems only.
3. Approach Kaizen with a reasonable and learning method so that assumptions which were part of the current processes can be re-examined.

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Jun 19, 2010

Just in Time (JIT) & Min-Max

There are two methods of inventory management ; JIT (Just in Time) and Min/Max for any company. The problem occurs when companies decide to manage their inventory based on what they've seen work elsewhere, instead of matching their approach to their company's business model, and the customers and market they service. So, given these two options, what should companies choose and why?

The Conditions for JIT

For those companies who have large purchasing volumes of raw materials and parts, and who have constant, high volume demand for their products, then JIT is often the inventory method of choice. Just in Time inventory management is based on the assumption that a company can reduce its inventory costs by ordering only what's needed, when needed. By managing inventory this way, the company has less inventory remaining at the end of the month, because it makes sure to use most of what it takes in. Now, some companies that run JIT, can get raw materials and parts in one day, and immediately ship that finished product in the same day. The benefit of this approach is that a company gets paid from its own customers, right around the time it must pay its own invoices. For example, the company orders parts and materials, receives an invoice, ships out a finished product the same day, and invoices its own customers. Sounds nice doesn't it? Well it can be, but there are some inherent drawbacks, and they are listed below.

• Defective Product or Delivery Delays: Any poor quality product or delivery delays are huge costs to JIT, because the company likely doesn't have any safety stock available. Try explaining that to an upset customer!

• Lack of Purchasing Power: Small companies that lack the volumes in purchasing shouldn't run JIT. Companies that adopt JIT must be able to be the number one priority in their supplier's eyes. You can't be screaming for product and have nobody listen to you.

• Too Many Different Product Lines: Companies that have small volumes spread across a large product portfolio, don't have the necessary individual volumes to make JIT work. The best example of this is an automotive company like Honda. They have a few car models, but extremely large volume across those models.

• Infrequent & Cyclical Demand: JIT requires constant and linear demand for products. Infrequent demand means infrequent volume and a lack of purchasing power.

• High Freight Costs at Times: If inventory is not available, or if that shipment is wrong or defective, then the company must rush parts into their warehouse, receive it, and then ship out again, often at huge costs.

The Conditions for Min/Max

The above points pretty much sum up the reasoning behind why a company might want to run Min/Max. Contrary to JIT, Min/Max is based on a minimum and maximum amount of inventory, hence the term Min/Max. While not as dynamic as JIT, there are fewer problems with defective parts or materials, as companies maintain a safety stock. In addition, companies that run Min/Max often don't have those high freight costs for urgent shipments when there's a stock out or late shipment. Min/Max is perfect for companies with infrequent and cyclical demand, as they know they'll get an order, but aren't exactly sure when. Having the inventory ready at a moments notice, allows them to service customers immediately. In addition, companies can often lower their per unit freight costs and purchase prices, by buying and shipping in bulk. However, like JIT, there are some issues with Min/Max and they are summarized below.

• High Inventory Holding Costs: Because inventory must be available at a moment's notice, the month to month holding costs are higher.

• Higher Incidence of Damage: Inventory that remains for extended periods of time runs the risk of being damaged.

• Higher Incidence of Outdated Inventory: Much like the point above, holding inventory for longer periods means that inventory could quickly become obsolete and outdated.

In the end, deciding which inventory system to run should really be based on the company's business model, its customer's ordering patterns, and the market it services. Match inventory approach to customer demand. There are benefits and drawbacks to both approaches, but never assume that what works for another company, should work for yours.

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Jun 18, 2010

Types of Groups and Teams

Organizations contain many different kinds of groups, which can be categorized by common characteristics such as how the group forms, what the group does, and who its members are. The most basic distinction is between formal groups that are formed by the organization and informal groups that are not officially part of the organization structure.

Formal Groups
A formal group is created by the organization to carry out a specific set of tasks related to official organizational goals. Such groups are part of the formal organizational structure, and they appear on the organization chart as part of the hierarchy. One type of formal group is a functional group, a group consisting of a manager and all the employees who report directly to that manager. The goals of command groups are not usually confined to one project, and members' work is ongoing. In a traditional command group, one member (the manager) supervises the others and provides the link in the chain of command through which organizational communication and authority flow.

At times, organizations confront issues that require more sharply focused attention or more highly diverse expertise than a command group can provide. In such situations, managers may designate a task group, a group created to handle a narrower range of tasks in connection with solving a particular problem or accomplishing a specific goal. Also known as a task force, this group's members are typically drawn from two or more command groups and may continue their roles in the command groups even as they serve on a task force.

Whether they are called task groups, task forces, committees, or other names, such groups are all part of the formal organization; organizations often have their own names for the formal groups they establish.

Task groups may be temporary or they may be permanent. Once temporary task groups complete their work and achieve their short-term goals, they disband. Permanent task groups such as standing committees conduct ongoing work and rarely disband. New members are sometimes added and members who leave are replaced, but despite such changes, permanent task groups usually continue their work dealing with recurring issues.

Informal Groups
An informal group is a group voluntarily formed by its members rather than by the organization. Members form these groups to serve social needs or to pursue common interests that may or may not relate to organizational goals. Informal groups often arise spontaneously in the normal course of interactions among group members, and employees and managers may be members of several informal groups.

One type of informal group is the interest group, a group created by members with a common purpose, agenda, or concern. These concerns may or may not be related to organizational goals. Another type of informal group is the friendship group, a group that arises in response to a social attraction among members rather than from a unifying interest. Friendship groups often develop spontaneously when individuals work together, and a friendship group linking members of a formal group can improve interpersonal communications while making work more enjoyable.

• A problem-solving team consists of a group of employee and manager volunteers who meet regularly to discuss methods for solving problems with products, processes, quality, or the work environment. Problem-solving teams generally make recommendations but cannot make changes without management approval. Many organizations create problem-solving teams as the first step toward encouraging greater employee participation.
• A special-purpose team, also called a cross-functional team, is made up of members with diverse levels of experience and knowledge who work together on a specific activity. In many plants, such teams work on ways to improve product quality; in other plants, they consider how to improve workplace conditions.
• A self-managing team is a team in which members are responsible for virtually all aspects of an operation or production process. The team operates fairly autonomously, without a management-designated leader, and members generally handle a variety of team tasks, sharing collective responsibility for the group's work.

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Jun 17, 2010

Push-Pull Systems

“Push-Pull” refers to the dynamics between a supplier and a customer. In this discussion, suppliers and customers may be internal – within the organization – or external.

Suppliers “push” products to their customers by marketing; customers “pull” products from suppliers by placing orders.

A “push” strategy may be interactive, as in the case of a telephone call to a customer. It may be non-interactive, in the case of a commercial message through the media. The key point is that a “push” strategy markets finished goods from “warehouses”.

A “pull” strategy waits for and responds to customer demand. This approach, if coupled with sufficiently quick production to meet customer demand, may require no pre-production and no warehoused inventory.

A prime example of a company using mixed – “hybrid” – strategy would be Dell Computer. Raw materials – components – are pre-ordered and warehoused. Despite their marketing “push”, the computer is not assembled until an order is placed – so the production strategy is “pull”. There is a boundary at the start of the assembly process.

Push-Pull Systems in Lean Manufacturing
A goal in lean manufacturing is to use a hybrid push-pull system. This means that:

•Do not build until an order is placed (whether from an external or internal customer)
•Do not store products or raw materials
•Receiving an order for a product triggers orders for its raw materials
•Low cost and high volume products may be pushed; high cost and low volume products may be pulled
•It is important to define boundaries between the push and pull systems

For example: you manufacture three models of a widget. Half the cost of a widget is one component, where each model uses a different but expensive alloy. Every widget also uses some inexpensive, standard fasteners. You likely keep the fasteners in stock, but place orders for the expensive alloy component only when a customer orders it.


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Jun 7, 2010

Decision Making Process

Managers facing either programmed or non-programmed decisions can follow this six-step process for more effective decision making. Of course, there is no guarantee that managers who apply the process will make correct decisions, but they will increase the odds of achieving good results.

Also, managers must take into account organizational goals and the broader implications of their own decisions when following the process. Although the steps are generally followed in order, managers sometimes lack the information to continue to the next step, or they uncover information that prompts them to return to earlier steps before the process is complete.
Step 1: Identify the Problem
The first step for the manager is to recognize the need for a decision and to define its parameters. Managers must be aware of a problem and analyze its scope and nature before they can take any steps to solve it.
• Recognize the problem. Managers recognize a problem by noticing changes in their organization's performance or changes in their internal or external environment that can potentially affect performance.
• Define the problem. Once managers recognize that a problem exists, they need to consider the elements that make up the problem and the relationships among the elements.
• Diagnose the situation. In this phase, managers gather additional informa¬tion and consider the causes of the problem so that they can come up with meaningful alternatives.

Step 2: Generate Alternatives
The second step of the process is to generate alternatives. It is usually best to try to identify standard and obvious alternatives as well as innovative and unusual ones. Standard solutions are those that come to mind with little thought; such as things that the organization or the manager has done in the past. Innovative approaches may be devel¬oped through such strategies as brainstorming—bringing people together and encouraging a free and open discussion of creative solutions to a problem
Managers can make better deci¬sions when they have a large range of alternatives to consider, because they will not feel pressured to choose an option simply because it seems to be the only available solution.

Step 3: Evaluate Alternatives
The third step in the process is evaluating the alternatives by considering the implications and the likely consequences of each. In this step, managers assess the attractiveness of each alternative and weed out those that seem unfeasible, inadequate, too expensive, or otherwise unacceptable. Of course, if a solution cannot be effectively implemented, or if it does not help the organization achieve its goals, then it's not a realistic alternative. Moreover, the way a decision might influence other parts of the organization or the environment is another consider¬ation.14

Step 4: Make the Decision
After evaluating the alternatives, managers make the decision. They select the best alternative by weighing the risks and benefits of each one. The manager must decide which alternative best solves the problem or takes advantage of the opportunity.
The manager should also consider the way in which the decision was originally defined. This may provide clues as to which alternative is truly best. For example, assume that the original goal was to reduce turnover as much as possible, regardless of the costs. If that is still the goal, the manager might choose an alternative that promises to reduce turnover substantially but that car¬ries a high cost rather than an alternative that would reduce turnover by a moderate level and cost only a moderate amount. If the original goat was to reduce turnover by a reasonable amount, or if that goal is more desirable now, the second alternative might be better.

Step 5: Implement the Decision
After they select the best alternative, managers implement the decision. Because decision-making managers generally depend on others to carry our decisions, they must carefully consider how implementation will affect these people and their functions. By openly discussing anticipated changes and expected results, managers can help their employees adjust to any changes that stem from deci¬sions.

Step 6: Evaluate the Results and Provide Feedback
The final step of the decision making process is to evaluate the results and provide feedback of the implementation of the chosen alternative.
This allows managers to see whether the results meet expectations and to make any changes needed to improve the decision or its implementation. If the original decision does not achieve the desired results, then perhaps the problem was incorrectly defined, or perhaps another alternative should be substituted. It is important to give the decision enough time to work before retracing the decision-making process in search of another solution.

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Jun 5, 2010

Managerial Functions

The job of management is to help an organization make the best use of its resources to achieve its goals. To accomplish this objective managers perform four essential managerial functions: planning, organizing, leading, and controlling .

Managers at all levels and in all departments- whether in small or large organizations, for- profit or not-for-profit organizations, or organizations that operate in one country or throughout the world- are responsible for performing these four functions. How well managers perform them determines how efficient and effective their organization is.
Planning is a process that managers use to identify and select appropriate goals and courses of action. There are three steps in the planning process: (1) deciding which goals the organization will pursue, (2) deciding what courses of action to adopt to attain those goals, and (3) deciding how to allocate organizational resources to attain those goals. How well managers plan determines how efficient and effective their organization is- its performance level.3

The outcome of planning is a strategy, a cluster of decisions concerning what organizational goals to pursue, what actions to take, and how to use resources to achieve goals. A low-cost strategy is a way of obtaining customers by making decisions that allow the organization to produce its goods or services cheaply so that prices can be kept low.

Planning is a difficult activity because normally what goals an organization should pursue and how best to pursue them – which strategies to adopt- is not immediately clear. Managers take risks when they commit organizational resources to pursue a particular strategy. Either success or failure is a possible outcome of the planning process.

Organizing is a process that managers use to establish a structure of working relationships tat allows organizational members to work together to achieve organizational goals. Organizing involves grouping people into departments according to the kinds of job-specific tasks they perform. In organizing, managers also lay out the lines of authority and responsibility between different individuals and groups, and they decide how best to coordinate organizational resources, particularly human resources.

The outcome of organizing is the creation of an organizational structure, a formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals. Organizational structure determines how an organization's resources can be best used to create goods and services.4

In leading, managers articulate a clear vision for organizational members to follow and energize and enable them so that they understand the part they play in achieving organizational goals. Leadership depends on the use of power, influence, vision, persuasion, and communication skills to coordinate the behaviors of individuals and groups so that their activities and efforts are in harmony and to encourage employees to perform at a high level. The outcome of leadership is a high level motivation and commitment among organizational members. 4

In controlling, managers evaluate how well an organization is achieving its goals and take action to maintain or improve performance. If standards are not met, managers take action to improve performance.

The outcome of the control process is the ability to measure performance accurately and regulate organizational efficiency and effectiveness. In order to exercise control, managers must decide which goals to measure- perhaps goals pertaining to productivity, quality, or responsiveness to customers- and then they must design information and control systems that will provide the data they need to assess performance. The controlling function also allows managers to evaluate how well they themselves are performing the other three functions of management- planning, organizing, and leading- and to take corrective action.

The four managerial functions- planning, organizing leading, and controlling- are essential to a manager's job. At all levels in a managerial hierarchy, and across all departments in an organization, effective management means making decisions and managing these four activities successfully.

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Jun 2, 2010


Why Auditors are Needed

ISO 9000 is an international standard developed to assist organizations to implement and operate effective quality management: systems. In a perfect world it might be sufficient lo publish an environmental standard and expect organizations around the world to conform on their own for the benefit of their customers and themselves.

In such a world, certification would be of no concern. Unfortunately, ours is far from being a perfect world. Even in an imperfect world, organizations would not need a certification process if there were a sin¬gle world authority that could mandate adoption of the standard and enforce adherence. The International Organization for Standardization (ISO) has no authority to mandate or enforce its standards; its job is to develop standards through its international committees. Individual organizations decide whether or not to use the standards. Any organization worldwide is free to adopt or not adopt ISO 9000. The decision is inherently an internal one, although organizations may feel pressure from customers or other interested parties.

Internal and External Auditors
Organizations seeking to use the ISO 9000 QMS model need "independent" observers verify conformance with the QMS and its constituent elements. These independent observers are the auditors. Auditors include employees of the organization and employees of a third-party registrar firm. While it is not normally a problem for third-party auditors to be independent, objective observers, it is an issue for internal auditors. Internal auditors should never audit their own organizational component (i.e. department, function, group). For example, an engineer should never audit the engineering department which he or she is assigned. Internal auditors must not audit their own work.

Auditor Qualification

ISO 10011-2 details the qualification for QMS auditors. Qualification criteria include the following:3
 Education—at least secondary (high school) or equivalent.
 Demonstrated competence-in clearly and fluently expressing concepts and ideas
 Orally and in writing.
 Training—to ensure competence in carrying out and managing audit, including:
- ISO 9000
- Assessment techniques
- Planning, organizing, communicating, directing
 Experience-four years relevant workplace experience, of which at least two years should have been related to quality assurance activities. Before assuming respon- sibility for performing audits, should have participated in a minimum of four audits,
 For a total of at least twenty days.
 Personal attributes-must be open minded, mature, possess sound Judgment, an- alytical skills and tenacity. Must have the ability to perceive situations realistically. understand complex operations, and understand the role of individual units with;
 The overall organization.
 Lead auditors have the same qualification criteria as auditors, but require more experience and demonstrated leadership capability (ISO 10011-2, clause 11).
In addition to the requirements for demonstrated auditor skill, knowledge, and expe¬rience, auditors are now required to demonstrate knowledge of the eight quality man¬agement principles on which ISO 9000:2000 is based.

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