Should Auditors add value?

A lot of our customers, and as I teach students and QMII alumni, have asked me about auditors, particularly internal auditors, who are pressurized to do quick audits and preferably without too many NCs (Non Conformities). Then there are auditors who have opinions (!), some who have been auditing for many years and start thinking they have the best advice. So who is a good auditor? What is the correct role of an auditor?

Here is what I think.

I first like to refer our alumni to an article I wrote some years back on “embracing audits and not fearing them”:

If auditors could improve a system then Enron would still be around. It is the management that improves the system. Their dependence on auditors weakens the system. A weak management needs advice! Managements including Top Management should be challenging the auditors against requirements and appreciating the inputs to be used in the P-D-C-A (Plan-Do-Check-Act) cycle and playing their part at the A-act stage to review the system (refer clauses under ISO 9001:2008 5). Once this fundamental is clear this conflict between auditors and managements (Auditee) will not remain significant.

Nowhere in ISO 9001:2008 does the standard ask the auditors to focus on non-conformities (NCs) Clause 8.2.2 urges auditors to look for conformity. So the intent of an auditor should be to look for conformity (unlike inspectors who go seeking non conformity). "The only bad NC is the one you do not know about - IJ Arora", so if while looking for conformity they do find a NC both the auditor and auditee (as also the audit client) should be delighted and use the input to do correction and CA (Corrective Actions). 

Of course the fundamental requirement is that the NC be based on a requirement being shown clearly by objective evidence to have not been met. A well written NC is worth its weight in gold. It is the starting point for correction, drives CA and when closed provides valuable data points, leading to data which the managements must convert into information which when analyzed enables PA (preventive Action) and as we look ahead to ISO 9001:2015, it will replace the PA and provide the input for risk assessment at the P stage of the P-D-C-A cycle. 

If only the auditors would stop trying to replace the managements, stop adding value to audits by giving advice, both the auditors and the managements would be better off.

The Sindhuratna Accident: A System Failure in the Indian Ministry of Defense

Resignation of the CNS (Chief of Naval Staff) of the Indian Navy (IN) a System Failure:

In the August 30, 2013 blog I wrote about the explosion on board the INS Sindhurakshak, a Russian built Kilo class submarine as a part of the Indian Navy submarine arm and the tragic death of 18 of its crew. My assessment of this being a system failure is now quite substantiated by the ill-fated accident on the INS Sindhuratna, another Russian built Kilo class submarine, which took the lives of two officers, and consequent resignation of Admiral DK Joshi as the CNS. I knew DK personally; we were students in the ASW specialization training in Cochin. A very fine upright officer let down by a failed system. Dr. Deming said: “a bad system will let down a good man every time”.

The ill-fated Sindhuratna was commissioned into the Indian Navy on November 19, 1988. The Russians operated the boat for about a year on trials and weapons testing before handing it over to India. On the date of  the accident the sub had effectively been in service for 26 years. These boats  are usually sent for a half-life (10 to 12 years) refit to Russia or done by the Indians in Vishakhapatnam, depending on the capacity of the dockyard. The major refit virtually rebuilds the submarine from its casing to the pressure hull. All hull valves are serviced and/or replaced and where advances have taken place new weaponry and sensors are replaced. The sub after such a refit is good for another 10 years. The pattern is similar to ships in the mercantile marine where the full term certificate is issued for 5 years (Clause 13.7 of ISM Code) and the ships maintained accordingly. Today most good ship registries as the Liberian ship registry will not register a vessel older than 20 years. However the Indian Navy squeezed out another two years of service from this boat. And finally the active life of this submarine ended in December 2013. Yet the submarine was operating…

The Achilles heel in a conventional submarine is its set of batteries. A Kilo class submarine is driven by 240 batteries, each weighing 800 kilograms. The batteries provide a service life of 200 fully charged to fully discharged cycles or exactly 4 years whichever comes first, and then they are due for change. The older batteries do not provide the juice necessary for running under water, require frequent charging, and emit excessive hydrogen and pollute the atmoshers inside quickly. The chlorine vapors and leaking electrolyte are hardly congenial to creating the safe work environment for performance as a warship (ISO 9001:2008 clause6.4).

 The Sindhuratna's batteries in use had completed their life cycle in December 2012. Lack of planning, and incorrect implementation of a system approach to managing such a vital arm of the Navy is adversely affected by a non-committed incompetent top management (TM) both at the ministerial level and at the administrative level. Even if the IN is projecting these requirements the TM still rests in the ministry where the defense minister may not even understand the nuances of the requirements. Further, interference in the safety levels occurs when the national operational requirements remain unchanged in spite of the navy’s underwater arm being  hugely depleted. This result in the IN pressurized to stretch the service life of these aged submarines with batteries which are a ticking bomb. In this particular case, it is reported that the  Sindhuratna underwent a minor refit over the last four months and it was on its first sea trial or Task 2 sea examination before it could be re-inducted into active service. It was however at sea with these batteries whose service life had expired! Batteries which should have been junked 15 months ago. Has not the IN had accidents or near misses before related to old batteries? 

So the question is why are the submarines being sailed in this state? Why were the batteries not replaced timely? Surely the CNS would have asked for these from the Ministry of Defense (MoD). The Defense Minister (DM) needs to understand the part that batteries play, even if he is just a political head, he needs the administrative organization to explain this to him and meet the Naby’s requirements. The ship didn’t get new batteries because the procurement process of the MoD failed. It perhaps did not take the CNS’s inputs correctly. When repeated accidents occur, the CNS is aware more accidents will follow because the system in the MoD has failed. He however has no recourse or face to show his men as to why he is sending them out in unsafe vessels. Thus his resignation.

A system which is failing needs to recognize the root cause of the failure. Who is responsible for this sad state of affairs? Clearly the MoD. Battery projections for the submarines are not made at the last minute. Naval Headquarters (NHQ) processes these requests timely and at least 3 to 4 years in advance. In any case battery requirements are periodic and well known to a country which has been operating submarines since 1967. The fleet is required to have a set of batteries as a reserve. It is therefore a system failure at the national level. Authorities higher than the CNS need to take responsibility and then the new incumbent should look at the system failure. There is no room for politics in such matters of national importance. If the nation’s defense forces lose faith in the system, then the loss of morale cannot be far away. “Morale is to physical as two is to one” - Napoleon. 

There is an urgent case for studying the system that runs the navy. The resignation of the CNS is a good example but not the solution.

ISO 9001 - The Revision Process

In these last few months I have had a hectic teaching schedule where I worked on teaching ISO 9001 and ISO 14001. It was only natural that students would have questions on the changes / revisions coming up for ISO 9001 as the ISO 9001:2015 version is being considered. Many of the students wanted to know if there was a process followed to update standards or was it just ad-hoc when some one felt the need and so on. 

At Huntington, WV with the CO and students

CG students in the 5 day RABQSA certified training, in Huntington and Duluth had questions and wanted me to explain the procedure. I also received an e-mail from a student of ISO 28000 from Qatar asking a similar question. This prompted me to write a few lines on the subject. In brief here is the process for updating the standard.

    The ISO 9001 as many good thoughts has its roots in the USA. It was first published as MIL-Q-9858 in by the Department of Defense in 1959. In 1969 NATO adopted it, subsequently the UK published it as BS5750 in 1979. As ISO 9000 it was first published in 1987. The first real revision came in 1994 and this was followed by a revision in 2000. The present standard came out as ISO 9001: 2008 in 2008. The 2008 version did not have many changes. It did stress on the outsourced processes and a few changes.

  

   This new version, expected in September of 2015, however has major changes. The fundamentals remain unchanged but more standardization has been introduced to enable ease of integration of standards. More on this in a separate article.

     The main stages of a standard development are:

1. PWI: This is the Preliminary Work Item where the preliminary work is done.
2. NP or NWIP: New Work Item Proposal. The proposal is put together at this stage. 
3. WD: Working Draft. This is the preparatory stage. 
4. CD: Committee Draft. 
5. DIS: Draft International Standard. This really is the inquiry stage. 
6.  FDIS: Final Draft International Standard 
7.  IS: International Standard. This is the stage when the finally approved standard is published.

In the development of the ISO 9001:20015, the standard reached the CD stage of voting in June 2013 and the voting closed in August 2013. This is a stage where the CD is distributed to the members of the committee. It is these committee members who can at this stage distribute the CD to public. We at QMII  re-reviewed a copy at this stage. (I shall be writing on some of the expected changes shortly.)

The DIS is expected sometime in August 2014. Traditionally the DIS is available to members of the public. It is expected that the FDIS ballot will close in August 2015 and the revised ISO 9001 will be published in September 2015.

QMII conducted the RABQSA certified EMS LA (Environmental Management System Lead Auditor) training for the USCG at Yorktown. The ISO 14001:2004, together with ISO 9001 and ISO 27001 will have a revised addition in 2015. All standards in future will incorporate the HLS (High Level Structure).

ISO 9001:2015 - Expected changes from ISO 9001:2008

I did make an introductory mention to the ISO 9001:2015 standard expected to be released in September 2015. The principled changes are mentioned there. Some QMII students and alumni have asked me to write a few introductory comments on the expected structure. I have already written on the HLS (High Level Structure). In this second blog entry on 9001:2015, I want to introduce our readers and followers of my blog to the expected changes to ISO 9001:2008 when it is revised and available as ISO 9001: 2015.

In the terms and definitions itself, some changes are expected. Stakeholder remains a term but the  preferred term “interested party” has been introduced.  Audit, conformity, continual improvement, correction, corrective action, documented information, effectiveness, management system, measurement, monitoring, non-conformity, objective, organization, performance, policy, process, requirement, risk, competence, and  top management , have now been defined. 

ISO 9001:2008 has stood the test of time, and there are statistics to clearly show that there is satisfaction with the current version. However, with the change in environment and to ensure the standard will continue to deliver in the future, changes are required. The standard must meet not only customer expectations but must consistently provide goods and services that meet the statutory and regulatory requirements. In the revised standard, the term “product” is being replaced by “goods and services.” Some of the standards had different definitions and or implications for the same term. Now these terms have been standardized for all the standards. The terms “outsourced” and “purchasing” have been removed and replaced with "external provision of goods and services". Another major conceptual change is that “design and development” has been replaced by “development.”

In ISO 9001:2008, clauses under 7.3 took us from design and development planning (7.3.1) to inputs (7.3.2) to outputs (7.3.3) to review (7.3.4) to verification and validation to control of design and development changes (7.3.4 thru 7.3.7). However, the standard allowed exclusions under 7.3 since not all organizations go through each of these stages. This has now been done away with. 

The principles in clauses grouped under 4 have not changed in concept, except that clause 4.3 has left the determination of the scope of the organization to the organization. The clauses under 5 are for leadership and these in principle have not changed. Clauses grouped under 6 provide the requirements for planning. Clause 6.3 is a change in that it requires an organization to plan the changes. It replaces the concept of integrity of the system covered under clause 5.4.2 of ISO 9001:2008.

As we study what to expect under clauses 7, we see overall the concept is the same. Except in 7.1 resources, there are changes. Presently in ISO 9001: 2008, clause 6.3 & 6.4 provide the requirements for infrastructure and work environment. This has been elaborated and process environment defined together with infrastructure, monitoring and measuring and in 7.1.5 Knowledge. This new requirement on how organizations manage knowledge, understand it and deal with it is a new concept. It is still not clear if this concept will remain and be approved by the committee. Clause 7.5.3 control of documented information replaces the ISO 9001:2008 clauses 4.2.3 and 4.2.4.

ISO 9001 Certification versus ISO 9001 Conformity

All organizations can benefit from making sure their organizational management system conforms to ISO 9001.

Certification provides marketing benefits to organizations whose customers value the independent certificate and the registrar that issues it.  Certain new customers may provide a new supplier with a certified management system with an opportunity to prove they can fulfill their requirements.  Certification reduces the risk for a new customer trying out new suppliers.

Existing customers often are not impressed with certification because they already know how well your organization, as a system, performs.

For organizations that work in markets with customers who have no interest in certification it is better to quietly make sure your management system conforms to the standard.  This provides confidence that requirements will be fulfilled and are being fulfilled.  It also enables continual improvement of products, processes and the management system to prosper and grow.

Certification has initial cost and then recurring cost when the registrar comes in at least every 6 months. The benefit of conformance is the system is always ready and when marketing demands require you can go ahead with certification.

To learn more about the benefits you can email me at info@qmii.com

ISO 9001:2015 ... What can we expect?

In this fast moving global environment the flexibility permitted by the international standards, whereby interpretation of the standard, correctly makes it applicable to "all organizations, regardless of the type, size and product provided" - Clause 1.2 of ISO 9001. Never the less to keep the standards aligned it is essential that they are updated on a regular basis. TC-176 works on ISO 9001 and considers and evaluates the inputs from users and SMEs (Subject Matter Experts) in the intervening period. The ISO standards are generally revised every 5 years. ISO 9001:2008 is now due for a revision.

In 2015 we will have the revised standard which should come out as ISO 9001:2015. QMII keeps track of the changes and ensures our alumni and students are always updated.  The process involves submitting  our comments via bodies affiliated with BSI in the UK and ANSI in the USA.  The CD is available and there is a lot to sort out before it becomes the DIS. However I do see that lot of training providers have already put out the draft standard for review! In fact some are offering courses to learn it!!

We should really be waiting for the DIS. Once that happens we too will update our course material to prepare our students for the changes in 2015. There are no worries there for the current users of the Standard. As always every organization is given a period of two years to comply with the new standard. Thus ISO 9001:2008 should tentatively go out of date sometime in 2017.

You can review the scrubbed version here. Please remember it is for "Review Only" as an advance copy. I would encourage you, our readers, to challenge yourself by reviewing the scrubbed version and recognizing the changes compared to the ISO 9001:2008. You may comment on the differences here, on the scrubbed version link or by sending me an email at iarora@qmii.com.

Please watch this blog. I shall soon put my comments to keep you updated and advised.

Why should SME (Small and Medium Enterprises) implement ISO 14001?

Our senior consultant Tom Venafro has been working on EMS (Environmental Management Systems ) all his life. I was having a discussion with him and asked him, “Why should SME (Small and Medium Enterprises) implement ISO 14001?” In fact more, why are they reluctant to meet this responsibility. Are these companies even aware that just being efficient (using a system based on ISO 9001:2008) may ensure efficiency, however unless the byproducts and pollutants which are the result of a process are controlled the organizations will eventually see a declining “cash in the bank”. Going further, and learning from 9/11 we know that an efficient system should not only take care of the environment to be profitable and viable but must be secure. The implementation of  a system to protect the global supply chain based on ISO 28000 needs to be considered as an asset. Social responsibility is integral to good business today. On ISO 14001 Tom had the following views:

Small and medium business should be considering ISO 14001 EMS for their sustainability in more ways than one. Of course having a certified EMS will provide both a green "sustainable" future as well as a green "monetary" bottom line.

Aside from and implemented EMS being the right thing to do for the environment, it also reaps financial benefits.  Recycling programs means less waste to landfill, less regular waste pick-ups more money saved. The EMS will provide the framework for a company to be a good steward of the environment and help reduce its impact on the environment. This equates to more control over pollution sources and less fines from regulators and huge "cradle to grave" liability.

These items are just the tip of the iceberg. Beneath the water line the hidden benefits begin to pile up. Employee moral improves, process organization and efficiency increases. Employee awareness from a EMS seeps into employee's home lives furthering green living.  These combined activities begin to make an larger positive impact on society. This eventually trickles down to economics, meaning that the positive cumulative effect of pollution prevention contributes to keeping costs to taxpayers low.

An EMS is the guide organizations should use to trigger constructive environmental thought. For example, 14001 clause 4.4.7 Emergency Preparedness and Response is meant for an organization to consider the environmental impact that can be caused from an emergency or natural disaster. This is not a normal consideration that would not usually be made.

The standard requires that employees understand the aspects and targets the organization is trying to obtain. Most importantly, they require that employees and contractors understand the consequences of their departure from specified procedures or operational controls.

Of course the EMS has the same customer benefits in the marketplace as ISO 9001QMS does.  Customers will ask and require a certified EMS more going forward. Having an EMS is a case of "sustainability".

Does implementing a Process Based Management System put my job at risk?

Recently while working with some students in a Lead Auditor class for ISO 9001 one of the students came up with a serious concern about his being committed to ISO 9001! His questions was “With a  well-documented Process Based Management System (PBMS) in place everyone will know what I do. So how can I then ensure the security of my job?”  Over numerous classes that I have taught, this question often comes in one form or the other. This is particularly relevant when I work in other countries where jobs are hard to come by. I am sure there are others who have this job insecurity as their  company begins the process of implementing a PBMS based on a standard. Their worry is “what is in it for me?”

Clause 5.5.3 of the ISO 9001:2008 requires the management to ensure internal communications with regard to the effectiveness of the quality management system. These internal communications must explain and address the doubts of the employees. The employees must appreciate that a bad system can let down the best man every time. Without a system the blame culture will prevail and overall efficiency be adversely affected. Management will then invariably ask “Who?” – meaning blame the employee, instead of asking “How?” and or “Why”- meaning how and why did the system let down the employee. In real terms with the system the blame moves from the individual to the system. Even if the employee’s incompetence caused the deficiency the system failed in terms of ensuring competence either by incorrect hiring, or training or continued education and so on. The organization should improve the system which placed an incompetent employee in a position where he/she could not perform, instead of blaming the employee. Disheartened employees are the result of being always blamed for poor work and the results, leading to the work environment (clause 6.4) not being congenial for achieving product conformity. How can any organization achieve continual improvement (clause 8.5.1) if deficiencies are not addressed.

Employees often forget that their job security is dependent on the organization constantly improving with the continual improvement cycle to be productive and viable. Without the improvements the organization itself will go out of business and so the jobs will be lost. Investing in a system approach and addressing deficiencies by corrective action(clause 8.5.2) can against the recurrence of non-conformities. As the data base builds and the employees can get the information from the data and analyze it (clause 8.4) can they predict potential NCs (clause 8.5.3) and so add value and therefore sustain the organization to enable the organization to continue to meet the expectations of the manpower. After all benefits are an outcome of the “cash in the bank”.

As the PARs (Preventive Action Requests) start coming in and the employee participation increases the system stabilizes creating the environment for innovation. The organization immensely benefits from innovative products (story of Apple is a case in point) and is therefore able to pay its employees better. A system approach therefore not only is an investment in retaining the employees (job security) but a sure way to ensure better future prospects. The success of the organization then contributes to the well-being of the society and the ultimate prosperity of the nation. We could stretch the benefit of the system approach further and say it would meet the futuristic stability too and ensure conduct which is socially responsible (SR). 

Should Auditors seek to find Non-Conformities?

Is the audit not complete unless a NC has been found?

“During a recent internal audit an employee performing a certain job, listed her actions slightly out of order from the written instruction.  The change did not affect the outcome in any way - it was basically comparable to making a pot of coffee and choosing to add the water first, even though the instruction says to add the coffee first.  Half of our team felt that it was a 'non-conformity' and the other half felt it was not. ” 

This is an interesting situation that was posed to me after a recent QMS LA (ISO 9001) course I led. I thought of sharing it on my blog as it touches on the principles of auditing, wherein auditors should look for conformity and not non conformity.  The answer lies in the difference between an auditor and a registrar. A good auditor, audits with no subjective opinion and does not go looking for NCs. Good Auditors go looking for conformity. When a preliminary audit conveys the impression of a NC an auditor should still give the Auditee the chance to show conformity. An auditor should not be there to "fix the Auditee", somehow give NCs and so on. Please refer clause 8.2.2 of ISO 9001 with regard to internal audits. The clause requires the organization to conduct "internal audits at planned intervals to determine whether the quality management system" "conforms to the planned arrangements" - it does not say go find how it does not conform! The clause requires the system to be "effectively implemented" not how it is not effective or not implemented. Sure if it is a NC it should be reported, as the only bad NC is the one we do not know about.

In this case, since the employee knows what she has to do, this should not be a NC. In any case knowing everything verbatim is never the intent unless it is a requirement as in the case of a nuclear reactor where actions in an incorrect sequence could cause a catastrophe.

Food Safety chain failure due to Poor Auditing or a victim of Top management Failure

The food related diseases have pointed to the failures in the food supply chain. Regrettably, the managements of these companies have without hesitation, pointed the finger at poor auditing, and further and even more to lack of appropriate requirements and guidelines! This is not surprising – considering that, the owners of the Titanic were very prompt in attributing blame to their Master! Concordia after Costa Concordia repeated history by blaming the Master! BP holds either Transocean responsible or the operators or anyone else but themselves!

When managements shirk away from their commitment to continual improvement of their system, (ISO 9001:2008 Clause 5.1) and chose to depend on auditors to improve the system it is a potent mixture for the death of the organization. If the industry was correct it might be a good idea then to have auditors as CEO's and let them run the companies and sole all the worlds’ corporate problems. We would then be surrounded by ENRON type debacles!

It is the managements who must retain the customer focus (Clause 5.2) and do all that is necessary to improve the system that runs the business and provide safe and wholesome food. The outbreak of food borne diseases is not an auditing failure- it is a management failure. Addressing auditing instead of the management failures would be like treating the symptom and not the root causes. The management must take on the responsibility for providing a quality policy (Clause 5.3) backed by their commitment (not the auditors commitment).The top management must set the measurable objectives leading to regular reviews to improve the system.

That the entire food chain starting from raw material to delivery of the finished product is the responsibility of the organization should leave no doubt. The failure of the chain is then is then a Top Management (TM) failure. Forgetting or mixing up that auditors and auditing are one of the many tools who provide input to the management to make decisions. When food organizations (for that matter any organization) leaves its decisions or passes its responsibilities to auditors that organization is doomed to failure (Clause 5.6.3). These defaulting companies get the audits and the results thereof. If they pay to ensure the system fails, it is their decision. Immature organizations forget that a deficiency (NC or CAR) is the starting point of correction and Corrective Action (CA). As the companies put in place a mature system they further appreciate the need to go beyond treating symptoms. Correction and CA will continue to cost the organization. Food chains will improve and meet the customer requirements when their reviews inclusive of audit inputs provide the data which can thence analyzed and interpreted to get the information to recognize potential problems and address them (Clause 8.4 & 8.5.3 of ISO 9001:2008).

The auditors and regulatory bodies can only do that much in the absence of uncommitted managements (read TM).

TITANIC TO COSTA CONCORDIA – USING THE ISM CODE IN THE TRUE SPIRIT OF THE SYSTEM APPROACH

Time, like an ever-rolling stream keeps moving.  Technology advances.  Civilization brings more and more rules.  Every tragedy from the Titanic to the Herald of Free Enterprise to the recent sinking of the Costa Concordia demonstrates one thing that does not change – human nature has its weaknesses.  Technology, to an extent, can produce the best of missiles but the man behind the launching mechanism retains the control and continues to be relevant.  Better educated, exposed and aware, perhaps, but still vulnerable to human frailties.  When organizations adopt the system approach, they set in place an atmosphere of continual improvement.

“A bad system will defeat a good person every time” – W. Edwards Deming.  This reminds me of a quote from the Cain Mutiny, which in essence says, “Navy is a master plan devised by the genius for execution by idiots”.  This master plan is the system, which should be so created that there is no need to blame the individual.  Every time the system fails, the management reviews and acts to work on the procedures that comprise the system.  Improve the system enabling better protection of the individual.

It is ironic that individuals who are assigned the designing and then implementing of the system often consider it a burden – little realizing that the system approach takes management away from asking, “Who” to asking, “How and Why”.  This results in further development of the system rather than blaming the individual who was simply working within the system.

In the maritime world, the P&I clubs may well be paying the insurance dues only after an individual is blamed, but the ISM Code in contradiction does not encourage the blame culture.  Good management personnel understand this.  Both the ISM Code and the process-based management system standard, ISO 9001, take management away from the blame culture and require continual improvement of the system.

Management, which can connect the clauses 4, 5, 8 and 9 of the ISM Code will understand and appreciate the fundamentals of the Code.  These members of management will reap dividends in terms of “cash in the bank”.  The term, “cash in the bank”, coined by QMII over 25 years ago, implies fewer to no accidents, resulting in greater customer satisfaction and an increase to the bottom line.  In the maritime world, the difference between a detention and a catastrophe really is the cost the company pays – the loss in revenue, the cash in the bank lost.  It implies loss of life, which in bare terms costs the organization.  Loss of a vessel can ruin the company.

If it is as simple as the correct implementation of the process-based approach, then why does management not get it?  Is it because the maritime industry is so drowned in day-to-day activities that it is more concerned with avoiding being detained, somehow getting away from Port State Control (PSC) scrutiny, to be unable to implement the ISM Code in the real sense?  Alternatively, is it that the old-fashioned top management (after all, those who go into management are a generation or two behind those who actually go to sea and operate the vessels) are not fully exposed to the true meaning of the system approach?

This analysis is not new.  Justice Sheen investigating the loss of the Herald of Free Enterprise found a “disease of sloppiness” and negligence at every level of the corporate hierarchy.  What did that mean?  It meant the system was not working.  In present-day man-made tragedies, we, too, conclude the system is not working.

Shore management and those at sea should already know the value of a correctly implemented process-based management system (ISM Code in conjunction with ISO 9001:2008).  The implementation of the Safety Management System (SMS) to prevent detention is not acceptable.  It should be one of the benefits of a good system. Aligning the system to just meet auditor requirements or take measures to prevent PSC actions is weakening the system.  The system will do that, however, the system should have a more honest, larger purpose where it welcomes nonconformities (NC)to enable management (both at sea and ashore) to fulfill their obligations under the ISM Code (clause 9).  Correction of NCs, followed by Root Cause Analysis does not end the cycle.

I have drawn this graph above to show the benefits of respecting NCs (CARs). As the data base builds information can be obtained from the data to objectively analyze it and get the trends and predict potential NCs. When a system is first implemented, the number of NCs will increase. This is because the system is now recording the deficiencies. As the data base builds the analytical ability of the system is able to get the desired information for the managements to resource the system (be it in hardware, equipment, training or manpower) and most importantly to recognize potential NCs. This then positively affects the bottom line as now we are tackling potential NC and not being reactive to NCs. There is a point in the system development of an organization where the NCs drop and the PARs (Preventive Action Requests) increase indicative of the employees having matured and embraced the system. This is the place where the management also sees innovative ideas coming up and the management taking a more socially responsible role.

Preventing detention too often becomes the Master’s primary responsibility to the shore based management.  For PSC activities not to reveal NCs is a daily short-term goal.  Actually, this is counterproductive to the expectation of the Code and the system approach in general.  It encourages “hood winking” the PSC officers.  In my experience at sea and in my interaction with seafarers I have come across incidents of seafarers being paid ‘bonuses’ to get a clean audit report. If management takes that path, true safety cannot be achieved.  The PSC officers are stakeholders in maritime safety at sea.  Why have the PSC officers come in?  They meet a public outcry and demand following the numerous tragedies over the years.  They detain vessels in order to prevent disaster at sea from occurring.  What would the management prefer – a catastrophe or a detention?  Which is less expensive?

In the selection of Top Management (TM) at sea, be it the Captain, the Chief Engineer or the Hotel Captain (on passenger vessels from the Titanic to Costa Concordia) – if the Master does not perform or does not conduct him-self professionally or as per expectations, whose fault is it?  Management ultimately picks the crews.  The hiring procedure needs to be targeted.  Those at sea are performing to the best of their abilities and working hard; it is their profession and life.  We must never forget that they are performing as per the selection criteria that management has set!  Often for seafarers the relationship with the vessel is from ‘gangway to gangway’. How does a company go about ensuring that its seafarers are equally invested in the success of the system? Some say that retention of seafarers is the answer. But is a high retention percentage indicative of a good ISM culture? The answer again lies in a better management system.  The Culture should filter top down. The blaming of individuals should shift to blaming the system in order to encourage a more open system.  There should be no fear in exposing NCs.

The only bad nonconformity is the one we do not know about.  A system should be created which welcomes nonconformities.  A detention is a NC, which has saved an organization from a likely catastrophe.  Detentions are expensive; therefore, the need to create an SMS in the true spirit so it ensures NCs are detected internally, well in time, enabling management to take corrective action to determine the root cause.  To do that after each mishap, management should not jump to the CHECK stage of the Plan-Do-Check-Act (PDCA) cycle.  

They should instead go back to the ACT stage and carry out better management reviews, leading to better planning followed by correct implementation (DO) of the system.  The system approach, correctly implemented, will lead to a system, which will work.  Moreover, when the system works, one of the many benefits will be few to no detentions.  The ISM Code is the basis for such a system.  An investment in a correctly designed system and the implementation together with active participation by management will ensure requirements are met.  When requirements are met, there will not be any detentions. Let us not prepare for audits, detentions and PSC exams.  That principle is incorrect.  Let management encourage those at sea, and those who manage the vessels from shore, (as the Superintendents, Port Captains, DPs and CSOs, etc.) to work together in the interest of a system which functions and leads to safety at sea.

The sinking of the Costa Concordia has brought into focus several SMS-related failures, from which timely and correct lessons must be learned to prevent the recurrence of similar catastrophic events.  These accidents will shape industry’s culture and motivate industry stakeholders to make vessel operations safer in an effort to continue to sustain the shipping business and ultimately create “cash in the bank”.

The ISM Code recognizes that human error is the cause of the majority of accidents.  The Code requires delineating responsibilities of the ship and shore side management, creating the system and then addressing the coordination of the ship-to-shore support.  If about eighty percent of marine incidents are caused by human error, companies then have the responsibility to create true organizational management systems, which help humans, prevent and mitigate such incidents.  The management system is documented to the extent necessary for effective planning, prevention, operation and control.  The most important parts of any management system are not documented as they involve leadership, care and coordination.

The fish-bone diagram above  indicates the principled working of a system. The inputs are worked on using the system to produce the desired output. The passengers coming on board will need the entire work spectrum indicated in the fish-bone diagram to work together under the Top Management exercising care and coordination for the output to be positive. For the satisfied passengers, to continue to patronize the company because, their expectations have been met in terms of the holiday, safety, and security and pollution prevention.

The fish bone diagram above has the vital rib – Care and Coordination – implying active and constant participation of the top management. The PDCA cycle at the Act stage (please see diagram above) requires the TM to act based on the review of the system. Audits are not meant to deliver changes or improve the system. If audits and auditors could improve a system, then auditors would be the CEOs of the shipping companies! It is the management that improves their systems. For this, they must understand their systems and lead the implementation of the system by example.  To do this, management must admit they also need to be trained.

The correct implementation of the SMS, based on the ISM Code, will ensure that ships operate safely.  The Code addresses the key provisions such as SMS objectives, safety and environmental protection policy, company responsibility and authority, designated person, master’s responsibility and authority, resources and personnel, shipboard operations, emergency preparedness, reports and analysis of nonconformities, accidents and hazardous occurrences, maintenance of the ship and equipment, documentation, company verification, and review and evaluation.  All of the provisions of the Code are designed to work interactively and in harmony with each other to enable the management system to be effective.  However, none of this can deliver the desired results without the total involvement and commitment of the company’s top management. Blaming individuals will only correct one person and not the system.  To improve the system, the root cause should be considered.  The management must take the blame for having a poor hiring process and lead the change by re-designing that process.  When the Captain at sea fails in his role, management must read it as the process having failed, not having been designed correctly.  It requires going back to the PLAN stage of the PDCA cycle.

One of the main risks that any shipping company encounters is the potential disconnect that can occur when the procedures in the SMS are not being followed by shore side personnel, seagoing officers and crew.  The worst that can happen to a company is when those ashore believe that the procedures are being followed, when in actuality, due to, for example, over documentation or lack of awareness and training, they are not.  Seafarers in our courses share experiences of over-documentation in certain companies where the ‘paper’ eventually takes more importance that the actual procedure. This disconnect again is indicative of a system not functioning.  It is indicative of a cookie cutter system based on generic templates (a common culture in the maritime industry).  The designing of a system must be based on the “As-Is” or current state.  If consultants are used to assist in designing the system, beware of those who promise to do it cheaply sitting in their offices and providing master solutions!  If you accept these, then as TM you have already sown the seed of a weed.  Do not expect it to give you roses!  Good investment at the PLAN stage of the PDCA cycle is vital, in terms of both money and time.  Investment in designing the correct system based on the existing state is vital to the success of the system.

Any major marine incident investigation, like the Costa Concordia, should focus on the ability of a company to effectively implement their SMS procedures and whether or not there were any gaps in how the SMS procedures were applied.

If a company believes it has a perfect system and rests on its laurels, it is doomed to failure.