Management Of The Contract Process Through Iso9001
- Date: 2008-06-02 - Word Count: 616
Share This!
In an effort to define an effective set of management processes, ISO 9001:2000 has a section dedicated to the management of the contract process. Earlier versions of the Standard (e.g. ISO9001:1994) defined this activity as Contract Review, a clear indication of its nature and objective. ISO 9001:2000 has located it in a section (7.2.2) "Review of requirements related to the product". In both cases the objective was to ensure that organisations were able to, and required to, clearly assess the customer requirements prior to entering into a contract, and also to ascertain their capability to meet those requirements.
But isn't this obvious? Possibly, and no one is claiming any originality for this inclusion in the Standard. The real question is what led the compilers of the Standard to believe it to be necessary to re-state the obvious. How often as individuals have we been told, "I didn't know you meant that", or "Oh, that's what you meant"? These are clear indications of a supplier's misunderstanding of the customer requirement, OR a lack of understanding of how to meet the customer requirement, OR simply an inability to meet the requirement; maybe in most cases, a combination of these leads to a customer becoming discontented. Contract Review as we will call it here, is designed to eliminate any misunderstanding of the requirement, while providing an assurance of the supplier's ability and capability to meet the requirements.
At its simplest, the requirement leads the potential supplier to fully understand the customer's needs and expectations, while assessing his (the suppliers) ability to adequately meet those needs. This ability isn't simply confined to the production and delivery of a product or service; it includes provision in a time specific domain and at a cost acceptable to the client. Also, there is an implicit requirement, if not otherwise specified, that the product is fit for purpose, conforms to legislative requirements, and will be supported in an appropriate manner after sale. The Standard requires the potential supplier to verify this prior to the submission of a bid or quote.
Assuming an acceptable bid, the next step would normally be the delivery to the supplier of a contract or purchase order. The Standard requires a review of this document prior to acceptance, to confirm the continued acceptable status of the requirement and the ability of the organisation to meet the demands of the offered contract. This latter element might seem obvious to the point of being unnecessary, but with any organisation there is a great temptation to accept any and all orders, particularly during a general down-turn in business prospects, and to worry about the consequences later. This strategy is not good for either party, so the requirement is for the potential supplier to conduct another review where key aspects of the proffered contract are compared to the organisations ability to deliver to the requirements. These include: - Ensuring that the product (or service) requirements are (adequately) defined. - Any requirements that differ from those previously expressed (the bid invitation and quotation) are resolved. - Confirming that the organisation has the capacity to meet the defined requirements.
Most observers of this review requirement would probably agree on the reasonableness of the requirements, and maybe add further detail, but independent audit experience suggests this review is seldom carried out with any rigour, frequently being confined to a cursory assessment by a sales department manager, more concerned with incoming order value than the organisations technical and administrative ability to deliver.
If companies are to improve their image in the market place, and with their customer base, the requirement to seriously review the commitments they are about to make with any new contract is an essential step towards this improvement strategy.
Copyright (c) 2008 Ed Bones
But isn't this obvious? Possibly, and no one is claiming any originality for this inclusion in the Standard. The real question is what led the compilers of the Standard to believe it to be necessary to re-state the obvious. How often as individuals have we been told, "I didn't know you meant that", or "Oh, that's what you meant"? These are clear indications of a supplier's misunderstanding of the customer requirement, OR a lack of understanding of how to meet the customer requirement, OR simply an inability to meet the requirement; maybe in most cases, a combination of these leads to a customer becoming discontented. Contract Review as we will call it here, is designed to eliminate any misunderstanding of the requirement, while providing an assurance of the supplier's ability and capability to meet the requirements.
At its simplest, the requirement leads the potential supplier to fully understand the customer's needs and expectations, while assessing his (the suppliers) ability to adequately meet those needs. This ability isn't simply confined to the production and delivery of a product or service; it includes provision in a time specific domain and at a cost acceptable to the client. Also, there is an implicit requirement, if not otherwise specified, that the product is fit for purpose, conforms to legislative requirements, and will be supported in an appropriate manner after sale. The Standard requires the potential supplier to verify this prior to the submission of a bid or quote.
Assuming an acceptable bid, the next step would normally be the delivery to the supplier of a contract or purchase order. The Standard requires a review of this document prior to acceptance, to confirm the continued acceptable status of the requirement and the ability of the organisation to meet the demands of the offered contract. This latter element might seem obvious to the point of being unnecessary, but with any organisation there is a great temptation to accept any and all orders, particularly during a general down-turn in business prospects, and to worry about the consequences later. This strategy is not good for either party, so the requirement is for the potential supplier to conduct another review where key aspects of the proffered contract are compared to the organisations ability to deliver to the requirements. These include: - Ensuring that the product (or service) requirements are (adequately) defined. - Any requirements that differ from those previously expressed (the bid invitation and quotation) are resolved. - Confirming that the organisation has the capacity to meet the defined requirements.
Most observers of this review requirement would probably agree on the reasonableness of the requirements, and maybe add further detail, but independent audit experience suggests this review is seldom carried out with any rigour, frequently being confined to a cursory assessment by a sales department manager, more concerned with incoming order value than the organisations technical and administrative ability to deliver.
If companies are to improve their image in the market place, and with their customer base, the requirement to seriously review the commitments they are about to make with any new contract is an essential step towards this improvement strategy.
Copyright (c) 2008 Ed Bones
Related Tags: iso 9001, iso, iso 9000 audit, iso 9000 consultants, iso 9000 vs iso 9001, iso 9001 auditor, iso 9001 certification, iso 9001 consultant, iso 9001 consultants, iso 9001 definitions, iso 9001 online, iso 9001 procedureiso 9001 registrar, iso 9001 wiki
Ed Bones formed Meon Consulting to assist clients with managing their businesses in a manner compliant with ISO 9001/14001. Ed had earlier held a number of senior positions with big companies in the UK, Europe and the USA. He has written and delivered lectures on quality improvement and TQM. www.rent-an-auditor.co.uk Please visit www.rent-an-auditor.co.uk/contactus.html to obtain your FREE copy of the Presentation. Your Article Search Directory : Find in Articles
Recent articles in this category:
- The No. 1 Rule For Projecting Confidence - Speak With Authority
One of the most important characteristics a person can project in a business setting - or any situat - After the Autumn Checkout European Debt Crisis and U.S. Brewing Rebound
In the commotion caused by the Fed on interest rates come to an end, the "disastrous" for the euro a - Advantages Of Arcade Game Rentals
There are many different advantages to arcade game rentals. Most people need something to release th - A General Primer on Truck Cargo Nets
In modern highways it is quite rare to see truck cargo nets in action, this is because they are usua - The United States Will Burst More Severe Financial Crisis
Not long ago, suddenly announced that the central bank to raise interest rates, the interest rate hi - Niche Marketing Profits - 3 Easy Steps to Finding a Profitable Niche Market Income in 10 Minutes
Like most beginners I was having a very difficult time trying to find a niche market to earn extra m - The Importance of Hospitality Management Consulting Firms Toronto
Businesses and the managers that help guide any business are in a constant state of improvement and - New Keynesian Theory Label
2010 winner of the Nobel Prize in Economics three theories have been labeled as "New Keynesian" labe - Federal Reserve Pouring Money QE2 Unpredictable Fortune
U.S. economist Milton Friedman proposed a "throw the cash from a helicopter" view, while the practic - Fiscal Consolidation Should no Longer Delay
British Chancellor of the Exchequer George Osborne today announced fiscal consolidation policy, shoc
Most viewed articles in this category:
- Common Financial Problems to Avoid
One must first change their habits and not procrastinate. American Consultants Inc at offers key fi - How a Bad Hire Can Hurt Your Business
What's worse - hiring the wrong person or not hiring anyone at all? Companies can become almost des - Joel Comm Is Dr. Adsense
What is Adsense? If you are new to making money online and net marketing, you may not know what Ads - 5 Steps For A Dynamic Wealth System Online
Recipe: Opportunity + knowledge + Dynamic Wealth System + Your Action = Massive Success!!! Step 1 - How To Stop Foreclosure
Losing your house to a foreclosure can be very scary. There are times when circumstances are ou - How to Always Pitch A Strike
As business owners, we are always working on new ways to convince people to become customers, client - Membrane Diffuser Solutions for Wastewater Treatment Systems
In the aeration basin of a typical wastewater treatment plant there are both organic and inorganic m - Another Year Hating Your Job or Loving Life?
Copyright © 2007 Mary Foley I've come to the conclusion that to be successful - really successf - Dyestuff Industry In India And China
World demand for dyes and organic pigments to touch $10.6 billion in 2008According to a study on dye - Cma-cgm Case : the Series of Lawsuits Continues in Syria, Lebanon, Egypt, France, England and the United States
Damietta company case : The series of lawsuits continues in Syria, Lebanon, Egypt, France, England a