Critical To Quality (CTQ) Objectives and their relationship with an organization’s Quality Management System (QMS)

In last month’s article I discussed how a QMS brings success to an organization. For example, a QMS can make an organization more successful if it is tied to both the structure and behaviour of its strategic, tactical, and operational levels of management.

In this article, I discuss:

• What are the properties of a ‘good’ QMS?
• What is a CTQ objective?
• What is the relationship between CTQ objectives and the organization’s QMS?
• How a risk commensurate determination/selection of the quality assurances and quality controls mechanisms enables the organization to achieve its CTQ objectives.

What are the properties of a ‘good’ QMS?

Simply speaking a ‘good’ QMS is one that helps the organization be successful. In a more analytical way, a ‘good’ QMS is seen through an examination of its actual characteristics and attributes.

To that point, in a blog that I wrote several months ago, I stated that the three most important characteristics of any QMS are that it is:

1. easy to use
2. continuously assessed for opportunities of improvement
3. embraced by all

These characteristics are often the first indication of ‘goodness’ that the human resources of the organization become aware of regardless of the roles and processes in the QMS that they are responsible for.

As for the attributes of a ‘good’ QMS, the human resources of an organization will encounter them when they attempt work activities like these:

• root-cause-analysis 
• the implementation of product or process improvement based on their awareness to known risks/threats to those very entities
• revising the context or scope definitions of the quality manual and hence revising the QMS itself

Specifically, in my own experiences I have found that the three most important attributes of a QMS are its:

1. availability
2. scalability
3. clarity

Why these three? … Well, first recall that a QMS quality manual exists for an organization’s human resources. Second, gaining improvements in the motivations for and the abilities of those human resources to generate the desired results are best fostered within a QMS that avoids complication, duplication, and ambiguity.

Please note that in Annex-1 of this article I provide examples of how the attributes of a ‘good’ QMS often manifest themselves in its operation. I also provide examples of why the characteristics and attributes of a ‘good’ QMS are very much aligned to business objectives that I feel are common to many organizations. 

What is a CTQ Objective?

A CTQ objective is an objective that is critical to the value an organization intends to deliver to its client, suppliers, employees or even its owners/shareholders. 

CTQ objectives can:

• exist for the organization’s people, process, and products. 
• be managed in separate ways by different people in the organization

For example, a CTQ objective can exist:

• at every level of an organization’s planning and management activities. This kind of CTQ objective is used to provide an indication of the success of an organization’s processes and outcomes with the overall obligation for delivering satisfaction/delight to its customers. This kind of CTQ objective can include but is not limited to objectives for:
  • customer growth or retention
  • process efficiency and productivity
  • the prevention of ‘escaped’ defects; i.e., the delivery of non-conforming goods to a client.
  • project event/milestone success indicators such as the absence of ‘must be resolved now’ action items being raised during a ‘move through this project gate’ review
• for a specific deliverable of the organization. This kind of CTQ objective can be specified by the customer, supplier or even the organization itself with the overall obligation of demonstrating that a product’s design is ready for manufacturing and release. Examples of these kinds of CTQ objectives can include but are not limited to:
  • key characteristic(s) of a product such as its conformity with its required weight and physical dimensions
  • the product’s successful qualification to a specific set of qualification and/or compliance tests dictated by an implicated regulatory authority

Please note that in Annex-2 of this article I provide examples of CTQ objectives broken out by the three levels of management within an organization.

What is the relationship between CTQ Objectives and the organization’s QMS?

CTQ objectives define how value is measured by the organization. The QMS speaks to every business process relevant to an organization. As such, the relationship between CTQs and the attributes of the QMS is going to be found in every employee’s:

• understanding of/awareness to the purpose and scope of the QMS (documented in the organization’s quality manual).
• enthusiastic and dedicated contributions towards meeting the goals of the organization. For example, those contributions are also often considered as characteristics of a good QMS in operation because every employee:
  • understands the importance of their role and how they are intended to deliver success
  • is focused on customer satisfaction
  • acts to increase productivity, reduce waste, lower costs using the organization’s defined quality control and quality assurance mechanisms. This includes the employee’s ability to, when necessary or appropriate, adapt themselves to the changing needs of or technologies used by the organization.

Recall from a previous article, the purpose of a QMS is to enable an organization:

• to mitigate risks with confidence to meet/exceed customer expectations as well as stimulate further business growth
• to develop the relationships with its customers, suppliers and employees through knowledge and empowerment such that the processes, people, and products implicated are continuously improved. Or putting it another way, one the most important values every organization strives to obtain its own (short and long-term) success

To that point, success for an organization occurs when it not only uses its QMS (context, scope) to define its CTQ objectives but also uses the QMS (policies, procedures) to meet them. Or putting that more succinctly from the perspective of what a QMS is intended for, the effort the organization puts into defining as well as assessing its performance against the CTQs, is how it determines the effectiveness and continued suitability of its QMS. 

In other words, control and assurance mechanisms must exist to ensure each CTQ objective is met. The QMS quality manual will define these control and assurance mechanisms as well as what, if any, tooling exists for them. For example, most organizations will have a standard product development methodology as well as continuously improving set of Standard Operating Procedures (SOP) that provide direction and best practice on how work is planned and managed to it successful completion.

However, and again, these control and assurance mechanisms may vary based on the objective’s classification.

How do the controls and assurances for CTQs manifest themselves within the QMS?

Before I discuss how controls and assurance manifest themselves within the QMS you may refer to Annex-3 for a brief review of the definitions of quality control and quality assurance. It is also important to remember that the mechanisms often used to perform quality control and quality assurance are peer review, audit, inspection, and test.

The controls and assurances for CTQs manifest themselves within the QMS in many ways such as:

• an organization’s dashboard might apply a weighting to the measurements of its more significant objectives as to ensure that proper consideration of the CTQ objectives is given within its business decision making activities. 

• whether during development or sustained engineering of a product most people agree that the issues/problems/defects found in or suspected of implicating that product must be classified by severity and priority. Why? Because there is not enough schedule, budget or otherwise resources to address them all it is often the case that each of an organization’s objectives will be classified (and with the ‘critical’ ones having the obvious/direct impact on the intended operation, products/services, and success of the organization). 

Please note that in Annex-4 of this article I provide further narrative on how a ‘good’ relationship between the QMS and CTQ objective can be created, obtained, and sustained.

Summary and Conclusion

In summary:

• CTQ objectives define the value the organization intends on delivering. They also serve as the linkage between the organization’s processes and the results of those processes with the need to obtain customer satisfaction.
• a primary purpose of any QMS is to reduce variance in the activities planned and attempted by an organization’s human resources. Thus, a ‘good’ QMS is one that has a multi-pronged approach to measuring the organization’s capabilities and results in a comprehensive and risk-commensurate manner. Specifically, the organization must carefully select and then deploy control and assurance mechanisms that will help it to meet its CTQ objectives. 
• CTQ objectives are part of a ‘good’ QMS. That is the QMS and the CTQ objectives enable the organization to be effective and efficient in meeting each customer, statutory and regulatory, supplier, and employee obligation undertaken.

To conclude:

• CTQ objectives chosen by an organization are the ones that have the most significant value when met and the most negative of consequences when not met. For example, not reaching a CTQ objective usually costs the organization a significant amount of money whether that is in loss of revenue and/or increased amount of spend on the (re-work) effort needed to gain customer delight.
• If the organization does not have CTQ objectives or a ‘good’ QMS then that organization will be more prone to lower profitability for reasons including but not limited to:
  • inconsistent costs when creating, delivering, and supporting its product/service offerings;
  • undesired defects in those offerings;
  • an incomplete understanding of its customers, suppliers, and employees as well as the processes that connect them. Such misunderstandings lead to the need for additional time to modify processes, re-train the human resources or even re-program and re-validate the design and manufacturing equipment implicated.

And now, a sneak peak into my next article

In my next article I will describe why an organization’s management review process is the first place to assess whether its QMS is (and will continue to be) effective towards meeting the obligations it has with its customers, implicated regulatory and statutory authorities, suppliers, and employees. Whereas some people believe that the examination of the results from the organization’s peer review and governance/auditing activities is the best indication of a ‘good’ QMS. Whereas, it has been obvious to me that the organization’s management review and then its risk management activities and results thereof are the best indicators of an organization having not only a ‘good’ QMS but a ‘good’ culture of quality.

Annex-1: 

The table below lists business objectives that most organizations are likely to have along with some exemplary QMS outcomes and use-case/circumstances. This table also correlates those business objectives with the attributes and characteristics of a ‘good’ QMS.

Annex-2: Examples of CTQ Objectives for the various levels of Management

An organization can have CTQ objectives at each of the various levels of its management levels. For example, the following table lists CTQ objectives many organizations have or minimally consider when they are defining the scope, context, and mission of their QMS.

It is also important to remember that since there is rarely enough time, money, and energy to address every business objective (let alone priority), the organization’s QMS (context and scope), mission, and values statements must be defined as to enable all levels of management to gain the desired success with the most critical business objectives.

Annex-3: Definitions of Quality Assurance and Quality Control

Quality Assurance and Quality Control (plans and activities) are an essential part of a QMS. For example, the following picture is often used to depict the relationship these activities have to each other and to the organization’s quality plan.

Such a depiction is true enough, but on the other hand, organizations should not over-simplify the quality assurance and quality assurance activities, nor their relationship to the QMS. Case point, the phrase ‘systemic’ should be used for how these activities are defined and used in the organization as they are, in fact, an integral part of the delivery of quality results to the organization’s clients, supplier, employees and implicated regulatory authorities. Or putting it another way, the organization’s QMS and quality plans must assess the entire product development methodology to identify each opportunity at which a quality assurance and/or a quality control activity needs to exist. That assessment often begins with a study of the “V” diagram of the organization’s product development methodology.

The following image is a generic/common depiction of the “V” diagram that organizations often profess as their product development methodology. In this image, various verification and validation activities can be seen (consistent with how an organization plans to conduct quality assurance and quality control).

The following table summarizes what quality assurance and quality control are. It also provides examples of about how they manifest themselves in the organization’s work activities and with which resources.

I do not wish to simplify a discussion of quality assurance and quality control to be a brief treatise of the organization’s verification and validation activities (listed in a product’s quality plan and summarized in the big “V” diagram an organization has of its product development methodology). Rather, quality assurance and quality control activities are much more than that – and like the QMS, they are:

• defined to address the risks/threats an organization has in its processes and their outcomes.
• an integral component of the organization’s culture of quality.

Annex-4: 

Here are some best practices for the organization’s QMS to possess/achieve to better enable its CTQ objectives to be met and sustained.

• The use of a product development methodology that is full life cycle based. For example, whether accepting, planning, implementing, testing, release, supporting or terminating a product or service, an awareness to the effectiveness of the processes implicated is needed to help ensure the organization’s success.
• Having peer review and governance occur in a timely manner. For example, peer review is a means for verifying and validating something as well as ensure industry best practices have been used. Governance helps ensure that the intended control and assurance mechanisms exist and are effective.
• Having everyone understanding their potential contribution to the Cost-Of-Poor-Quality (COPQ) when they do not use the intended processes and tools.
• Having CTQ objectives that are ‘S.M.A.R.T’ (e.g., specific, measurable, achievable, realistic, and targeted).
• Recognition by senior management that the issues encountered in the journey towards being a successful organization will usually require cross-functional multi-disciplined teams to resolve.

Next, and as specific best practice to the better understanding and measurement of the COPQ within an organization, the cost account management of all QMS activities should also be organized by the nature of the activity being performed. For example, in my experiences all QMS activities can be classified as either preventative, corrective or improvement-based planning and action. So yes, it is important to track costs by the project/product implicated, but it is also particularly useful to track/roll-up costs by the nature of the QMS activity being performed.

To that very point, the table below correlates each of those three cost categories with the processes implicated by an organization’s compliance with QMS standards like ISO 9001, ISO-14001, etc.