QUALITY MANAGEMENT SYSTEM GUIDELINES FOR SUPPLIERS BY H&M

Introduction
Congratulations!
If you are not already working with a quality management system, you will now get some ideas about how you can improve effectiveness and customer satisfaction in your company.
H&M aims to build long-term co-operation with suppliers that take ownership in creating a sustainable system and organisation to ensure the H&M group quality requirements and continuously improve the quality for the long term in the factories.

A management system is a complement to the RQS.

Table of Contents

Introduction ......................................................................................... 1

1. Definition of a Management System .................................................... 4

2. Key Success Factors ......................................................................... 5

3. Benefits .......................................................................................... 6

4. Limitations....................................................................................... 6

5. Foundation of H&Ms Management System ........................................... 7

5.1. Plan ............................................................................................. 7

5.2. Do .............................................................................................. 7

5.3. Check .......................................................................................... 7

5.4. Act .............................................................................................. 7

6. Elements of a Management System ..................................................... 8

7. Policy/Vision/Mission/Strategy............................................................ 10

7.1. Definition ...................................................................................... 10

7.2. Purpose........................................................................................ 10

7.3. Key points .................................................................................... 10

7.4. Self-assessment ............................................................................ 10

8. Organisation ..................................................................................... 11

8.1. Definition ....................................................................................... 11

8.2. Purpose......................................................................................... 11

8.3. Key points ..................................................................................... 11

8.4. Self-assessment ............................................................................. 11

9. Processes and Routines ....................................................................... 12

9.1. Definition ........................................................................................ 12

9.2. Purpose.......................................................................................... 12

9.3. Key points ...................................................................................... 12

9.4. Self-assessment .............................................................................. 12

10. Communication and Implementation .................................................... 13

10.1. Definition ....................................................................................... 13

10.2. Purpose......................................................................................... 13

10.3. Self-assessment ............................................................................ 13

11. Feedback and Improvement/Action ...................................................... 14

11.1. Definition ....................................................................................... 14

11.2. Purpose......................................................................................... 14

11.3. Key points ..................................................................................... 14

11.4. Self- assessment ............................................................................ 14

12. The System Must Suit Your Company .................................................... 15

13. Step by Step How to Start .................................................................. 16

13.1. Set your strategy ............................................................................. 16

13.2. Define your main process to achieve the strategy ................................ 16

13.3. Set the organization you need to achieve the strategy/policy ................ 16

13.4. Document your system ..................................................................... 16

13.5. Communicate ................................................................................... 17

13.6. Control, evaluate and improve ............................................................ 17

14. Appendix ............................................................................................. 18

1. Definition of a Management System

A management system is the framework of policies/strategies, processes, routines and responsibilities that organisations use to achieve their goals and fulfil customer requirements.

It is a tool to successfully lead an organisation in a structured and systematic way and constantly improve the processes in order to increase customer satisfaction and reach the goals of the organisation.

In short, an efficient tool for the management to get where they want.

2. Key Success Factors

It is the supplier’s responsibility to work for continual improvements towards full and sustainable compliance with the H&M quality requirements. This can only be achieved with the following factors:

• A committed top management: The success of a management system is highly dependent upon the commitment and ownership of top management.

The top management needs to ensure that the MS is well functioning and that the MS activities in the daily operations are well integrated.

The top management must work on the principle of continual improvement, meaning that it is an on-going process. Revisions must be made once the initial planned system has been implemented.

• A user-friendly and simple system: To get the commitment and involvement of all employees they must understand the system and the benefit. To get a living management system all employees should feel involved and understand their own contribution.

• Organisation with clear responsibilities and secured competence: Necessary and regular training and resources are given to the staff to perform their work and constantly improve. The choice of the right person for the right responsibility in the management system affects the outcome of the activities. The person in charge of a task should not have any conflicts with other responsibilities.

• Documentation: A well-documented system together with employee’s implementation is to be evaluated as a fully implemented system. The documentation should be there to secure consistency and traceability.

• Evaluation of the system by different auditors becomes difficult if documents are not well maintained.

3. Benefits

Fulfilling all of the above and having a functioning Quality Management System will end up with the following benefits:

• Business benefits: A company with a well-functioning management system will be more competitive through increased customer satisfaction and trust. Effective control of the processes leads to lower costs.

• Controlled quality performance: Setting clear policies in accordance with the H&M requirements and developing targets will allow the supplier to focus on the quality issues in a more structured and efficient way and increase performance. Everyday problem-solving will then be systematic rather than at jeopardy.

• Contribution from all employees: When all employees are committed and understand their own importance and the quality goals, their full potential will be used for the benefit of the organisation. Involved and motivated employees will create a competitive organisation always working for improvement.

• Secured responsibility for the future: A well-functioning MS lowers the risk of people dependency and creates a sustainable system. The quality system will not fall down even if some key people leave the organisation.

• Transparency: The increase in transparency through a well-functioning management system improves the ability to respond to the H&M requirements. This is the foundation of long-term business relationships. It will, for example, help everyone to find root causes and limitations of a problem and based on earlier results find good solutions more effectively.

4. Limitations

The design and implementation of an organisations management system is influenced by:

• Its size and organizational structure

• Its geographical area

• Its production type

• Its process type etc.

Each factory should take the aspects above into consideration when creating its own management system.

5. Foundation of H&Ms Management System

H&M group’s Quality Management System is based on the PDCA tool.

PDCA (plan-do-check-act) is a commonly used base of a repetitive four-step problem-solving process typical for process improvement. This tool is known as a flow diagram for learning and for improvement of a product and a process.

5.1. Plan

Establish the objectives and processes necessary to deliver results in accordance with the expected output. The expected output is the focus, while the completeness and accuracy of the specification is also part of the improvement.

5.2. Do

Execute the plan to achieve the objective.

5.3. Check

Measure the implementation and compare the output against the expected results to find out the differences.

5.4. Act

Analyse the differences to determine their cause. Each will be part of either one or more of the P-D-C-A steps. Determine where to apply changes that will secure the improvement.

7. Policy/Vision/Mission/Strategy

An H&M QMS audit begins with an evaluation of the company quality policy.

7.1. Definition

The policy/vision is a statement of will and commitment set by the top management. It shows the target which is aimed to be achieved and the purpose behind it. It shows the strategy and long-term goal of the company’s quality work.

The statement should be clear and complete so that measurable goals and plans can be developed.

Policy and Routines should help the management to reach their own goals.

7.2. Purpose

The process of writing a policy is important for the management to make it clear what they are aiming for regarding quality. What is the long-term goal and strategy for quality for the company? To write it down makes it clear to the management and the whole company.

A policy guides the employees in decisions and helps to achieve a long-term goal.

7.3. Key points

The policy/strategy should help your company to reach your long, term goals. We have some key points that we want to see.

The policy should:

• Include a target and a purpose that can be clearly explained by the top management

• Be written and authorised by the top management with a signature and date

• Should be a separate document and should not be more than 1-2 pages

• Be known by all staff in the factory

• Be spread to all staff effectively by general activities to enable a good implementation of the system. The top management needs to ensure that these activities are well integrated in the daily operations and give the necessary support to its staff in authority.

• Cover all necessary areas, depending on product type and production setup and be broken down to measurable goals for each related department. Meaning that the policy should be existing or used as measurable goals/sub-goals in the following departments:

• Material

• Sample

• Production

• Customer focus

7.4. Self-assessment

Think about the key points. Are they a part of your existing system?

Do you have a clear policy/strategy for quality and is it used in the daily work? Do you know if you are going in the right direction?

8. Organisation

8.1. Definition

Organisation refers to people working together in a structure of relationships, power, objectives, roles etc. to achieve a common purpose.

The organisational structure should be clearly defined so that each member of staff knows their responsibilities and task(s). It is very important that a person has the right competence for their responsibility. The quality organisation must have the authority to take decisions regarding quality. To have a sustainable organisation there must also be a plan to secure the competence in case of staff turnover.

8.2. Purpose

Employees at all levels are the most important resource of the company. An engaged and competent problem-solving workforce creates a competitive and strong organisation.

An organisation chart and job descriptions make the responsibilities clear to everyone. Together with a structured training and competence securing plan it makes the system more sustainable and not dependent on people.

8.3. Key points

The quality organisation should suit your company.

We have some key points that we want to see:

• A written organisation chart with a clear delegation of responsibilities and who reports to whom

• People responsible for external parts (secure that quality requirements are understood/ followed/controlled, evaluation and development of e.g. material suppliers, wash mill, print house etc.) included in the chart

• People responsible for customer focus (secure that quality requirements are understood/ followed/controlled, customer relations and feedback) included in the chart

• Independent quality organisation, not reporting to the production manager

• Job descriptions for all personnel

• Training plan for continual training to secure competence and records

• Written or verbal back-up plan for key quality positions

Overall, there should be no conflict of responsibilities in the organisation. However, in case the appointed personnel have multiple responsibilities in small factories, the factory has to ensure and provide evidence that quality issues have not been compromised.

8.4. Self-assessment

Think about the key points. Are they part of your existing system? Do you have a structured way to work with organisation, responsibilities and competence? Is your quality organisation stable and secured for staff turnover?

9. Processes and Routines

9.1. Definition

A process is a set of activities where input gives an output by using different resources. A process can be defined at different levels.

“Routines and procedures” is a specific way of performing an activity which describes the who, what, when, how and why of any operation. A relevant document ensures consistency, compliance and uniformity of a performance.

9.2. Purpose

Identifying the main processes in a flow chart makes the system and product flow visible and clear and makes it easier to find, for example, critical or inefficient parts of the process or the interaction between processes. The desired result will be reached more effectively.

When important quality routines are written down and gathered in a manual, it is easy for everyone to understand the system. The manual also secures a system in case of staff turnover for key quality personnel.

A written routine (or shown with pictures etc.) ensures consistency.

9.3. Key points

The processes and routines should suit your company. Based on your policy/strategy, production type, etc., you decide which processes and routines are critical and need to be documented.

Key points regarding processes and routines that we want to see:

• A documented and complete quality manual (might be the same as the RQS and the Supplier Lab Manual) including the most important routines (should not be complicated, easy to read), securing:

• quality policy/strategy of the supplier

• quality of external parties

• quality of customers (H&M group quality requirements) in the long term

• documentation of “processes and routines” in different forms such as a flow chart, pictures, written documents, hard or soft copy, reports, records, graphs, signs and posters, including:

o interaction between processes

o how decisions are taken

o action in the event of failure

9.4. Self-assessment

Think about the key points. Are they part of your existing system?

Have you identified your most important processes and routines? Are they documented enough and effective? Can you easily explain your system to a new employee? Have you identified the important interactions between processes?

10. Communication and Implementation

10.1. Definition

Communication is a process of information flow to create a shared understanding of activities within a system. Implementation is the execution of planned activities to achieve compliance in accordance with routines and/or procedures.

10.2. Purpose

The management system must be a living system and not only on paper. To reach the goal, management wants to reach and make everyone clear about the goal and their own task.

When all employees feel involved and see the benefit of the system, their full potential will be used to reach the company goal.

In the communication flow between departments – information about, for example, fabric, colours, mistakes, focus areas, etc. – there is often big potential to improve the effectiveness of the system.

In our audit we will talk to employees to understand if policy, organisation and processes and routines are well understood and implemented.

10.3. Self-assessment

Do you have a living management system? Have all employees understood what you want?

Have you communicated the policy/strategy, responsibilities and routines clearly and do you know if all employees have understood?

Do the employees follow set routines?

11. Feedback and Improvement/Action

11.1. Definition

Feedback and improvement/action define the activities “check-record-analyse” data of a system to determine the necessary corrective and preventive action for continual improvements (both of the quality result and the management system itself).

Once the areas of improvements have been determined, factories need to decide on preventive/corrective action and keep a record of it.

11.2. Purpose

When using facts to identify areas of improvement, the supplier knows exactly where action is needed. It is the most effective way and also gives proof of whether the action has given the desired result or not.

Using feedback from employees, the workers are often the ones who have the best ideas for doing a task in a better and more effective way.

When employees have ideas about how to improve their work operation or the system, it means they are committed and see the benefit. It means that the management system is living and has reached a higher level.

11.3. Key points

You should use feedback in the smartest way for your company. It can be used in many different ways. The key points that we want to see:

Policy:

• Data and statistics analysis to follow up goals

Organisation:

• Quality to be used in the performance evaluation of employees

• Feedback system about quality and between employees/managers in the factory

• Improvement ideas from employees are encouraged and used

Processes and routines:

• Regular and written evaluation of the quality system (processes), strategy, customer feedback and feedback regarding external parties

All:

• Corrective and preventive action to be documented

• In case of corrections that are needed according to the analysis of the results of the feedback, the factory needs to provide additional evidence showing all necessary action has been taken

11.4. Self- assessment

Think about the key points. Are they part of your existing system?

Do you work on the constant improvement of your processes and system?

Are your employees involved and work for quality improvements?

Do you work in a systematic way to evaluate and improve your external parties?

Do you use customer feedback to improve?

12. The System Must Suit Your Company

There are many different kinds of management systems and quality models.

You can find more general information in:

ISO 9001: 2008 – sets out the requirements of a quality management system

ISO 9004: 2009 – focuses on how to make a quality management system more efficient and effective

ISO 9000: 2005 – covers the basic concepts and language

At www.iso.org you can read more about the 8 Quality Management Principles.

H&M will not require a full ISO 9001 system, but this is a very general standard which is used globally and can be read as a reference.

There is also a lot of information to find regarding different quality concepts and theories. Here are some examples:

Lean (customer focus, flow efficiency in processes, what is value-adding for the end customers, all employees involved)

Kaizen (customer focus, mind-set: all employees should think improvements, small steps in a continuous process)

Six Sigma (specialised team for improvement projects, often in big companies, control and improve processes based on analysed facts, must be controllable factors)

Toyota systems (in many ways the base of Lean, the famous “Toyota string” – every employee has the responsibility and authority to stop production if they notice a problem).

Learn more and get inspired!

Many parts overlap in the different concepts. You should pick the parts that suit your company and production type in the best way.

A quality management system that is made according to your needs will be used by the employees.

H&M will check for some key points that are important for us.

A quality management system is a complement to routines mentioned in our RQS and Supplier Lab Manual.