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"Value-Added" Audits

Discussion in 'ISO 19011 - Auditing Management Systems Guidelines' started by Andy Nichols, Jul 26, 2022.

  1. Andy Nichols

    Andy Nichols Moderator Staff Member

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    Can anyone help explain the term “value-added auditing”? I really struggle to understand why the term needs to be applied. It infers that audits can be non-value-added, and that’s an even bigger challenge for me to understand why anyone would entertain such a thing as a non value-added audit...
     
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  2. John C. Abnet

    John C. Abnet Well-Known Member

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    So, @Andy Nichols ...a few questions/observations if I may....
    1- Where have you seen that term used? (I hear "value-added" applied to all manner of 'things', including but not limited to ...auditing.)
    2- Value-added, in the context of manufacturing where most on this forum likely 'live', is really specific to WHAT the customer is willing to pay for...
    e.g.
    - Painting (value added)
    - Sorting (NOT value added)

    ...so, most times I hear the term "value-added", it is actually not being applied correctly. Unless an organization tries to get creative and roll internal auditing into SG&A, then it doesn't apply here either.

    3- In most cases, what is meant when the term "value added" is used is, instead, "beneficial". In other words "Beneficial Internal Audits".

    Now that I've beat the semantics to death, no, I have no idea why "value-added" (wrong application), nor "beneficial" would be applied to internal audits, unless it is simply part of a discussion,....
    e.g. "Our current internal audits are adding no benefit to our organization. Let's review and reconsider how we can make our internal audits more beneficial".


    By the way...I found this...
    Value-added auditing (VAA) is a proven method for looking at effectiveness of an organization's operational and financial performance. It has its roots in the US Government Accountability Office (GAO) “Yellow Book”
    https://www.bluesynergyassociates.c...diting (VAA),(processes) that affect finances.


    My thoughts.

    Be well.
     
    Andy Nichols likes this.
  3. Miner

    Miner Moderator Staff Member

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    I think it is a buzzword for focusing internal audits on high risk areas in order to reduce total overall audit costs as well as making recommendations for improvement.
     
  4. Bev D

    Bev D Moderator Staff Member

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    IF the phrase is being used correctly from a lean (or TPS) perspective, an audit is generally a non-value-added activity. This is not to say that an audit doesn't have value. John Abnet has the lean definition of value ad correct. Given this definition all inspection activity is categorized as non-value-add. I know some people really bridle at this but it is an operational definition as part of a lean system to reduce waste. In my experience it really helps focus improvement activities.

    Now there are some inspections that the lean system considers valuable and necessary.
    When defects are present and/or likely inspections reduce the greater downstream waste that the Customer may experience if the inspection doesn't occur. (In lean it is essential to understand that some wastes are increased in order to decrease worse waste)
    SPC is not considered a waste (unless it's a poorly designed chart that false alarms or misses real alarms) as it is trying to maintain reduced variation and defects. Also supervisors and managers are expected to continually monitor (another word for audit) operations to ensure that everyone is complying to standard work. We also audit and observe processes to detect waste, eliminate the causes and improve the process.

    SO a value add audit would be one that observes a process and looks for improvement opportunities and is actively involved in the improvement activities. this would be different than the traditional audit for compliance.

    but of course the phrase as you heard it Andy may just be a snarky anti audit jab...
     
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  5. Andy Nichols

    Andy Nichols Moderator Staff Member

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    Thank you both for your answers.

    @John C. Abnet here's a reference which causes my flesh to creep: https://committee.iso.org/files/liv...diting General/APG-ValueVsConsultancy2015.pdf

    I seem to recall it reared its ugly head in the 90s when the CB community were coming under scrutiny for doing checklist audits of clauses...

    My take is its the CB audits, but since so many internal audits are done following the CB process, they are similarly tainted...

    It really is time that IRCA/Exemplar Global bit the bullet on some kind of "Audit Program Manager" training and qualification - why would anyone schedule and conduct an 9internal) Management Systems audit which didn't bring value?
     
  6. Andy Nichols

    Andy Nichols Moderator Staff Member

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    Really, Bev? I had not considered it like that, I admit. Certainly, if we're to think Lean being focusing on product manufacturing, I'd agree that things like product audits are somewhat wasteful (odd IATF doesn't see it that way, isn't it?) but looking at QMS audits, they are vitally important (if we can get beyond the need to comply, which most people hold up as the primary reason for internal audits) and use Internal Audits for the way they were intended: To add the independent validation (or not) of the QMS being used to ensure planned results. This is all traced back to the scheduling of audits not being time-based (in the same way that calibrations and management reviews shouldn't be time based). Event based is far better being "value added" if they confirm the role of the QMS and peoples' compliance with it as contributing to process performance.

    As I mentioned above, if I am an audit program manager/process owner, I wouldn't schedule and plan an audit that wasn't value-added. That takes a lot of different steps to simply filling in a calendar with what gets audited annually/semi-annually/monthly or whatever. Just like calibrations done that way, it's always too late when it's discovered something went wrong. Management only want to hear "new" news.