What do we REALLY have to do for ISO 9001:2015 transition? Part 1 of 5: Context of the Organization

Your CB will tell you what they require for a transition audit, like the number of audit days they need and certain aspects of your system that you must confirm you have addressed, but they can’t tell you much about what the requirements of ISO 9001 actually mean for your business.  This is that start of a 5-part series about the 5 main changes to ISO 9001 that cross all of your functions and processes.  Once you understand these broad changes, you can make sure you apply them everywhere you need to – that is, if they haven’t already been the way you do business under ISO 9001:2008.

The first major change to ISO 9001 is in 4.1 where you are required to define the “context of the organization.” What does that mean, exactly? Clause 4.1 says

 “The organization shall determine external and internal issues that are relevant to its purpose and its strategic direction and that affect its ability to achieve the intended results of its quality management system.”

Let’s break that down into its parts. I like to start with the last bit – “intended results if its quality management system.” 

Ask yourself why you even have a QMS in the first place? What are you trying to achieve, or what problems are you trying to avoid? No matter how many reasons you list, they boil down to the three-legged stool: Quality, Cost, and Speed.  Better products and services, less waste, and faster delivery or responsiveness to customers.

Second, the leaders of your business have to decide which “intended results” are most important to how you compete and fulfill customers’ needs.

If you were making a critical or specialized part for a satellite that had to launch on a certain date, then quality and speed would probably be more important than cost.  On the other hand, if you were in tight competition with many suppliers for a product or service, even a slight change in costs could make customers change suppliers from year to year or it could doom your profit margin.  You would, therefore, manage costs very closely. One company in that market might decide to differentiate itself by always being the lowest cost supplier, while another might emphasize guaranteeing on time delivery and another might aim to have superior support.  

You see, a company has to decide how to balance the competing needs for quality, cost, and speed based on what it wants to be in the industry.  It then builds those decisions about quality into its systematic ways of doing business – your QMS. That’s what Clause 4.1 is getting at when it ties the QMS to your “purpose and strategic direction”.

Now the third part of Clause 4.1, which is actually at the start of the sentence, says you “…shall determine external and internal issues that are relevant…”.

What do they mean by relevant external and internal issues? That could be anything and everything, so where do you draw the line? Well, issues are relevant if they can positively or negatively affect your ability to achieve the results you want relative to where you intend to perform in the marketplace. 

Putting it all together then, Clause 4.1 is asking your leadership to systematically define the important aspect of its business situation that affect the ability to achieve the intended mission. And because those issues are important, the organization needs to keep an eye on them to see how they change, for example, if they make it easier or harder to achieve goals or even cause the goals themselves to change.

So what do you really have to do to show that you meet this requirement?

At a minimum, you should set up a systematic way to define the following and to periodically update the information as changes happen:

  • Determine the purpose and strategic direction of the business. What does “success” look like now and in the future?
  • Determine the results the QMS should deliver (cost, quality, speed) to support that strategic direction.
  • Identify the major factors that can help or hinder your success, both those within your control and those from outside the business.

On the surface, Clause 4.1 might look like an exercise in writing a statement that describes your overall situation and goals, but if you want to get the most from using ISO 9001, you’ll see that 4.1 is guiding you to a much deeper self-analysis that can help you anticipate risks and opportunities that will drive your success. 

Also, 4.1 is key to applying the rest of the standard. Take your time developing what it asks you to determine, and you’ll be better off in the long run as a business.

For more a deeper look at Context of the Organization…