Why You Should Conduct Internal Quality Audits
If you’re a product developer, manufacturer, or part of an engineering team, you know the excitement, challenge, and profitability that come from transforming an idea into an actual product. Many companies within aerospace and defense, electric vehicle (EV) technology, medical devices, biotechnology, and clean tech sectors are seeing lucrative business opportunities to compete in the market.
In 2022 alone, the global aerospace and defense market size has grown from $795.92 billion to $855.62 billion in 2023.1 This year’s medical device industry is projected to grow from $536.12 billion to $799.67 billion by 2030.2
As the numbers indicate, there are plenty of business opportunities, market share, profit, and competition in developing complex, smart, innovative products. However, one crucial caveat to all this growth and opportunity is that—you need to follow industry compliance guidelines and deliver on quality.
Ensuring quality and regulatory compliance in product development
Developing products requires stringent compliance from agencies and regulatory frameworks before a product can be manufactured and go to market. Quality management also plays a crucial role in product development. Without efficient quality processes, a company can have a difficult time passing an audit—quality is synonymous with regulatory compliance.
Quality management systems (QMS) ensure that quality procedures, regulations, and compliance standards are followed and are effective. A QMS typically aligns with your product lifecycle management (PLM) solution and your product innovation goals.
Meet Arena’s internal audit expert
To ensure your PLM, QMS, and everything in between are aligned, an internal audit is an indispensable tool to effectively help you understand how your company is performing and prepare your team for imminent audits. We recently sat down with Christine Pompa, Customer Success Coach at Arena, a PTC Business to understand how you can conduct a thorough, results-driven internal audit.
With over 25 years of quality expertise, Christine has worked with many top firms assisting, advising, and setting up their internal auditing strategies. She joined us to share her insights on the benefits of conducting an internal audit and what you need to know.
Why do an internal quality audit?
To better understand how your team will fair with an external audit, it’s best to conduct an internal audit first to see where your strengths and weaknesses lie. External audits can be nerve-wracking with key personnel and teams running from pillar to post searching for records or documents, especially if you don’t have a quality management system (QMS) software solution in place. An internal audit provides your company with a dry run, so you understand what to expect and where you need to focus.
The indispensable role of internal auditing in steering a healthy QMS
Christine, can you explain why internal auditing is vital for companies? “Internal auditing is key to maintaining a healthy QMS. No one knows your systems like your own employees. This makes for a robust assessment of whether your processes are meeting your internal and external requirements. The beauty of it is that, because you are running the show, you can pivot to what makes sense for all customers without prejudice. It also prepares you for the external audits that are sure to come from your customers and third-party registrars.”
Internal audits expose your strengths and weaknesses
Internal quality audits can be an essential component of a manufacturer’s quality strategy because they can spot possible problems, put remedial measures in place, and work toward continuous improvement.
Internal audits yield vital information that can help you:
- Ensure compliance verification
- Enhance business operations and reduce errors
- Improve efficiencies
- Get better control of risk management processes—improve vulnerabilities
- Improve workflows
- Decrease costs, improve cost recovery, and increase profits
- Correct any processes not performing well
- Keep employees alert about responsibilities to improve their efficiency
- Identify potential risks
- Increase stakeholder confidence
An internal audit provides executive management with an alternative perspective of priority areas or areas that may not be reviewed in an external audit but are important. Addressing these areas now with a strategic plan can deliver value through digital innovation, growth, and success.
Leveraging internal audits to align quality management with key business metrics
When asked what are the benefits of conducting an internal audit? Christine said, “I have used internal audits as the baseline to improve our overall business metrics. I take our major KPIs (like on-time delivery, product yield, incoming quality acceptance rate, customer return rate, etcetera,) and use those as guidelines to drive the internal audit process. It is a win-win: Not only do you hit all the major pieces of your QMS, but you put the focus of audits in terms that your executive team can relate to regarding business goals, and people pay attention to what is important to the C-team.”
Driving excellence, trust, and operational efficiency through internal auditing
An audit lets you evaluate your operations, internal controls, and risk management processes—anytime—so you can be prepared for any third-party or unscheduled audits. If you have a QMS solution in place, you have an advantage.
Everything within your QMS is contained in one centralized location, providing easy access by employees to your:
- Quality documents, such as your quality plan
- Device master record (DMR)
- Bill of materials (BOMs)
- Manuals
- SOPs
- Policies
- Org charts
- Procedures
- Past audit results
- Training records
- Purchasing and supply chain details
- Approved vendors
“Collaboration is essential when forming a team of cross-functional internal auditors. There is no real ‘I’ in team, and people must work together to create meaningful audit reports without focusing on nit-picking. What I also love about it is that, as an internal auditor, you get to live in someone else’s shoes and understand what they are up against day in and day out. Also, having another set of eyes look at a process could help bring some improvements that weren’t thought of before—especially since that person knows the overall product/company. It is not a stranger coming in to view processes without any background,” said Christine.
Getting started with strategic planning: The foundation of successful internal audits
Internal audit teams have the unique opportunity to re-envision the impact they can make for the company by restructuring their approach, so it aligns with current business practices and industry trends.
Christine, what’s the first thing a team should do? “Planning is key to a successful internal audit. It is necessary to gather all procedures, documentation, and the appropriate standards and develop open-ended and thought-provoking questions. I find this to be the heart and soul of the internal audit process. The more preparation, the higher the quality of internal audit.”
Some areas to consider before you start:
1. Who Conducts the Audit?
A key first step in determining the audit is—who is going to conduct it—your Regulatory or Quality teams or a hybrid? After making that determination, you’re ready to start the planning process.
2. Create Direct, Fact-Finding-Oriented Questions:
- What goals do you want to accomplish?
- How does the process support the company in achieving its goals and objectives?
- What risk(s) does the audit address?
3. Prepare Your Strategy:
- Construct your daily operations—which areas or departments will be evaluated and inspected?
- Shift from a one-size-fits-all approach to diversifying the nature of audit activities, including issues-based reviews or audit workshops
4. Conduct the Audit:
- Collect all relevant documented information that relates to the process you’ll be auditing such as metrics, work instructions, charts, diagrams, process maps, workflow charts, and control plans
5. Report the Findings:
- Conduct meeting(s) with the process owner(s) to discuss findings such as weaknesses to be addressed or areas improved
- Discuss the positive and potential improvement areas so the process owner will get better value from the audit
- Continuously monitor enhancements or changes
6. Communicate Results to Upper Management:
- Communicate to upper management audit results and recommendations
- The audit team can schedule breakout sessions with audited teams to address resolution
Internal audit challenges and overcoming them
While the benefits are numerous, internal auditing isn’t without challenges such as:
- Resistance from employees who might view audits as scrutiny or criticism, leading to workplace opposition
- Maintaining objectivity
- Ensuring that the auditing team remains unbiased, especially in smaller organizations
When it comes to internal audit challenges, Christine said, “I think the biggest challenge when performing an internal audit is maintaining a level of empathy for the auditee. A lot of times auditors can forget that people don’t usually like being put on the spot and asked questions. It’s scary and people usually clam up, so it is important to remember to put people at ease and let them know that you understand what it is like to be audited. Going in with an open mind is really important to getting the most out of an audit.”
Arena QMS prepares you for any audit
As more manufacturers vie for market share, you’re going to need to prove you’re compliant and your quality processes work. Whether it’s an internal or external audit or inspection, Arena QMS helps your company ensure compliance with FDA, EU MDR, ISO, and AS 9100 regulations with a product-centric approach to quality.
When discussing Arena’s capabilities with customers, Christine tells her customers, “Think about Arena as the total package. Everything’s connected—your engineering, manufacturing, and quality teams. You’re ready to take your product from inception all the way through to life “span.”
Listen to Christine discuss internal audit readiness in this informative webinar.
Joseph Prock