Quality Assurance: A Guide to the Application of I S 0 9001 to Process Plant Projects

Second Edition

Fred Owen and I

Derek Maidment (Editors)

Distributed by GULF PUBLISHING COMPANY P.O. BOX 2608 Houston, T X 77252-2608 USA

- -

Institution of Chemical Engineers

The information in this guide is given in good faith and belief in its accuracy, but does not imply the acceptance of any legal liability or responsibility whatsoever, by the Institution or by individual members of the Working Party, for the consequences of its use or misuse in any particular circumstances.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner.

Published by Institution of Chemical Engineers, Davis Building, 165-189 Railway Terrace, Rugby, Wanvickshire CV21 3HQ, UK. Copyright O 1996 Institution of Chemical Engineers A Registered Charity

ISBN 0 85295 372 0

Printed in the UK by Henry Ling Limited, The Dorset Press, Dorchester DTI IHD.

ii

Acknowledgements

The first edition of the guide was prsduced in 1992 under the direction of the Institution of ChemicalEngineers by a Working Party comprised of the following company representatives:

Dr G.G. Cutts Mr M.J.P. Garrett Mr D.W. Maidment Mr A.T. Markham Mr F.J. Owen Dr J.S. Parkinson Mr A.W.J. Petherbridge Mr R.P. Willis

Rh6ne-Poulenc Chemicals Ltd Hawker Siddeley Power Engineering Ltd The Wellcome Foundation Ltd Norton Chemical Process Products Harcros Chemicals UK Ltd Courtaulds Research Ltd EEC International Ltd John Brown Engineers & Constructors Ltd

This revision was prepared by members of the previous Working Party, namely:

Mr M.J.P. Garrett Mr D.W. Maidment Mr F.J. Owen Mr R.P. Willis

They would also like to thank Mr A. G. Simrnonds of John Brown Engineers & Constructors Ltd for his contribution on the quality assurance of software.

The Institution expresses its thanks to these members for their individual contribution.

Foreword to the first edition

I am happy to recommend the IChemE Guide to the Application of I S 0 9001 to Process Plant Projects. It is a particular pleasure that the Institution has produced this and is promoting the ideas of quality assurance and total quality manage- ment. Inmy 1977Report on Standards and Specifications in the Engineering Industries, recommendation G was on steps necessary to build a national structure of quality assurance bodies with mutual acceptance of approvals to avoid multiple assess- ment. This was taken up in the 1982 White Paper from the Department of Trade and Industry on Quality Standards and Competitiveness which led to a formal memorandum of agreement, signed by Lord Cockfield and myself. In 1985 I presented to the National Economic Development Council the report of a Task Force on Quality and Standards which carried further the progress on certifica- tion and its role in removing technical barriers to trade in the EEC.

The Institution is to be congratulated on this guide, which is another of the substantial aids to industry in the tradition of the pioneer IChemE Model Forms of Conditions of Contract for Process Plant. It is also part of the whole methodology which now forms our approach to safety, reliability and economy of resources.

Professor Sir Frederick Warner

Foreword to the second edition

It is now ten years since Sir Frederick Warner presented the Task Force report to the NEDC on Quality and Standards. That document laid the corner stone for the Institution in its pursuance of the principles of quality. During this period the international Quality Assurance Standard IS0 9001 has increasingly gained recognition and its principles applied to the management of safety, health and environmental issues. After its latest 1994 revision it is extremely gratifying to see the Institution revise its Guide to the Application of I S 0 9001 to Process Plant Projects. Within the United Kingdom over the last few years we have seen new stricter laws with respect to safety and the environment. Applying the principles and concepts within the guide will greatly assist chemical engineers to comply with this legislation.

Sales of the first edition were extremely encouraging and give a clear indication of how seriously chemical engineers consider the whole ethos of quality.

In this second edition, the authors have not only updated the guide but have also addressed the increasing demands, requirements and controls of information transfer, which is today having a much greater impact on the success of engi- neering projects.

Personally, one of the most rewarding aspects of this publication is that two of its contributors were students of mine when I was a young lecturer at the Borough Polytechnic, London in the early 1960s.

It therefore gives me great pleasure to support and recommend this second edition of the guide which continues to promote the Institution of Chemical Engineers in the pursuance of total quality.

Professor John Garside

Contents

Introduction How to use the guide 1. Scope 2. Normative references 3. Definitions 4. Quality system requirements

4.1 Management responsibility 4.2 Quality system 4.3 Contract review 4.4 Design control 4.5 Document and data control 4.6 Purchasing 4.7 Control of customer-supplied product 4.8 Product identification and traceability 4.9 Process control 4.10 Inspection and testing 4.11 Control of inspection, measuring and test equipment 4.12 Inspection and test status 4.13 Control of nonconforming product 4.14 Corrective and preventive action 4.15 Handling, storage, packaging and delivery 4.16 Control of quality records 4.17 Internal qualify audits 4.18 Training 4.19 Servicing 4.20 Statistical techniques

Text references

Page 1 4 5

vii

Introduction

Quality Assurance and Total Quality Management have become recognized as the modern techniques for improving company competitiveness and profitabil- ity. In the UK, the initiative for improving the performance of manufacturing industry was taken by the government in the early 1980s when it launched its National Quality Campaign. The vehicle used for this campaign by the DTI was BS 5750: 1979: Quality systems1. Emphasis was given to its use by government departments insisting that their suppliers became registered to this Standard if they were to continue to receive their business. In the early years most of the emphasis on its implementation was in the mechanical and electrical component sectors serving the car industry.

In the mid 1980s chemical manufacturing companies started to receive demands from customers using products destined for the motor industry to apply the Quality Assurance system BS 5750: 1979 to their production proce- dures. These companies found difficulty in interpreting the Standard for chemi- cal manufacture to such an extent that BSI and the Chemical Industries Association set up a working party in 1986 to prepare guidance on its consistent interpretation. This was issued in 1987 as BS 5750: Guidelines for Use by the Chemical Industry 2. It was published to coincide with the re-issue of the Standard as BS 5750: 1987 and IS0 9000,1987, to emphasize that theupdated Standard had received international recognition. This was an important step for the UK to achieve, given its historically poor reputation for quality. Since that time many other countries have accepted the Standard. Of particular sighcance was its recognition in Europe as EN 29000 and the publication b CEFIC in 1991 of EN Y 29001, ISO9001: Guidelines for Use by the Chemical Industry which superseded the 1987 document previously mentioned.

The 1987 standard, like the 1979 original, was in three parts: BS 5750: Part 1, IS0 9001, Specification for Design/Development, Production,

Installation and servicing4; BS 5750: Part 2, IS0 9002, Specification for Production and Installation5; BS 5750: Part 3, IS0 9003, Specification for Final Inspection and ~ e s t ~ .

In 1994 the International Standards Organisation published a revision of IS0 9001 designated:

IS0 9001: 1994, Quality Systems - Model for Quality Assurance in Design, Development, Production, Installation and ~ e r v i c i n ~ ~ .

This has superseded BS 5750: Part 1: 1987 (which has been withdrawn) and has been recognized in Europe (by CEN, the European Committee for Stand- ardisation) as EN IS0 9001: 1994. In the UK, the British Standard isnow known as BS EN IS0 9001: 1994. BSI stated the revision did not include any major changes, but believed the wording needed to be improved and simplified to make the Standard more relevant due to its increased application and scale of

usage. Details are given in BSI Quality Assurance Guide to the 1994 Revision of BS 5750, IS0 9000~. The IChemE guide has been revised to take account of the changes made to IS0 9001: 1987 in the new IS0 9001: 1994.

All references in the guide to IS0 9001 mean IS0 9001: 1994; BS EN IS0 9001 1994 and EN IS0 9001.

The guide sets out to show how IS0 9001 may be applied effectively to a process plant project from design to commissioning, when it would then be operated for chemical manufacturing to IS0 9002, for which the most recent guidance is given by CEFIC as mentioned previously.

In essence, the IS0 9000 series is a formalized quality assurance manage- ment system designed to ensure that quality is built into every stage of the activity in hand. It moves away from the concept of quality control by inspection and test at the end of the project. Implemented successfully, the Standard seeks to improve performance continuously by learning from experience and exarnin- ing reasons for complaints, discrepancies and failures and by building corrective actions into the revised system to avoid their recurrence. In this way costs of waste, rework, modification, blending and poor plant utilization are reduced and customers' needs and expectations can be satisfied first time, every time by constant improvement. An additional benefit, of particular importance to the process industries, is that such a system strongly reinforces health, safety and environment standards and procedures, like Hazop, by formally checking, auditing and improving them on a regular, defined basis. The Institution places great emphasis on these aspects of all systems relating to project management and this is reflected throughout this guide.

Because the Standard relates to a quality system and not a product, it can be applied to any activity, whether researching, designing, manufacturing, servicing, consulting, building or constructing. Thus, many companies who have seen the benefits of such a formalized system in manufacturing are applying the same techniques to every aspect of a company's operation from personnel to accounts and from telecommunications to marketing. This is a natural progres- sion to Total Quality Management, TQM. Some large multinationals have started with a TQM policy and implemented the Standard as a step on the way. Essentially TQM recognizes that every activity in a company can be regarded as a 'process' with inputs and outputs which can be given a specification. Equally important is that each activity or 'process' has a supplier -for example, of design information - and a customer, both of whose needs and expectations must be met if the process is to be specified with quality built-in to produce the required output first time. The same procedures are applied to each process as defined in the Standard.

Following on from the above, it is believed that the procedures involved in the design, construction, commissioning and servicing of chemical plant lend themselves to a Quality Assurance system that has the potential to achieve substantial savings by reducing costly errors - that is, by building quality into the design process itself. To this end, in 1989 the IChemE Engineering Practice Committee (EPC) set up a working party to give guidance on how to implement

IS0 9001 in design offices. The purpose of the guide was to assist companies who provide such services in interpreting the Standard for all phases of chemical plant design through to its commissioning, when, hopefully, the company will be registered to IS0 9002 for chemical manufacture. Many major contracting com- panies now have registration to IS0 9001. The guidance given here is intended not only to help both contracting and operating companies in the chemical process industry, which have their own in-house project design functions, to achieve the benefits which a formalized Quality Assurance system provides, but also those in the food, drink, pharmaceutical and building service industries. There is no doubt that the benefits of Quality Assurance and TQM are real and the techniques are here to stay. The guide will also prove beneficial to under- graduates during their design project and to graduates in small to medium sized companies who have no special or dedicated expertise in Quality Assurance.

It is hoped that this guide will complement the long-standing IChemE Model Forms of Conditions of Contract for Process Plants Suitable for Lum Sum

It' Contracfs (the Red ~ o o k ) ~ and Reimbursable Contracts (the Green Book) , thus advancing the confidence clients have in suppliers who use them.

How to use the guide

The guide has been arranged to enable its user to find the appropriate section quickly. Whilst some familiarity with the structure and requirements of the Standard is assumed, it should not be necessary to plough through large portions of the guide to find the help needed on the topic of the moment. This has led to unavoidable repetition between some sections. However, ease of use has been considered to be more important than relying on excessive cross referencing. The following notes will quickly familiarize the reader with the layout of the guide.

For simplicity, all references are given the IS0 9001 number within Section 4, Quality System Requirements. Each part of Section 4 of the guide has the corresponding number for the same section in IS0 9001 for direct reference when needed. Assistance is given under two headings in each part of Section 4 to help the reader interpret the requirements in relation to process plant projects.

The headings are:

Guidance This directs the reader into the application of IS0 9001 for a process plant project. It cannot be specific, but identifies those project requirements which need to be addressed within that section of the Standard. In most sections, guidance is further elaborated in:

Advisory procedures Where it has been felt that further assistance would be useful, the advisory sub-section offers additional comments, specific suggestions and sometimes examples of how compliance with IS0 9001 may be achieved.

Note: In the first edition of this guide the purchaser received a current copy of IS0 9001 for direct reference. This enabled the publisher to reproduce Section 4 of the Standard in the margin of the guide under the title 'Abstract'. In response to readers' suggestions, and since most now have access to the revised standard, this practice has ceased.

1. Scope

IS0 9001: 1994 Quality Systems relates to all the design, manufacture, supply, installation, commissioning and servicing activities that determine the quality and reliability of a process plant, as created by a multidisciplined engineering project team to a specification agreed with a customer.

The design of each project has to identify and take account of the require- ments of current legislation, International and National Standards and other specifications that may be referred to in the design and by agreement with the customer.

2. Normativereferences

The references given in IS0 9001 are self-explanatory. Additional text references are listed on page 70 of this guide.

3. Definitions

In the guide the following definitions have been adhered to as closely as possible.

Contract: accepted order Requirements mutually agreed between a supplier and customer, and conveyed by any means.

Customer The person(s), employer or organization, often referred to as the client, who engages the contractor or engineering design department for the design, manu- facture, supply, installation and commissioning of the process plant.

Design review A formal, documented, comprehensive and systematic examination of a design to evaluate the design requirements and the capability of the design to meet those requirements and to identify problems and propose solutions.

Engineering contractor A company which supplies engineering man-hours and equipment, either sepa- rately or in combination, to a customer. This could be for a simple plant item, a feasibility study or a complete process plant.

Engineering department A team of engineers, technicians and tradesmen who carry out the same func- tions as an engineering contractor but are permanent employees of the same company as the customer.

Hazan Hazard analysis

Hazop Hazard and operability study

Product Outputs of activities or processes

Project engineer A person appointed by the project manager who has the responsibility and authority for a particular discipline and for the management of specific aspects of the project.

Project manager The person employed by the supplier, having the authority to direct the contract and meet the obligations of the supplier to the customer, to fulfil the project requirements. Within an organization, this person may have varying titles from Chief Engineer to Managing Director or Chief Executive.

Quality The totality of features and characteristics of a product (process plant) or service, that bear on its ability to satisfy the specified need.

Quality Assurance All those planned and systematic actions necessary to provide adequate confi- dence that a product (process plant) or service will satisfy specified requirements first time.

Quality Plan A document setting out the specific quality practices, resources and sequence of activities relevant to a particular product, service, contract or project. In the context of this guide it comprises the project co-ordination procedure and departmental work instructions.

Quality Policy The overall quality intentions and direction of an organization as regards quality as formally expressed by top management.

Reliability Ability of an item (plant) to perform a required function under stated conditions for a stated period of time.

Sub-Confractor The organization from which the supplier procures goods or services.

Supplier The company - for example, contractor or engineering department - imple- menting the quality system and providing the goods or service to the customer.

Tender Offer made by a supplier responding to an invitation to satisfy a contract award to provide goods/services.

4. Quality system requirements

4.1 Management responsibility

4.1.1 Quality policy Guidance The quality policy for any organization must have the total commitment of its management to establish and maintain the quality system, which will ensure the requirements of the customer are consistently achieved.

Once a clear commitment to a quality policy has been established, the Chief Executive must delegate the responsibility and give authority to competent persons who will ensure that the policy is fully understood, implemented and maintained through its quality system.

The quality objectives for a process plant project should be that it is: 'fit for the purpose' for which it is designed; it is completed within cost estimate; on schedule and is reliable. It is also paramount that the plant is safe in operation and that all potential hazards and risks have been identified and properly controlled. It must be engineered to protect the health of the employees and the public and not damage the environment.

Advisory procedures For any organization supplying process equipment or services to IS0 9001 there must be dedication to quality. This commitment must be total. It will emanate from the Chief Executive and be transmitted through all levels of management, engineering departments and include the craftsmen and fitters. The responsibil- ity for achieving it must be defined clearly within the company's Quality Manuals. It is normal practice for a policy statement on quality assurance to be issued by the Chief Executive and placed at the forefront of these manuals.

4.1.2 Organization

4.1.2.1 Responsibility and authority

Guidance The Quality Manual will include a management structure which will clearly identdy who is responsible for the control of quality at each stage of a project.

Adviso y procedures Projects will always vary in size and complexity, so companies have to decide whether they have sufficient engineering resources to undertake a particular project or whether they should employ the services of an engineering contractor. Equally, engineering contractors may wish to engage sub-contractors. In either of these situations the Quality Assurance department must have the responsibil- ity and authority to ensure that the requirements of the company's quality system are achieved.

4.1.2.2 Resources

Guidance Once a project has been sanctioned and the requirements specified, a detailed engineering design will have to be undertaken. This will ensure that the process plant is engineered into an efficient and safe operating unit. The resource needs of any project will be dependent on the value, the complexity, location and time schedule. Therefore the project manager must ensure that the manpower resource is qualified and trained. In addition, craftsmen must be competent and skilled.

To assist the project manager he may require the services of a planning engineer for resource allocation. He willidentlfy any shortfall inmanpower for thevarious engineering disciplines for support in both the design office and on site. On major projects, failure to idenbfy reasonably accurately- the resources required can lead to delays which may impact on quality. It is essential that systems and procedures are in operation during all phases of the project to ensure it is completed on time within budget, and operates to its technical specification within the overall project scope.

Adviso y procedures Project management will provide adequate resources and trained personnel (see Section 4.18 Training, page 67) to undertake the detailed engineering and main- tain the integrity of the installation. This may include qualified and trained engineers, technicians and craftsmen to undertake the following:

heat and mass balances; design calculations of a mechanical or process nature; software applications; Hazop and Hazan studies; environmental impact assessments; integrated pollution control (PC) authorization; detailed drawings for construction; inspection during installation and erection; commissioning and validation procedures; quality and safety audits.

4.1.2.3 Management representative

Guidance The Chief Executive or project manager will appoint a quality representative to ensure the implementation of the company quality system. The representative may need to employ in-house trained quality personnel or use the services of outside specialist companies.

Adviso y procedures The quality representative will be responsible directly to the Chief Executive or project manager and will ensure that the requirements of IS0 9001 are imple- mented and maintained. To resolve conflicts which may arise during the life of a project and which can impact on the quality objectives - for example, time schedules and cost - the quality representative must have no direct project responsibility and have direct recourse to a senior manager/director who has authority to resolve the matter.

4.1.3 Management review

Guidance A management review is a systematic reappraisal of the quality system proce- dures and objectives and will identlfy where they can be improved, based on experience, or if they require any amendments or minor changes. The latter may arise for reasons such as staff changes, new legislation and new computer techniques. The review should not be confused with a quality audit, which sets out to establish that the organization as a whole is operating to the demands of the company's quality system and procedures. The review will, however, con- sider the results of audits. The composition of the group formed to undertake the review will depend upon the organization.

The frequency of the reviews must be established based on how critical they are to the product (process plant) quality. In addition to the quality system review, an engineering contractor would probably examine each project on completion and implement any changes as highlighted by deficiencies which arose during the life of the project. An engineering department may consider the suppliers' performance, with special regard to their compliance with the Quality Plan, company standards and safety procedures. An example of this would be to ensure that a supplier of process plant had complied with a customer's number- ing system for items of equipment, valves and pipework. They may also wish to consider any standards and procedures, and review these documents, together with any others which are issued to suppliers, to ensure that plant installations conform to company engineering policy, not only during construction but also on completion, to minimize maintenance.

Adviso y procedures The quality system has to be reviewed at defined intervals. It is wise to review its key elements on a 3-6 month basis and other sections at least annually, with a supplementary review at the completion of each project. Project team members involved in reviews could be selected from:

project manager; quality manager; planning engineer; process engineer; systems engineer; civil and structural engineer; mechanical engineer; electrical engineer; building services engineer; instrumentation engineer; health, safety and environment advisor; purchasing manager.

Management review must include an appraisal of the quality system currently in operation, so the agenda would include topics such as:

quality policy and objectives; improvements to the quality system; documentation and software control; changes in working practices; customer complaints and corrective actions; audit reports; corporate and future plans.

When a project management review is undertaken, items of discussion could include:

project planning and organization; variations to contract and cost control; engineering rework; customer complaints (where the customer may be either internal or external

to the company).

The review must be recorded and recommend to the Quality Assurance manager any action needed to amend the procedures in the Quality Manual or to improve the quality of the engineering activities. Actions should be monitored to ensure they are implemented and effective. Care should always be exercised in making amendments so as to ensure that the instructions are clear and concise and that ambiguities are avoided. Any obsolete documentation must also be removed. Changes must be approved and authorized by nominated responsible persons in accordance with document and data control and change procedures defined in Section 4.5.3.

4.2 Quality system

4.2.1 General Guidance The quality system must be based on the principle of 'do it once, do it right', which will ensure the efficiency and safety of any process plant project. To achieve this the company will have its own approved standards and procedures which reference other International or British Standards and/or statutory regu- lations and act as reference documents against which the system can be tested for compliance. For each project a Quality Plan should be produced which would be based on the standards and procedures given in the Quality Manual. The distinction between these is shown by the following descriptions and their relationship within the quality system by Figure 1, page 17.

4.2.2 Quality system procedures Guidance The Quality Manual covers the quality system procedures within the whole operation of the organization with regard to Quality Assurance. This is often written against the corresponding paragraphs of IS0 9001 Sections 4.1 to 4.20, augmented as required by work instructions for the department.

The Quality Manual will be unique for each company and will recognize the business environment in which the organization operates (being either a large process engineering contractor or an engineering department - see Chapter 3 Definitions, pages 6-7).

Advisoy procedures The Quality Manual should set out the quality policies, procedures and practices within the organization. It may be found convenient merely to indicate the existence and contents of the more detailed procedures which operate in other departments. Each department may have its own procedures and practices, and specific parts of the overall quality system could be arranged as follows:

process and design engineering procedures; procurement; sub-contractor control.

4.2.3 Quality planning Guidance Quality planning sets out the specific quality practices, resources available and sequence of activities relevant to a particular process plant project (see BS 4778:

Part 1 1987: 3.9"). Standards will be agreed prior to contract or detailed engi- neering design. Any standards having a subjective element would initially be approved by a procedure acceptable to both the customer and the supplier. An example of this would be the quality of surface finish for an item of process equipment -for example, satin or mirror finish for stainless steel plate.

For each project the Quality Plan would normally make reference to the Quality Manual and only describe in detail the exceptions to the quality procedures. The Quality Plan will include, or refer to, Inspection and Test Plans (ITPs) (see Section 4.10 Inspection and testing, page 45).

When the process plant is commissioned and is handed over for production, the Quality Plan should have established the plant 'pedigree', and could be used as the basis for all future maintenance and plant inspections.

Adviso y procedures The Quality Plan is specific for the total project and it is the compilation of all the individual quality plans required for all plant items and equipment which are specific to the project. Typical individual Quality Plans include:

plant fabrication; building construction; environmental services; pipework fabrications; equipment testing; commissioning; validation; plant optimization (if applicable).

4.3 Contract review

4.3.1 General

Guidance Contract review is the beginning of the design validation span of a project as defined in Figure3, Section4.4.8, page 26. It is essential for the customer to specify the project requirements and extent of supply as accurately as possible, because it is on this information that the contract is based and the order accepted.

The intention of contract review is to ensure that the requirements of the contract are fully understood, that deliverables are identified, variances between tender and contract are resolved and that the supplier has the technical, managerial and manpower resources to complete the contract.

A contract is a legally binding agreement made between a customer and supplier for the supply of services and/or equipment. However, for an engineering department supplying s e ~ c e s or equipment within the company, the legal requirements of a contract do not apply since the customer and the supplier belong to the same company. The scope of review for a contractor will be broader and may be more stringent than for an in-house engineered project as it will include legal matters. The legal position with drawing up contracts is extremely complicated, and is important for any process plant project, especially where high capital investment costs are involved. IS0 9001 requires that procedures are in place and are maintained to ensure the project scope is clearly defined in the accepted order or contract document and that queries are resolved with the customer in good time.

4.3.2 Review

Guidance The review should consider:

(i) Contract basis The contract conditions must be agreed between the supplier and the customer, and will include such topics as terms of payment, contract price and delivery (or completion). The form of contract may either be a lump sum payment or reimbursable as described in the Institution of Chemical Engineers Model Forms of Conditions of Contract for Process Plants Suitable for Lump Sum Contracts (Red ~ o o k ) ~ or Reimbursable Contracts (Green ~ook)".

It is unlikely that the signed formal contract will be the totality of the agreement. Therefore a procedure must be followed to agree which documents, drawings and specifications will be included in the contract. The contract should clearly state the order of precedence in the event of a conflict of documentation (see Section 4.6 Purchasing, page 32). There will be a number of important aspects but most crucial is the definition of the 'purpose for which the plant has to be fit'. A precise definition of all conditions that could affect the design or perform- ance of the plant, including composition and quality of feedstock and product, service demands and environmental performance must be agreed before the contract is accepted.

It must also be remembered that a contract for the supply of process plant may carry heavy financial risks in the form of performance warranties, which the contractor would be prudent to limit. It is recommended that performance guarantees be written into the agreements so that each party is able to assess their own liability in the event of the plant failing to meet the performance.

A project programme which details all factors which can influence the final completion should also be issued to the customer.

The review procedure should ensure that clear agreement is obtained on the precise terms ahd conditions which pertain to the contract, particularly for export, where it is essential to establish which national legal system applies. Legal advice for the preparation of such a procedure should be sought.

It is recommended that representatives from the project team should be involved as early as possible in the project, preferably at the pre-contract stage, to ensure they have a good understanding of the customer needs.

(ii) Variations behoeen contract and order requirements The contract between the customer and supplier will commence immediately the order has been acknowledged. Therefore, pre- and post-contract docurnen- tation mustbe checked to ensure that the scope of supply for which the contractor has quoted remains unchanged. All documents must be compared thoroughly with the enquiry and differences resolved with the customer before contract acknowledgement.

(iii) Contractor capability Before proceeding, the contractor should establish that he has all the necessary financial, technical and managerial resources to carry out the contract require- ments. A detailed review of the engineering requirements for the project is essential. This, together with the estimated cash flow during the project, are often critical factors.

4.3.3 Amendments to contract

Guidance Amendments to the contract must be reviewed promptly, with variation orders issued and acknowledged.

All contract changes and additional work instructions raised during the contract period must be strictly recorded and the customer advised promptly of the impact of these variations on price, delivery and other factors affecting quality - for example, reliability.

4.3.4 Records

Guidance Contract reviews must be documented to ensure proper accountability is main- tained. The records could be administered by a check-list procedure which would assist proper accountability. They will be specific to equipment suppliers and used to compare their performance with the original project programme to monitor key completion and delivery dates.

Such records will provide objective evidence that the Quality Assurance proce- dures have been followed (see Section 4.16 Control of quality records, page 64).

4.4 Design control

4.4.1 General Guidance This section of the Standard covers the design verification span referred to in Figure 3, Section 4.4.8, page 26. Procedures for design control should recognize that, in executing the design of a process plant, a supplier will need to draw on the expertise of a number of engineering and other disciplines, whose activities are co-ordinated by a project manager or project engineer. These disciplines include all or some of the following, depending on the size and scope of the project.

Technical functions: chemical; mechanical (including vessel, machinery, piping and plant layout specialists); electrical; instrument; systems software; civil and structural; risk analysis and safety; environmental impact; building services; quality assurance; construction; commissioning.

Other functions or departments: purchasing; non-destructive testing and inspection; planning; shipping - dimension constraints imposed by transportation routes and

regulations; legallinsurance.

Quality Assurance depends not only on the quality of work produced by the different disciplines, but also on the efficient co-ordination and interfacing of their activities. Company procedures should address this requirement.

Adviso y procedures In order to cover the whole range of activities it is recommended that the quality

system (see Section4.2 Quality system, page 12) will require two levels of written procedures. These are:

standard procedures which apply to all projects and are referred to in the Quality Manual;

supplementary procedures which are specific to a particular project and written in the Quality Plan.

The Quality Manual and Quality Plan together form the quality system as shown in Figure 1.

The Quality Manual comprises: Standard procedures which are not project-specific including:

(i) Company procedures which: define the company's overall policy; describe general methods of implementing company policy; describe responsibilities of relevant functions and personnel.

(ii) Departmental procedures which: describe how the company's policy within a specific department is imple-

mented; provide detailed instructions regarding mandatory methods of design.

QA System 4.2

Quality manual Quality plan 4.2.3 4.2.3

Company Departmental Project co-ordination Departmental work procedures procedures procedure instructions

4.4.1 4.4.1 4.4.1 4.4.1

Standard procedures - To be considered for all projects

Supplementary procedures - Project specific

1 Figure 1 Elements of the QA system.

The Quality Plan comprises: Supplementary procedures which are project-specific including references to the standard procedures where appropriate. It is these supplementary, project- specific procedures, which comprise the Quality Plan as defined in this guide.

(i) Project co-ordination pvocedure The project co-ordination procedure is normally written by the project manager to ensure the companfs procedures and the customer's requirements are met for a particular project.

It should include the following: scope of project; project team and organization; quality objectives; communication between the customer, contractor and subcontractors; project schedule; payment schedule; file references; - progress reporting; special features of the project - for example, design codes; regulatory requirements, climatic conditions, health, safety, hazard and envi-

ronmental impact; nominated personnel; document distribution schedule; electronic data transfer; drawing and document numbering; drawing and specification registers; control of design changes;

and any other special requirements not covered by these.

(ii) Departmental work instructions Departmental work instructions should be written for each engineering disci- pline and function by the relevant department manager, or delegated by them to a responsible, competent person.

They should include the following: collection and collation of data; documentation; project schedule; calculations:

- methods; - approved sources of physical property data; - software programs validated for use on the project;

specifications: - format;

- maintenance of registers; design standards and codes; checking and approval; reporting; maintenance of records;

and any other special requirements of the project not covered by these.

4.4.2 Design and development planning Guidance This requires the supplier to set up an organization to give fu.1 managerial effect to multi-discipline co-ordination and planning referred to in Sections 4.1.2.2 and 4.4.1, pages 9 and 16. In particular, the responsibilities across interdepartmental functions need to be clearly defined. In practice this is equivalent to a project manager (contractor or engineering department) setting up the project team for a particular project within the overall organization of the company.

The supplier needs to ensure that within both the company organization, and the project team, adequately trained and experienced staff are appointed for specific projects to execute the level of responsibility assigned to them. Adviso y procedures A detailed plan should be drawn up at the commencement of every project, identifying in a logical sequence the activities necessary to achieve the overall project schedule. They are classified by department with responsibilities for the activities indicated. These plans cover all relevant aspects of design, procure- ment, construction and commissioning, depending upon the company's contrac- tual arrangement with the customer. The timing of key design reviews is shown on the detailed plan. The project schedule may be presented in the form of a bar chart or a planning network, consistent with the size and type of the project. For major projects this activity will require the involvement of a specialist planner. AU project plans should be approved by the project manager.

The project co-ordination procedure (part of the Quality Plan) should identlfy those personnel with s u p e ~ s o r y responsibiIities for the project, plus any other key personnel.

The departmental work instructions should assign other personnel to design verification activities. They should be demonstrably qualified and experienced for the assignment and level of responsibility undertaken.

The progress of the work should be reviewed regularly. Following these reviews the overall project schedule should be updated to show the current situation and the progress achieved on the plan to date. Actions resulting from these reviews should be recorded.

Related written procedures should cover: project planning; progress reporting; design reviews.

4.4.3 Organizational and technical interfaces Guidance This recognizes the distinction between people and technical interfaces within an organization. It requires the supplier to identify where these interfaces occur and to have documented procedures to cover them. A typical, and generally difficult, example is the interface between those responsible for piping and plant layout and all other disciplines. There is frequent interplay between location of equipment and its size or specification, which depends on detailed information from manufacturers of proprietary equipment.

Aduiso y procedures The organizational and reporting relationships of personnel assigned to a project should be shown on an organization chart contained in the project co-ordination procedure. Technical interfaces between each engineering discipline and the method of review of design documents should be defined in a company proce- dure, with detailed implementation contained in departmental procedures. These procedures should describe the scope and purpose of every design docu- ment produced, the originating department, the source of input data and the departments to whom the document is issued. The number of review stages and the method of review should also be defined.

Interfaces with the customer and external organizations, contractors, licensors, regulatorylstatutory bodies, third party inspectorates, vendors and subcontrac- tors are managed by the personnel identified in the project co-ordination proce- dure. Some of these interfaces may be described in the contract, or further discussion with the customer may be required. Departmental procedures should describe the normal methods of managing the interfaces with outside bodies.

It is emphasized that it is unlikely that organizational and technical interfaces can be adequately serviced by departments working in isolation, however close their adherence to written procedures. Interfacial activities should be monitored by a project manager or project engineer and this role defined in the project co-ordination procedure.

Technical interfaces with vendors of equipment should be managed by specialist engineers by preparing detailed specifications and monitoring the design output to ensure compliance with them. Depending on company procedures, or perhaps on the size of the project, commercial interfaces will be managed by the same specialist engineer or separately by the purchasing department.

Related written procedures are: production of project co-ordination procedures; design document interfaces; validation and authorization of design documents; management of vendor's data; various departmental procedures; IT strategy. I

4.4.4 Design input 1 Guidance The availability of design data, and its state of development at the commence- ment of a project, can vary considerably. Typically, design data will originate from the customer, technology licensor, pilot plant trials, laboratory experiments or from the supplier's knowledge and experience.

Procedures should exist to ensure that designers are kept up to date with regulatory requirements and to ensure conformity with these. At project concep tion, there should be liaison with the appropriate authorities to confirm that the regulatory requirements have been correctly interpreted. It is recommended that a database enquiry is made to ensure that the latest regulatory documents, standards and codes of practice are applied.

It is important that the starting data and source are documented, and that suitably qualified staff review its content, iden* where essential data is missing or ambiguous, and resolve shortcomings with its originator.

Adviso y procedures The customer will define plant capacity and product quality, mandatory stand- ards and other essential documentation. Such requirements, where the supplier is a contractor, should form part of the contract reviews as described in Section 4.3 Contract review, page 13.

As the design progresses, additional input data will be received from the customer, licensor, vendors, consultants and other bodies, and this data should be similarly documented and reviewed for accuracy and completeness.

AU the procedures identified kn Section 4.4.3 should contain sections relating to documentation and software review and the use of design input data.

4.4.5 Design output Guidance 1 Company and departmental procedures define the types of documents (see Section 4.2 Quality system, phge 12) that should be produced in order to meet

the requirements of different types of projects. Additionally, the scope of the required design output will normally be defined contractually in terms of the drawings, schedules, specifications, calculations, manuals and dossiers to be produced for the project, which may either be by hard copy or electronic means. Where appropriate, particular attention should be given to documenting the basis of health, safety and environmental protection measures for the project.

Advisory procedures Design output must:

(a) Fulfil the specified design input needs Although based on the starting data, account must be taken of any contingencies added, changes imposed from external sources (see Section 4.5.3 Document and data changes, page 31), and smaller changes which arise as the design develops. Designreviews are required to ensure that the design remains in accordance with the design input documentation.

(b) Contain or reference the conditions of acceptance Duty specifications, whether related to the whole plant or to individual items of equipment, should clearly define criteria such as characteristics to be checked, tolerances, inspection requirements, commissioning trials and guarantee per- formance tests.

(c) Identify those characteristics of the design that are crucial to the safe and proper functioning of the product Safety reviews should be performed routinely to identify potential hazards and the measures taken to safeguard plant, personnel, the general public, the envi- ronment and the integrity of the manufactured product. Responsibility will normally extend to the provision of operating and maintenance manuals both of which should contain instructions on safe working practices.

Related written procedures: safety reviews; hazard analysis (Hazan); hazard and operability studies (Hazop); safety critical items; environmental impact assessments; IPC authorizations; verification and authorization of design documents; validation; inspection; departmental procedures.

4.4.6 Design review Guidance For any major project the design review is one of the most important stages to ensure its successful completion. At the contract review stage the project is in embryonic form and the design requires to be developed and controlled continu- ally to ensure it meets the demands of the specification. Unlike mass production processes, which manufacture product on a repetitive basis, a process plant project is often a 'one-OW. Sometimes the project may be similar to an earlier installation but even then the location, climatic conditions or available utilities may differ. Therefore, the supplier has to ensure that the detailed engineering design, as issued for construction and installation, is suitable for purpose. This requires to be monitored by careful reviews.

Input data (see Section 4.4.4 Design input, page 21) may be incomplete prior to the commencement of design, as it is often not technically necessary nor com- mercially viable, to gather all design information prior to contract. This generates the need to gather additional technical information for the design to proceed. Changes which take place must be checked for their impact on the total design which must be managed and dove-tailed together. If this is not co-ordinated by the project manager then the individual discipline engineers will work in isola- tion of each other and this will result in 'clashes of interest'. A simple example of this is if design reviews are not regularly undertaken, the space occupied within a service duct could be allocated by both the electrical design section for cable trays and the services engineer for ductwork, resulting in a clash of hardware. These are relatively easy to amend at the design review but can be expensive and time consuming to correct at the installation stage. The project manager must ensure that the design is co-ordinated and misunderstandings between disciplines are avoided. This will require continual vigilance as the design progresses and good communications must exist between all the inter- ested parties.

The design review should be seen as formulated stage inspection. During the design phase it is extremely important that all representatives with any interest in the design take an active and constructive part in the design review, such that the right decisions are made as early as possible. Figure 2 on page 24 illustrates typical input groups.

The role of the project manager is strategic for the whole project and would not normally involve detailed engineering decisions. Decisions should be made at the lowest possible levels providing that the basis of the information on which the decisions are made is sound. Particular points of issue should be relayed to the next tier of project management until they are resolved by the project manager.

Figure 2 Typical input groups for the design review.

Design documentation must be checked and approved (see Section 4.4.1, page 16) but in addition and most importantly revisions and amendments must be documented. The information arising from these changes must be quickly and clearly communicated to other engineering disciplines and involved individuals. The documentation should also clearly state who authorized the change and the reason for it. Equally, any impact a change may have on capital cost and time must be quickly estimated and forwarded to the project manager.

It is important that only valid documents are used for design purposes; therefore if changes are made and issued it is essential to withdraw the previous document issue from circulation. When superseded documents are retained they should be clearly identified.

Adviso y procedures The organization of a project team will consist of a group of experienced engineers from various disciplines reporting to the project manager. He in turn will report to an organization structure representing the customer. At the pre- liminary design stage when schematics are being prepared and developed - for

example, piping and instrumentation diagrams (P&IDs), electrical distribution, control systems - this work may be undertaken individually by the sections. However, once general arrangement drawings are commenced it is essential that the requirements of all disciplines are accurately co-ordinated. Clash control at this stage of the project is critical. Modern CAD systems can recognize and highlight clashes; the alternative is to undertake this operation through careful and systematic checking on the drawing board.

Once the project has been completed, the 'as-built' drawings which have been conscientiously amended and checked will form the basis of the validation of the process (see Sections 4.4.8, page 26 and 4.16, page 64).

Procedures should be in place for: project organization; change control; drawing reissue and withdrawal of previous issue; documentation and data receipt and distribution; design approval.

4.4.7 Design verification Guidance Written procedures should be used to ensure that the design is verified at predetermined specific stages during the project, and that these stages are defined in the project co-ordination procedure in the Quality Plan.

Adviso y procedures All design verification activities should be documented. This requirement im- poses the need for all significant design documents to bear 'drawn by', 'checked by' and 'approved by' entries, and for review meetings to be minuted. Such review meetings require actions by named individuals or departments and a follow-up procedure should ensure that action is taken.

The design verification measures should include: checking in accordance with the departmental procedures and departmental

work instructions; design reviews by engineering management, project management and con-

struction management; planned and regular project and company internal quality audits; checking of calculations by alternative means, if appropriate; verification of software, for in-house use; review of past experience with similar projects; pilot plant trials/small-scale laboratory tests; hazard evaluation tests.

Related written procedures: quality control of software for in-house use; validation and authorization of design documents including those produced

electronically by CAD; the preparation of departmental work instructions; departmental procedures.

4.4.8 Design validation Guidance This is a new clause in the 1994 revision of IS0 9001. A diagram illustrating the differences and connections between verification and validation is given in Annex A of the BSI Quality Assurance Guide to the 1994 Revision of BS 5750, I S 0 9000~. It is reproduced here as Figure 3.

review

Design input

Design I plan 1 I I*-4 Responsibilities I I 1 . 1 ~nterfaces I

1 - 1 Verification I Design Validation output

in use

Figure 3 A diagram illustrating the revised design control model. (Annex A from the BSI Quality Assurance Guide to the 1994 Revision of BS5750, IS0 9000~ is reproduced with the permission of BSI.)

Design validation covers the need to establish that the finished process plant meets all the requirements of the contract. This means that the Quality Plan must include procedures for testing all equipment to ensure that design parameters, specifications and outputs have been complied with. It will include, for example, the criteria for acceptance of guarantee runs by the customer.

Briefly, validation encompasses the design verification procedures by extending them to cover commissioning and handover criteria of the finished plant to the customer. It covers Sections 4.3 to 4.15 of the Standard.

Design verification compares the design input with the design output at each stage of design control - see Section 4.4, page 16.

Design validation and verification together defirie how quality is built into the product throughout the project so that the product is right first time to customer requirements - the essence of Quality Assurance.

Part of design validation is to identify the critical components and functions. Certain projects may require a lesser degree of design validation than others. Validation is extremely critical within, for example, the nuclear and phannaceu- tical industries where the products of processes are life threatening, but takes a much lower profile on projects such as mineral treatment (for example, gravel extraction).

Adviso y procedures The completed plant design will be validated on completion of the following stages which will be encompassed within the Quality Plan. (i) Erection completion The completion of construction of buildings and the installation of equipment and materials is checked to be in accordance with the drawings, documents and specifications in the contract.

(ii) Mechanical completion Mechanical completion means that the fabricatioA and installation of equipment and its off-site and on-site static testing has been completed in accordance with contractual specifications and detailed design drawings.

I (iii) Pre-commissioning 1 Pre-commissioning is the period when the installation is checked for complete- ness and the equipment is test run and prepared for operation as far as practica- ble to ensure it is safe to receive and process feedstock.

Such test running and preparation of individual items of equipment or systems, referred to as functional testing, is normally performed using clean water, air or inert gas as substitutes for process materials.

At the conclusion of this phase, which may partly overlap the mechanical completion period, the plant is said to be 'ready for ccomrnissioning'. At this point the plant is ready to receive normal feedstock.

fiv) Commissioning Commissioning begins when normal feed is admitted for the first time to the plant. During commissioning, the plant throughput is adjusted to design oper- ating conditions to give a period of full production prior to the demonstration of performance tests.

(v) PelfOrmance Tests Known also as guarantee or warranty tests. These are technically supervised and recorded tests which verify that plant, systems or equipment within a plant meet the performance guarantees in accordance with the contract. Once mutually ac- cepted they conclude the design validation span referred to in Figure 3, page 26.

Written procedures are required to cover all these stages. Specifically, check-lists are required to provide objective evidence that, for example, erection is complete or the plant is ready for commissioning. Completeness or readiness in this context is seldom 100%; it usually refers to a condition which is mutually acceptable to supplier and customer with exceptions documented in a reserva- tion list ( or punch list) with a commitment by both parties to elimination of the identified reservations in a timely manner. Safety must be the overriding factor to be taken into account before commissioning any part of the plant.

Each stage should be accepted by the signatures of the supplier and customer on certificates and accompanying reservations lists, culminating in the %andover certificate' described in Section 4.10.5 Inspection and test records, page 51.

Depending on contractual requirements the completed plant may be tested as an integrated plant running for the duration of the test period, or the test may be the culmination of individual sub-systems and systedequipment perform- ance tests at the design rate.

The pharmaceutical industry has its own stringent requirements for validation to meet the requirement of Good Manufacturing Practice (GMP). In thisindustry, erection and mechanical completion is frequently referred to as 'installation qualification' (IQ), pre-commissioning as 'operation qualification' (OQ) and commissioning and performance tests as 'process qualification' (PQ).

4.4.9 Design changes Guidance Written procedures should be established and maintained for the identification, documentation and appropriate review and authorization of all design and

software changes and modifications. Procedures should ensure that the implica- tions of change in tenns of safety, design effort required, cost and time are considered, documented and authorized.

Advisoy procedures There is considerable potential for change to affwt adversely the quality of the design, unless it is effectively managed. Adverse effects can be created by additional work causing a dilution of resources, or by inadequate dissemination of change information throughout the design team. Even with adequate distri- bution of change documentation, effective action following the change cannot be assured unless there is a systematic review procedure to follow up all actions to completion. Changes to documents is discussed in Section 4.5.3 Document and data changes, page 31.

Related written procedures: change control; safety review; software control.

4.5 Document and data control IS0 9001 accepts that documents, data and records may be in any media - for example, hard copy, electronic and microfiche - but does not deal with the inter-relationship between Quality Assurance and information technology (IT). Software plays a critical part in most quality systems and close attention must be paid to ensuring its suitability and quality. Quality Assurance of software is described in IS0 9000-3'~, but the 'Tickll" ~ u i d e ' ~ describes best practice for a quality management standard for development and validation of software. It is a standard devised by IT professionals with DTI and British Computer Society support. IS0 9000-3 is included in part 2 of the 'TickIT' Guide. Readers are advised to refer to this publication for more detail.

4.5.1 General ~ ~ Note: In the 1994 revision7, 'data' has been added to the title of this section. For any process plant project, the flow of accurate and relevant information must be quickly distributed to maintain the completion schedule. Controls should en- compass documents and drawings from external origins such as the customer and statutory bodies and those generated within the project. The data may be received in any form such as hard copy or electronic media.

The Standard demands procedures for the contrbl of all documents and data relating to the requirements of the Standard itself, as well as for the project. It includes the quality system documents as described in Section 42, page 12.

4.5.2 Document and data approval and issue Guidance It is important that an effective system of document numbering and control is in place from the early stages of a project. This is when many of the documents are initiated, yet it may be a time of rapid change as the design concepts are developed. The controls also apply to software.

For many design organizations there are sufficient dissimilarities between pro- jects or types of projects that it is impractical to develop an all-embracing single system for document control. To overcome this difficulty a two-tier system of document control is recommended:

(a) A system implemented at company level which covers the control of company and departmental procedures - for example, those issued by the Quality Assurance department or by a company standards engineer.

(b) A system implemented project by project covering the issue and re-issue of project-related material including drawings, specifications, data sheets, orders, plans and other documents.

The document control system is required to identify each document, its date, its revision number (or a similar issue identifier) and its distribution. It will also help subsequent audits if the reason for the revision is included. The implemen- tation of such a system requires the compilation and regular updating of a document register.

Procedures should idenhfy those persons authorized to initiate or to approve the issue of each type of documentation.

Written procedures are required to control all documents and data which have a bearing on quality. Control of documents should be such that:

(a) they are issued appropriately and to locations (for example, onsite) where the functions are being performed;

(b) obsolete documents are promptly removed from use and are stamped or otherwise identified as 'obsolete' if retained for record purposes;

(c) important documents which are retained for future reference - for exam- ple, soil reports - should be identified and archived. This data could then be placed on an electronic database for retrieval.

Adviso y procedures Documents should be initiated, prepared, approved and issued in accordance with written procedures. Not all documents are prepared 'in-house' under such control, and documents from external sources - for example, vendors' or

sub-contractors' data - should be numbered, reviewed and approved by authorized personnel before further dissemination.

Records should be maintained of the issue and re-issue of 'controlled' documents toenable these to be updated or withdrawn as appropriate, when obsolete. On ocksions it will be necessary to issue a document to personnel not on the official distribution list, to enable a particular, perhaps previously unanticipated, task to be performed. Written procedures should take account of this eventuality, but it is customary, as a minimum, to stamp such documents 'uncontrolled' as an indication that the recipient will not automatically receive revised documents.

Related written procedures should cover: initiation, preparation, approval and issue of company and departmental

procedures; production of project ceordination procedures; drawing, document numbering and software; validation of design documents.

4.5.3 Document and data changes Guidance It is ideal if changes to documents and software are reviewed and approved by the same functions that performed the original review and approval. Where practicable, the nature of the change should be identified in the documents or on attachments. For example, changes to drawings may be highlighted by drawing a cloud or bubble around the change, and changes to text may be highlighted by the use of a revision number or letter in the margin. Alternatively, change lists can be prepared as an attachment.

Adviso y procedures I Registers of documents and software should be maintained, idenwng the current revision (or issue) and date. Company and departmental procedures are not project-specific and will normally be expected to change infrequently. How- ever, drawings and specifications in use on a particular project will be subject to frequent updates. Such documents are often initiated at a 'preliminary' status, and ultimately be raised to 'for purchase' or 'for construction' status. Registers of project documentation should contain entries defining the status of each document.

The project schedule (see Section 4.4.2 Design and development planning, page 19) details the timing of the issue, updating and re-issue of design documents. In addition to the planned re-issue, documents should be re-issued after a practical number of changes have been made or if even a single, but significant change has been made. Minor changes to the design maybe found to be necessary during the construction and commissioning phases of the project. It is important

that neither health, safety, environment nor design intent should be compro- mised through unauthorized changes. Written procedures should address the feedback of information from site, the authorization of any changes found to be necessary, and the production of as-built drawings for record purposes.

Related written procedures should cover: initiation, preparation, approval and issue of company and departmental

procedures; change control; production of project co-ordination procedures; site feedback of engineering matters; software change reviews.

4.6 Purchasing

4.6.1 General Guidance The term 'purchased product' as used in IS0 9001 refers to the procurement of materials or services for inclusion in the supplier's own product or senices. Technical interfaces with sub-contractors of equipment should be managed by specialist engineers preparing detailed specifications and monitoring the result- ing design output to ensure compliance. This point is amplified in Section 4.4.3, page 20 and Sections 4.6.2 to 4.6.4, pages 33-39. The ultimate customer or user might himself regard the term 'purchased product' as being the process plant or senices provided by the supplier. The customer need not, however, regard himself as lacking a framework for ensuring the adequacy of what to him is 'purchased product'. A suitable contract could be taken from the Institution of Chemical EngineersModel Forms of Conditions o f Contractfor Process Plants Suitable for Lump Sum Contracts (Red ~ o o k ) ~ or Reimbursable Contracts (Green ~ook)". Frequently the contract is not a stand-alone document, and the final agreement may incorporate aspects of the invitation to bid and the supplier's tender. Where the possibility of conflict between documents exists, the contract should clearly state an order of precedence.

Advisory procedures Procedures should be applied both to individual items of equipment, serving mechanical, electrical, control or other functions, and also to materials which are usually referred to in the industry as 'bulk materials' - that is, material which does not normally have to be installed in a unique location. Examples are piping, pipe fittings, cable, cable trays and reinforcing bar.

The first step is to iden* suitable vendors and sub-contractors (see Section 4.6.2 Evaluation of sub-contractors). The next step is to analyse the bids, both

technically and commercially, to ensure that equibment and materials quoted conform to specified requirements. Company procedures should address the following three main requirements:

(i) Classification of bids Where appropriate, equipment and materials or entire sub-contracts are classi- fied (typically into two to four groups), so that high value/technically com- plex/long delivery/safety-critical equipment receives closer scrutiny than low value/standard design/off-theshelf equipment.

(ii) Technical analysis of bids Technical analysis should be performed in a struckwed manner, based mainly on a determination of:

compliance with performance requirement; compliance with specification(s); adequacy of scope of supply.

Where defiaenaes are noted, further communication may be needed with the vendor to determine whether there are any cost implications in achieving a full compliance with requirements. If so, this should be fed forward into the com- mercial appraisal.

(iii) Commercial analysis of bids Commercial analysis should be based on:

cost including packing, transport and insurance; delivery period; an assessment of the vendor's capabilities, as amplified in Section 4.6.2; other commercial considerations -for example, terms of payment and valid-

ity of offer.

On occasion, commercial considerations will be such that a re-examination of the technical analysis will be called for. Where this is done on commercial grounds, it will be necessary for a competent engineer to distinguish between the essential technical requirements and those which are desirable or preferred.

Related written procedures should cover: vendor selection and bid analysis. I I

4.6.2 Evaluation of sub-contractors ~ Guidance The term dsub-contractors~ should be regarded as a general term embracing anyone who provides goods or services to the supplier (see also Chapter 3 Definitions, pages 6-7). Companies with a high level of activity in design and

procurement normally favour a structured approach, leading to established approved sub-contractor and vendor lists which are regularly updated as data becomes available from completed projects. Customer requirements for pre- ferred sub-contractors require a project-specific approved supplier list. A small company, or one infrequently undertaking design and procurement, may review only the vendors selected for the contract. However, the basic principles outlined above still apply.

Advisory procedures

(i) Categorization It is recommended that sub-contractors should be suitably categorized within their own areas of technical and commercial activity.

For example, a four category system could be employed:

Category 1: fully acceptable Quality AssuranceIQuality Control system; Category 2: acceptable Quality AssuranceIQuality Control system with some minor deficiencies;

Catego y 3: inadequate Quality AssuranceIQuality Control system; Category 4: not suitable for use.

As described in Section 4.6.l(i), page 33, equipment and materials or entire sub-contracts should be classified into groups which reflect the critical (or otherwise) nature of the goods or services under consideration.

Company standards and the project co-ordination procedure should then ad- dress the level of surveillance and inspection which goods and services should receive from the supplier when purchased from a particular category.

Level of inspection (see Table 1): (a) inspection requirements to be specified individually; (b) full time inspection necessary; (c) minimum inspection required.

Table 1 -Required levels of inspection Supplier category 8 1 2 3

Critical purchases (a) (a) or (b) Cb) Non-critical purchases (c) (a) or (c) (a)

It should additionally be noted that there may beg requirement for third party inspection - for example, a statutory requiremeAt for steam raising plant, or a requirement imposed by the customer or an insurer. In locations outside the UK there may be additional mandatory requirements.

(ii) Selection of sub-contractors Selection of sub-contractors and vendors will nor lly be achieved using one or more of the following means:

1 (a) an assessment by the supplier of the sub-contractor or vendor, by ques- tionnaire, audit or both; (b) recent experience with the sub-contractor; (c) evidence of current accreditation to IS0 9001 or IS0 9002.

Company procedures should define how these are used to assign subcontractors and vendors to categories 1, 2 and 3, and the period of validity of such an assessment.

It may also be appropriate to conduct a financial assessment for a critical (for example, long delivery) purchase. Such an assessment may be conducted by financial analysis of the latest company accounts, or by means of a report from a credit rating organization.

(iii) Establishment and maintenance of records The approved subcontractor and vendor list should detaiI the product range and the category assigned in (i) above. It is possible that a sub-contractor or vendor may be in different categories for different items in his product range. The period of validity of the information should also be entered in the list. Supporting information such as audit reports and photocopies of accreditation to IS0 9001 or IS0 9002 should be retained.

Periodic review is necessary in order to update the information and to ensure that quality system controls are effective. This may be obtained by feedback relating to the actual performance of sub-contractors.

Related written procedures should cover: assessment of vendors and sub-contractors;

i company approved list of vendors and sub-con I ractors.

4.6.3 Purchasing data

Guidance ~ ~ Purchasing documents will normally consist of a technical specification s u p

ported by general specifications (if applicable) and a commercial section relating to validity of tender, cost, delivery, guarantees, scbpe of supply, the company's

and the customer's right to access for inspection purposes and other agreed conditions of purchase. Specifications will sometimes unavoidably contain in- formation of a confidential nature, in which case there may be a need for a secrecy agreement to be included.

Purchasing documents should state clearly the data and drawings to be provided to and by the supplier or sub-contractor, and the time schedule for the provision of this data.

Adviso y proceduws It is customary that, in order to minimize the chance of ambiguity or the omission of important information, a company should develop standard forms for the specification of all classes of equipment and materials normally encountered on process plant or specific to the company's line of business. Such forms may exist as pre-printed paper or, as is increasingly the case, on computer.

All equipment should be provided with a unique title and/or reference number. Bulk material components should be specifically identified. It will frequently be appropriate to append to the equipment specification, information and specifi- cations of a more general nature which are applicable across the project. Such information and specifications should describe, for example:

climatic conditions; availability of utilities and services; standards for design construction quality and the environment (effluents,

emissions, noise); painting; insulation; inspection and test requirements; delivery instructions.

Each specification, whether specific to a particular item of equipment or of a generalnature, should be annotated withanissue (or revision) letter (or number), dated and paginated.

Each specification should be signed as 'prepared by', 'checked by' and 'approved by' in accordance with company procedures, in order to ensure that documents are reviewed and approved at an appropriate level before being released for purchasing.

Related written procedures should cover: numbering of equipment and materials; preparation of technical specifications; standard conditions of purchase; the issue of purchase orders.

4.6.4 Verification of purchased produci Guidance I I Whilst brief definitions are given in Chapter 3, it is appropriate to define and explain here some of the t e r n used in more detail to avoid confusion. In the supply chain, many elements of that chain have a customersupplier relation- ship, but two of these relationships can be highlighted as being of particular relevance. They are shown diagrammatically in Figure 4. For example:

(i) The ABC Chemical Company is the customer of the DEF Contracting Company (the supplier), to whom equipment is provided by the GHI Pump Manufacturing Company (the sub-contractor). Similarly the supplier could be an internal engkeering department within the ABC Chemical Company.

Customer ABC Chemical Co

Contractor DEF Contracting Co

Sub-contractor GHI Pump Manufacturing Co

Sub-contractor JKL Seal Manufacturing Co

- Direct lines for s~pplier/customer relationships ----4--- Indirect lines for supplier/customer relationships

Figure 4 ~ustomer/contractor/sub-contractor/supplh matrix of relationships.

37

Alternatively:

(ii) The DEF Contracting Company (the purchaser) may be providing an entire process plant, with the GHI Pump Manufacturing Company (the supplier) providing a pump for installation as part of the process plant. The JKL Seal Manufacturing Company would be a sub-contractor to the GHI Pump Manufac- turing Company, providing seals for use in the pump.

4.6.4.1 Supplier verification at sub-contractor's premises Guidance Where plant and equipment is purchased from a sub-contractor the level of inspection is dependent on the nature of the supply and this is specified in the purchase order.

For critical items an individual Quality Plan is prepared and acceptance criteria agreed prior to manufacture. A stage inspection procedure identifies the 'hold' points and the acceptance authority will venfy that the equipment has been produced in accordance with its specifications.

For a process plant project, the sub-contractor's premises could be either a specific manufacturing unit or an on-site, temporary construction facility. In either situation, the supplier must satisfy himself that the sub-contractor's facili- ties are adequate and systems are in place which venfy the quality and ensure that the product produced is in accordance with the purchasing document.

Particular attention must be paid to project-specific, onsite, temporary premises. Since these are not permanent establishments, channels of communication must be clear and acceptance levels defined. Strict adherence to safety procedures such as hot work permit and permit-to-work must be enforced.

4.6.4.2 Customer verification of sub-contracted work Guidance In addition to Section 4.6.4.1 the customer or his representative has the right to venfy that any sub-contractor's product conforms to specification. This again will apply to any component manufactued either on-site or produced as a proprietary item.

For specific items of equipment, it may be necessary for not only the customer to inspect, but also his representative. An example of this would be the stage inspection of a pressure vessel by an independent insurance inspector to venfy that the equipment has been constructed in accordance with the design and fabrication code.

Any customer inspection would not absolve the supplier of his overall respon- sibility for the supply of individual items of equipment or the plant installation.

Adviso y procedures The Standard is very clear with regard to the verification of components such as pumps, but Sections 4.6.4.1 and 4.6.4.2 also apply to on-site construction and equipment servicing. Figure 4, page 37, gives a graphic interpretation of the relationship between customer, supplier and sub-contractor, to help the reader clearly understand the supply trails which exist in the execution of a process plant project. I Related written procedures should cover:

inspection of equipment and materials; subcontract software supply; I stage inspection procedure in accordance with the Quality Plan; responsibilities for inspection - general and project-specific; notification of readiness for inspection; lines of communication; records; nonconfonnances; safety procedures; I permits-to-work

4.7 Control of customer-supplied product Guidance The use of 'customer-supplied product' (often referred to as 'free issue material') is a common practice within an engineering project and frequently affords benefits. For example, the customer might provide electric motors to all of his sub-contractors who are supplying pumps or other items of equipment. Alter- natively the customer might supply components such as valves from his own stores to ensure uniformity across his production site. The supplier will normally be responsible for the control, safe-keeping of customer-supplied product after receipt.

I I If equipment, such as valves or motors, is supplied by the customer to a contractor then care should be exercised regarding the warranty covering the items supplied. I

Normally the warranty of the process plant will dommence on completion of practical handover or after successful commissioning and would probably exclude 'customer-supplied product' (for example, valves and motors). The supplier must ensure that any equipment issued to him by the customer will not adversely affect the overall integrity of the process plant, and should consider

the impact of failure of such items after commissioning and during the process plant warranty period.

Advisoy procedures The relationships between 'supplier' and 'customer' are defined in Section 4.6.4 and Figure 4, page 37. The customer should provide documentation to the supplier for the identification of material, whether provided to a sub-contractor for incorporation in plant or equipment, or provided directly to site. It should include data to enable the recipient to verify that material is to specification and instructions on storage and installation, which will ensure that the quality of the process plant is maintained.

Related written procedures should cover the following (see also Section 4.15 Handling, storage, packaging and delivery, page 60):

stores stock control; equipment handling on-siteloff-site; packaging; nonconfonnances.

4.8 Product identification and traceability Guidance In the context of the design and supply of process plant, 'product' should be regarded in very broad terms as comprising the design (that is, drawings, calculations and specifications), procuring equipment and materials required for the whole project and eventually installing and commissioning the complete plant.

Requirements for traceability are determined by the operating conditions, reli- ability demands, the nature of the equipment and the materials of construction. These will be defined by the design, specified by procurement, confirmed by inspection, and registered by documentation, and are an integral part of the Quality Plan.

Adviso y procedures

(i) Design All items of equipment should be provided with a unique title and/or reference number (see Section 4.6.3 Purchasing data, page 35). This can be done by allocating identification numbers to items of equipment, instruments and pipe- lines. Schedules should be maintained and regularly updated.

Bulk materials (described in Section 4.6.1 Purchasing, page 32) should also be adequately identified, specified and quantified, which is customarily referred to

as a 'material take-off'. Company standards should address the degree to which the individual components of a bulk material are provided with identification numbers. For example, an order for pipe of a particular size and specification should have a unique identification, but if supplied in 6 metre lengths, each length need not normally be separately identifiable (see Section 4.8 Product identification and traceability (ii)).

In regarding the process plant as 'the product', it follows that design information which appears in calculations, specifications and drawings should be demon- strably up to date and traceable. This overall requirement can be developed into the following recommendations:

documents should idenhfy equipment and daterial within the body of the product (process plant) by using a systematic numbering system;

calculations should contain references to basic data, calculation methods, software used, physical properties and assumptions;

drawings, spec