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Introduction
On 8th June 2018, the American Petroleum Institute (API) published Addendum 2 to API Spec Q1 [9th Edition, June 2013] with 1-year implementation deadline for API Monogram Licensees and the organisations certified to API Spec Q1. Addendum 2 went into full effect on June 1, 2019. API Spec Q1 is the specification for Quality Management System Requirements for Manufacturing Organizations for the Petroleum and Natural Gas Industries. Addendum 2 is the most significant change to API Spec Q1 since the release of API Spec Q1: Ninth Edition in June 2013. Effective 1st June 2019, the organizations those operate in compliance to or those which are certified to API Spec Q1 shall be able to demonstrate full compliance to the Addendum 2 requirements.
This article describes the background behind this addendum, explains the changes introduced by the addendum, provides clause by clause comparison of requirements, and provides guidelines for implementation to fulfil the requirements of this addendum.
Background
Basically, the Bureau of Safety and Environmental Enforcement (BSSE) within the U. S. Department of the Interior have been working to identify and address the recurring problems with product failures. The BSSE QC failure investigation team performs forensic evaluation of these product failures and issues reports called the “QC-FIT Reports”. One of these QC-FIT Reports described repetitive connector and bolt failures in safety critical equipment. They admit a number of bolt failures in Blowout Preventors (BOPs), Risers and other subsea equipment. After a thorough review, BSSE concluded that the primary cause of those failures was hydrogen induced stress corrosion cracking (SCC) due to hydrogen embrittlement. These failures were caused by ineffective, faulty or improperly applied coatings. After digging a little deeper, one of the key findings that emerge was that, although the primary supplier’s QMS fully complied with the API Specification Q1 and the API certification programs, the controls over critical sub-tier suppliers were even not exercised or were not effective. As a result, the QMS only qualified first tier level suppliers and not other critical suppliers of the processes within the supply chain. So, it turns out that the QMS conforming to the requirements of API Spec Q1 prior to Addendum 2 did not identify or provide effective controls over critical products or process throughout the supply chain. Obviously, something needed to be done. So, based on the results of the evaluations, BSSE recommended that the industry development improve quality management standard that addresses the controls over multiple tier suppliers. And that is how we arrived to the Addendum 2 to API Q1 9th Edition.
Synopsis
API defines supply chain as, Suppliers and associated sub-supplier(s) required for product realization. This means your suppliers and your suppliers’ suppliers that they use for your product realization. Most organizations only focus on the first level of their supply chain, which are their direct suppliers, but don’t drill down to the second level of the supply chain, your suppliers’ suppliers. Organizations must consider the first and second level of their supply chain. Your first level supplier may be doing a great job, but the risk to the quality of what they provide you may be in the second level supplier. Addendum 2 is focused on ensuring organizations have a strong supply chain by focusing on both levels of the supply chain.
The overview of the introduced changes is as below:
- Modifies requirements related to purchasing to extend controls over supply chain. Requires to extend purchasing controls up to sub-suppliers. Focuses on Supply Chain – considering suppliers & associated sub-suppliers.
- Enhances focus & requires to establish additional controls on critical purchases and outsourcing.
- Requires to consider “components” in addition to products & activities for applying purchasing controls.
- Requires the purchasing procedure to define type & extent of controls applied to supply chain for critical purchases.
- Requires verification of type & extent of controls applied by the suppliers – internally & to their supply chain for critical purchases during initial evaluation and/or re-evaluation.
- Requires to determine frequency of supplier re-evaluation.
- Requires to have criteria for supplier re-evaluation for critical purchases same as criteria for initial evaluation. [In earlier scenario, the criteria for re-evaluation of suppliers providing critical supply was down-gradable to the criteria for supplier re-evaluation for non-critical purchases.
- Requires to ensure that the supply chain conform to requirements for validation if the organization chooses to outsource a process that requires validation.
- Adds requirements in verification of critical purchases, to review documentation, to verify use of applicable versions of the specified purchasing information, and to have a procedure stating requirements for testing considering the risk associated with supplier product quality.
- Adds coating & plating in processes requiring validation when identified as critical to product performance.
- Limits the corrective actions & preventive actions up to the suppliers rather than entire supply chain.
Affected Processes
The Addendum 2 brings changes to the following sections of API Spec Q1 [9th Edition, June 2013]:
- Section 3.1.22: Definitions
- Section 5.4.3: Design and Development Outputs
- Section 5.6.1.1: Procedure for Purchasing Control
- Section 5.6.1.2: Initial Supplier Evaluation for Critical Purchases
- Section 5.6.1.3: Initial Supplier Evaluation for Non-critical Purchases
- Section 5.6.1.4: Supplier Re-evaluation
- Section 5.6.1.6: Outsourcing
- Section 5.6.2: Purchasing Information
- Section 5.6.3: Verification of Purchased Products or Activities
- Section 5.7.1.5: Validation of Processes for Production & Servicing
- Section 5.11.2: MOC Implementation
- Section 6.4.2: Corrective Actions
- Section 6.4.3: Preventive Actions
Considering the changes in above enlisted sections of API Spec Q1, the affected QMS processes are as below:
- Design and Development
- Purchasing Control
- Supplier Evaluation
- Supplier Re-evaluation
- Outsourcing
- Purchasing Information
- Verification of Purchased Products or Activities
- Validation of Processes for Production & Servicing
- Management of Change
- Corrective Actions
- Preventive Actions
Clause by Clause Comparison
The clause by clause comparison between the requirements of API Spec Q1 [9th Edition], before the addendum and, after the addendum, showing the changes in red text is available in the Full Article.
Implementation Guidelines & Required Actions
To implement the changes introduced by Addendum 2 and to demonstrate full compliance to this addendum, the required actions are described below in a step-by-step manner:
- Avail a copy of Addendum 2 and keep it along with specification set having API Spec Q1 [9th Edition, June 2013], Errata 1 [February 2014], Errata 2 [March 2014], Addendum 1 [June 2016]. The Addendum 2 can be downloaded from Techstreet. A copy of API Spec Q1 [9th Edition, June 2013] with all the errata and addendums incorporated into it can be downloaded from Techstreet.
- Modify the registry of external origin documents to include Addendum 2.
- Identify the changes affecting the processes of your Quality Management System.
- Develop training content to impart awareness on the changes. Impart training to all the concerned personnel engaged in the affected processes.
- Modify following documented procedures to incorporate the changes introduced by the addendum:
- Procedure for Design and Development
- Include identification of activities which are deemed critical to the design along with products and components.
- Procedure for Supplier Evaluation and Re-evaluation
- Identify the critical products, components or activities in the procedure;
- Include “components” for supplier evaluation and selection.
- Identify the type and extent of controls to be applied to sub-suppliers in addition to the suppliers. Describe the types and extent of these controls for entire supply chain.
- In the criteria for initial evaluation of suppliers providing critical supplies, include criteria for verification of type and extent of control applied by the supplier, internally and to their supply chain.
- Define re-evaluation frequency based on the supplier risk and supplier quality performance. It is recommended to define the frequency in two situations – a) a standard frequency for re-evaluation of suppliers, and b) a conditional frequency for re-evaluation of suppliers considering the change in supplier risk and supplier quality performance. The standard frequency for re-evaluation of suppliers providing critical purchases may be more strict than that of suppliers providing non-critical purchases. Quality Performance Assessment: Describe a methodology to determine supplier quality performance. Define the frequency for this determination (This may be done half yearly or annually). Establish an acceptance criteria for this evaluation. Identify the actions needed if supplier fails to meet this criteria (Recommended Actions: Disqualification from List of Approved Suppliers and a fresh Re-evaluation). If supplier meets this acceptance criteria, then consider the standard frequency for re-evaluation. Supplier Risk: Perform a supplier risk assessment considering the quality & delivery risks. Enlist and prioritize the identified risks. Establish a condition based on the supplier risk which may call for re-evaluation of the supplier. If there are no circumstance corresponding to the defined condition, then consider the standard frequency for re-evaluation.
- Procedure for Outsourcing Control
- Address the need for supply chain to conform to the requirements for validation of processes when the process requiring validation is outsourced.
- Procedure for Verification of Purchased Products, Components and Activities
- Include “components” for verification of purchased supply.
- Include followings in verification of critical purchases:
- Review of the organization’s required documentation from the supplier (e.g. test report, material test certificates, inspection clearance / inspection release notes, etc).
- Verify use of applicable versions of the specified purchasing information. (e.g. verification of revision of purchase order referenced in the supplied material test certificate, verification of the edition of applicable standard referenced in the supplied test report against the edition specified in purchase order, etc).
- Incoming control inspection & testing methods, frequency and responsibility considering the risks associated with the supplier product quality.
- Procedure for Validation of Processes for Production & Servicing
- Address the applicability of the procedure to the supply chain when the process requiring validation is outsourced.
- Include coating and plating in process requiring validation when identified as critical to product performance by product specification or by the organization.
- Procedure for Management of Change
- Replace “critical suppliers” with “suppliers of critical products, components or activities”.
- Procedure for Corrective Actions
- Replace “supply chain” with “suppliers”. Limit the corrective actions up to the suppliers rather than entire supply chain. [If feasible and necessary, the organization may continue the application extended up to the supply chain as that is more stringent].
- Procedure for Preventive Actions
- Replace “supply chain” with “suppliers”. Limit the corrective actions up to the suppliers rather than entire supply chain. [If feasible and necessary, the organization may continue the application extended up to the supply chain as that is more stringent].
- Procedure for Design and Development
- Modify Quality Manual to the address the changes in affected sections, and include the addendum in references section of Quality Manual.
- Impart training to the personnel concerned with the affected changes in the procedures and manual.
- Start identifying the activities which are deemed critical to the design as Design and Development Outputs.
- Perform re-evaluation of suppliers based on the revised procedure. Start performing initial evaluation of suppliers based on the revised procedure.
- When the process requiring validation is outsourced, ensure the process is validated as per the organization’s documented procedure.
- Start performing the verification of purchased supplies as per the revised procedure.
- If coating and/or plating are/is required and these/this processes/process are/is identified as critical to product performance by product specification or by the organization, ensure that the processes/process are/is validated as per the organization’s documented procedure.
- Start taking corrective actions and preventive actions as per the revised procedures.
- Cover the Addendum 2 requirements in Internal Audits. Verify the adequacy of revised procedures and manual against the Addendum 2 requirements. Verify whether the personnel concerned with the affected changes are trained for implementation of Addendum 2 or not. Verify the effectiveness of implementation of the revised procedure and manual. Identify and report the gaps observed.
- Consider the changes introduced by Addendum 2 as input in management review in agenda point “changes that could affect the quality management system, including changes to legal and other applicable requirements (such as industry standards)”. Report effectiveness of implementation of Addendum 2 requirements. Report the gaps observed in the implementation. Bring any relevant open actions in the notice of top management.