Enterprise Quality Management: Automotive issues and perspectives

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Evolution of Automotive quality standards
While ISO 9000 addressed quality management issues and standards in general, vehicle manufacturers felt it did not meet the unique requirements of the automotive industry. In 1994, this led to the development of QS 9000 the ISO 9000 derivative for suppliers to the automotive Big Three - DaimlerChrysler, Ford and General Motors. QS 9000 is a worldwide automotive requirement for Tier 1 suppliers to the OEMs and contains all of ISO 9001:1994, along with automotive sector-specific, and Big Three and other Original Equipment Manufacturer (OEM) customer-specific requirements. The standard is supported by a series of support manuals, focusing on the key automotive tools, namely Measurement System Analysis (MSA), Failure Mode and Effects Analysis (FMEA), Advanced Product Quality Planning (APQP), and Statistical Process Control (SPC). General Motors and DaimlerChrysler mandate that their Tier 1 suppliers be registered to QS-9000 and Ford Motor Company requires that their supplier base be compliant with QS-9000.

Around the globe, France, Germany and Italy developed quality system requirement documents similar to North America’s QS 9000 quality standard. The French automotive industry’s ISO 9001 based EAQF certification (Evaluation of Supplier Quality Capability) is for suppliers of French automobile constructors and is recognized by French automobile manufacturers, Citroen, Peugeot and Renault. The German automotive industry’s VDA6.1 certification (Verband der Automobilindustrie) published by the Automobile Industry Association integrates ISO 9001:1994’s requirements and other supplier quality standards like EAQF, AVSQ and QS-9000:1995. This standard is critical for companies that manufacture or supply components and other products to German automotive manufacturers that include Volkswagen, Audi, Mercedes-Benz and BMW. AVSQ (The Association of Quality System Evaluators) created by ANFIA, Italy’s national association of car building industries is of significance to all suppliers and inspects the stability of the manufacturing process and the development of products from design through the completion stage. Alfa Romeo, Innocenti, Lancia, Maserati, Ferrari are among the manufacturers who recognize ASVQ.

With a vision to synchronize national and international automotive quality system requirements and provide improved quality products to automotive customers worldwide, representatives from European and North American vehicle manufacturers, suppliers and automotive trade associations established the International Automotive Task Force (IATF). In 1999, the IATF members jointly developed a common automotive quality system requirements catalog based on ISO 9001:2000, AVSQ (Italian), EAQF (French), QS-9000 (U.S.) and VDA6.1 (German) automotive catalogs and submitted to the International Organization for Standardization (ISO) for approval and publication. The new technical specification and an associated third party certification scheme for automotive supplier quality systems came to be known as ISO/TS16949:1999.

Since then, there has been a revision to ISO/TS16949, with the new structure being formulated by the IATF along with participation from the Japanese Automobile Manufacturers Association (JAMA). The revised specification, ISO/TS16949 second edition, was issued in March 2002 as ISO/TS16949:2002 and is published and available from the Automotive Industry Action Group (AIAG). In August 2002, Daimler Chrysler, Ford and General Motors issued statements fully adopting the new ISO/TS16949:2002 standard, as well as other vehicle manufacturers from around the globe accepting ISO/TS16949 as equivalent to their own national requirements. In order to implement, manage and ensure global consistency as well as develop and maintain a central database of strategic information of the ISO/TS 16949 registration scheme oversight activities on behalf of the IATF, the International Automotive Oversight Bureau (IAOB) was established.

Requirements of the Quality Standard - ISO/TS 16949:2002
ISO/TS 16949:2002 is an ISO Technical Specification aligning existing automotive quality system requirements developed by IATF, JAMA and supported by ISO technical committee (ISO/TC 176). ISO/TS 16949 applies to all internal and external suppliers of products or production material, or services such as heat treatment, painting, plating, varnishing, galvanizing or other surface treatments and products specified by original equipment manufacturer (OEM) customers.

ISO/TS 16949:2002 combines QS-9000, AVSQ, EAQF, and VDA, is aligned with ISO 9001:2000 and replaces QS-9000. The standard reflects the automotive sector’s interpretation and additions to ISO 9001:2000 in comparison to ISO/TS 16949:1999 which is based on ISO 9001:1994 and does not have contributions or recognition from JAMA. ISO/TS 16949:2002 is organized along the same structure as ISO 9001:2000 and has 8 clauses in comparison to the 20 of the previous version. The eight clauses are titled: “Scope”, “Application”, “Terms and Definitions”, “Quality management system”, “Management responsibility”, “Resource management”, “Product realization” and “Monitoring and Measurement” with the last five dedicated to system requirements. ISO/TS 16949:2002 highlights the importance of cross-functional activities as can be seen from the requirements -

• A process-oriented quality system
• Control plan for processes producing bulk materials
• Analysis of field failures
• Continual improvement
• Emphasizing defect prevention, reduction of variation & waste in the supply chain
• Customer satisfaction requirements
• Preventive action process
• Improved employee training requirements
• Communication with suppliers and customers to assure quality
• Improve employee quality responsibility
• Employee competence
• Awareness and training
• Design and development
• Production and service provisions
• Control of monitoring and measuring devices
• Measurement, analysis, and improvement

Globally automakers have indicated their individual requirements and their positioning on ISO/TS 16949:2002. DaimlerChrysler require all its suppliers’ register to ISO/TS 16949:2002 by 1 July 2004, since certification to QS-9000 will no longer be accepted after this date. Ford and General Motors have established December 14, 2006 as the final date for registration to ISO/TS 16949:2002 by all its suppliers, and will no longer accept certification to QS-9000 after this date.

Peugeot Citroen and Renault require all suppliers to register to ISO/TS 16949:1999 or ISO/ TS 16949:2002 and accept EAQF as optional till 15 December 2003, after which it is mandatory registration to ISO/TS 16949:2002. Volkswagen requires registration to ISO/TS 16949:1999 or ISO/TS 16949:2002 and to VDA 6.1 as optional, but after 15th December 2003 requires mandatory registration to ISO/TS 16949:2002 or VDA 6.1. BMW and Fiat requires compliance only to ISO/TS 16949:1999 or ISO/TS 16949:2002, but after 15 December 2003 registration to ISO/TS 16949:2002 becomes mandatory.

Nissan requires compliance only to ISO/TS 16949:1999 or ISO/TS 16949:2002, but after 15 December 2003 requires mandatory compliance to ISO/TS 16949:2002. Toyota and other Japanese manufacturers recognize ISO/TS 16949:2002 and may reduce 2nd Party audits for suppliers who are certified by the standard.

Transitioning to ISO/TS 16949:2002
Since ISO/TS 16949:1999 and QS 9000 will expire by 2003 and 2006 respectively, companies should begin the process of transitioning to ISO/TS 16949:2002. Transitioning is a critical factor as indicated by the requirements of large North American and European vehicle manufacturers who make up a significant part of the customers supplied to.

The IATF has announced transition arrangements for ISO/TS 16949:1999 (expires on 15 December 2003) to ISO/TS 16949:2002, with a ‘grace period’ for companies that are already certified to ISO/TS 16949:1999, but no later than 15 December 2004. For organizations that have not upgraded their certification from ISO/TS 16949:1999 to ISO/TS 16949:2002 by 15 December 2003, the audit day reduction defined in clause 4.9 of Rules for achieving IATF recognition, for ISO/TS 16949:2002 shall apply during the ‘grace period’. This would be applicable provided all customers of the organization subscribe to the ‘grace period’ to 15 December 2004, the certified QMS shall be maintained in accordance with ISO/TS 16949:1999 and CB Surveillance shall continue at the normal frequency and duration during this ‘grace period’. Certifications and renewals to the QS-9000 third edition (includes ISO 9000:1994 text) standards document will expire December 14, 2006 (or earlier based on individual OEM customer requirements) after which the standard would be replaced by ISO/TS 16949:2002.

Transitioning to ISO/TS 16949:2002 like any other quality management systems transition effort, requires top management commitment including establishing and implementing a business plan, availability of required resources, proper training, extensive documentation and record keeping, implementation of quality metrics and audit to track compliance. It’s important to study your organization in detail, and understand the current manufacturing processes, delivery mechanisms, and personnel involved in each operation including all support activities and processes that directly or indirectly affect your products.

Clearly define responsibilities, review the performance of the quality system and report as well as evaluate the cost of poor quality. Human resource management should be a primary focus area with the implementation of processes that define competence requirement, provide training for all personnel and verify the efficacy of procedures and actions taken. Management can go a step further by putting in place additional processes while creating an environment that’s conducive to employee motivation, towards realizing quality objectives as well as promoting innovation. These processes must provide employees with crucial metrics that clearly indicate the relevance and importance of their activities and how they contribute in achieving the quality objectives.

There are critical areas during the transition phase for production, product and process design that require due diligence and provision of adequate work instructions. During production, management must provide a process to authorize stopping production to correct quality issues while the use of control plans augments controlling production processes. Management must also ensure effective and efficient control of internal and external labs, process and product audits and analysis of data to drive continual improvement. They have to develop a process for key inputs and measurement in relation to customer perceptions and satisfaction.

The benefits of transitioning to ISO/TS 16949:2002 are many, for one it provides automakers with a single global uniformly recognized automobile specific regulation. It pushes for a comprehensive management approach and the integration of company processes. A systematic approach for targeting, company code system and a continuous improvement process with regular proof management of all company and process related codes. The emphasis is on regular detection of customer satisfaction levels, benchmarking and strong emphasis on prevention and planning. Consistent error detection that consequently relates to increased client trust, stronger concentration on internal and external customers and targeted display of strengths, weaknesses and improvement potential. The standard has a better understanding of the automobile and supplier industry issues that gives it an advantage over its predecessors.

Information regarding the transition can be obtained from the Automotive Industry Action Group, the International Automotive Oversight Bureau or the Society of Motor Manufacturers and Traders Ltd.

Factors that affect the success of an Automotive QMS implementation
It is important for suppliers to implement an effective QMS system that complies with customer-specific requirements, and does not jeopardize their relationship with clients. There are many factors as mentioned below that can affect the success of an automotive QMS implementation. These factors are more then crucial to the business environment, since failure to comply with requirements can not only result in the loss of future business, but deteriorating supplier/client relationships too.

• Lack of top management support: One of the biggest implementation pitfalls, is not having commitment and support from top management, who feel that systems (QS, TS or ISO) are a waste of time, paperwork, escalation in cost and expenditure to consultants and registrars
• Lack of understanding about the existing processes: Lack of understanding about how existing processes/procedures currently meet the regulatory requirements and the gaps involved in the processes
• Lack of clear communication: Not communicating the objectives/rationale behind the EQM efforts and how it impacts the business
• Failure to involve everyone in the process: Not involving all employees/teams that will be affected by the implementation
• Lack of follow-up /Review: Not monitoring the progress of the implementation schedule and working towards a deadline, thereby increasing the amount of time /costs
• Lack of validation: Failing to conduct internal audits in an atmosphere of freedom to tell the truth and with an effort to understand why the procedures may not have been implemented
• Premature implementation efforts: Jumping into implementation before being ready for it. Not conducting proper gap analysis/requirements analysis thereby incurring additional time/resources and missing out on key issues

Other Automotive Standards & Regulators
Since electrical systems are a highly critical feature of the automobile, the AEC-Q200 industry standard published by The Automotive Electronics Council (AEC) a joint effort by Delphi Packard, Delco Electronic Systems, DaimlerChrysler and Visteon Automotive Systems has been adopted by most first and second-tier automotive suppliers in North America.

In order to minimize the impact on the environment, ISO 14001 certification is a requirement that applies to all Tier 1 suppliers and will eventually apply to all suppliers. Daimler Chrysler, General Motors, Toyota, Honda among others require all its suppliers to achieve third party registration to ISO 14001. Low Emissions Vehicles (LEV II) and Zero Emissions Vehicles (ZEV) are CARB (California Air Resources Board) approved standards that require light trucks, sports utility vehicles, pick-ups, small vans including medium duty vehicles to meet similar emission standards as passenger cars.

Organizations and bodies that track the automotive quality space are numerous as can be seen from those listed below -

• United States Council for Automotive Research (USCAR) - Association established by DaimlerChrysler, GM, and Ford for shared technological and environmental concerns.
• Corporate Average Fuel Economy (CAFE) - Government web page offers information on the standard measure of the overall fuel efficiency of an automaker’s products.
• National Institute for Automotive Service Excellence (ASE) - Nonprofit, independent organization, improving the quality of automotive service and repair through the voluntary testing and certification of automotive service professionals
• Institute of Electrical and Electronics Engineers Standards Association (IEEE) - Develops and disseminates voluntary, consensus-based industry standards involving today’s leading-edge electrotechnology.
• Occupational Safety and Health Administration (OSHA) - Federal agency, under the US Department of Labor, that focuses on the health and safety of the American workforce.
• Department of Transportation’s Advanced Vehicle Technologies Program - Developer of technologies and programs to produce new vehicles, components, and infrastructure for medium- and heavy-duty transportation needs.
• National Highway Traffic Safety Administration (NHTSA) - Carries out safety programs, investigates safety defects in motor vehicles, sets and enforces fuel economy standards, helps states and local communities reduce the threat of drunk drivers, promotes the use of child safety seats and air bags.
• Inter-Industry Conference On Auto Collision Repair (I-Car) - Non-profit international training organization dedicated to improving the quality, safety, and efficiency of auto collision repair.
• National Crash Analysis Center - The FHWA/NHTSA National Crash Analysis Center is a federally funded research center concentrating on vehicle crash research, based at the George Washington University Virginia Campus.
• Motorist Assurance Program - Strengthening the relationship between the motorist and the automotive repair industry through education of the motorist and service provider, and through the creation of industry standards.
• National Automotive Technicians Education Foundation - Non-profit organization to evaluate technician training programs against standards developed by the automotive industry and recommend qualifying programs for certification and accreditation by the ASE.
• U.S. Department of Transportation (DOT) - Maintains and improves the US transportation system by keeping statistics, setting standards and developing federal transportation programs.

The MetricStream Solution - Power Your Enterprise
MetricStream develops enterprise-class quality management solutions (QMS) that are designed to ensure quality adherence across the extended supply chain and includes the key modules that drive quality compliance in the automotive industry

As automotive manufacturing has become less contained within an organization and more dispersed through outsourcing, the main challenge is that of ensuring quality adherence across the extended supply chain. This has fueled the need for the large automakers to engage in greater collaboration in the design phase and provide visibility into internal operations. Simultaneously, the criticality of pre-production programs such as APQP, PPAP and the role of oversight bodies such as the AIAG and OESA have set the stage for software automation of quality initiatives.

MetricStream’s suite of Quality Management Solution (QMS) applications is well suited to the needs of the automotive industry

• Corrective and Preventive Action (CAPA) - Reporting of product and process problems combined with flexible workflows to ensure quick time to resolution
• Audit Management - The interfaces to perform internal and 3rd party audits of production systems and conduct subsequent effectiveness reviews
• Employee Training - The tools to properly train and certify employees to perform their duties. Also includes personnel skill tracking on specialized machines and manufacturing equipment
• Dashboard Visibility - A combination of metrics and charts that allows OEM managers and executives to monitor supplier performance, product defect rates and inventory levels in real-time
• Document Management - The ability to store, manage and retrieve documents pertaining to design specifications, processes and training material, with appropriate levels of access security
• MetricStream’s seamlessly integrated suite of web-based products, facilitate enterprise- wide deployment and assist customers throughout all phases of installation and deployment.

Technical Details

• Fully web-based with an intuitive, easy-to-use user interface
• J2EE and XML compliant, n-tier architecture
• Runs on Windows NT and Solaris
• Tightly integrates with Oracle Manufacturing, Financials, HR and other third party applications

MetricStream’s quality and performance management solutions help Automotive enterprises benefit significantly through the use of software solutions that enable regulatory compliance and increase operations efficiency. Through our enterprise-class quality management solutions (QMS) we can help power organizations by reducing administrative and operating costs, achieve business objectives, competitive advantage and increased market share. For more information on implementing solutions for your enterprise, please contact us at 650-620-2955, or by email atinfo@metricstream.com