Current State of Quality in the Automotive...

Current State of Quality in the Automotive Industry

Scott Gray

Director, Quality Products and Services, AIAG

Agenda

• Survey Demographics

• Top Issues

• Deep Dive on Top Five

– Why is this issue important?

– Level of difficulty to close the gap?

– Level of impact if the gap is closed?

• Key Takeaways

2

Survey Demographics

Good balance across

product commodities

85% of respondents

are from Suppliers

Source: Deloitte AIAG Quality 2020 Study 3

Survey Demographics

Feedback from functional

SME’s, Middle Management

and Corporate Executives Approximately one-third from

Engineering, Operations, Sales

and Purchasing functions


Current State - Top Issues

5 Source: Deloitte AIAG Quality 2020 Study

Issues All

Respondents

OEM

Supplier

Problem Solving 1 1 1

Customer Specific Requirements 2 2 2

Quality Management Systems 3 7 3

Product Development 4 5 4

Loss of Experience 5 4 5

Supplier Management 6 3 6

Change Management 7 5 7

Core Tools 8 8 8

Warranty 9 9 9

Metrics 10 10 10

Issue #1 - Problem Solving

6

“Why is Problem Solving important to you?”

Source: Deloitte AIAG Quality 2020 Study

1. Impacts ability to manage, monitor, and

respond to quality related events

2. Impact ability to implement operational

efficiencies

3. Impacts brand and/or customer relationships

OEM and supplier rankings of the top three reasons why

Problem Solving is important were exactly the same.

Problem Solving

7

What is the risk to the industry if we

don’t improve?

How capable is your company now?


Almost two-thirds of respondents

feel their organizations are at

best Moderately capable at

Problem Solving

More than half of

respondents see significant

risk if no action is taken to

close the gap.

Problem Solving

8

How difficult will it be to close the gap? How much impact if we close the gap?


OEMs and suppliers almost unanimously agree that

closing the gap is not easy, but doing so would have a

significant level of impact on improving quality.

Problem Solving - Causes

9

Although differences emerge when ranking why

Problem Solving is inadequate, both point to a desire

for a rapid answer, compromising analysis.


CAUSE OEM SUPPLIER

Jumping to the Solution 1 4

Root Cause Analysis Lacking 2 1

Management / Organizational Culture 3 2

Rushed 4 3

Lack Prevention through Lessons Learned 5 5

Not Data-driven 6 7

Not Systemic 7 8

Lack Resources 8 6

Issue #2 – CSR’s

10

Why is this issue important?


Reasons OEM Supplier

Impacts ability to standardize business processes and systems

5 1

Impacts ability to manage customer expectations and relationships

1 2

Impacts ability to implement operational efficiencies

3 3

Impacts ability to manage profitability 4 4

Impacts ability to manage, monitor, and respond to quality-related events

2 5

OEM and supplier rankings differed on the top reasons why CSR’s

are important to improving quality

CSR’s

11

Impact from T1 CSR reduction Impact from OEM CSR reduction


OEMs and suppliers overwhelmingly agree that the industry would

benefit from a significant reduction in Customer Specific Requirements

CSR’s

12

Respondents also overwhelmingly agree that the degree of

difficulty to minimize CSR’s would be significant


Issue #3 - QMS

13

Why is this issue important to your company?


Reasons OEM Supplier

Impacts ability to standardize business processes and systems

1 1


5 2

Impacts ability to manage customer expectations and relationships

3 3

Impacts ability to mange, monitor, and respond to quality related events

2 4

Impacts ability to manage profitability 4 5

Respondents agree that standardization is the #1 area impacted

by complex and redundant QMS requirements.

QMS – Average Site Impact

14

How many workdays does it take annually

to comply with all QMS requirements?

If complexity and redundancy

were reduced to a minimum, how

many workdays would remain?


Avg. = 116 workdays Avg. = 67 workdays

Opportunity = 2.7M Workdays

QMS – Average Site Impact

15

If complexity and redundancy were

reduced to a minimum, what

approximate expense would remain?

What are your approximate total

expenses related to all the external

audits – certification and customer?


Avg. = $100,225 Avg. = $51,189

Opportunity = $3.5B

QMS

16

Respondents agree on the top actions to improve QMS, and are

aligned on the potential implications if no changes are made


Top Actions that have the most potential for improving the effectiveness and efficiency of current QMS requirements

1. Reducing TS requirements to only those elements with direct impact on product quality and reliability

2. Determining audit schedules based on performance

3. Combining TS and VDA requirements

Top Issues or Concerns if no change is made

1. The need to maintain multiple systems in support of multiple standards

2. Increase in number of CSR’s (OEM and Tier 1)

3. Poor correlation between certification(s) and actual performance

QMS

17

Impact that could result from

improved standardization and

reduced complexity of standards

and requirements

The level of resistance you

believe would be encountered

in changing current QMS

standards and requirements


Issue #4 – Product Development

18

Top Reasons Why Product Development is Important


Reason Total Supplier OEM

Impacts ability to assure product compliance

1 1 1

Impacts ability to manage profitability 2 2 6


3 3 3

Impacts ability to drive innovation and collaboration

4 4 2

Impacts customer relationships 5 5 7

Respondents agree that assuring product compliance

is the top reason why this issue is important

Product Development

19

Current level of

capabilities to design,

develop, validate, and

launch new products

effectively.


Respondents feel their organizations are

capable in product development

Product Development

20

Top sources of

complexity and

risk if no

actions are

taken

Top two

improvement

actions that

should be

pursued


Improvement Actions OEM Supplier

Design in Quality 1 2

Design for Manufacturability 2 1

Lean Product Development 5 3

System DFMEA 3 4

Design for Six Sigma 4 5

Sources of Complexity OEM Supplier

Unrealistic Specifications 1 1

System validation occurs at launch 2 2

Continuous launch cycles 4 3

Global Platforms 3 4

Advanced technology software 5 5

Issue #5 – Loss of Experience

21

Top reasons this issue important to your company


Reasons OEM Supplier Total

Impacts ability to avoid repeating past mistakes

5 1 1


1 2 2

Impacts ability to develop new talent 2 3 3

Impacts ability to solve problems 2 4 4

Impacts ability to manage, monitor, and respond to quality-related events

2 5 5

Respondents believe this issue will impact their

ability to avoid repeating past mistakes and ability to

implement operational efficiencies

Loss of Experience

22

Over three-quarters of respondents

rate their organizations, at best, as

moderately capable of preserving

and transferring knowledge

What methods do you use to

preserve and transfer knowhow?


Loss of Experience

23

Level of difficulty to address the

concerns

Risk to the industry if no action is

taken


Respondents overwhelmingly feel that while it is

difficult to address the issue, not addressing the loss

of experience is a significant risk to the industry.

Key Take Aways

• Tough Challenges, Big Rewards

– Significant levels of difficulty will be encountered in driving change, yet all agree significant benefits will result

• Solve the Problem Solving Challenge

– The issue isn’t lack of tools, or skills to use them, the issue is leadership, cross-functional team culture, and discipline

• Standardization. Standardization. Standardization

– Complexity and redundancy drive process/system variation

– Huge amounts of time and money could be saved

• Product Development is key to quality, product compliance

– More emphasis on designing in quality, design for manufacturability needed to address advanced technology and system validation challenges


Quality Survey Partner

• AIAG wants to thank our partner

25

• For their support in getting the survey developed and launched to the industry

• We also appreciate their insights on the analysis and reporting of the results

Closing

Questions?

26

Current State of Quality in the Automotive...

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