2020 Quality Report

The Automotive Industry Action Group (AIAG), in collaboration with Delotte Consulting, has published “2020 Quality”, a report on the “Automotive Industry’s View on the Current State of Quality and a Strategic Path Forward.”

The survey results reveal that OEMs and suppliers both rank Problem Solving and Customer-Specific Requirements as the most critical issues impacting quality. Quality Management System, Product Development, and Loss of Experience round out the top five issues as ranked by all respondents.

The information below is extracted from the report overview.

Problem Solving

OEMs and suppliers say problem solving is important because it impacts the organization’s ability to manage, monitor, and respond to quality-related events, their ability to implement operational efficiencies, and brand and customer relationships.

OEMs and suppliers identify the same four reasons that they believe the industry’s problem-solving capabilities are inadequate. Although they rank them in a different order of importance, all are emphasized about the same:

  • root cause analysis is lacking,
  • management/organizational culture,
  • jumping to the solution, and
  • feeling rushed.

Interestingly, jumping to the solution is considered by OEMs as the top reason problem solving is inadequate, while suppliers rank it as having the least impact.

Particularly intriguing is that almost two-thirds of the respondents feel their organizations are, at best, moderately capable at problem solving. More than half see significant risk if no action is taken to close the gap between where the industry is today versus where the industry should be in problem solving.

Customer-Specific Requirements (CSRs)

OEMs and suppliers both agree that Customer-Specific Requirements are a critical issue impacting quality. However, suppliers are most concerned with their ability to standardize business processes and systems, while OEMs were concerned with managing customer expectations and relationships.

OEMs and suppliers overwhelmingly agree that automakers would benefit from having one consolidated set of OEM CSR requirements. However, they also agreed that significant effort would be required to change QMS standards or requirements. Despite the expected challenge, a near-unanimous agreement on the benefits of a single set of requirements indicates an opportunity for collaboration in addressing this impediment to optimum quality.

Quality Management System (QMS)

Respondents agree that standardization is the #1 area impacted by complex and redundant QMS requirements, which also affects operational efficiencies, relationships, and the ability to respond to quality-related events.

Top among the reasons why a QMS is important is the agreement from OEMs and suppliers that it impacts their ability to standardize business processes and systems.

On average, respondents spend over $100,000 annually per site to comply with QMS requirements, and project savings of nearly $50,000 per site if complexity and redundancy are reduced.

Despite the indicated opportunity to reduce effort and cost, and the potential impact from improving standardization and reducing complexity, respondents overwhelmingly believe that there would be significant effort needed to change current QMS standards.

The top three actions that have the most potential for improving QMS are reducing ISO/TS 16949 requirements to only those elements with direct impact on product quality and reliability, determining audit schedules based on performance, and combining ISO/TS 16949 and VDA requirements.

Respondents also are closely aligned on their top three concerns if no changes are made to QMS:

1. The need to maintain multiple systems to satisfy multiple standards,
2. A continued increase in the number of OEM and Tier 1 specific requirements, and
3. Continued incidents of poor correlation between certification status and actual performance.

Product Development

Survey respondents agree that assuring product compliance is the top reason why product development is important. OEMs also feel this issue is important to innovation and to sustained quality performance, while suppliers place greater emphasis on impact to profitability and operations.

OEM and supplier respondents are in complete agreement that the top two sources of complexity and risk are unrealistic expectations and the concern that at times, system validation occurs at launch.

Loss of Experience

Wrapping up the top five concerns that could affect automotive quality is loss of experience. Survey respondents indicate that a lack of skilled workers, compensation that does not meet requirements, and little incentive for young people to select automotive careers, are long-term concerns that may impact automotive quality.

You can download the full “2020 Quality” report for free at this website.