In the first part of this blog series, I defined end-to-end quality for the Automotive industry. Here I’d like to go into a bit more detail about some of the unique characteristics of this industry that are driving the need to adopt this holistic approach.
First: Complexity. Let me give you a real-world example. Several years ago, I was working with a small tier supplier in Stuttgart. They produced the rear mirror for a specific vehicle. They told me that the BOM for the mirror was hundreds of pieces. 20 years ago, that product was just 1, maybe 2 pieces. Today, with electronic controls, heating, color of the mirror, remote adjustment, etc., that product has become highly complex.
This type of tier supplier has not historically had to manage this kind of complexity. Today, they really struggle. They may receive the design and drawing from the car manufacturer, or an external partner, that specifies only the external requirements. They are asking for a “black box,” so to speak, that must behave in a very specific way. But they don’t specify the internal parts or requirements for the product.
So, the engineering expertise for the tier supplier has increased dramatically. They now need to manage the entire product lifecycle, with many more performance variables. They also need to handle change management within the product lifecycle.
Second: Regulation. The relationship between tier suppliers and car manufacturers is highly regulated. There are a host of standards, like ISO 9000, 9001, ISO TS 16-949 (with its new release this October), among others. These kinds of standards, together with the large Automotive associations, create an extremely codified set of interactions between the OEM and supplier. For a new supplier, or an existing supplier to certify a new part, there is a list of steps and formal documents codified by the standards and supported by the associations. Either you follow those definitions, those templates, the complete set of information, you cannot be a supplier of those OEMs.
Third: Geographic and Infrastructural Disparity. In this industry, we’ve seen a lot of mergers and acquisitions. Larger automotive tiers have acquired smaller tier manufacturers because they have certain technologies, or are in close proximity to the OEMs. These manufacturers are now operating companies with different technologies, different levels of maturity in quality.
With an end-to-end solution, which is not only on premise, but has the capability to be managed in a centralized way, these types of companies have the ability to engineer globally, and execute locally. Now you are able to align standards and provide access to more sophisticated quality tools and techniques. Global manufacturers have greater control to guarantee levels of quality across these disparate plants. An enterprise, end-to-end quality management system is allowing the synchronization of the quality expectation and capabilities of the entire supply chain.
In the next blog in this series, I’ll give you my perspective on how quickly the Automotive industry is adopting this holistic approach to quality, and what it means for the various members of the Automotive supply chain.