Beacon Quality Blog

While it’s often thought to be much lower, multiple sources have measured quality-related costs at 10 to 20% or more of an organization’s annual revenue. Put simply, that means a company with $1 billion in annual revenue loses $100 million or more from its bottom line as a price for quality.

It’s a huge number, a fact recognized by companies heavily invested in Lean, Six Sigma and other operational excellence initiatives. And while results of these programs are often reported as savings over several years, layered process audit (LPA) programs are simple and effective enough to drive big results in a matter of months.

LPAs require checking high-risk processes as often as every shift, drawing auditors from every layer of the organization. Automation is key to achieving this frequency with minimal overhead, reducing quality costs, improving visibility and developing a culture of quality.

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Companies with a robust culture of quality save an average of $350 million annually compared to low-performing companies, according to a survey by CEB. While the benefits are clear, getting there is no simple task. In fact, 6 in 10 companies struggle to create a culture where quality is a personal priority to employees, instead of just a management requirement.

So how do you achieve cultural change, an element that is both intangible and reliant on human behavior? Auto and aerospace suppliers are finding that layered process audits (LPAs), in addition to reducing defects, foster quality culture in several important ways.

In this post, we’ll look at how LPAs promote a culture of quality through standardization, leadership engagement, communication and customer satisfaction.

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Reading the Automotive Industry Action Group’s CQI-8 Layered Process Audit Guideline, you might notice a line saying LPAs are “completed on-site ‘where the work is done.’”

For Lean manufacturing experts, this specific quote might bring to mind Gemba walks, a method where leaders observe and solve problems on the shop floor. In Japanese, Gemba means “the real place,” or in manufacturing, where the work is done.

Whether the reference is intentional or not, layered process audits (LPAs) and Gemba walks share clear similarities. Could it be why companies doing Gemba walks have an easier time with LPA programs, despite their complexity? This post compares Gemba walks with LPAs, exploring how to tell if you’re ready for LPAs and how to prepare.

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