While nearly every manufacturer has employed audits to identify issues with staff output and process compliance, an LPA is distinctive in that it focuses on driving cultural change throughout an organization to improve quality and reduce failure rates. LPAs are part of a formalized system for providing constant attention to an organization’s core, high-risk processes and controls to ensure minimal variation.
Created by the Automotive Industry Action Group (AIAG) nearly a decade ago, LPAs were first applied in Daimler Chrysler and Toyota plants, and since have become required practice for most auto manufacturers. Over time the practice has spread to other manufacturing industries, but with only varying degrees of success.
Ease has found that this limited effectiveness has been due, in some part, to a loosening of the LPA definition. For manufacturers considering LPAs or experiencing LPAs that fall short of expectations, it is important to note that an LPA is more than a simple group of questions to examine potential areas of concern. In reality, LPAs are unique from other audits in several key ways:
- Involvement of Management. True LPAs drive a culture of continual improvement by involving all levels of management, including C-level executives. LPAs get managers and leaders out of the numbers and on their feet, checking that standards and controls are in place and working.
- Rotation of Audit Supervisors and Assignments. To account for the potential of human relationships to consciously or unconsciously bias evaluations and degrade quality standards, LPAs require rotation of audit supervisors and resource assignments at all organizational levels.
- Frequency of Audits. LPAs require regular daily and weekly audits, allowing for issues to be more quickly discovered. This is a key to cost-cutting; when compared to identification during an LPA, non-conformance is on average 100 to 1,000 times more costly when identified after product shipment.
- Action Plans for Operational Excellence. LPAs not only require auditors to record non-conformance, but also require management to review audit metrics and create and update action plans to ensure continual improvement.