Beacon Quality Blog

Roughly 7 in 10 manufacturers have implemented Lean manufacturing principles in their organizations, with 5S, Six Sigma and Kaizen representing the most popular strategies today.

One tool that supports these specific approaches and Lean manufacturing principles more generally is a layered process audit (LPA) program. LPAs draw auditors from all management layers and departments to verify mission-critical processes on a daily basis.

Let’s examine how LPAs align with Lean manufacturing principles, providing a structured approach to unlock the biggest benefits of this popular quality methodology.

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Pareto’s Law, also known as the 80/20 rule, tells us that 20% of inputs are responsible for 80% of results. Even when it’s not an even 80/20 split, the idea that a few factors drive a large proportion of outcomes applies to many business processes and everyday situations.

Like how a majority of complaints often result from a few key defects. Or how 20% of our time accounts for 80% of our productivity, with the remaining 80% spent on meaningless tasks.

In the automotive and aerospace industries, organizations can use a range of tools to leverage the 80/20 rule for bigger, faster quality improvements. Pareto management is the most obvious of these, but manufacturers should also apply the rule to performance metrics, risk management and audits.

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Compare the following process audit questions, asking which would be more effective at preventing defects:

Question A: Does the operator know how to handle non-conforming material?

Question B: Can the operator describe each step of the non-conforming material process according to the quality manual?

Clearly, Question B is more likely to identify errors that result in defective product reaching the customer—the main goal of layered process audit (LPA) requirements for General Motors (GM) and Fiat Chrysler suppliers. These high-frequency audits focus on how products are made, and are also gaining traction in industries like aerospace as a best practice for minimizing variation, defects and quality costs.

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By all accounts, the transition from ISO/TS 16949 to IATF 16949 has been a bumpy road so far. The standard encompasses a range of new requirements, including major changes to parent standard ISO 9001. Added to that, General Motors (GM) recently issued new customer-specific requirements that have significant implications for internal audits.

Many suppliers still have questions about what the new requirements are, what they should be doing to prepare and what auditors are looking to see. Time is running out, so it’s critical that organizations take action now to avoid any unnecessary delays or business interruptions due to certification issues.

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If you had your AS9100 transition audit tomorrow, could you say right now whether you would pass? More importantly, do you know where the gaps are in your processes that could trigger non-conformities?

AS9100 is the leading standard for aerospace management systems, required by original equipment manufacturers (OEMs) and suppliers worldwide as a condition of doing business. The most recent version of the standard, AS9100 Revision D, was released in 2016, giving manufacturers until September 15, 2018 before AS9100 Revision C certificates expire.

To ensure a smooth transition, suppliers need to be aware of several key changes to the standard. Avoiding an interruption in business means proactively planning your transition strategy, focusing on training, gap analysis and internal audits.

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In less than a year, all ISO/TS 16949:2009 certificates will officially expire, with IATF 16949:2016 replacing the standard on September 14, 2018. Over 67,000 suppliers will need to make the transition, and there’s no time to waste in understanding the new requirements and gaps to address.

So what are the big changes automotive suppliers need to comply with? More than just a basic update, IATF incorporates dozens of new requirements covering areas like management accountability, risk management, and internal audits.

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What sets apart the top 20% of innovation leaders from their competitors? According to LNS Research, one key difference is that a majority (52%) of the top tier has real-time visibility into manufacturing quality metrics, compared to just 9% of the competition .

Organizations collect quality data in a variety of ways, including audits. For companies struggling with quality problems, audits themselves can stand in the way of identifying and fixing the underlying causes.

How is this possible when audits are meant to shine a light on your processes? Common barriers include reactive auditing methods, low audit frequency and data integrity issues.

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Section 9.2.2.3 of General Motors (GM) IATF 16949 customer-specific requirements states,

“The organization shall incorporate an internal layered process audit process to assess compliance to standardized processes, to identify opportunities for continuous improvement, and to provide coaching opportunities.”

Layered process audits (LPAs) provide daily checks of high-risk processes and known customer issues, involving all layers of the organization and holding management accountable for quality. GM lists just nine elements in its IATF 16949 customer-specific requirements, but those few lines pack a huge punch in terms of their impact on supplier operations.

Suppliers must also read between those lines to earn or maintain IATF certification, addressing areas like management participation, corrective action verification and key performance indicator (KPI) tracking.

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With only a handful of aerospace original equipment manufacturers (OEMs) as potential customers, aerospace suppliers have to hustle to make sure they’re selected. Stand out for the right reasons, and you could solidify 20 years worth of business. Make the wrong impression, and you could miss out on tens of millions (or more) in sales.

Taking a page from auto manufacturers, aerospace suppliers are increasingly adopting layered process audits (LPAs) as a way to build a competitive edge. LPAs help achieve many quality goals beyond cost and defect reduction, including one that can be hard to pin down: creating a culture of quality.

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