Beacon Quality Blog

Layered process audits (LPAs) are a standard requirement in the automotive industry, which saw more than 53 million vehicles recalled in 2016, according to the U.S. Department of Transportation. The reality is that many companies struggle with implementing an LPA program effectively due to the overwhelming complexity of scheduling and data management.

The number one mistake we see these companies make? Trying to manage LPA programs with paper-based and spreadsheet-based systems.

Executed properly, LPA programs require hundreds or even thousands of individual audits over the course of the year. It’s extremely difficult to do the multilayer scheduling correctly with spreadsheets alone, and next to impossible to fully analyze the results for meaningful quality improvements with a paper-based system.

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Providing daily checks of high-risk processes, layered process audits (LPAs) act as a finely woven net for catching defects upstream before they impact the customer.

While you may conduct thousands of audits throughout the year, what you actually catch with that net is directly proportional to the quality of your questions. Poorly designed questions leave room for error and make it hard to detect the right problems. But knowing where to find good questions, keeping them simple and updating them regularly can help you build a more robust and effective LPA program.

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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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The Path to Better Performance and Profitability

What are layered process audits?

Layered process auditing (LPA) is a quality management approach increasingly used by manufacturing and service companies alike to address a gap in traditional product-oriented approaches. When properly implemented,. l­­­­ayered auditing is the most effective way to ensure processes consistently follow approved standards, reducing waste and rework, improving quality, and driving cultural change throughout an organization.

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A recent Wall Street Journal article detailing how Boeing is facing up to 24 million dollars in FAA penalties over quality control going back several years across a number of locations shows how even the biggest manufacturers need to close the loop on quality control (QC). Closing the QC loop requires a two-way flow of information across functions that enable end-to-end visibility into quality across the value chain.

This can only be done when quality functions such as document control, compliance management, nonconformance/corrective and preventive actions (NC/CAPA), audit management, and others are integrated across critical business processes. It may be clear on the surface to manufacturers that moving beyond the concept of a bi-directional connection of people, processes, and data across the value chain is paramount to success in the manufacturing sector. That being said, the hard work of achieving that goal starts with understanding the benefits and the challenges of a closed loop approach to quality control.

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In a manufacturing environment, it’s common for teams to run into Murphy’s Law - the notion that “anything that can go wrong, will.” A simple day that starts with an employee calling in sick, can escalate through other events such as a workstation running out of parts, a machine shutting down for unknown reasons, or similar issues which result in missing production targets for the week.

In order to minimize risks, plants should use a Layered Process Audit (LPA) program to ensure that the most important controls to prevent defects and waste are in place.  But with so many things that can go wrong, where do you start?  

One great tool to consider is Process-FMEA (Failure Mode and Effects Analysis). Teams that are looking to start a Layered Process Audit (LPA) program often have a long standing practice of doing PFMEA to determine their areas of high risk and frequent failures. Teams can use the Risk Priority Number (RPN) calculated from PFMEA as the basis for focus areas to prioritize when developing LPA questions.

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In manufacturing, leaders innovate and grow while followers fall prey to inefficiency and waste. A recent report from the Aberdeen Group, Lean Manufacturing: Success Starts with Visibility and Alignment, describes how manufacturing leaders consistently benefit from having tools in place to track continuous improvement activities. In addition, 61% of these high performers provide management with a comprehensive, easy-to-understand view into operations. These results reinforce the truth that lean principles are only as good as the actionable data available, and it follows that organizational integration of manufacturing software solutions is key to process improvement.

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Historically, business executives have viewed manufacturing plants as cost centers because they are units that do not produce profit directly, but instead add to the operational costs of the organization. Increasingly, however, more business leaders are daring to challenge that paradigm by stating a case to recognize manufacturing units as profit centers. This, of course, has raised eyebrows.

The shift from the narrower perspective of the manufacturing plant as a cost center into a profit driver is supported in part by concepts from the balanced scorecard approach developed by Robert Kaplan and David Norton nearly 25 years ago. More than a measurement tool, the balanced scorecard is a management system. By bringing together measures that are focused on internal processes and external outcomes, the balanced scorecard promotes continuous improvement through strategic performance and results.

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