Beacon Quality Blog

With growth of digitalization in manufacturing, what does the future hold for Layered Process Audits (LPA)?  LPAs today generally verify human conformance to key processes with and outside set of eyes. But with automation, what will humans be doing?... and eyeballs won’t be as accurate as sensors.

Based on a presentation given by Murray Sittsamer and Richard Nave of The Luminous Group at our 2019 Beacon User Summit, this post will discuss the what layered process audit programs might look like in the future with advancement in technology. 

Industry 4.0 will be a $155 billion market by 2024, part of a rapid growth in technologies like machine learning and Internet of Things (IoT) revolutionizing the manufacturing industry. 

As Industry 4.0 picks up steam in automotive and aerospace manufacturing, we are witnessing an evolution towards more sensors, more data communication and more analytics. And while layered process audits (LPAs) could drive even more powerful quality insights and actions, companies also need to be aware of—and hopefully avoid—the potential downsides. 

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Quality is actually quite simple—it’s the human element that makes it difficult. We all know it can be challenging to get employees to follow a standardized set of steps, as people often have their own reasons for taking shortcuts or deviating from the established standard.

The problem is that when people deviate from standards, you’re less likely to achieve the desired outcome. That’s where layered process audits (LPAs) can make a big difference, providing frequent process verifications that address the human element of process adherence.

 In this post, we’ll look at how LPAs help create a culture of quality in manufacturing plants, promoting process conformance and employee engagement. The payback is in improved quality metrics and lower cost of poor quality.

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In 2017 and 2018, respectively, General Motors (GM) and Fiat Chrysler (FCA) both released new customer-specific requirements that suppliers must meet for IATF 16949:2016 certification. Among other topics, the automakers outline layered process audit (LPA) requirements, each putting their own spin on these high-frequency checks aimed at process standardization.

If you’re a supplier for both original equipment manufacturers (OEMs), it’s important to understand what the two sets of requirements have in common—and where they’re different.

Understanding the details is the only way to create an LPA program that’s streamlined and ensures customer satisfaction. Here we compare the two sets of requirements and summarize best practices for an LPA program that satisfies both of them.

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When you look at standards like IATF 16949 or ISO 9001, the requirements boil down to two essential elements: improving customer satisfaction and reducing risk.

They go hand in hand, because effective risk management means safer products and happier customers—and fewer problems for their suppliers.

To help automotive suppliers proactively avoid quality and safety issues, we’re looking at 4 important places to focus for improving risk management and reducing costs.

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When a customer asks to see your layered process audit (LPA) documentation, will you be ready?

For many manufacturers, the answer is no. Instead of having proof of an effective LPA process, they’re left scrambling for data that show low audit compliance and few actual results. Unfortunately, poor LPA processes are enough to fail a customer audit, which could put your key contracts at risk. 

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One of the highlights from last year’s Beacon User Summit was our first annual Champions for Quality Awards. Before jumping into what we learned from our champions, we’d like to introduce the 2018 award winners:

Catalyst Award: Tom Sholty, Girtz Industries

Sholty is a quality manager who led Girtz’s ISO 9001:2015 certification, also helping lead the company to the Quality Magazine 2018 Quality Leadership 100. His efforts helped reduce Girtz’s warranty rate to 0.26% of sales dollars and nonconformance rate to 0.89% of sales dollars, both record lows for the company.

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If your organization conducts layered process audits (LPAs), which of these statements accurately describes your results?

A. We’ve significantly reduced defects and complaints, using these high-frequency process audits to improve standardization.

B. We’ve been doing LPAs for awhile, but we’re not seeing much change in quality.

Those of you that answered B may question if LPAs are just a pointless customer requirement, or whether there are deeper problems within your approach. Here we examine 7 signs of a struggling LPA program, with tips and strategies for improving your results.

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In 1982, W. Edward Deming’s Out of the Crisis outlined 14 points companies could learn from his success helping drive the industrial boom of post-WWII Japan.

The idea that quality pays was revolutionary at the time. Today, another revolution is taking place. Industry 4.0 represents a tectonic shift in manufacturing technology focused on automation, data exchange and interconnected cyber-physical systems.

But these massive changes don’t make Deming’s points any less relevant today. In fact, Industry 4.0 reinforces many of Deming’s 14 points—and can help the next generation of quality leaders relate to these foundational concepts.

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PricewaterhouseCoopers estimates that by 2020, Industry 4.0 digital transformation initiatives will deliver nearly 4% in annual cost reductions for both the aerospace and automotive industries.

One area manufacturers are automating is internal audits, including the layered process audits (LPAs) required by several original equipment manufacturers (OEMs). These daily checks of high-risk processes are a best practice for reducing defects, but they’re also time-consuming when tracking a large volume of audits manually.

Given the understandable scrutiny on costs, the question for auto and aerospace manufacturers becomes whether paper-based or spreadsheet-based LPAs actually cost less than automation. Here we discuss various costs to consider, including administration, implementation and quality costs—as well as hidden costs that should figure into your decision.

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