New Automotive Study Voices the Industry's View on Quality and a Strategic Path Forward

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Jun 10, 2015, 01:21 ET

SOUTHFIELD, Mich., June 10, 2015 /PRNewswire/ -- Automotive OEMs and suppliers estimate $3.5 billion in cost savings could be achieved if complexity and redundancy in Quality Management System (QMS) requirements were reduced, according to a new study and survey based on extensive interviews with the nation's leading automakers.

The study reveals that while the current state of quality is the best it's ever been, significant opportunities for improvement still exist within QMS — along with Problem Solving, Customer-Specific Requirements (CSRs), Product Development, and Loss of Experience — which the study identified as the top five issues challenging automakers in their efforts to achieve greater efficiencies in the industry's quality systems, standards, and practices.

The survey and subsequent analysis is packaged into a just-released white paper titled Quality 2020, conducted by the Automotive Industry Action Group (AIAG) in collaboration with Deloitte Consulting LLP (Deloitte). AIAG is a not-for-profit, member-supported organization that works collaboratively with automotive manufacturing companies, suppliers, and service providers to help them develop common solutions to industry pain points.

Quality 2020 uses the survey data to identify needed improvements, with the goal of putting them in place by 2017 and then measuring the results of this industry-wide quality initiative by 2020. The comprehensive white paper based on the study — including exclusive interviews with the top quality executives from several automakers and Tier 1 suppliers — is available for free download at http://go.aiag.org/quality-2020-report.

"Quality 2020 is an illumination of where the industry needs to take action, improvements only possible if automotive companies are willing to put resources behind the plan, get engaged, and address the concerns," says J. Scot Sharland, AIAG's executive director. "With the release of the new standard ISO-9001:2015 expected in September, the timing and findings of the Quality 2020 study are even more important."

Among the study's key findings:

OEMs and suppliers both rank Problem Solving and Customer-Specific Requirements as the two most critical issues impacting quality.
Over one-third of respondents felt there is significant potential for improvement in Problem Solving.
Regarding CSRs, suppliers are concerned most with the ability to standardize business processes and systems, while OEMs are most concerned with managing customer expectations and relationships.
On average, respondents invest 116 workdays and over $100,000 annually to comply with QMS requirements. A savings of nearly $50,000 per site is projected if QMS complexity and redundancy are reduced.
Respondents identified the top two sources of complexity and risk to quality as unrealistic expectations and the concern that system validation sometimes doesn't occur until product launch.
Automakers are concerned about the large number of Baby Boomer retirements in the next five to eight years, citing loss of know-how, teachers, and mentors.

The white paper provides introspection on these findings and others, and concludes with key takeaways and recommendations for a path forward.

"Our industry has made phenomenal progress in the quality and reliability of the vehicles we produce," says Sharland. "But while the industry has deployed very robust processes and supplemented them with great tools, it needs to accelerate basic knowledge transfer throughout its global supply chain and make a renewed, focused, and industry-wide commitment to use the tools properly and follow the processes developed."

"Collaboration, standardization, and pervasive deployment of quality knowledge and allied tools are the only ways we can successfully mitigate risks and deliver more predictable outcomes on a global basis," he says.

For more information on AIAG's quality initiatives, visit www.aiag.org.

About AIAG

The Automotive Industry Action Group is a unique, not-for-profit organization where OEMs, suppliers, service providers, government entities, and individuals in academia have worked collaboratively for more than 30 years to drive down costs and complexity from the supply chain. AIAG membership includes preeminent manufacturers and many of their parts suppliers and service providers.

About Deloitte's Automotive group

Deloitte's Automotive group is at the forefront of top trends and issues facing the industry. Deloitte has more than 220 automotive clients in the United States, representing some of the world's largest manufacturers, suppliers, dealers, finance companies and aftermarket companies. With more than 400 American automotive practitioners, Deloitte services 86 percent of the automotive companies on the Fortune 500 and 86 percent of the automotive companies on the Fortune 1,000. For additional information about Deloitte's Automotive sector, please visit: http://www.deloitte.com/us/automotive or follow us on Twitter @DeloitteMFG.