Supplier Opportunities for Competitive Differentiation through Process Audits
As a supplier, there are many elements being used to measure your effectiveness. Some of the most critical elements include:
- Are order specifications being met?
- Are your goods or services being delivered on time?
- Are orders taken effectively?
- How is the quality?
You likely have a number of quality management processes that support your ability to meet your customers’ expectations including:
- Inspection process
- Sales and customer service process
- Shipping and logistics process
- Product and performance reliability
There are a number of different ways to differentiate your company, such as:
- Measuring customer satisfaction
- Send, track and measure Customer Satisfaction Surveys to recognize areas of excellence and opportunities for improvement
- Showing accountability
- Demonstrate that everyone is accountable by layering audits across multiple organizational levels and shifting areas audits across functional areas
- Checking all of your customer-driven processes frequently to:
- Review, audit and document process performance
- Identify deviations, their core cause, and how they were corrected
- Demonstrate a closed-loop quality control process by ensuring all items are fully dispositioned
- Reporting on customer-driven quality metrics on a regular basis
- Demonstrate your organization’s awareness and responsiveness by using charts and graphs showing real-time and historical performance
Most organizations can only do this by presenting a ‘rearview mirror’ view showing what was done in the past and what corrective measures will be put into place to prevent problems from reoccurring. Many automotive manufacturing companies, in fact, already have a Layered Process Audit (LPA) program in place to take advantage of these opportunities, but their effectiveness is often still limited in this very way. This limited view comes from key weaknesses including:
- Poor support by top management
- Inconsistent or non-existent penalties for failure to perform audits
- Lack of management review
- Burdensome checklist(s) that are hard to maintain
- Checklist(s) that do not consider actual sources of process variation
- No feedback to operators
- Not grounded in daily routine
Implementing LPAs requires careful thought, planning and leadership involvement. The system has to be implemented in a way that works for you, or they won’t be effective or sustainable. Your successful implementation of LPAs will be undermined if they are perceived as a temporary quality initiative. There has to be total commitment – from top management to the plant floor. Keys to successful LPA implementation include:
- Leading by example
- Keeping it simple
- Increasing standardization
- Establishing daily routines
- Getting everyone involved
- Making the process and audit reports visible
- Recognizing and rewarding desired behaviors
It’s also extremely helpful to implement a Layered Process Audit (LPA) system, as it can virtually eliminate the overhead associated with standard LPA approaches and significantly improve the success of any LPA program. When done well, LPAs are a low cost strategy that produce a high Return on Investment (ROI). They will result in cost reductions, higher throughput, better first pass yields, and higher customer satisfaction.
Murray Sittsamer, president of The Luminous Group, was the AIAG committee leader for development of the CQI-8 2nd edition industry reference document "Layered Process Audit Guideline." He was part of a team that helped a Big-3 Automotive OEM fine-tune their guidelines to apply FMEA, which is credited with an over 20% reduction in warrantee costs. With his leadership, The Luminous Group was selected by a well-known Tier One supplier in the Aerospace industry to provide workshops for Advanced Product Quality Planning (APQP), and partnered with an Automotive OEM to roll-out the Layered Process Audit (LPA) strategy to their North American Suppliers.