Auto OEMs, Suppliers Think About Quality: 5 Key Problems Identified

Industry action group releases Quality 2020 report. Problem solving, QMS, product development issues cited.

In October 2013, the Automotive Industry Action Group, a non-profit organization, commissioned an automotive quality study titled Quality 2020. This study was intended to establish what automotive supply chain quality improvements could be instituted by 2017, measuring the results in 2020.

This study was eventually broadened to include other global automotive industry associations as well as OEMs and major Tier 1 and Tier 2 suppliers and the results of this are really interesting.

Image courtesy Automotive Industry Action Group.

Image courtesy Automotive Industry Action Group.

The above image lists the top concerns brought up by OEMs and suppliers alike.

1.       Problem Solving

Respondents noted that root-cause analysis was lacking, management and organizational cultures are inadequate and short deadlines all contribute to weak problem solving skills.

More than half of respondents feel that there is a significant risk to the industry if action isn’t taken. Ninety-five percent of respondents believe closing the problem solving gap would have a moderate to extremely high impact in improving product quality.

2.       Customer Specific Requirements (CSRs)

OEMs and suppliers overwhelmingly agree that automakers would benefit if they had a single consolidated set of OEM CSRs.

As OEM purchasing teams reduce the number of suppliers, those Tier 1 heavyweights have become very large. Big Tier 1s are no longer captive, meaning they must now cope with multiple CSRs from other OEMs and that costs money.

3.       Quality Management Systems

On a per-site average, respondents invest 116 work days annually to comply with QMS requirements. Those same firms spend more than $100,000 annually per site to comply with QMS needs and they project a savings of only $50,000 per site if complexity and redundancy could be reduced.

4.       Product Development

This boils down to design-for-quality and that’s where the most “arm waving” political vagueness still exists. Design for quality, design for manufacturability, lean product development, Six Sigma, they all play a part. The bottom line is, OEMs are thinking about innovation and sustained quality performance, but suppliers have to think about the impact on the organization, profitability and operations.

5.       Loss of Experience

This is happening as the “baby boomer” generation is retiring and we’re not seeing a wave of young talent coming in to replace them. This is a problem affecting all industries. Half of respondents said there is a very high level of risk to the industry if no action is taken to close this gap.

What can be done?

So what should the industry do?

Simulation and Big Data offer new tools and options with design for quality, but I think the problem is excessive complexity. Simple systems are always the most robust and in mechanical, electrical and software systems alike, simplicity rules. I think simplicity is the answer to sustained, high levels of delivered quality.

OEMs and Tier 1’s have a tremendous depth of engineering talent, but I think what’s really needed would be an in-house engineering group specifically dedicated to product simplification. A team designed for this purpose would go a long way in addressing any of the issues described above.

Simplification of any system inevitably leads to higher levels of quality and lower cost.

For a look at the Quality 2020 report, visit

Written by

James Anderton

Jim Anderton is the Director of Content for Mr. Anderton was formerly editor of Canadian Metalworking Magazine and has contributed to a wide range of print and on-line publications, including Design Engineering, Canadian Plastics, Service Station and Garage Management, Autovision, and the National Post. He also brings prior industry experience in quality and part design for a Tier One automotive supplier.