Interview with Automobil Produktion: "Fulfilling Standards Alone Does Not Lead to the Top"

Quality assurance is primarily the supplier’s job. This way of thinking, still often practiced by OEMs around the world, may come to an end in September 2018 when the new IATF 16949 comes into effect. Florian Schwarz, CEO of the German quality management software maker CAQ AG, says that now’s the time to make a virtue out of necessity: action instead of reaction is the advice he gives to companies that wish to excel in their quality management.

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AUTOMOBIL PRODUKTION: Mr Schwarz, the number of product recalls appears to be on the rise continuously. What are the OEMs and their suppliers doing wrong with regard to quality management?

Processes and supply chains, not only in the automotive world, are becoming increasingly international and ever more complex. The sheer variety of customized vehicle versions and the number of installed electronic components is becoming more and more as well. All of this means that the areas for possible faults increase in tandem. The omnipresent media landscape of today also means that product failures and recalls are reported much faster and to many more people than ever before.

The causes, however, are also and probably most importantly to be found in the interpretation and management of quality in the automotive industry itself. We today very often still encounter the fact that quality management is performed with pen and paper, Excel, Word, or other poorly maintained tools and that only few standards are enforced.

The pressure to adhere to specific quality standards, norms, and specifications in the automotive industry historically originated from the big OEMs as self-commitment that was passed down in direction of the suppliers. This means that the further down a supplier is positioned along the supply chain, the more important strict adherence to applicable OEM-standards becomes. There have in fact previously been very few government institutions, regulators, or lawmakers that exerted pressure on the OEMs with regard to quality standards and the like – this, as it appears, is about to change now.

AUTOMOBIL PRODUKTION: From 14.09.2018 onwards all previous ISO/TS 16949 certificates will no longer be valid and the new IATF 16949 will be the only accepted standard. What consequences and challenges will the automotive industry be facing?

In the past the OEMs and larger suppliers were pretty much able to pass on the responsibility for quality management to suppliers and sub-suppliers. This will change now, because the overall responsibility for quality will be moved up through the tiers to the uppermost level. The IATF 16949 requests a much greater commitment by the OEMs which, for instance, also encompasses the validation of electrical components.

A further consequence of the new standard affects the traceability of products. In future it will no longer suffice to say “I’ll simply purchase part X from supplier Y” as I will require the correct certificates and need to ensure that the applicable suppliers adhere to all necessary regulations. Common incoming goods inspections have of course been around for a long time, but now it will become more and more necessary to provide evidence regarding the entire supply chain. Fault and responsibility can now no longer be simply passed down – the guys at the top tiers will have to engage with the subject more seriously.

AUTOMOBIL PRODUKTION: What does this specifically mean with regard to software solutions in the area of quality management?

Data transparency and availability will play key roles within the concept of enhanced traceability. This means that companies who still need to sift through piles of paper or document filing folders are virtually unable to identify precisely where, when and to what degree faults occur. It therefore becomes very difficult to react and, for example, perform recalls in due time.

Process Control is Becoming Increasingly Important

AUTOMOBIL PRODUKTION: Product quality must correspond to the digital changes and challenges that factories around the world are facing. How can this be facilitated?

Process control is becoming increasingly important and there is, unfortunately, still plenty of room for improvement throughout the automotive industry regarding this area of production. What is required is a change from common quality assurance toward comprehensive quality management. The smart factory of tomorrow accelerates this necessity, as it will lead to machines and tools themselves becoming increasingly intelligent. This means that quality inspections, tolerance monitoring, and other quality assurance measures will increasingly take place in the production line – right in the machine itself. All these automated data suppliers must be intelligently linked and feed into a sophisticated quality management system that monitors, controls, and optimizes the subordinate quality assurance processes.

Process optimization also requires that the entire supply chain is analysed and included. This means that order formats will also become increasingly important. The aim is to receive supplier data, inspection certificates, and inspection data of the received parts in a standardized format. The automotive industry has already made some great advances here. In reality, however, the existing standard formats – such as those for inspection reports – are not used to the degree that they could be.

AUTOMOBIL PRODUKTION: Does “The more the merrier” also apply to data?

There obviously is such a thing as “too much” data, but the problem is not necessarily the volume of data: The main aim should always be to filter and select what data is really necessary. The problem is that data today is often recorded incorrectly and in the wrong formats. Many people still think that digital just means “no paper” and then data is simply stored in shape of .pdf files. The data is then, however, useless for further analysis and evaluation purposes. What needs to be done is implement processes that ensure data is available in a truly machine-readable format.

AUTOMOBIL PRODUKTION: What role do cloud-services play in this respect?

Cloud services are essential in order to facilitate data exchange between suppliers and customers and thereby increase overall efficiency. Many suppliers today still face the problem that each and every OEM or manufacturer has his different system that needs to be connected and fed with data. All of this makes matters both complicated and expensive for suppliers.

We often encounter company-internal clouds which – even though they are hosted externally – still remain in one closed corporate world. This is understandable, because “private” quality data is obviously pretty confidential stuff.

AUTOMOBIL PRODUKTION: Many companies still see quality management as a necessary evil. What would you like to tell them?

A truly high-quality product generally originates from a manufacturer’s self-understanding as premium provider: Merely fulfilling standards alone will not suffice to achieve top-notch quality. Quality management needs to be understood as an instrument that allows companies to not just uphold the status quo, but allows them to develop a competitive edge with which they can excel in their respective market.

This is the experience that companies make who do not simply implement quality management tools and processes because someone tells them they need to do so, but because they aspire to be better than the other guy and know what role quality management plays within the notion of sustainable company growth and performance.

The latest versions of the applicable standards and guidelines interestingly enough actually reward this type of approach, as, even though they still demand that processes are controlled and documented, they now give companies much more room for interpretation and freedom regarding problem solving techniques or process control.

This is precisely where a transition must take place in the automotive industry: quality management should not be seen as a necessary evil, but a subject that they should happily embrace. If one looks at the guidelines more closely, one realizes that adhering to them and putting the correct measures into practice can actually greatly contribute to the overall success of the company.

Interfaces are the Most Important Aspect

AUTOMOBIL PRODUKTION: What can the automotive industry learn from other lines of industry regarding quality management?

Without a doubt the automotive industry is and always has been very strong in the area of quality assurance. With regard to quality management, however, we also recognize top performers in the life science, medical technology, pharmaceutical, and food industries. Within these FDA-regulated areas it is virtually impossible to survive without comprehensive Quality Management Software.

Regarding validated systems and traceability, these industries are also highly advanced, as the applicable regulations require that necessary measures are put in place. But it appears that the different industries are learning from each other and exchanging best-practice concepts. Many of the features that we developed for the medical device or food industry – for instance regarding risk analyses – are now slowly being adopted by the automotive industry as well. The changes that the new IATF 16949 and the harmonization of VDA and AIAG brought about regarding FMEA and risk analysis appear to definitely show traits of FDA-regulated industries.

AUTOMOBIL PRODUKTION: What should a software solution provide in order to facilitate future-proof quality management?

Interfaces are probably the most important aspect. This importance starts with the interconnected ERP-system, ranges across the direct connection of production facilities or measuring equipment all the way to bidirectional interfaces with CAQ/HR software-systems. Ideally interfaces mean that several ERP, MES, or other systems can be brought together to form one global production network.

A further aspect that highlights a sustainable software-solution is the user interface: Software systems should ideally be so intuitive that they require exactly zero training days. The third aspect relates to human-machine-interfaces with which the perceived “reality” can be enhanced with further digital information. Augmented reality is one of the more popular human-machine-interface concepts.

AUTOMOBIL PRODUKTION: What projects are your developers busy with at the moment?

Augmented Reality is in fact one of the projects our developers have been dealing with for quite a while now. We actually began to analyse the potential of this technology for quality management purposes several years ago. Another project that is just coming into its final phase deals with the application of machine learning and artificial intelligence for measurement data analysis.

AUTOMOBIL PRODUKTION: What does that have to do with quality assurance?

We use advanced technology in order to go a step further than the requirements of applicable standards with regard to distribution models and trend recognition algorithms by analysing measurement data with machine learning and artificial intelligence. This allows us to recognize patterns in data that the common algorithms can’t see. We can thereby identify trends well in advance and react much faster if, for example, data input processes are performed incorrectly or gathered data is not plausible. Keeping an eye on the potential of new technologies is an aspect that we believe is vastly important if one wishes to continuously provide cutting edge Quality Management Software solutions.

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