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by Jeff Pfeiffer

Are you considering obtaining certification to ISO/TS 16949? Has your automotive customer mandated certification, or are you casually exploring your options? If your company is currently registered to ISO 9001, you are keenly aware of the plethora of benefits that can be derived from a quality management system standard. You might even remember that there were some implementation headaches along the way. Whether you are currently certified or not, the road toward an ISO/TS 16949 certification should be embarked upon with a great deal of respect, planning, and patience.

This article takes you through two compelling certification stories. The first tells of a company that was forced to certify to ISO/TS 16949 or risk losing its automotive business; the second is about a company that decided that the automotive-specific certification would be great for business. Each had its share of headaches and failures, but each learned valuable lessons along the way.

We have to do this!
Have you been given an ultimatum by one of your largest customers? Maybe, “Get your company certified or all future sales will be redirected to a competitor!” This story is about such a company being forced into compliance. The obstacles and successes for this company were complicated by two primary factors. First, it was attempting to obtain its certification as a moving target through several international dimensions, and second, it was being forced into submission by one of its largest customers.

The company is owned by a Japanese conglomerate operating in California with a multinational staff. Halfway through the implementation effort, management crunched some numbers and concluded that business would be far more profitable if it moved its operations to Mexico. That certainly put a kink in the schedule and implementation budget, but it wasn’t catastrophic.

That move actually solved one major issue that was creeping into the implementation effort. Management considered ISO/TS 16949 a quality system, rather than a management system. By holding onto that antiquated belief, management was not supportive, most of the middle managers and supervisors left training early—or didn’t attend training at all—and the ISO/TS 16949 implementation budget was constantly under fire. The crucial risk to the success of the ISO/TS 16949 effort was the absence, or perceived weakness, of the management commitment toward the program. Furthermore, since ISO/TS 16949 was merely viewed as a quality system by management, the responsibilities for quality only belonged to the quality department. ISO/TS 16949 is not just a quality system. Its tentacles reach out to nearly every aspect of a company’s business operations and cannot be shrugged off as another “quality fad du jour.” As most world-class companies understand, quality is everyone’s business—it doesn’t belong to just the quality department.

Another problem: The parent company and its management team had no experience in Mexico and little knowledge of that country’s working culture. The company placed Japanese managers in the top tier of the management structure, while the secondary management tier was composed of managers of Mexican heritage. The leadership style of the Japanese management team was met with some level of disdain by the Mexican managers, which created a rift in the organization. The separation of leadership caused other issues, including employee turnover, lack of a clear understanding of the intent of the ISO/TS 16949 standard, and false interpretations of the standard’s requirements. Cultural norms must be acknowledged, respected, understood, and addressed with care and diligence.

The quality management system documentation was written in a minimum of two languages, English and Spanish. Proofreading required at least one English-speaking person, one Spanish-speaking person, and a committee to resolve the language-conversion disputes. Language conversions from English to Spanish and vice-versa are not necessarily straightforward. For example, the internal audit procedures and corresponding training documents for internal auditing described the need for first-party (internal), second-party (customer), and third-party (certification body) audits. In Spanish, all the auditors believed it was going to be a fiesta . Yes, “party” translates into a fiesta and fun times for everyone .

Employee turnover was extremely high, reaching 60 percent in a single month. With a staff of more than 400 production employees, training was a constant ordeal. Maintaining accurate training records and ensuring that everyone was trained in a timely manner were difficult issues to resolve. It was imperative to keep operations running as efficiently as possible. All production employees needed training on the importance of quality as well as training on their specific machine or work station.

Misinterpretations of the ISO/TS 16949 standard led to excessive requirements, which burdened the organization with increased bureaucracy and rules. For example, the Mexican managers wrongly believed that the training requirements indicated that trainers must be in possession of a “train the trainer” certificate before they could do any training. That was fine until all of the people who had “train the trainer” certificates left the company. Not surprisingly, the procedure was changed.

ISO/TS 16949 emphasizes the ability to measure quality objectives, process efficiencies and effectiveness, and product conformance. To ensure that all the data were captured, every supervisor and engineer was given an assistant to gather and graph data that very few people actually analyzed. Pretty soon the assistants had to have assistants. It didn’t take long before the company realized that its bulging management and assistant staff needed some trimming.

One of the publicized benefits of obtaining an ISO/TS 16949 certification is fewer customer audits. Maybe it was the lure of a trip to Mexico, but the benefit of reduced audits never materialized. Audits aren’t necessarily a bad thing, but when expectations are set that these visits are supposed to be curtailed, the continuation was a disappointment.

It’s not all bad news
As the implementation of the quality management system progressed, a definite transition occurred as department managers began taking ownership of their processes and their procedures. The gratification was obvious.

Another benefit was personal and professional growth. The quality director and others in the company quickly learned the benefits of tools, such as failure mode and effects analysis (FMEA), control plans, gauge repeatability and reproducibility (GR&R) studies, and statistical process control (SPC) techniques. Not surprisingly, these tools benefited process and product quality improvements.

Tackling the ISO/TS 16949 certification effort was ambitious and required support from people across the company. This led to enhanced communication, mutual respect, a greater understanding of each other’s roles and responsibilities in the company, and a better appreciation for each other. Teamwork became the norm.

Less ons learned
If you are being forced to obtain certification to ISO/TS 16949, ensure that you have full buy-in from all layers of management.

Be extremely sensitive to the cultural norms of all parties involved and be flexible. When you form the team, be sure to invest the right amount of time creating a high-performing team atmosphere.

Embrace the idea that quality is everyone’s business.

The standard is easy to read but extremely difficult to interpret. Ensure that the leader of the team has done this before. Your leader must understand when the team members begin taking ownership. That’s when the leader needs to let go and watch the organization excel.

Create a robust training program early on to capture all the training record requirements. Understand who will benefit from personal and professional growth opportunities through formal education classes in FMEA, GR&R studies, SPC techniques, and other similar courses.

When people say, “The ISO/TS 16949 standard requires it,” have them show you where it says that. It’s amazing how people use the standard to get all kinds of things approved.

Talk to your customers about a plan to reduce your customer audits. This includes all customers, not just the one that is forcing you down the certification path.

 

We don’t have to. Should we do it anyway?
This story follows a company that was not being mandated into the ISO/TS 16949 certification arena. The company was already registered to ISO 9001 and felt that ISO/TS 16949 would provide a foothold in the automotive market, with huge orders to follow. The company exercised due diligence in the decision to move forward. Management analyzed the modifications necessary to the existing quality management system, talked with the third-party auditor, and asked a lot of questions of the potential new customer base. It seemed like the right thing to do.

After three years, the company’s experience has been met with a lot of frustration. In spite of the setbacks, the company will not abandon its desire to make an impact in this market sector. There is a silver lining, but it took some effort to catch a glimpse of it.

For many years, the company has successfully produced lines of products using vinyl and extruded rubber tubing . It has a good reputation in the industry for producing superior products with a reject rate that is far below the competition. That sounds like a good start for anyone. So what could go so horribly wrong for a company that was already ISO 9001-registered and had a firm grip on its products and processes? Before we can fully appreciate the company’s pains, we must understand its product.

One of the most interesting aspects of extruded rubber tubing is the manner in which the product is measured to ensure conformity to the requirements. Extruded rubber tubing is heated and extremely pliable during production and then cools, hardens, and shrinks over time. If you have to meet a dimensional requirement of 0.0001 in., when do you measure the product if it’s shrinking? Immediately as it’s oozing its way out of the extruder? In the first hour, after the product has cooled? Right before you ship the product? Should you wait until it’s on the dock at the customer site?

Another issue: Rubber is like a loaf of bread—it has a defined life expectancy depending on the formula of the rubber compound. Aging issues create inventory issues. Also of note, extruders need to run for a minimum of four hours to achieve a break-even margin on costs.

During the negotiation process with a potential customer, it became readily apparent that the customer had very little understanding of the rubber manufacturing process. This particular customer representative was not aware that an extruded rubber product could be miles long if the input hopper is constantly filled with raw material. Customer education became essential.

The customer insisted on zero defects with the aforementioned unrealistic tolerance level of 0.0001 in. That’s fine in theory, but the application of the part was noncritical. High standards are to be expected, but there seemed to be no room in the negotiation process for this requirement.

The automotive industry typically requires a very narrow delivery window to ensure on-time arrival of products. The solution was to locate the products in strategically placed warehouses near the customer’s final assembly points. Trying to meet the inventory demands led to exorbitant freight costs that couldn’t be billed to the customer.

Also, there seemed to be a never-ending demand for cost reductions with each new order. There are three synergistic parameters in the product-development life cycle: cost, schedule, and quality. If one is stressed, the others become stressed.

Silver lining?
Improvements are evident. This company has tremendous pride in itself, its products, and its customer relationships. It firmly believes that it made the right decision to move into the automotive market, and will strive for continued excellence. This experience has alerted the company to readdress its abilities in the contract-negotiation arena; these enhanced skills will help them with all future business.

Remember, this company was registered to ISO 9001 before venturing into this new frontier. It already understood the values of strong leadership demonstrated through management commitment, a systems approach to management, and continuous improvement.

Lessons learned
ISO/TS 16949 is not as simple as adding a few more requirements to the ISO 9001 procedures and quality manual. Be ready for change, embrace the changes, and look forward to improvements after the struggle.

If you have not obtained quality certification previously, do not attempt to do this on your own. It won’t be cheap to bring in a consultant, but it will be better than potentially destroying your company’s reputation.

Don’t ever assume that the customer understands your product or your processes. Your control plan may have plenty of detail, but it still doesn’t convey process idiosyncrasies the way a personal conversation with your customer can.

Ask every question you can think of and then come up with 10 more. Learn everything you can with regard to inventory requirements, delivery needs, advanced notification of orders, changes to requirements, etc. Review the ISO/TS 16949 standard as a good starting point to formulate your questions and concerns.

Don’t wait for your customer to challenge you for cost reductions. It will
happen, so be prepared.

The automotive market may not be as lucrative as you think. The customer may test you with smaller orders at first. You probably won’t be the only supplier making the product. Single-source suppliers don’t have a strong place in the automotive supply chain.

 

About the author
Jeff Pfeiffer is the CEO and senior consultant of Et Cetera Group Inc., which provides process methodology consulting services for ISO/TS 16949, ISO 9001, AS9100, TL 9000, business process reengineering, project management, and risk management.