The automotive industry continues to operate under a number of different standards, with respect to managing the Quality Management System (QMS) requirements at the Tier One and sub-tier supply chain levels. While ISO/TS 16949 and VDA 6.3 are the most common and most recognized standards, many other global OEMs do not subscribe to either of these two major standards; instead, they manage their supply chain according to internal standards and requirements. Although a number of OEMs recognize and operate to the ISO/TS or VDA standards, each manufacturer also mandates a plethora of additional Customer-Specific Requirements (CSR) to their supply chain.

For those Tier One suppliers conducting business with a number of OEM customers, this has resulted in the need to maintain QMS procedures and documents that require compliance with several different sets of standards. The need to maintain different standards and satisfy multiple customer demands results in QMS procedures that are often very detailed, complex, and at times, redundant. For sub-tier suppliers, this becomes an even bigger issue, as they must struggle with the OEM CSRs passed on by their customers (Tier One suppliers) as well as maintain a wide number of unique requirements that are subsequently demanded by the Tier One supply chain.

The OEM members of the IATF conducted a project in 2014 to align their CSRs. This project had two parts: first, identify “nearly common” requirements and work to integrate them into the revision of ISO/TS 16949, and second, develop a common architecture for the CSR documents.

While the revision of the ISO/TS 16949 standard is still in process (release is targeted for December 2016), it is difficult to measure exactly how many CSRs have been eliminated through the commonization project. It is clear that this type of project was directionally correct and demonstrates that the IATF OEMs are supportive of reducing QMS complexity for the suppliers. Also, the common architecture for the CSR documents will make it much easier for suppliers to find the relevant customer requirements and for the OEMs to continue the work on reduction of CSRs.

While the OEM initiative was being finalized, an initiative for Tier One suppliers to align their CSRs was launched. The intent was to simplify the overall complexity of multiple — and sometimes conflicting — requirements for the sub-tier supply base.

APPROACH AND METHODOLOGY

Approximately 10-12 larger Tier One suppliers participated during the early stages of this initiative. The early challenge was gaining an understanding of the various Tier One CSRs and determining how similar or unique they were. Many of the Tier One CSRs are driven by the need to satisfy the particular OEM CSRs the Tier One suppliers are working with. During the early part of these discussions, attempts were made to identify the common requirements across the Tier One suppliers that comprised the work group.

An on-line tool was used to identify common terms throughout each of the Tier One’s specific Supplier Requirements Manuals, and a large number of common references were seen. The problem is that the common terms often related to reference terms used in the various supplier manuals and not to the actual procedures or requirements detailed for sub-tier suppliers. Although a number of meetings were held to review and discuss the common terms, very little progress was made toward determining common procedures that could be combined into similar language across the Tier One CSRs, or perhaps even be recommended for inclusion in the ISO/TS standard itself.

There was significant discussion around establishing a common architecture to be used with the various Tier One CSRs, clearly linked to specific ISO/TS requirements (or sections) that would help sub-tier suppliers navigate the multiple sets of requirements. Subsequent discussions, while recognizing general support of the architecture model in principle, also raised some questions as to overall effectiveness due to:

• The challenge of getting large Tier One suppliers to structure their Supplier Requirements Manuals in a common format and architecture
• Many Tier One requirements manuals include additional supplier requirements beyond QMS requirements, including commercial, regulatory, and compliance issues
• While overall architecture might make for ease of reference, this does not address the major concern of sub-tier suppliers, which is the vast number of requirements cascading from OEM and Tier One CSRs

The group also discussed the value in establishing common language around requirements that were identified as consistent requirements across multiple Tier One suppliers. There was a significant variation in how Tier One suppliers detail requirements across their sub-tier supply base. Depending on the profile of sub-tier suppliers that a Tier One uses, there is a broad range of comprehension of the higher-level QMS requirements defined within the ISO/TS or VDA Standards. Sub-tier suppliers are not required to be certified primarily beyond ISO 9001, and therefore, many of the Tier One CSRs also contain a high level of description and clarification of some of the key CSRs communicated to sub-tier suppliers. This presents an additional challenge to the establishment of common language that might be used by all Tier One suppliers.

NEXT STEPS

During this work group’s latter discussions, the industry effort to revise the current ISO/TS 16949 standard was well underway. There was concern that any type of consolidation efforts would be like trying to hit a moving target. With the decision to base the new automotive standard on ISO 9001:2015 — and cognizant of concerns the IATF has with the broader scope of ISO 9001:2015 — there is some concern that the new TS standard replacement might be characterized by even more complexity, presenting more challenge to any consolidation efforts. Ultimately, any complexity for QMS requirements at the sub-tier levels is largely determined by the complexity of requirements at the standards and OEM CSR levels. If there is little or no consolidation across the large, global OEMs, sub-tier consolidation faces a very significant challenge.

The initiative of this particular work group should not be abandoned at this time; however, there is likely limited value in proceeding until the new standard is released (at least in draft form), resulting in a more qualified assessment of where the OEM CSRs might be heading. At some point, it is still value-add to attempt at least some consolidation of OEM-Tier One CSR complexity, penetrating beyond common architecture and language.

SUMMARY

We operate with global customers and a global supply chain; yet, it this global industry is managed to a large degree by regional standards. This results in increasing complexity down the supply chain. In most cases, the complexity is greatest among the suppliers who are least capable (from a resource standpoint) to manage the challenges of that complexity.

Effective resolution of this issue will come only with a major paradigm shift. While we will not likely see one automotive standard for the industry in the foreseeable future, the issue of increased complexity and restriction down through the supply chain must be addressed. Most suppliers have limited resources and end up managing multiple requirements as best they can. While some may think that one global automotive standard might present risk to the industry, the risk presented by the current complexity and strained resources is a much higher risk, subsequently validating any future efforts at managing and reducing that complexity more effectively.