Provisions of QS 9000 and Their Benefits to Automobile Suppliers - Research Paper Example

?Provisions of QS 9000 and Their Benefits to Automobile Suppliers Provisions of QS 9000 and Their Benefits to Automobile Suppliers Supply chain management is the management of a network of interconnected businesses that are involved in provision of service and product packages that are required by the end users in a supply chain. Many firms operating in the same industry are increasingly coming together to improve their supply chains by drawing their supply strategies together that focuses on quality and customer satisfaction. Organizations find the importance of relying on effective supply chains and networks to create a competitive advantage in the global market. The current trends in the supply chain management have shifted from the traditional enterprise boundaries to incorporate different companies in the supply network. Indeed, the three biggest automotive makers in the world, the General Motors, the Chrysler and the Ford came together to develop a supply network that would ensure customer satisfaction and process control in the automobile industry referred to as the QS-9000. This paper looks at the provisions of the QS-9000 and the benefits of automobile suppliers adopting the standards. In order to answer find out this, this paper will look at the history and the development of the QS 9000. It will look at the steps required for an organization to be certified as QS 9000 compliant. The various requirements of the organizations under QS 9000 will be discussed in detail while finally the paper will look at the benefits of organizations that are compliant with the standards. According to Hoyle (1996), quality system requirements 9000 (QS 9000) refers to an international quality management system standards for the automotive industry. They were originally developed by and meant for the “Big Three” automobile giant companies in the American motor world which are Daimler Chrysler Corporation, Ford Motor Company, and General Motors Corporation. The QS 9000 was in line with the 1994 ISO-9001 Standards whixch embraced customer satisfaction and process control. According to the QS 9000, all suppliers in the automotive world are required to be quality sensitive and adhere to high quality production materials, quality production of motor spare parts, heat treatment and professionalism, in plating and painting of the automobiles (Chrysler Corporation, et al., 2009). The QS 9000 is divided into three sections that include all the twenty ISO 9001 elements, including a number of automotive requirements. Secondly, the systems requirements, which are defined by the “Big Three” automobile companies, meant for their own use referred to as “Additional requirements” and lastly, the customer specific requirements r-that which are unique to every individual manufacturer of cars or trucks (Kanholm, 1995). Kanholm, (1995) outlines a number of activities that are carried out by the QS 9000 include Quality Systems Assessment which is involved in making sure that products are safe and efficiently serves the purpose for which they were intended. Advanced Product Quality Planning and Control Plan is referred to as a framework that involves procedures and techniques that are used to develop goods and products in a particular industry, especially in the automotive industry. It is the process for development of system products for General Motors, Chrysler and Ford and including their suppliers (Kanholm, 1995). Production Part Approval Process is used for establishing confidence in component suppliers and the process they follow in production by making sure that the supplier properly understands all specification requirements and customer design records. It ensures that the process possesses the capability to make production that meets the requirements by the customers (Borror, 2009). Potential Failure Mode and Effects Analysis on its part involve reviewing any possible components, assemblies and subsystems to identify failure modes, their causes and effects. Measurement Systems Analysis and Statistical Process Control seeks to identify the components that lead to variation after the measurement (Anleitner, 2010). Years ago, before the automobile industry had developed into the current state it is today, it was faced by a myriad of problems of multiple specifications and standards. Although the standards are believed to have been developed by the biggest three automobile firms Chrysler, Ford and General Motors, the idea was generally from the suppliers. Having been suggested by the suppliers, the standardization work begun in the late 1980s. The idea however, began much earlier due to increased growing separation between the suppliers and the customers. Back in the early days, the customers and the suppliers were closely linked, and enjoyed good interactions and relations. Due to the increased interaction between the customers and suppliers, any issues arising either due to quality of products or standards, customers were able to raise the problems directly through the suppliers. However, the integration of the markets and expansion of the markets to global levels, the distance between customers and the suppliers increased. As demand for products kept growing, more manufacturers joined in the supply chains, and this lead to the loss of customers’ voice. The first step to solving this problem was the development of specifications. As the different firms came up with different specifications, the terminologies changed and thus became hard to understand as multiple terms had similar meaning. The situation was even worse for two tier suppliers, who sold to one tier suppliers. They were subjected to numerous Tier One supply quality standards that sought to incorporate their own personal standards with those of the final customers. Coupled with their minimal resources to meet these requirements, it became hard for them to keep the abreast with the requirements. The ISO 9000 in the year 1987 released the standards requirements. After the inception of the standards requirements, the three motor many manufacturers came in. They chose to adapt the use of ISO 9001, which was the base standardised requirement for automotive sector that was documented as QS-9000. There was heightened rumour that automobile companies had to be ISO 9000 certified in order to do business in Europe and thus the adoption by the three companies. Although no particular provision in the ISO 9000 was objectionable to the Big Three automakers, there were omissions of various elements critical in the automotive business by the time which included issues such as business plans, customer satisfaction, continuous improvement, manufacturing capabilities and quality planning. Currently, due to continuous improvement of the standard, a number of ISO 9000 are specific and unique to the sectors, based on quality systems and standards requirement. While some sectors do not consider adding elements like customer satisfaction and continuous product upgrade, others do. Others find it extremely cumbersome, deciding to do away with it all together. Through these developments, the three companies the General Motors, the Chrysler and Ford found themselves in the mix of the adoption of QS-9000 in the year 1988. The companies developed the advanced product quality planning framework that contains the procedures and techniques that are used to develop products in the automotive industry. Advanced product quality planning framework is a process for product development system used by General Motors, the Chrysler and Ford and their suppliers. According to the AIAG manual the framework seeks to produce a quality plan for the products offered by the companies which will subsequently support the development of products that will satisfy the customers (Chrysler Corporation, et al., 2009). There are a number of differences however, between QS-9000 and ISO-9000 although they are constantly confused to be identical. Although all the elements in the ISO-9000 are contained in the QS-9000, the QS-9000 incorporates a number of clauses that are not present in the ISO-9000. To ensure efficiency in the QS-9000, several provisions to en sure standards have been incorporated, such as business plan requirements, tracking customer satisfaction and benchmarking, which are offered in line with the 4.1 of ISO-9000. QS-9000 also uses a number of sector specific requirements, which makes it more appropriate to various users. Additional elements not based on ISO 9000 and which appear in QS-9000 include production part approval processes. There are requirements for gaining approval from the customers to run new or altered part or processes. The QS-9000 also provides for continuous product improvement, while automobile associations are required to have systems in place to ensure that improvement activities are organized and measurable. The standards also consider manufacturing capabilities of suppliers. It also offers requirements for planning and effectiveness of equipment, facilities and processes. Finally, it provides requirements for mistake proofing and tooling management (Anleitner, 2010). The above provisions are aimed at making the standards more effective and efficient to the suppliers and the motor companies. Inclusion of the different elements pertinent on the industry is an additional strength for the various firms to improve on quality while not tampering with customer satisfaction. Chrysler Corporation, et al., (2009) points out that for a company to be fully certified and be referred to as QS-9000 compliant, it has to undergo through a number of steps. Firms, their leaders and employee are tasked with various responsibilities to ensure compliancy with the standards. First, the firm should review the both the software and the document that contains the Q- 9000 and its literature. Secondly, the organization is required to appoint a team that will oversee the certification. Development of a quality manual that meets the requirements of the QS-9000 should be developed. The organization then should focus on developing support documents for its quality manual. After the development of the quality manual, the organisation should focus on implementation of the quality management systems that have been defined by the quality manual. Although the pre assessment of the quality systems is optional, it is encouraged to organizations. After everything has been verified and ascertained to be fully functional with the organization being found to be compliant with the QS 9000 requirements, the organization is certified as QS 9000 compliant. A continuous assessment is then undertaken to assess the organization’s systems quality in relation to the QS-9000 requirements in order to avoid a revocation of its registration. Organizations under this framework are required to set time-studies, machine and operator layout and production layout through their industrial engineer. Other obligations and responsibilities include performing all work in compliances with all the documented procedures and instructions of the work that are applicable (Anleitner, 2010). Employees should have access to all procedures and instructions that are applicable to their jobs. The employees should also know the company’s QS-9000 quality policy statement, and attend and complete all required training sessions. The employees are required to attend every meeting pertaining to their job function. Respect and control of documents should be adhered to, and adhere to corrective actions. All forms, logs and records are required to be correctly filled and notify appropriate personnel of non-conformance which could lead to quality issues during audit. The requirements of the ISO 9000 have been extrapolated by QS-9000 to make more meaning to the users. During the adoption of ISO 9000, the various elements were generalized and clumped together. However, for them to be effective in automobile industry, they had to undergo modification. For instance, the management responsibility as provided for in the elements contained in the ISO 9000 was further broken down by the QS-9000 to incorporate multi-disciplinary teams, business plan, and analysis of data at company level. It also outlined the process of determining customer satisfaction and comparing competitiveness of a company to the others in the same industry. Quality system, another standard element by ISO 9000 was developed to include the requirements for utilization of advanced quality planning and control plan. Procedure for identifying the special characteristics was also incorporated in the QS-9000. Utilization of cross-functional teams as well as new product manufacturing feasibility was also requirements provided for in QS-9000 (Kanholm, 1995). Design control according to QS 9000 required the companies to make use of advanced tools in their production process. In their production, the firms were required to make use of computers and improved technology, engineering and analysis. Firms are required to use a prototype program to verify their production, and give customers the opportunity approves product changes. Firms are also required to control their documents and data by use of customer referenced documents by taking into consideration the special characteristics of the product. This gives the customers an opportunity to ensure that they use products that are of high quality and meet the safety standards, getting a value for their money. The firms’ process review should put into consideration the specifications of the customers to make sure that they are more satisfied. Further, the ISO 9000 provide standards requirements for purchasing terms for customers. They provide requirements for customer approved list of items, compliance to government and safety constrains of the products provided by the firms. It requires the customers to be subcontractors in the development of QS 9000 and bestows it as an obligation for the firm to provide planning information to the subcontractors (Kanholm, 1995). Process control is yet another field requiring standardization according to the ISO 9000 and which the QS-9000 provided a number of requirements for the firms to follow. These requirements include compliance to government’s safety and environmental regulations, and special characteristics of the product. The standards also require customers to be provided with total preventive maintenance. Firms are required to process, monitoring and operator instructions while its production process should have the capability to house special characteristics. There should be a verification of the job set up. The appearance of the product, including the aesthetic characteristics should also be controlled. The inspection and testing of the product should qualify for the zero acceptance criteria, while the testing ought to and should be done in accredited laboratories. The layout of the product should also be inspected, while firms should observe and adhere to incoming inspection criteria. Although the various rules and regulations have been clearly laid down by the standards requirements, certain products do not qualify for consumption by the consumers. Thus, to control these products from getting into the hands of the customers, the standards requires that all suspected goods ought to be inspected and controlled and should be rectified in accordance to the rework instructions. Customer approved decisions should also be approved. The provisions also uphold the discipline of problem solving and proper rectification of a product that has been returned by a customer. Handling and packing of a product is yet another requirement that was in depth discussed by the QS 9000. It requires that a product was supposed to be packaged in line with customer standards and labelling requirements. The scheduling of delivery was required to be in accordance to the order time, while shipping was supposed to be done with the help of computer aided shipping notices. Other requirements in the quality control standards include the specification retention requirements, internal quality auditing to ensure a suitable working environment. Training of staff and employees should be strategically done and its effectiveness be done with the help of periodic evaluation. For a company to be certified as QS-9000 compliant, it has to undergo a long process, with a tedious and very involving procedure. The steps involved are cumbersome, while the requirements themselves are really hard to adhere to. It is clear that the standards are very specific on the quality of products produced by the organizations, while they value customers very much. The standards are focused on ensuring that customers are very satisfied by the products offered by firms and organizations in the industry. Why then do organizations have to painlessly go through the trouble of being registered as QS 9000 certified? Benefits of QS 9000 have been proven by a survey group conducted in 1998. The survey found out that over 200 suppliers reported that the average cost of QS 9000 registration was found to be about $ 120,000. Only $ 20, 000 is required to be paid to the certification body, while a meagre 17% of the incurred costs by the various firms go to consultancy and training services. However, organizations that are QS 9000 certified have reported increased sales in their products (Singh, 2008). The increased sales have also far reaching effects, with increased remuneration to the employees of the organizations (Singh, 2008). Up to a 3 to1 return on total costs and close to 17 to1 return on certification body costs has been achieved. Organizations have realized full benefits of having been registered and adhering to the provisions of the QS 9000, which are increasingly attracting more companies to join and receive full certification. The fact that the certification is keen on quality ensures that organizations provide goods that are of high quality (Brent, 2006). This creates a competitive advantage over other companies in the same industry. In fact, statistics indicate that customers are willing to pay any amount of money to acquire a high quality product. There are numerous costs benefits that organizations acquire by being registered as QS 9000 compliant. Recently, however, the QS 9000 have become obsolete, and have been replaced by ISO/TS 16949:2002 and ISO 9001:2008. These new standards are concerned more about the suppliers in the supply chain of automobiles. Regardless of the numerous hurdles that automobiles have to go through and the trouble inherent with trying to maintain quality and customer satisfaction under the provisions of the QS 9000, automobile organizations seek to be certified in regard to the standards, due to the numerous advantages that they have in terms of sales. Many customers have developed trust in the automobile suppliers, a factor that has contributed to increased sales and more revenue to the companies. Thus, the benefits of a firm being QS 9000 certified are numerous and it subsequently enjoys a competitive advantage over other companies. References Anleitner, M. A. (2010). The power of deduction: Failure modes and effects analysis for design. Milwaukee, Wis: ASQ Quality Press. Borror, C. M. (2009). The certified quality engineer handbook. Milwaukee, Wis: ASQ Quality Press. Brent, R. J. (2006). Applied cost-benefit analysis. Cheltenham, UK: Edward Elgar. Chrysler Corporation, Ford Motor Company, General Motors Corporation, & International Organization for Standardization. (2009). Production part approval process (PPAP). Detroit, Mich.: Chrysler Corp. Hoyle, D. (1996). QS9000 quality systems handbook. Boston: Butterworth Heinemann. Kanholm, J. (1995). QS 9000 requirements: 107 requirements checklist and compliance guide. Los Angeles, CA: AQA Co. Singh, M. (2008). Strategic management and competitive advantage. New Delhi: Global India Publications. Read More