Report: Streamlined Operations Would Save Automotive OEMs, Suppliers $3.5B

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Automotive OEMs and suppliers estimate about $3.5 billion could be saved annually if the complexities and redundancies in quality management systems were reduced, says a recent study by Southfield-based Automotive Industry Action Group, a non-profit organization.

"Our industry has made phenomenal progress in the quality and reliability of the vehicles we produce," says J. Scot Sharland, executive director of the organization. "But while the industry has deployed very robust processes and supplemented them with great tools, it needs to accelerate basic knowledge transfer throughout its global supply chain …"

Sharland says while automakers and suppliers believe the quality of work is the best it's ever been, problem solving, customer-specific requirements, product development, and loss of experience could all be improved. Respondents said they invest 116 workdays and more than $100,000 annually to comply with quality management system requirements. A savings of nearly $50,000 per site is projected if complexities and redundancies are reduced.

The study found suppliers are most concerned with the ability to standardize business practices and systems, while OEMs are concerned with managing customers expectations and relationships. Automakers are also concerned with baby boomer retirements within the next decade, as with that comes a loss of mentorship and know-how.

Sharland says the Quality 2020 study has a goal of putting the improvements into place by 2017, and then measuring the results by 2020.

To download the survey, visit Go.aiag.org/quality-2020-report.​

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