Home Resources Blog August 2020

IATF 16949 - Supplier QMS Development

17 August 2020
When the IATF 16949 standard was introduced in 2016 we were also introduced to clause 

This clause requires an organization to ‘using a risk-based model, the organization shall define a minimum acceptable level of QMS development and a target QMS development level for each supplier’. 

The clause then goes on to state that ‘a Quality Management System certified to ISO 9001 is the initial minimum acceptable level of development. Based on current performance and the potential risk to the customer, the objective is to move suppliers through the following QMS development progression’, with ‘the ultimate objective of eligible organizations becoming certified to this Automotive QMS Standard (IATF 16949)’. 

The word ‘eligible’ in this case refers to an organization’s eligibility to be certified to the IATF 16949 standard.  Basically if you don’t produce a product, or provide a service that is part of product, e.g. welding, plating, painting, etc. which goes into a road going vehicle (Not Construction, Military or Agricultural), then you’re not eligible for certification to the IATF 16949 standard.

Some of the wording given above comes from a Sanctioned Interpretation, given by the IATF, which alters the wording and requirements of this clause from those given in the standard. This Sanctioned Interpretation has been given to clarify certain requirements of this clause.

OK, so we now know what we need to do and just as importantly why we need to do it. There are obviously risks associated with your supply chain and minimising these risks can only be a good thing. But here comes the challenge. How can we achieve this? 

For some organizations, typically those further up the supply chain, tier 1 or tier 2 to the OEM’s this is not often a challenge, as they’ll have dedicated resources for working with their supplier base. Also they’ll typically have enough influence with their suppliers to help them develop. 

But what about the little guys? Those companies with less than 50 people, or those whose order book isn’t made up entirely of automotive business and as a result have little buying power with which to go to their supplier base and ask for improvements or changes in how they operate, let alone ask them to implement and pay for a management system in compliance, or certified to IATF 16949. How can these guys satisfy the requirements of this clause, whilst adding value and minimising risks to their own business and the supply chain they operate in? 

From my experience the main challenge here is firstly having enough influence to go to your suppliers and ask them to adopt practices above and beyond their ISO 9001 certified management system. In many cases the suppliers aren’t willing to do this. They often explain that the business you’re placing with them is so little that it doesn’t justify them changing their processes to accommodate your requests. So what do you do next? 

Your own risk analysis shows that to your business these suppliers represent a risk and we still have the requirements of the standard to satisfy. The best solution I’ve found is to demonstrate to your suppliers the benefits that can be brought to their business by adopting automotive tools and techniques. For example do your suppliers complete effective root cause analysis when they identify a non-conformance? 

Perhaps you could highlight to them the benefits of such tools as Ishikawa (Fish-Bone) diagrams, which when teamed with 5Why analysis can help an organization find the true and complete root cause of an issue. You could also consider demonstrating to them the benefits of an 8D approach to problem solving. Which when teamed with effective root cause analysis will allow them to fix a problem and prevent it from recurring with greater success. You may then go on to demonstrate that applying lessons learnt from this exercise to similar products and processes can prevent such issues from occurring elsewhere in their organization. 

Surely the use of such techniques will be of benefit to them. You could also consider giving them access to your own standardised forms for completing these tasks. That way if you do encounter a supplier issue their response to you will be in a format that you’re very familiar with.

Another potential benefit that could be highlighted to your suppliers is the use of Failure Mode Effect Analysis (FMEA). ISO 9001 calls for an organization to identify risks and opportunities. What better tool could there be for doing this in a structured way? 

Initially the methodologies for completing such an exercise may seem daunting. But as experts in their chosen fields they will actually be fully aware of the risks posed to their products and processes. The use of an FMEA will allow them to capture and analyse these risks in a structured way, so they will then be in the best position to address these risks in an organised and informed way. 

Finally, via the minimisation or elimination of these risks your supplier will effectively avoid issues. All of which would inevitably cost them time and money to address. Again it has to be beneficial.

In effect you can take your knowledge and experience of all of the automotive tools and techniques, which we utilise every day, and distribute this across your supplier base. Through their use you will be able to improve your supplier’s performance, avoid issues, minimise risks and help them to develop their management systems towards compliance with the IATF 16949 standard.

Finally, if your suppliers are willing to accept them and you have the resource to deliver them, you could complete second party audits of your suppliers. From these audits you will be able to identify those areas of your supplier’s management systems that could benefit the most from the use of automotive tools and techniques. You can then pass on your experience, give guidance and share the forms and documents from your own management system. Your suppliers can use them to strengthen and develop their management system in turn.

Surely all of this can only be a good thing for the entire supply chain in the long run.