Original Equipment Manufacturers (OEMs) are always exposed to business critical risks from unforeseen supply chain vulnerabilities and disruptions. These can include quality failures, financial risks, supply chain interruptions, IT failures, cybersecurity breaches, and product defects among others. For OEMs, the lack of transparency and inability to communicate in real time with their sub-suppliers adds to the risk equation. There is an absolute need for a smart and connected Enterprise Risk Management (ERM) solution to mitigate supply chain risk – in fact it is more crucial than ever as the globalization of automotive supply processes continues to increase.
OEMs that have a more established, more mature risk culture, already require suppliers to implement their own risk management procedures, contingency plans and strategies. There is also a greater focus from regulatory and standards bodies, who are now requiring organizations to implement a full risk management structure as part of their requirements towards becoming successfully certified. For example, standards such as ISO 26262, ISO 14001 and ISO 45001 now all address risk management; successful IATF 16949 certification requires evidence of risk-based thinking including the implementation of a new digital QMS – advocating risk mitigation and avoidance as well as demonstrating risk reduction through “preventative actions”.
The need for a more enhanced and focused view on risk assessments is clear; there is still a lack of robust risk processes that can actively identify and successfully manage the growing number of supply chain risks.
When it comes to auditing suppliers, many OEMs will fall back on paper in order to assess if quality standards are being adhered to. Unfortunately, OEMs are still spending more time working through these manual processes and gathering supplier assessment data sets than actually remediating supplier issues. However, this is changing, all thanks to a willingness from OEMs to embrace digital transformation. Digital transformation is giving OEMs the opportunity to implement digital, automated assessment solutions that can force suppliers to be proactive about their Risk, Quality and Compliance initiatives; providing operational visibility for quality and delivery.
Digital transformation, especially in eGRC, has also propelled Enterprise Risk Management innovations forward, which has fundamentally changed the daily lives of customers, organizations, products and even the entire ecosystem of the automotive supply chain. We are on the brink of a revolution, with AuditComply leading the way.
AuditComply is working as part of a broader supplier management program which is critical in maximizing the value of supplier relationships, while also building trust with stakeholders and customers. With enhanced communications, real-time risk data sets, instant reporting and issue management capabilities all working together as a cohesive unit; OEMs can meet the increasing demand to assess supplier quality and boost their delivery performance in a more streamlined and efficient manner.
With OEMs being held to increasingly high quality standards, supplier audits are playing a pivotal role in ensuring that the products delivered by suppliers meet expected quality specifications. Once all suppliers have been assessed, OEMs can plan and schedule audits to identify quality gaps, issues and opportunities for optimization and performance enhancement.
Autoliv is the world’s largest automotive safety supplier, with sales to all major car manufacturers in the world. Their entire team (67,000 employees in 27 countries) is passionate about saving more lives. Autoliv’s vision of Saving More Lives guides their daily work. They understand that life can change in a fraction of a second – and they have developed automotive safety systems with that moment in mind for over six decades. Each year, their products save more than 30,000 lives, products that must operate perfectly in milliseconds.
In 2016, Autoliv contacted AuditComply looking to develop their digital processes. Autoliv needed to be able to assess thousands of suppliers around the globe on a regular basis. However, their quality team were not well served by their manual, Excel based Risk, Quality and Compliance processes. For Autoliv, the benefits became clear as soon as they implemented the AuditComply ERM platform, taking their manual based quality and supplier audits, digital. With the ability to report real-time supplier variances and anomalies at source, Autoliv are now exceeding quality expectations.
AuditComply enables Autoliv to effectively manage, monitor and track multiple stages of their supplier relationships, spotting hazards/issues, tackling risk uncertainty and boosting overall supply chain performance. AuditComply increases productivity across their global supplier network through efficient data collection, instantaneous reporting, corrective and preventive action management, root cause analysis and real-time data analytics. Supply Chain management has been simplified with remote self-assessments, non-conformance/issue management workflows and bespoke performance monitoring with actionable business intelligence.
AuditComply Enterprise Risk Management (ERM) platform
Fast forward to 2019, AuditComply is used by Autoliv for all their supplier auditing requirements with the aim to integrate AuditComply deeper into the organization over the next number of years. Autoliv continues to achieve operational excellence whilst boosting their overall supply chain performance with AuditComply.
So, how can OEMs mitigate supply chain risk?
OEMs need to:
-Digitize their current Risk, Compliance and Quality initiatives.
-Capture supplier issues and conduct investigations to determine the root cause.
-Manage corrective and preventive actions.
-Verify the effectiveness of the remediation to ensure that the problem is resolved effectively.
-Enable a structured process to terminate specific suppliers in the event of quality dissatisfaction.
A more digital, holistic and standardized approach to supplier quality management will help OEMs gain visibility into the supply chain as a whole and improve the overall performance of the organization.
Is your supply chain prepared for the future?
Why not dive deeper? Download AuditComply’s free Manufacturer’s Guide to IATF 16949:2016. This guide can help you learn how IATF 16949 benefits your organization; discovering what the IATF 16949 requirements are, and learn the practical steps you need to take to get certified.