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AIAG Annual Survey Shows Suppliers That Quality Pays

24 February 1999

AIAG Annual Survey Shows Suppliers That Quality Pays

    SOUTHFIELD, Mich., Feb. 23 -- With the recent release of the
Automotive Industry Action Group's (AIAG) fourth annual Quality Survey Report,
the automotive industry continues to demonstrate the significant value of
implementing QS-9000 and other quality initiatives.
    "From the results of the survey, we were encouraged to find that -- in the
first year of QS-9000 certification -- savings averaged more than six percent
for our respondents," said Larry Higgason, chairman of AIAG's Annual Quality
Survey and president of Productivity Action Associates.  "And if you base that
figure on average company sales of more than $130 million, that represents an
average savings of nearly $8 million."
    Respondents reported, on average, improved performance including:

    *  A 48 percent improvement in parts per million (PPM) defect rates;
    *  A 38 percent improvement in on-time shipping performance; and
    *  A 23 percent increase in OEM market share.

    Document and data control provided companies with the most initial
benefit, followed by management responsibility, process control, internal
quality audits, and corrective and preventative actions.
    Respondents said that elements providing companies with the greatest
amount of on-going benefits were internal quality audits, process control,
corrective and preventative action, management responsibility, quality systems
and training.
    "Compared to last year's quality survey results, PPMs and scrap rates
improved just slightly," said George Phelps, co-chair of AIAG's Annual Quality
Survey and QS-9000 document systems manager for Libralter Plastics.  "However,
we were pleased to find that rework and customer returns had significantly
improved."
    When asked to identify upcoming industry-wide initiatives that were
needed, respondents most often named continuous improvement (69 percent),
world-class manufacturing (44 percent), customer value (37 percent) and lean
manufacturing (32 percent).
    The primary data collection method used for the quality report was a
questionnaire on diskette that was mailed to 1,700 select companies --
primarily those that achieved third-party QS-9000 certification.  The
questionnaire was also sent to a second group of companies -- consisting of
those subject to the QS-9000 Tooling and Equipment Supplement.  In addition, a
telephone survey of 150 companies was used to obtain additional information.
    The data collection for the quality survey took place during the first
quarter of 1998 and included tier one, tier two, tier three, tier four and
lower suppliers.
    Those interested in obtaining a complete copy of the 1998 Annual Quality
Survey Report -- which costs $15 for members and $30 for non-members -- should
contact the AIAG Customer Service Center at 248-358-3003.
    Founded in 1982, the AIAG is a not-for-profit trade association of over
1,500 automotive and truck manufacturers and their suppliers.  AIAG's purpose
is to provide an open forum where members cooperate in developing and
promoting solutions that enhance the prosperity of the automotive industry.
Its focus is to continuously improve business processes and practices
involving trading partners throughout the supply chain.
    More information about AIAG and its quality initiatives can be found at
its website at http://www.aiag.org.