Cooking up a better approach to development & quality. (Information Technology Update).

Here's a pop quiz:

* What does APQP stand for?

* What does PPAP stand for?

* Why are they important?

I have to tell you that I suspect that many people in the auto industry would flunk this quiz. Yet some people in the industry have high hopes that APQP and PPAP (don't they both have an arcane sound to them?) will help fix two of the industry's thorniest problems: Less-than-stellar quality and plodding new vehicle rollouts.

To answer the first two questions: APQP stands for "Advanced Product Quality Planning." PPAP is the "Production Part Approval Process." As for the third question, about the importance, the answer takes a little longer.

To fully appreciate the mission of APQP and PPAP a little background is in order. The auto industry does not jump from designing a vehicle to building it immediately. This would be akin to saying parents make a baby and presto!, it becomes a full-blown adult. There are plenty of steps and stages important to vehicle (and human) development. A tremendous challenge is reviewing and approving (or not) the thousands of conditions and steps suppliers must meet to satisfy a cascading series of requirements. The OEMs believe the best way for suppliers to proceed is by precisely following a "cookbook." These cover every stage in how to make a car from prototype to pilot to production. Such cookbooks are collectively known as APQP and PPAP. Complying with them isn't optional. These cookbooks encapsulate the OEMs' hard-earned knowledge and wisdom. They aim to ensure that suppliers won't leave out the proper ingredients, including the supplier's:

* Quality systems

* Employee training

* Tooling

* Production processes

* Component design

* Sub-supplier management.

The book analogy isn't far-fetched, as the OEMs have defined APQP and PPAP in lengthy requirements documents. These include "recipes" and prescriptions such as Failure Mode and Effects Analysis (FMEA). An OEM uses an FMEA to focus the supplier on a critical characteristic of a part, such as a key dimension. The supplier must convince the OEM prior to production that its processes can deliver that characteristic without fail. Only after receiving OEM approval can the supplier proceed to the next step.

Motorcity Consulting, Inc. (734/996-4669) provides an excellent overview on APQP and PPAP in its comprehensive "Automotive How" report. Traditionally, APQP and PPAP reviews and approvals have been paper-based. Customers and suppliers trade documents extensively to ensure both compliance and that corrective measures are taken when noncompliance is detected, for instance. Information technology (IT) can play a major role automating these labor-intensive, manual processes and paper-based systems and accelerate information exchange between the customer and supplier.

To date, the big IT vendors haven't picked up on this area despite its gigantic, underlying information content. That will change, however, as portals and the Internet become the main venues for APQP and PPAP information exchange. The companies most directly addressing APQP and APAP are IT vendors with backgrounds in quality management. These include companies such as Powerway and IQS. Some of their more well known initiatives are to help manufacturers attain QS-9000 certification. However, their participation spans virtually the entire product development lifecycle. Some large IT vendors offer fullblown product life cycle management (PLM) suites to address these areas. However, Oracle, SAP, J.D. Edwards, EDS and the others are typically biased toward particular segments of the broad life cycle. For instance, mySAP PLM emphasizes the full-production phase of quality management (vs. the earlier design phase).

The large vendors are strong in workflow software necessary for integrating the various collaborating parties. The biggest vendors, however, try to serve at once multiple, vertical industries (such as consumer packaged goods and pharmaceuticals). As a result, they tend to have more generic packages than those meeting the auto industry's specific APQP and PPAP requirements. Cleveland-based IQS, for example, has built its entire business around the automotive industry's needs. It partners with Oracle and a dedicated workflow vendor to round out its offering. Another smaller vendor, Powerway, has been selected by Covisint to handle communications with Covisint's industry portal via Powerway.com.

Three levels of standards are used by automakers. Most universally, the auto industry relies on broad standards such as QS-9000 that are also deployed widely outside of the auto industry. A second level of standards is APQP and PPAP. Here Ford, General Motors and DaimlerChrysler, through the Automotive Industry Action Group (AIAG), banded together to create a common standard among the Big Three. Lastly, each OEM has its own supplemental standards, such as the General Motors' RFQ Required Quality Information list.

Tier-one suppliers traditionally have responded to these mandates in a piecemeal fashion. For instance, Autoliv ASP, the airbag manufacturer, created multiple Excel and Word files without coordination. Another supplier, Parker Hannifin, a maker of motion-control systems, generated 50 to 60 paper manuals. They contain work instructions and procedures in response to ISO 9002 requirements. Both Autoliv and Parker Hannifin now run IQS software to better integrate their documentation and worflow.

Hurting the movement to computer-based systems in this arena has been the stepchild role that quality still plays in the auto industry. A manufacturer's quality department is typically small. It has little budget to cut across and integrate all the areas pertaining to APQP and PPAP. Such oversight could prove fatal to some companies in the industry. For two decades U.S. vehicle makers have been losing market share every year due to quality problems. Much better quality and faster launches are absolutely mandatory for the survival of the U.S. auto industry.