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PREFACE:
The automotive industry is the biggest industry in the world and constantly changing. Over 8 million people working for 50 manufacturers produced over 60 million vehicles in 2003 with production rising by 6% by mid-2004.
As revealed by Table 1.1, 180% of the vehicles were produced by just 12 manufacturers and over the next two decades there is speculation that this may reduce to just six. There has been modest growth since 1999 and apart from some changes in position, the top 15 vehicle manufacturers have remained the same over the same period. Our lives revolve around the automobile.
We use it to transport goods and people, for work, for sport, for war and for pleasure, and in many ways our world would not be the same without it. With oil prices rising since the start of the second Gulf War, today’s consumers are interested in more fuel efficient, smarter and safer automobiles, and consumer groups are pressing for sustainability thus impacting not only the selection of materials to build automobiles but also the efficiency and effectiveness of the production processes.
Until the oil crisis of 1973 and subsequent recession, it was an industry that pushed products onto the market in quantities derived from sales forecasts. This mass production strategy depended on sustaining consumer demand but when oil prices soared, the post-World War II gas guzzling cars were no longer wanted. Faced with having to cut costs while producing a small number of many types of cars, in 1945 Toyota began todevelop a different strategy one in which the consumer pulls the goods they need thus eliminating overproduction.
However, while both Toyota and Ford used the same workflow system, Toyota managed to eliminate the warehouse. 2 The Henry Ford quip “that you can have any colour as long as it is black” characterized by mass production but it was also characterized by excessive waste.
The economies of scale tied the manufacturer to providing a limited choice, but an order-driven production strategy would turn this around causing parts to be produced only on demand and so the consumer could have within reason, any colour, any combination of features and engines, i.e. a car to their specification. In the late 1980s and early 1990s as companies became aware of the Toyota Production System, they too started to adopt what is being called a “lean production” philosophy.
The industry is now global. Cars designed in one country are assembled in another with parts made in a third, fourth or fifth country. Organizations operating in the automotive sector continually have to improve product quality and delivery, reduce material and labour costs,waste and vulnerability in the supply chain and hence attract some of the best engineering talent.
It is the management systems of organizations that need to be responsive to these changes because it is these systems that produce the 60 million or so vehicles every year. It is therefore vital that the management systems in the automotive industry are designed to enable organizations to satisfy the needs of customers and other stakeholders, not simply short-term profits for shareholders.
It is against this background that pressure for a common set of quality management system requirements emerged. Generic international quality management system requirements came in 1987 with ISO 9000 and, from an amalgam of company-specific requirements in the early 1990s, the first international automotive specification ISO/TS 16949 emerged in 1999 followed by a second edition in 2002.
This standard will remain current until at least 2008 when ISO 9001:2000 will complete its review cycle. Poor-quality components entering the supply chain create massive problems for the vehicle manufacturers thus making product quality key to survival and so we begin by looking at the meaning of the word “quality” and the principles and practices that have emerged to determine and manage it.
