Process as a determinant of production success is an unchallenged perception in every industry. In a VUCA (Volatility, Uncertainty, Complexity and Ambiguity) -RUPT (Rapid, Unpredictable, Paradoxical, and Tangled) world, with the manufacturing industry increasingly swayed by market expectations and competition pressure, reliability becomes a sensitive factor that determines success. Defects, delays and cost overruns are never a rarity. And reliability is more dependent on how best we can repeat our performances and how good we are in replicating the performances elsewhere. The characteristic of being predictable in performance is an attribute of systematic operations, a fundamental outcome of being process-based. It is a well-articulated fact that the quality of a process determines the quality of the product. Hence, industries are more and more inclined toward a process-based organisation within and outside the shop floor.
In the early 1900s, industrialisation flourished and the automotive industry in the USA and Japan dominated because of their abilities in meeting market expectations, mass production, and customisation. The mid-section of that era saw the uprising of European industry masterminded by efficiency in processes and professionalism. Engines grew in complexity, features grew with demand, and increasing automation and fuel variety furthered inevitable innovations to sustain the market. The resounding successes of multiple automotive majors pointed towards the improvements and innovations that arrived as byproducts of a systematic way of life–another term for process. With increasing components and complexities, process-based industry becomes an inevitable reality, including for the automotive industry.
The Indian auto industry will be on a growth trajectory with an increasing younger population, higher earning capacity, better infrastructure, growing mechatronic industries, availability of sustainable fuels and a demand for larger variety to cater to needs of a segmented market, providing all the ingredients for a rising automotive market. The country has the metal, manpower and machines to fuel the growth. Here, each of the ingredients is complex and therefore their integration becomes even more complex, hence sound, repeatable process becomes the solution.
Most processes of automotive manufacturing are standardised in such a highly competitive industry. Requirements gathering, designing, production, testing and release to market is virtually the same for every manufacturer. The competitive differentiation appears around activities that happen within each of the steps in the macro process.
As an example, the production step might look similar to any production shop floor with metal sheets, stamping, welding, power train fixing, painting, integration, testing, etc. However, each of these minor steps could generate a further micro detailing. Sometimes at the micro step sequence level there could be activities where man, material, methods, and machines will interact to create unique value for the customer. Competency, material quality, efficiency and effectiveness of methods employed, and IoT-based machines are vital assets; and in certain sequence and combination will become strategic for the manufacturer, providing a competitive advantage.
Therefore, Indian automotive manufacturers not only must focus on their processes but also benchmark against the best in class since multi-disciplinary interactions are going to be routine with I4.0 entry. Holding on to the basics, embracing the latest and being sensitive about the market must be a disciplined exercise, for which process and process benchmarking becomes an absolute necessity.
Being competitive is not only about establishing success at home but also displaying dominance elsewhere in the globe. This means stability in culture and behavior is the need of the hour. Culture creates the cradle within which behavior evolves and stabilises. Repeatable and reproducible behavior is an outcome of a process culture. That sets the tone to explore ways and means to create an evolved process culture in the automotive industry.
Every member of the industry has their processes implemented, but to retain competitiveness, process is not enough; rather, a process culture is required. The automotive industry relies on component manufacturers from OEMs to many tiers of feeder suppliers. The suppliers are implementing many of these benchmarks to provide best in class products to OEMs. From the grass root supplier to OEMs, the so-called quality culture must be embedded and practiced aggressively to ensure the final integrated product meets customer requirements. Quality culture and its offshoot, quality in processes, must be part of every member of the automotive manufacturing ecosystem.
A culture is a combination of beliefs, values, principles, ethics, and practices. Therefore, a process culture is supposed to inculcate such higher ideals in the industry. Integrating best practices from within and those external to the industry is a route to continuously drive the cultural evolution in the industry. The source of these best practices are the standards, frameworks and models prepared with a cross-industry application that are available for benchmarking the processes used in the production houses.
The latest model of ISACA’s Capability Maturity Model Integration (CMMI) is created with cross-industry best practices for performance improvement and with intention to be industry agnostic. The CMMI model is prepared without limiting itself in application to any industry by hybridising the flavors of IT/ITES practices, various industry specific standards such as Automotive SPICE, Auto-Functional Safety standards and others from advanced product manufacturing industries, such as medical electronics and aerospace domains, making it a rich compendium of best practices tenable to the automotive world.
CMMI enables appropriate application and intensity to the industry where it is applied. The Supplier Sourcing practices, Safety and Security practices, and Configuration Management (CM) practices bridge the gap with any other automotive-specific standards. Supplier Agreement Management practice covers the tendering process through types of purchase. Requirements Management effectively covers Statutory and Regulatory compliance through requirements analysis. CM in CMMI is a comprehensive practice that covers end-to end of work product development, change management, integrity handling, preservation and contingency handling—a key component requirement of any automotive process management system requirement. Process Asset Development along with CM will cover the documentation management requirements specific to an industry. Engineering practices that cover the technical solution, verification and validation aspects in detail cover system engineering and integration aspects with expectations from environment setting to culmination in data-based actioning—a comprehensive set of practices from which even aeronautical industries have benefitted.
As a performance improvement maturity model CMMI provides process performance improvement and cultural transformation over a longer period of time as a journey to a state of optimisation with maturity levels from 1 to 5. These milestones provide periodic health check-ups and multiple kinds of assessments that keep rekindling the spirit for improvement cycle after cycle, realigning the organisation to improved process discipline, the process and process enablers that are frequently recharged to keep the organisational culture uniform and thriving. CMMI covers the product lifecycle as well as any other benchmarks and can integrate any other standard. CMMI maturity model assessments provide a chance to benchmark against the model and against the peers. The model can create customer loyalty, long-term business relations and cost advantage, making it advantageous for automotive players to adopt and practice it.
As trend setters and thought leaders, it is a well-founded realisation that an experiment to embrace CMMI as a comprehensive model that aids in building an ecosystem of quality processes, that truly aligns to organisational strategic elements, is worthwhile. The current model lays the foundation for modern challenges in this sector through practices in safety and security, data management and supplier sourcing, and has evolved to handle automotive sector-specific challenges such as intellectual property protection, multi-tiered suppliers and OEMs handling, and data monetisation.
Dimensions of quality are limited only by the aspirations of the customer, creating the market with survival of the fittest. When make-in-India accelerates, the auto industry is bound to see a surge in handling end-to-end world class automotive manufacturing. When the market is readying for such an eruption, are our automotive manufacturers fully geared up for the same by getting themselves benchmarked with a world class process maturity model?
Authored by Rahul Turki, Partner, Transformation-BE, KPMG in India and Dr. Sajit Jacob, Associate Director, Transformation-BE, KPMG in India. Views expressed are personal. Photo courtesy: KPMG