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Enchancing an IATF 16949 Based Quality Management System To ENHANCING AN IATF 16949 BASED QUALITY MANAGEMENT SYSTEM TO PROMOTE PERFORMANCE EXCELLENCE ____________ A Thesis Presented to the Faculty of California State University, Dominguez Hills ____________ In Partial Fulfillment of the Requirements for the Degree Master of Science in Quality Assurance ____________ by Daniel Leon Fall 2019 THESIS: ENHANCING AN IATF 16949 BASED QUALITY MANAGEMENT SYSTEM TO PROMOTE PERFORMANCE EXCELLENCE AUTHOR: DANIEL LEON APPROVED: ______________________________ Milton Krivokuca, DBA Thesis Committee Chair ______________________________ Catherine French, MSQA Committee Member ______________________________ Denis Bourcier, Ph.D. Committee Member Copyright by DANIEL LEON 2019 All Rights Reserved Dedicated to all my family, especially to my wife Anne, and my children Daniel and Anna. They bring joy to my life and sense to this work. ACKNOWLEDGEMENTS I would like to thank Robert Spencer and Tanya Spencer for their extraordinary guidance provided to finish this thesis. I would also like to thank my thesis committee members, Milton Krivokuca, Catherine French, and Denis Bourcier for their guidance. Special thanks to Mike Hudson for giving me the flexibility at work to make this happen. v PREFACE In this competitive world, a Quality Management System is not enough for an organization to be competitive. All its parts need to work in sync like a grand orchestra. In order to achieve a competitive market position, an Operational Excellence Management System is necessary to satisfy expectations of the entire organization, including shareholders, government entities, and customers. Within the Operational Excellence Management System, opportunities are available to establish balance, efficiency, and effectiveness as in a well-greased complex piece of machinery. This thesis proposes a framework for such a management system. vi TABLE OF CONTENTS ACKNOWLEDGEMENTS……………………………………………………………………….v PREFACE………………………………………………………………………………………...vi TABLE OF CONTENTS………………………………………………………………………...vii LIST OF TABLES…………......………………………………………………………………..viii LIST OF FIGURES……………………………………………………………………………….ix ABSTRACT…………………………………………………………………………………….....x 1. INTRODUCTION………………………………………………………………………………1 Background………………………………………………………………………………..1 Statement of the Problem………………………………………………………………….2 Purpose of Study…………………………………………………………………………4 Theoretical Basis and Organization………………………………………………………..6 Scope and Limitations……………………………………………………………………..9 Definition of Terms………………………………………………………………………..9 2. REVIEW OF LITERATURE………………………………………………………………….14 PDSA Cycle……………………………………………………………………………...14 High-Level Structure and Management System Standards………………………………16 Management Systems for Quality, Safety, and Environmental…………………….…….17 Quality Tools for Performance Excellence………………………………………………19 Pursuit of Organizational Maturity……………………………………………………….23 Performance Excellence Models: CMMI and MBQA……………………………………27 Operational Excellence Management System……………………………………………33 3. METHODOLOGY…………………………………………………………………………….34 4. RESULTS AND DISCUSSION……………………………………………………………….44 Plan: OEMS Requirements………………………………………………………………44 Company ABC: Manufacturer of Automotive Batteries…………………………………46 Do and Study: OEMS Process Requirements and Gap Analysis…………………………51 Act: Proposal Design for Change………………………………………………………...69 5. CONCLUSION………………………………………………………………………………..74 REFERENCES…………………………………………………………………………………..81 vii LIST OF TABLES 1. Evolution of the Deming’s 14 Points of Management…………………………………………24 2. Components of the System of Profound Knowledge (SoPK)…………………………………26 3. A Better Practices and Best Practices under SoPK……………………………………………27 4. Relationships Among Categories, Capabilities, and Practice Areas.…………………………..30 5. OEMS High-Level Structure and Performance Objectives Summary…………………………36 6. OEMS Program Performance Scorecard………………………………………………………39 7. Comparison of Annex L with CMMI and Baldrige CPE Performance Excellence Models…………………………………………………………………………….40 8. OEMS Elements Relevant for Company ABC………………………………………………...45 9. Actual OEMS Scorecard for Company ABC………………………………………………….50 10. ISO and IATF Leadership Processes and Performance Excellence Models……..…………..52 11. ISO and IATF Planning Processes and Performance Excellence Models…..………………...54 12. ISO and IATF Resource Processes by Performance Excellence Models……………………56 13. ISO and IATF Operation Processes by Performance Excellence Models..…………………..58 14. ISO and IATF Performance Evaluation Processes……………………………………………61 15. ISO and IATF Continual Improvement Processes..…………………………………………..63 16. Common Clauses Among Quality and EHS Management Systems…………...……………..67 17. Recommended Actions to Improve the OEMS Maturity Level…………………….………...72 viii LIST OF FIGURES 1. Deming’s PDSA Cycle for Continuous Improvement…………………………………………7 2. Six Levels of Organizational Maturity Established in the CMMI Model………………………..8 3. Evolution of the PDSA Cycle…..……………………………………………………………...14 4. Seven-Step PDSA Cycle………………………………………………………………………15 5. House of Quality………………………………………………………………………………20 6. The Objectives and Key Results Cycle………………………………………………………...22 7. The Stanford Design Thinking Process………………………………………………………...23 8. CMMI Initial Models…………………………………………………………………………..29 9. Evolutionary Levels for Maturity Assessment…………………………………………………31 10. 2019-2020 Baldrige Excellence Framework Criteria Overview……………………………...33 11. PDSA Sequence of Activities for Developing a New Integrated Management System………35 12. Quality Function Deployment Analysis for OEMS…………………………………………..38 13. OEMS Maturity Level Radar Chart…………………………………………………………..41 14. Pareto Chart of Categories in CMMI…………………………………………………………41 15. PDSA Framework for Enhancing an IATF 16949 Based Quality Management System……...42 16. Actual Quality Function Deployment for OEMS………………..……………………………49 17. OEMS Maturity Level by HLS Clause…………………………………….…..……………..65 18. Pareto Chart of Maturity Levels of the Current Management Systems………..……………...66 19. Common Tools Used in Quality and EHS Management Systems……………..……………..69 20. Integrated Mechanisms for OEMS Efficiency………………………………………………..69 ix ABSTRACT Automotive manufacturers establish their quality management system (QMS) based on requirements from the International Automotive Task Force (IATF) 16949 and International Organization for Standardization (ISO) 9001:2105. The automotive industry is highly competitive and must apply systems thinking to establish an Operational Excellence Management System (OEMS). Despite best efforts, Company ABC is struggling to keep its systems up-to-date, be prepared for audits, and maintain excellent customer satisfaction in the automotive supply chain. Company ABC practices the Plan-Do-Study-Act cycle to strategically align its QMS to drive competitiveness and improve customer perception while complying with IATF 16949. Deming’s Theory of Profound Knowledge, including leading standards and principles, is used to propose a framework for an OEMS. A scorecard is developed to communicate effectiveness and efficiency metrics throughout the sequence of operational processes of OEMS. Baldrige Performance Excellence is incorporated in proposed continuous improvement practices to maintain competitiveness and promote excellence in customer satisfaction. 1 CHAPTER 1 INTRODUCTION Background In the automotive industry there is one essential reference source that dictates the minimum requirements for a Quality Management System (QMS) in any organization participating in the automotive supply chain. This reference is the International Automotive Task Force (IATF), which consists of automotive Original Equipment Manufacturers (OEM) and national automotive industry associations that represent industry suppliers. The IATF has set forth standards for use in conjunction with the international standards for a QMS based on International Organization for Standardization (ISO) 9001:2015 standards. On top of IATF and ISO 9001:2015 requirements, customers may choose to add their own specific requirements. The intention of this family of standards is to drive competitiveness through the supply chain to improve efficiency, effectiveness, and create value for consumers. Essential requirements of IATF and ISO 9001:2015 standards are risk-based thinking and continuous improvement requiring an organization to assess their risks and opportunities in strategically supporting their supply chain and customer requirements. In order to stay ahead of the curve and remain competitive, it is necessary for organizations to develop their QMS within an Operational Excellence Management System (OEMS). Full maturity is accomplished through interdependent relationships with other elements of the organization such as safety, environmental responsibility, and good community relationships. 2 Annex L, formally known as Annex SL, provides the new high-level structure for ISO management system standards. ISO technical committees must now use Annex L when revising a standard or creating a new one. Additionally, Annex L replaces the historical ISO Guide 83, expands on the base ISO structure already implemented (from eight clauses to ten clauses), and introduces identical core text, common terms, and definitions as follows: • streamline standards; • encourage standardization; and • ease the integration of management systems (NQA, 2019). The adoption of the Annex L structure for coordinating ISO standards has made it easier to combine multiple management systems into one integrated management system. By implementing the Annex L structure,
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