Establish and maintain a network of competent suppliers and inspire them to improve their capabilities: these are the objectives of Faurecia Supplier Quality and Development team. We talked about it with Mr. Yan, SQD Engineer of the T&E department.
November 20, 2019
For years, “outsourcing” has been a sort of magic word in the automotive industry; OEMs assign entire projects to tier suppliers: design, style, engineering, development for the process itself, with every phase entirely managed by tier suppliers. This is because, from a cost perspective, it is more convenient for OEMs to rely on external suppliers, who, working for different customers, are more effective in managing capacity and payback time.
In this way the process is more efficient but, at the same time, creating value and the product itself (and of its quality) is entrusted to suppliers.
As a consequence, quality control (from OEMs all the way through the supply chain) becomes extremely important for ensuring only the best products are delivered to the market. OEMs have implemented and expanded qualifying their tier suppliers. And the latter have been structuring themselves to better evaluate and control their suppliers of goods, raw materials and machinery to create a prosperous and lasting relationship with them.
Faurecia in numbers
- 1 in 3 vehicles around the world are equipped with Faurecia technology
- 4 business groups: Clean Mobility, Seating, Interiors, Clarion Electronics
- 122,000 employees working in 37 countries
- 8,300 engineers in 35 R&D centers
- 17.5 billion in turnover
Faurecia is a leading automotive technology company that develops solutions for Sustainable Mobility and the Cockpit of the Future.
Faurecia, in the list of the 10 largest automotive companies, is one of the first tier-ones to master the challenges posed by the automotive market, having established and implemented a department dedicated to analyzing, evaluating and enhancing (understood as developmental support) its suppliers. This activity belongs to the SQD (Supplier Quality and Development) team.
We met Jonathan Yan, Supplier Quality & Development Engineer of the T&E department, who told us about Faurecia’s approach to quality control, sustainability and supporting the development of their suppliers.
Cannon News (CN): Hello Jonathan, and thank you for giving us this interview. Let’s talk about the SQD team: when and why was it established?
Jonathan Yan (JY): First, let me say that SQD is the acronym for Supplier Quality and Development, that means that our target is to create and maintain a network of competent suppliers, helping them improve their capabilities to ensure their performance as suppliers. The team was born in 2015 following a series of repetitive crisis we were facing in the tooling & equipment department (in the Interiors Business Group), mainly related to injection tool maker suppliers. I’m talking about specifications not respected, or important delays in delivery… So, the team, which at the began with three people, was established to address and avoid these kinds of risks.
CN: And now? How is the SQD team organized and what are its targets?
JY: Now the SQD team is part of commodity organization in Faurecia’s Interiors Business Group. Driven by Stéphane Sicard, today the team has evolved and numbers 5 people assigned to five different geographical areas: Europe (my territory), India – Korea – Thailand – Japan, China and North & South America. We audit our suppliers regionally, but the whole SQD organization is a global way to manage all different suppliers. As for the targets, avoiding potential risks coming from suppliers, the concepts have been extended: currently the SQD department deals with creating a winning, virtuous and long-lasting relationship with its partners, helping them to improve various aspects, like production efficiency and, more generally, organization or communication. In this way the supplier improves their performance, we receive a better guarantee of receiving a high-quality product, and we can provide a competitive panel of suppliers to commodity buyers.
CN: You said that the auditing is regional. Do you audit also by technology?
JY: No, SQD does not follow technical matters, but focuses on the supplier’s processes: for every geographical region, our team checks the supplier’s overall management system (organization, capabilities and skills of suppliers, etc.), highlighting any critical issues and deciding alongside suppliers how to overcome these weak points. So, we manage suppliers working with different technologies in the automotive component production process: injection, assembly, special machines, acoustic, and so on.
CN: How do you decide which company to audit?
JY: Due to the limited resources and the high costs of an assessment, we have to be efficient. So, we developed an internal review that gives priority to suppliers needing to be assessed and, every 6 months, a “commodity panel” reviews the pool of suppliers in order to choose.
CN: And what happens after the assessment?
JY: The assessment is the first step in understanding our suppliers’ strengths and weaknesses. After the audit, we assign the supplier a score: 75 is the target in an assessment. Companies with a similar score have a low risk level, while those with a lower score require our attention and will be a priority in future assessments. Then, suppliers are requested to give us feedback and an action plan. The PDCA (Plan, Do, Check, Act) document released by the supplier helps us understand which areas the supplier needs to improve and how Faurecia can help them: we support our suppliers in this improvement, providing them courses, training, workshops and coaching to solve the situation. To strategic suppliers, we are also introducing the lean manufacturing concept through a dedicated workshop. We propose these activities as a way to strengthen our suppliers’ skills. We would like to inspire them.
CN: It is interesting that, as you said, you may provide coaching activities to your suppliers to help them to solve critical situations. What do you do, exactly?
JY: Our coaching for suppliers is mainly about problem solving methodology. At Faurecia we are implementing QRCI, Quick Response Continuous Improvement, with which we help the supplier better understand customer needs and detect potential internal organization problems. This methodology teaches them how to avoid similar risks happen again next time. Of course, if a supplier has a delivery problem once in a while, this situation is not deemed critical. For us, recurrent issues require attention. This is a sort of philosophy, if you like: the idea is to share good practices.
What is lean manufacturing?
Lean manufacturing is a systematic method of production based on a “no waste” philosophy: all waste is minimized, possibly eliminated, without sacrificing productivity.
CN: Which areas do you deem most important in your assessment of suppliers?
JY: The assessment questionnaire is the same for all suppliers and is organized into chapters in logical order from Organization and Management to CE regulations, passing through their PMS (program management system), design, organization of deliveries, sales and after-sales… We have some chapters we focus on most. The first is HSE (Health Safety Environment), important because it concerns safety. If a supplier does not work in safe conditions, it not only impacts their own image, but also ours: we are careful about sustainability and a supplier who does not have a good HSE management cannot be accepted. The second point we prioritize is SCR (Social Corporate Responsibility): how a company takes care of its employees. In this field, EcoVadis (the platform that provides Sustainability Ratings for global sustainable procurements) helps us evaluate suppliers, giving them a score. The third thing is CE regulations and directives: all machines must respect the norms and we need to be sure how suppliers manage the machine regulations to avoid safety issues. Otherwise we could refuse the equipment before being supplied. And the last point we focus on is KPI (Key Performance Indicator) management: it is an important indicator and the heaviest part of the assessment. For us, it is important in terms of continuous improvement: our efforts are to inspire our suppliers to implement how KPIs are managed, because KPIs can bring added value to the supplier.
CN: Why have you chosen EcoVadis for the SCR evaluation?
JY: We believe that by acting responsibly, we can create long term value for all our stakeholders. Back in 2012, we decided to apply our convictions and values to the supply chain. We needed a partner to support us with their experience and who could take on an international supply base working in many countries, addressing many languages, in various businesses and company sizes. We also wanted this partner recognized by some of our customers and applying an assessment based on the 3 pillars of sustainability in ISO 26000. It’s for these reasons we chose EcoVadis, for which Faurecia is today holds a Gold Medal.
CN: We mentioned sustainability several times: how important is this value for Faurecia?
JY: Sustainability is the core of Faurecia’s policy and it is a value the company shares with its clients: we think that acting responsibly is the key to ensure the sustainable development of our ecosystem for future generations, and also a long-term value creation for stakeholders and suppliers. For these reasons, in 2005, we signed the global compact and chose EcoVadis as a partner. Last year, we were awarded with the EcoVadis Sustainable Procurement Leadership Award for the global excellence of our “Buy Beyond” procurement program. It is based on the four fundamentals of ISO 26000: protecting the environment, respecting human & labor rights, ethical business conduct and sharing best practices across the Group’s global supply chain. Sustainability, respect, innovation and partnership are key concepts in our DNA.
CN: How will be the SQD team develop in the future?
JY: First, the future plan is to extend, step by step, the SQD to Faurecia’s other business units: we will restrict the pool of suppliers, carrying forward only those with whom it will be possible to have a long-term relationship.
The selection will be based on these assessments, for the future of SQD project. We will maintain the same philosophy of quality development (organisation, management, transparent, communication, and so on) but will add new coaching like Lean Manufacturing, Hoshin, and Kaizen to introduce the request from global business constraint: Efficiency.
CN: Last year Cannon went through your audit. From our point of view, your assessment is effective for working smarter according not only to tier-one requirements, but also the automotive industry in general. From Faurecia’s point of view, what was the most remarkable outcome about Cannon?
JY: We were happy to go through this assessment with Cannon: all of Cannon’s departments and the people involved in this activity put effort into disclosing and exchanging all the information. In terms of management organization, I was surprised by your HSE quality management system: a very regular risk assessment is in place, with KPI indicators to track the production plant performance. Furthermore, your internal audit is well implemented: you have 26 qualified internal auditors focused on different business branches. So you are able to make sure that there are no potential risks to your customers. For us, this is a very important double control system. From my point of view, Cannon takes care of their employees’ health and the management organization is efficient.
Cannon is certified:
- UNI EN ISO 90001 since 1997
- OHSAS 18001:2007 since 2012
- PED 2014/68/EU
The company is also certified by EcoVadis.
