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Jan 22 2015

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In the Automotive Industry, was 2014 a Year Worth Recalling?

year_worth_recalling2014 was a record-setting year in the automotive industry – but not in a good way. Recalls reached record levels, and show no sign of letting up. You couldn’t pick up a paper, log onto your favorite news portal, or turn on the radio without hearing about the industry’s quality problems. If it wasn’t a new and damaging recall, it was an auto executive being grilled by a government committee.

In an age where information rules, and where the price of failure is so high, why do recall problems continue to make headlines every month? Why is quality so hard to control in the automotive industry?

Increasing Complexity

Obviously, part of the answer is the sheer complexity of the modern supply chain. The more global our industries become, the more far-reaching the processes that we have to monitor, control, and correct. This is why manufacturers and suppliers have become so focused on improving the track and trace systems that provide visibility to quickly identify problems and their sources—ideally down to the specific part and production run—so issues can be contained quickly.

Improving Responsiveness

But there’s another part of the issue that isn’t getting as much attention, and that’s the manufacturing industry’s ability to respond quickly and precisely once an issue has been identified. In this case, identifying a recall issue sooner and responding faster could have an enormous impact on reducing the cost and impact, letting manufacturers rebound faster from a problem, and then quickly re-supply production operations—either to provide the needed parts for recall or to ramp up new and better products. To tackle this aspect of the problem, auto manufacturers may need to think about how to improve their ability to see issues sooner, to react quickly and to pursue remediation actions within minutes of a problem being identified. Global product traceability solutions are now available to perform this capability.

It struck me as I was reading about the on-going airbag recall, one of the biggest such events within the industry. Given the size and scope of the recall, a major issue in tackling the problem is how widespread it appears to be. Given the lack of precise historic operational intelligence to know exactly which airbags are defective and the scope of the problem going back several years, a conservative approach will likely avail whereby more airbags are recalled than actually necessary.

Alternatively, if the companies had recorded and archived more detailed information about the individual components, a more “surgical approach” could be pursued, limiting the impact to both end-user customers and manufacturers of this recall.

It’s not too tough to see that the ability to swiftly and precisely respond to a suspect part situation could go a long way toward paying for a manufacturer’s investment in a state-of-the-art global track, trace and containment system. Return on Investment could be quickly achieved through reduced liability, improved public goodwill, faster resolution, and less “hits” on brand equity via fewer headlines. At the very least, it’s yet another strong reason for automotive companies to be investing in modern manufacturing systems.

In any event, here’s hoping that 2015 will be a more forgettable year for recalls!

Permanent link to this article: http://www.apriso.com/blog/2015/01/in-the-automotive-industry-was-2014-a-year-worth-recalling/

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