IATF 16949:2016 Update and Automotive QMS Transition Success SCAC/AIAG Supply Chain & Quality Conference August 25, 2017

IATF 16949 Success Panel Bob DeGarmo Cherie Reiche Scott Gray General Motors BIQS Cherie Reiche IAOB Program Manager Scott Gray AIAG Director Quality Cathy Fisher – Panel Moderator Quistem, LLC SCAC/AIAG Supply Chain & Quality Conference August 25, 2017

SCAC/AIAG Supply Chain & Quality Conference August 25, 2017 Session Agenda IATF 16949:2016 Overview Customer-specific Requirements and IATF 16949 IATF 16949 Transition Audit Update Top 8 IATF 16949 Transition Audit Nonconformities Common Questions about transitioning your Automotive QMS to IATF 16949 Your Questions Answered Next Steps SCAC/AIAG Supply Chain & Quality Conference August 25, 2017

SCAC/AIAG Supply Chain & Quality Conference August 25, 2017 IATF 16949:2016 Overview Scott Gray AIAG Director Quality SCAC/AIAG Supply Chain & Quality Conference August 25, 2017

Transitioning to IATF 16949:2016 Scott Gray, AIAG August 25, 2017

Background on the Revision Project Revision work began in December 2014 and was completed in August 2016 The team completed a 5-Phase approach to develop IATF 16949 Pre-plan; Analyze; Build; Validate; and Deploy Revision Work Team consisted of 17 global partners from 14 organizations (IATF OEMs, National Associations, Oversight Offices) AIAG IAOB ANFIA IATF France BMW Jaguar Land Rover FCA US LLC (formerly Chrysler) PSA Group FCA Italy S.p.A. (formerly Fiat) SMMT Ford VDA QMC GM VW

Unprecedented Stakeholder Input IATF launched a survey (via the National Associations) early June 2015 soliciting feedback from over 2,000 key stakeholders: OEMs Suppliers (all Tiers) Certification Bodies Witness Auditors Subject Matter Experts Oversight Offices Over 1,700 comments were received for consideration Additionally, the IATF conducted a face to face review of the draft IATF 16949 standard in Rome, Italy in April 2016 with over 100 stakeholder representatives including CBs, suppliers, and witness auditors. Several hundred more comments were received for consideration

Context of organization Performance Evaluation ISO/TS 16949 to IATF 16949 The new automotive standard: IATF 16949:2016 . . . Follows the high level structure of ISO 9001:2015 Rationale Better alignment to business strategic direction PDCA approach More compatible with other management system standards ISO is going from 8 clauses to 10 clauses Plan Do 4 Context of organization 5 Leadership 6 Planning 8 Operation 9 Performance Evaluation 10 Improvement 7 Support High Level Structure Check Act

Builds on the new areas of emphasis in ISO 9001:2015 ISO/TS 16949 to IATF 16949 The new automotive standard: IATF 16949:2016 . . . Builds on the new areas of emphasis in ISO 9001:2015 Leadership Competence Risk-Based Thinking Must be used in conjunction with ISO 9001:2015 Two (2) documents must be used to have all requirements IATF 16949 cannot be used as a stand-alone requirements document

Changes to Drive Value & Credibility IATF members focused on the linkage between ISO/TS 16949 Certification and Supplier/Client quality performance Increased focus on operational performance and customer feedback (customer scorecards/metrics) IATF 16949 contains many former OEM Customer Specific Requirements (CSRs) Most of the changes occurred in areas where IATF OEM’s observed weakness trends and systematic issues

IATF Transition Support IATF 16949:2016 Resource Center IATF and ISO Standards Rules 5th Core Tools and other CQI’s IATF 16949 Training Auditor Certifications Gap Analysis Tool

IATF16949 Training Courses Understanding IATF 16949:2016 Transitioning to IATF 16949:2016 Transitioning to IATF 16949:2016 for Automotive Auditors IATF 16949 Understanding and Internal Quality Auditing Exemplar Global Certified ISO9001:2015 Internal Auditor Training with Automotive Emphasis Exemplar Global Certified ISO9001:2015 Lead Auditor Training with AIAG IATF 16949:2016 Supplier Auditor Certification New – IATF 16949 Executive Understanding New – Transitioning to IATF 16949 - eLearning

Questions?

Customer-specific Requirements and IATF 16949:2016 Bob DeGarmo General Motors BIQS SCAC/AIAG Supply Chain & Quality Conference August 25, 2017

IATF 16949 Roll-Out Meeting Robert DeGarmo GM IATF Representative SCAC/AIAG Conference Charleston, SC August 25

Instructions to Suppliers The need to transition to IATF 16949 has been affirmed by Gary West, General Motors Executive Director of Supplier Quality and Development The letter was communicated to all GM Tier 1 Suppliers on November of 2016

Customer Specific Requirements GM released the new CSR for IATF 16949 (80% reduction in content) ISO/TS 16949 CSR has also been updated Each CSR contain requirements unique to the two standards Both documents will be maintained in sync during the transition period Both are available on IATF web site and on GM Supply Power

Changes to GM-CSR for IATF 16949 9.1.2.1 Customer satisfaction – Supplemental. BIQS Certification Organizations shall achieve and maintain BIQS or QSB certification. The organization whose BIQS or QSB certification is revoked shall notify its Certification Body within 5 business days after revocation.   Lack of the organization having a BIQS or QSB certification shall result in a major finding by the organization’s Certification Body. CSII (Controlled Shipping Level 2) The organization shall notify its Certification Body within 5 business days after being placed in Controlled Shipping – Level 2 (CS II) Status. NOTE: The GM special status conditions of CS II (Controlled Shipping – Level 2) is a performance indicators of an organization’s product realization problems. Such status should have resolution, or credible resolution and corrective plans in place, which are confirmed by the customer.

SUPPLIER CERTIFICATION MANAGEMENT SYSTEM (SCMS) NEED SLIDE(S) 123456789 – ABCD Supplier

New GM Sourcing Tool (replacing the old GM Bid-List)

Key Points about Customer-specific Requirements (CSRs) May exist at any level in Automotive supply chain, (OEM, Tier 1, etc.) Identify CSRs for all your Automotive customers Determine applicability of CSRs and align with your QMS processes Include CSRs in Scope of our QMS Internal auditing of CSRs SCAC/AIAG Supply Chain & Quality Conference August 25, 2017

SCAC/AIAG Supply Chain & Quality Conference August 25, 2017 IATF 16949 Transition Audit Update including Transition Audit Nonconformities Cherie Reiche IAOB Program Manager SCAC/AIAG Supply Chain & Quality Conference August 25, 2017

SCAC / AIAG IATF 16949:2016 Transition Audit Update August 25, 2017 Cherie Reiche, IAOB

Current Certificate Distribution (both standards) Distribution of the 68,654 certified sites as of 31st July 2017 (only countries with more than 500 certified sites listed)

IATF 16949 - Progress As of 31st July 2017: 1,939 completed audits to IATF 16949 As of 31st July, total NCs issued = 2,320

IATF 16949 - Progress Top 8 non-conformity areas in order of frequency 8.5.1 (ISO) Control of production and service provision 8.5.1.5 Total productive maintenance 8.5.1.1 Control plan 8.5.1.2 Standardized work – operator instructions and visual standards 8.3.3.3 Special characteristics 6.1.2.3 Contingency plans 7.1.5.1.1 Measurement systems analysis 8.3.5.2 Manufacturing process design output

8.5.1 Control of Production & Serv… ISO 9001:2015 requirement Production and service provision implemented under controlled conditions Includes documented information for: characteristics of the products produced, services provided, activities performed; results to be achieved; availability and use of suitable monitoring and measuring resources;

8.5.1 Control of Production & Serv… monitoring and measurement activities at appropriate stages (verify criteria for control of processes or outputs, and acceptance criteria for products and services) use of suitable infrastructure and environment for the operation of processes; appointment of competent persons, including any required qualification;

8.5.1 Control of Production & Serv… Validation of the ability to achieve planned results of the processes for production and service provision Implementation of actions to prevent human error Implementation of release, delivery and post-delivery activities Also see IATF 8.5.1.2 Standardized Work and 8.5.1.3 Verification of Job Set-ups

8.5.1.5 TPM Total productive maintenance System for maintaining and improving the integrity of production and quality systems through machines, equipment, processes, and employees that adds value to the manufacturing process. TPM should be fully integrated within the manufacturing processes and any necessary support processes. Also see 8.5.1.6 Management of production tooling …

8.5.1.1 Control Plan Strengthened control plan requirements Brought IATF OEM customer-specific requirements into the IATF 16949 standard Elevated NOTE regarding customer approval to a requirement Strengthened control plan review and updated criteria and linked to the PFMEA updates. Control plans are needed for the relevant manufacturing site and all product supplied, and not just for the final product or final assembly line

8.5.1.1 Control Plan Family control plans are acceptable for bulk material and similar parts using a common manufacturing process Care should be given to identify the degree of difference that is acceptable to apply common control

8.5.1.2 Standardized Work … Operator instructions and visual standards Communicated / understood by the employees who perform the work (legible, in the language understood by personnel, accessible at the designated work areas)

8.3.3.3 Special characteristics … Established using multidisciplinary approach to identify special characteristics Risk analysis performed Documentation of all special characteristics: drawings, control plans, standard work / operator instructions (identify with specific markings) Control and monitoring strategies Customer-specified approvals, as required Use of symbol conversion table, submitted to customer as required

6.1.2.3 Contingency Plans Prepare contingency plans along with a notification process to the customer or other interested parties. Organizations would first take a systematic approach to identifying and evaluating risk for all manufacturing processes, giving particular attention to external risk.

6.1.2.3 Contingency Plans Contingency plans would be developed for any of the outlined disruption conditions -- interruption of externally provided products, processes, and services, recurring natural disasters, fire, or infrastructure-related disruptions. Customer notification is a mandatory step in any contingency plan, unless there is no risk to deliver nonconforming product or affect on-time delivery.

7.1.5.1.1 MSA Conducted to analyse variation in results of each type of inspection, measurement, and test equipment system (per control plan) Analytical methods and acceptance criteria; alternative methods may be approved by customer (records of customer acceptance retained along with results of alternative MSA) MSA study prioritization should focus on critical or special product / process characteristics. Also see Section 9.1.1.1

8.3.5.2 Mfg Proc. Design Output Shall be verifiable against mfg process design inputs This includes specs/drawings; special characteristics for product/mfg process; id of input variables; tooling and equipment for production and control, including capability studies of equipment and processes; mfg process flowcharts/layouts; capacity analysis;

8.3.5.2 Mfg Proc. Design Output mfg process FMEA; maintenance plans/instructions; control plan; std wk/wk instructions; acceptance criteria approval; quality/reliability data; results of error proofing; rapid detection and correction of nonconformities

IATF 16949 - Progress Top 8 non-conformity areas in order of frequency 8.5.1 (ISO) Control of production and service provision 8.5.1.5 Total productive maintenance 8.5.1.1 Control plan 8.5.1.2 Standardized work – operator instructions and visual standards 8.3.3.3 Special characteristics 6.1.2.3 Contingency plans 7.1.5.1.1 Measurement systems analysis 8.3.5.2 Manufacturing process design output

Common questions … Must we use both ISO 9001:2015 and IATF 16949:2016 when conducting audits? ANSWER: Yes, as it states in the IATF 16949 Foreword – Automotive QMS Standard, IATF 16949 is not a stand-alone standard, it must be used in conjunction with ISO 9001:2015

Common questions … Will the IATF be granting waivers for those organizations who cannot meet the Transition Plan timing? ANSWER: No, from 1st October 2017 onward, all audits are required to be conducted to IATF 16949 There are no plans to approve/grant waivers ISO/TS 16949 certificates are not valid past their expiry or 14th September 2018, whichever occurs first.

Common questions … What about competency for internal auditors and second-party auditors? Do they have to all take an IATF-sanctioned lead auditor training course? ANSWER: No. Organizations are responsible for ensuring key personnel, including their auditors, are properly trained and competent. The IATF supports the use of IATF-recognized training providers; however, the IATF does NOT mandate the use of a lead auditor training course for all auditors in the organization. Organizations are still allowed to have key personnel trained and certified as lead auditors, and then using those key personnel to T3 (train-the-trainer) to disseminate the information throughout the organization.

Common questions … What is the goal of 8.4.2.3? Do all organizations supplying automotive product have to be IATF 16949 certified? ANSWER: As stated in 8.4.2.3, the ultimate objective is to have IATF 16949 certification; however, the IATF recognizes that for various reasons, that is not feasible for all organizations. At a minimum, the expectation is for organizations to be certified to ISO 9001:2015, unless otherwise authorized by the organization’s customer(s) This cadence is applicable to the entire automotive supply base

8.4.2.3 Supplier Quality Management System Development IATF 16949 3rd party certification Supplier’s QMS IATF 16949 2nd party conformity ISO 9001 registration + customer-defined QMS ISO 9001 3rd party registration ISO 9001 2nd party conformity SCAC/AIAG Supply Chain & Quality Conference August 25, 2017

Common questions … Do all of my support locations need to be audited to IATF 16949 before the mfg locations can transition to IATF 16949? ANSWER: No. Please see the IATF 16949 Transition Strategy document. The Transition Strategy supplements Rules 5th Edition (and any SIs or FAQs related to Rules): http://www.iatfglobaloversight.org/iatf-169492016/iatf-16949201-iatf-transition-strategy/

SCAC/AIAG Supply Chain & Quality Conference August 25, 2017 Your Questions SCAC/AIAG Supply Chain & Quality Conference August 25, 2017 SCAC/AIAG Supply Chain & Quality Conference August 25, 2017

Standards and Rules available at: www.aiag.org Next steps … You need to have these critical documents: ISO 9001:2015 IATF 16949:2016 Rules 5th edition Transition Strategy Applicable Customer-Specific Requirements – confirm with your customer Standards and Rules available at: www.aiag.org

IATF 16949 Power Breakfast Stakeholder Feedback Thursday, August 31, 2017 8:30-11AM Center for Manufacturing Innovation, Greenville, SC www.IATFPowerBreakfast.com SCAC/AIAG Supply Chain & Quality Conference August 25, 2017