cal-8 Layered Process Audits Guideline 2nd Edition Insight »> Expertise » Results Y € c 5 € c c The Catalyst for Peak Performance AIAG > C c «cal-8 AIAG» Layered Process Aucits De cotae rak posnce ‘Version 2 ised 01/2014 ABOUT AIAG Purpose Statement Founded in 1982, AIAG is a globally recognized organization where OEMs and suppliers unite to address and resolve issues affecting the worldwide automotive supply chain, AIAG's goals are to reduce cost and complexity through Collaboration; improve product qualty; promote corporate responsiblity, health, safety, and the environment; and ‘optimize spead to market throughout the supply chain AIAG Organization AIAG is made up of a board of directors, an executive director, executives on loan from member companies, associate directors, a full-time staff, and volunteers serving on project teams, Directors, department managers, and [program managers plan, direct, and coordinate the association's activities under the direction of the executive director. 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Please referto tho Maintonance Request Form af the back of ts document fo submit a requost Published by: ‘Automotive Industry Action Group "26200 Lahser Road, Sulte 200 Southtfiold, Michigan 48033 Phone: (248) 358-3870 » Fax: (248) 368-2253 APPROVAL STATUS The AIAG Qually Steering Commitee and designated staksholders approved this document for publican in January 2014. AIAG COPYRIGHT AND TRADEMARK NOTICE: (© 2014 Automotive Industry Action Group, except that copyright not elsimed as ta any part of an orginal work prepared by @ US. {rstate govemment officer or employea a part ofthe person's offal duties. Excopt as noted above, all gh are reserved by AIAG and no part ofthese materials may be reproduced, reprinted, stored in 9 ‘atroval system, or transmitted, in any form or by any means, electronic, photocopying, recording, or athonwis, without the prior \wnlten pormission of Automotive Industry Action Group. Copyright iningement is 2 vation of federal aw subject to erminal and {i penalties. [AIAG and Automotive Industry Action Group are registered service marks of the Automotive Industry Action Group, Automotive Industry Action Grou makes no claim to any trademark ofa third pay, Trademarks of hird partes Included in these materials are ‘the property oftheir respective owners. (© 2014 Automotive Industry Aetion Group saw: 978 1 60534-3006cals Layered Process Audts AIAG.» Version 2leeued 0172014 rm cat! peak parenescals AIAG Layered Process Auta Imocataat le paotgutomarce Version 2 fesued 01/2014 FOREWORD ‘This guideline will help you utilize Layered Process Audit (LPA) as a tool to take your organization to the next level of performance. Atits core, LPAs are verifications that the most important standards and controls are in place. In a larger sense, LPAs provide constant attention to the core processes of an organization -- by all levels of management. A well deployed LPA system drives a culture of accountability, process control and continuous improvement. ‘The result of this minimal effort is tighter alignment toward organizational goals ~ which is a key to success inthis highly competitive global marketplace. Ityou've implemented LPAs but consensus in your organization is that itis non-value added, we believe aspects of this manual will help you see LPA in a new light. Debugging your existing LPAs should start with a review of the «questions on your check sheets. In Section 4 of the guideline, we share techniques for writing questions that are value-add, rather than “classical” quality checks, Other aspects for fine-turning your LPAs can be found in Section 6, If you're new to LPAs, you can create LPAS that impact Key Performance Indicators (KPIs) such as Safety, Quality, Cost, Delivery and Morale, Since reaching established goals for these measures is in the interest of everyone in an organization, it makes sense that all levels, or layers, of management participant in LPA deployment and on-going audits, The critical suecess factors fora value-add LPA are addressed in this revision of CQL: * Top management support ‘+ Communication of the value to employees ‘© impactful auditsCaQl-8 Layered Process Audits Version 2 sued 01/2014 ACKNOWLEDGEMENTS AIAG Bryan C. Book II Robert D. Francois Il Chrysler Group LLC Johnson Controls, Ine. Arun Prasanna Tenneco, Ine. Murray J. Sittsamer (Chair) The Luminous Group LLC | Neil Taylor Magna Exteriors & Interiors AIM Systemscals AIAG Layered Process Auclts Tho cats pt poten Version Issued 01/2014 TABLE OF CONTENTS ‘ABOUT AIAG... FOREWORD ‘ACKNOWLEDGEMENTS. ‘TABLE OF CONTENTS INTRODUCTION. 1.1 LPA DefinmON AND PURPOSE... 2 VALUE OF THE LPA MANAGEMENT TOOL... 2.1 How WiuL LavEREO PROCESS AUDITS BENEFIT THE ORGANIZATION? nono ee 3 TOP MANAGEMENT PLANNING ne) 3.1 LPA Process OwneR. ane crt : 9 3.2 LPA PLANNING TEAM : : rename] B.BLPA SCOPE sarnssenennnane : nnn a 10 3.4 CusTomen-Srecinic REQUIREMENTS, fon 11 3.5 Process PriowITZAT10N os 11 3.6 AuoMT Lavens. sone — . e a2 3.7 DEVELOPING TEMPLATES FOR AUDITING AND REPORTING. = e ened 3.8 LPA PROCEDURE 13 3.9 Staxewouner BUYIN er 14 4 DEPLOYMENT. eed 4.1 LPA IMPLEMENTATION TEAM WonxsHo?, as 4.2 TRAIN THE AUDITORS. — 18 4.3 COMMUNICATE THE LPA ROLLOUT TO THE PROCESS AREA nnn : rnd 8 seen 5 CONDUCTING THE AUDIT snrsessnsnsn 5.1 CONDUCTING THE AUDITS ANO RECORDING THE FINDINGS. 5.2 OBSERVATIONS AND PERSONAL INTERACTIONS. 6 TOP MANAGEMENT REVIEW AND CONTINUOUS IMPROVEMENT OF LPAS wns 6.1 To MANAGEMENT LPA REVIEW... 6.2 CONTINUOUS IMPROVEMENT OF LPAS, APPENDIX A- WHAT IS LPA? APPENDIX B - RASIC APPENDIX C- FREQUENCY OF AUDIT BY LAYER [APPENDIX D~ AUDIT SCHEDULE. [APPENDIX E - EXAMPLE CHECK SHEET. APPENDIX F ~ REPORTING EXAMPLE. [APPENDIX G - GLOSSARYcal-8 Layered Process Auetts AIAG > Version 2 sued 01/2014 ne cots pos peorcars AIAG» Layee Process ute roca pat pororance Version 2 Issued 01/204 1 INTRODUCTION 1.1 LPA Definition and Purpose Layered Process Audits (LPAs) are management tools used to verify that work is done according to established standards, to emphasize the importance of those standards, and to identify opportunities for continuous improvement. LPAs can be applied to verify any defined process within an organization. A process is the methodology and controls used to create a product or service. Some aspects of a process sare Machines/Equipment, Materials, Methods, Manpower, and Measurement. faction are Nonconformances such as costly recalls, warranty issues, and customer and employee dissat often caused by poor process control or by failure to follow the process instructions. Employees often complete process steps from memory. When necessary process changes are identified, employees must re-leamn and adjust. It is very easy to return to the old, familiar methods. LPAs are a structured way to verify that work is performed as originally intended, resulting in improved performance metrics. Because LPAS are conducted at the location where the process is being used, LPAS also facilitate ongoing two-way communication between management and the process users. These interactions strengthen trust and demonstrate shared ownership in the work being done right. ‘The Layered Process Audit is actually more ‘verification’ than ‘audit.’ A Layered Process Audit verifies that controls are in place and the standard process is being followed . .. and followed correctly. Because LPA is not a control but a verification of a control, it does not belong in a Process Control Plan, ‘When defining Layered Process Audits, it often helps to explain to personnel of all levels what Layered Process Audits are and also by explaining what they are not. ‘The "is/is not" tool is recognized in many problem-solving disciplines. This has been applied to Layered Process Audits in Appendix A.cal-8 Layered Process Audits Version 2 Issued 0172014 AIAG Thecus peat para 2 VALUE OF THE LPA MANAGEMENT TOOL 2.1 How Will Layered Process Audits Benefit the Organization? Effective Layered Process Audits provide management with verification of process conformance, identify areas of potential process variation, and provide opportunities for continuous improvement of Key Performance Indicators (KPIs). These outcomes can have a direct impact on the quality of the product the organization ships to the customer. Ultimately, the improvements to the organization will have a positive impact on business results. When applied effectively, Layered Process Audits can provide specific benefits, including the following: Mitigating safety incidents (injury, near- accidents, lost time, etc.) Reducing waste Improving cash flow satisfaction Improving product quality and customer Reducing quality incidents (errors, scrap, rework, etc.) Increasing First Time Capability M Reinforcing key or updated process steps, including safety requirements Increasing interaction between plant management and line operators Allowing first hand feedback from operators to plant management tion and pursue continuous, suring and encouraging work process standardization Enabling management to implement corr improvement Institutionatizing training and process knowledge Reducing the overall cost of poor quality While these ate typical benefits of Layered Process Audits, some might not be applicable to every organization, Conversely, as an organization implements Layered Process Audits, additional benefits may become apparent.cal-8 AIAG. Layered Process Audits ects pc poremace ‘Version 2 Issued 01/2014 3 TOP MANAGEMENT PLANNING In neatly every case, the most effective Layered Process Audits are those that are carefully planned rather than hastily put together without a clear direction, A cross-functional approach to planning, with the involvement and support of management, is critical to the success of any LPA program. When planning. ‘an LPA program, there are several things that need to be considered: 1, LPA Process Owner ~ What individual will be responsible for the LPA program? Who ensures that the audit is conducted and that the results are reviewed and acted upon? 2. LPA Planning Team — What departments and individuals will need to take part in planning the LPA program? 3. LPA Scope ~ What areas-or processes will need LPAs conducted? 4. Customer-Specific Requirements ~ What customer LPA requirements should the team be aware of when developing the LPA program? Process Prioritization ~ What areas or processes show the biggest opportunities for improvement? Which LPAs should be implemented first? 6. Audit Layers ~ What levels of the organization will be involved in conducting the LPAs? 7. Development of Audit and Reporting Templates ~ What will be the format for conducting the LPAs? For reporting results and actions? 8. Developing Metrics for LPA Effectiveness - What metrics or indicators will be monitored to ensure the LPA program is effective? 9. LPA Procedure ~ What needs to happen in order to implement the LPAs? Who will do that? ‘What formats and report formats will be used? 10, Stakeholder Buy-in ~ Are all of the involved departments committed to the LPA program? Is, there Top Management support and commitment? How is this support and commitment demonstrated? 3.1 LPA Process Owner A single individual from Top Management should be assigned overall responsibility for the Layered Process Audits. This individual serves as the program lead and is responsible for the following: © Obtaining audit results and records from each area of the organization; + Ensuring that responsible individuals have developed corrective actions for issues and implemented them according to schedule; * Reporting to Top Management on the status of LPAs and implemented actions; ‘+ Ensuring that LPA results and actions are communicated throughout the organization; ‘Facilitating the addition of new processes to the LP. © Creating, maintaining and updating, as requited, the LPA procedure(s), templates, and schedules. Because Layered Process Audits are not simply another audit to be carried out by the Quality Department, the LPA Process Owner role does not need to automatically belong to the Quality Manager. In fact, itis recommended that the organization's Operations (e-g., Manufacturing) Manager be designated as the LPA Process Owner.-10- cal-8 Layered Process Audits Version 2 Issued 0172014 AIAG» raat pak prtormares In addition to the LPA Process Owner, the manager in each area of the organization that performs the LPAs must take ownership for their area, They will be responsible for ensuring: LPAs are conducted on time, LPAs are conducted by the designated team members. Corrective actions for issues in their areas ate developed and implemented on schedule. ‘The department results are recorded and reviewed regularly. Resources are available and focused on corrective actions for the nonconformances identified. 3.2 LPA Planning Team ‘The LPA Process Owner should assemble the Planning Team to begin developing the Layered Process Audits. A cross-functional team should be created, with participation from—at a minimum—all the organization’s departments and levels that will be affected by the Layered Process Audits. Suggested areas include but are not limited to: Operations / Manufacturing Production Control Human Resources Engineering Maintenance Sales / Finance Quality Supply Chain Material Control Any other department or area affected by the LPAS. 3.3 LPA Scope ‘As mentioned previously, the purpose of a Layered Process Audit is to verify that work is done according, to established standards, to emphasize the importance of those standards, and to identify opportunities for continuous improvement, Processes included in Layered Process Audits should have the following characteristics: Be in their final state (ie., not under development). Layered Process Audits reinforce existing processes and requirements and are not intended to develop pilot or draft processes. Fully documented, including work instructions, control plans, ete, Layered Process Audits check to an established standard, Be approved processes, either by customer or by management Be critical to customer satisfaction, satisfying government regulations, or the performance of the organization. Layered Process Audits performed on low-riskcal-8 AIAG Layered Process Audits ‘acta peo gaomance Version 2 Issued 01/2014 processes will have a correspondingly lower impact on the organization's performance, ‘The first action the Planning Team should take is identifying those areas and processes that will be considered for inclusion in the Layered Process Audits. Using the above criteria, the Planning Team is encouraged to consider manufacturing areas, non-manufacturing areas, and support functions, The general rule should be “If a process is critical to the performance or functioning of the organization, check it.” On the other hand, trying to include everything in the organization would likely reduce the LPAs* effectiveness, | Note that in no circumstances does a Layered Process Audit replace internal or third party management | system audits 3.4 Customer-Specific Requirements The Planning Team shall review and adopt Customer-Specific Requirements for the Layered Process Audits. These can include specifications on frequency, participation, and scope, as well as others. When developing the Layered Process Audits, the Planning Team should review the specific requirements for each customer they interact with and ensure that all such requirements are incorporated into the program. These should serve as program “minimums.” Ifthe Planning Team is unclear on where to obtain these Customer-Specific Requirements, they should contact their designated customer representative for direction or clarification, 3.5 Process Prioritization With the scope defined and Customer-Specific Requirements identified, the Planning Team should focus on prioritizing which processes will have Layered Process Audits developed first. The Planning Team. should review each process’s performance to see which ones are causing problems of the highest severity and/or frequency. Some examples of items to look for when prioritizing processes for the Layered Process Audits include but are not limited to: + High number of safety incidents / injuries © High number of customer complaints or quality spills from the process * High-risk or high-severity items from the PEMEA * High scrap rate / low First Time Capability (FTC) ‘+ Low machine efficiency or high downtime / maintenance Process runs longer than originally intended (¢.g., process was expected to run 2 shifts a day for 5 days but instead is running 24 hours a day 7 days a week) Ultimately, certain factors will always make a process take priority over others when developing the Layered Process Audits. Whenever a process is identified with one of the following characteristis, it should receive a higher priority + Customer has mandated a Layered Process Audit * Process has caused a critical quality issue for one or more customers (suc! stopping the shipment of a product or resulting in a warranty field campaign). + Process is regulated by government standards, especially safety or environmental ete-12- on AIAG 2 Layered Process Audits Version 2 tssued 01/2014 ra catse poate + Process is critical to the functioning of the organization (i.e., the plant could shut down if the process fails). For example, material management and tool maintenance, ete. 3.6 Audit Layers A Layered Process Audit gets its name from the requirement that multiple “layers” (ie., personnel at various levels) of an organization conduct the audit. Unlike an audit of a product characteristic or feature that is typically conducted by an operator or a quality department team member, a Layered Process Audit is conducted by personnel ranging from working-level team members to personnel at the highest levels of the organization's structure. The Planning Team should determine what levels of management in the “organization will be tequired to take part in the program. Auditors should come from every area of the ‘organization because someone unfamiliar with a process will tend to objectively review evidence and can have new insight to how it is working and/or how it should work. See Appendix C for an example, ‘Supervisors, team leaders, department managers, and Top Management should all conduct LPAS; however, the organization’s top manager within the facility shall always take part. A Layered Process Audit places people of multiple levels of the organization where the work is being, done to verify critical items. This facilitates communication between management and the working-level team members. The Layered Process Audit also demonstrates to all team members that these designated, critical items are very important. In some organizations, visiting corporate executives should be included in the LPA schedule, When higher levels of the organization are involved with verifying conformance to standards through interaction with front-line employees, this drives home the message that conformance to standards are important and the responsibility of everyone in the organization. 3.7 Developing Templates for Auditing and Reporting ‘The Planning Team should obtain or develop the standard templates to be used for the Layered Process Audits. This will ensure consistency actoss each department / area and prevent uncontrolled documents, from being used. The team should develop templates for LPAS to be performed in the organization and the templates that will be used for reporting LPA results. In addition, they should ensure that corrective actions will follow the organization’ Corrective Action process and use the same format as detailed in that document. Once developed, the templates should follow the organization’s Document Control and Record Retention processes, They should be stored in a location that is known and accessible to all of the area-specific process owners, such as a centralized database or web-based location. The LPA Process Owner is, responsible for maintaining and updating the templates, as required Examples of LPA templates are shown in Appendices E & F. 3.8 Developing Metrics for LPA Effectiveness Layered Process Audits (LPAs) are more effective when their output is carefully monitored and, in the case of nonconformances, corrective actions are implemented. Initially, itis helpful to monitor and report conformance to set audit schedules. ‘This will help establish accountability for those assigned toAIAG. Ccal-8 Layered Process Audits ‘Version 2 lasued 0172014 conduct the audits. As the LPA system matures, the focus will shift from reporting audit events to ‘monitoring the effectiveness of the LPAS. LPA reporting might include the following in Table 1 ‘Table 1: Sample LPA Metrics iG Measures Percent of Audits completed (by Layer) Implementation of the program and assigned LPA priority | Percent in Conformance (by Area) Percent of items checked that were observed to be in conformance with defined work standards, settings, methods, technique, ete. Corrective Actions completed (by Area) Repeat Non-Conformance in LPA | on-time completion of Corrective Actions Effectiveness of Corrective Actions (e.g. 8Ds) | KPIs (see section 2.1) Effectiveness of the LPA program (e.g,, effect ‘on operating metrics) Po (See Appendix F for an exampl 3.9 LPA Procedure ‘The Planning Team should document the LPA process in a standard “LPA Procedure.” When developing the LPA Procedure, the Planning Team should consider all of the following: ific Requirements © Conformance with Customer-Sps * Roles and Responsibilities (e.g,, an organizational RASIC — see Appendix B) * Documenting and Implementing Corrective Actions + Management Reporting * Training Requirements and Records ‘The LPA Procedure should also include or make reference to the following forms: ‘© Process Prioritization List -13--14- cal-8 Lever Proces Aus AIAG 2» Version 2 issued 0172014 Te cal rp para ‘+ Schedule Template + Check sheet Template ‘+ Reporting Template The LPA Procedure should be a controlled document that is approved by Top Management and made accessible to all levels of the organization as needed. 3.10 Stakeholder Buy-in ‘The Planning Team shall ensure buy-in from all stakeholders of the Layered Process Audits. All stakeholders should commit to follow the process by performing audits as scheduled, reporting results, developing corrective and preventive actions for discovered issues, and ensuring those actions assigned to them are completed by their target due dates. At a minimum, buy-in shall come from: ‘+ The LPA Process Owner * Management of each applicable department + Planning Team members ‘+ Top Management (including the top manager in the facility) = Corporate Management Without this buy-in, there is a strong likelihood that the Layered Process Audits will not have the support they need to provide true benefits to the organization,cal-8 AIAG. Layered Process Audits ro catya peat zotomanee Version? Issued 01/2014 4 DEPLOYMENT After Top Management planning is completed, each process area can take the lead on how LPAs will be used in their area. For that purpose, each process area that will adopt LPAs should form an ad hoc Implementation Team. The primary deliverable of those teams is a process-specific LPA check sheet. It is most helpful if member from the Planning Team works as part of each Implementation Team to provide consistency and a wider knowledge of LPAs. LPAs provide maximum benefit when Arca Managers take direct responsibility and become involved in their implementation. ‘The Implementation Team for each area might be composed of: * The area or process manager/owner # Associate(systaff who work in that area Each process area is unique and will have its own best opportunities for LPA verifications. Organizations might find that similar process ateas will have similar questions. This could be helpful in accelerating question development, but be sure that the base question template is composed of verification questions that are effective in improving results (KPIs). ‘When implementing LPAs in each process area, consider using the following procedure: 1) Conduct an LPA Implementation Team Workshop a) Present an overview of the LPA process and its benefits b) Explain the target KPI metrics for improvement ©) Develop audit check sheet questions 2). Train the Auditors 3) Communicate the LPA Rollout to the Process Area 4.1 LPA Implementation Team Workshop 4.1.1 LPA overview Each Implementation Team should get an overview of the LPA management tool and of the organization's LPA procedure. This will educate the team on the intent and mechanics of LPA. Participation of the Top Management group in the training should be encouraged because it will reinforce the importance of the strategy and enable management to ensure that each area is committing adequate resources. 4.1.2 Target KPI metrics for improvement ‘Once an area’s Implementation Team is trained, they should assess what Key Performance Indicators (KPIs) or performance measures need the most improvement. While LPAs often are applied to improve Quality (scrap, ppm, FTC, etc.) they can also be used to address Safety (accidents, lost days, near accidents, etc.), Delivery (downtime, days late, etc.), and other metrics. While LPAs are often used to drive improvement in a KPI, LPAs can also be used to maintain a KPT that is performing well. a 15-oe AIAG 2» Layered Process Audits Version 2 leued 0172014 Insc pt patron 4.1.3 Develop audit check sheet questions One of the most critical elements of LPA implementation is defining the questions which will 20 into an area’s LPA check sheet. A check sheet is composed of a series of questions, each with an associated explanation of why that question was selected and a nonconformance reaction plan. ‘Table 2. Format of Audit Check Sheet Questions Reaction Plan Question Explana What Where/How to | Why the question was | How to react if'a check selected nonconformance is found LPA check sheets are used to audit @ specific process, not product, to ensure itis free of unwanted variation that could negatively affect the area’ reasonable to verify all aspects of a process every day — there just isn’t enough time, Asa general rule of thumb, a Layered Process Audit in an area should take 10 to 15 minutes (5 to 15 questions) per shift, every day. When a process is more complex, or has more sources of uncontrolled variation (¢.g., manual assembly), then the LPA may require additional time and questions. uestion Creation: LPA check sheet questions should focus on process areas and not involve looking at parts for potential defects, The focus of an LPA is to verify that defined process controls are in place and the process is working as designed, LPA questions should be written to verify what is happening in real time, LPAs take a snapshot ‘of what is actually occurring compared to what is expected. Each question should be specific and meaningful to the process being audited. Before generating questions, review relevant risk aspects from the Quality Management System (FMEA, SD/NCR, Customer Concerns, Control Plan, Error Proofing verification, Lessons Learned, etc.). These are excellent inputs to help the Implementation Team identify the risks and pin point the cause mechanisms that should be verified in the LPA. ‘When developing check sheets it is recommended to consider the following questions: ~ To what extent could the process element or setting vary? — How frequently could the process element or setting vary? What aspects of the process element or setting are least robust? If the process element or setting varied, how significant would be the impact? = What process element or setting might negatively affect safety or regulatory requirements? ~ If the process element or setting requires error proofing, is the device functioning effectively today and when was it last checked? LPA questions should avoid terms such as ‘proper,’ ‘correct,’ ‘accurate,’ and ‘appropriate? because itis not possible to verify a ‘proper’ setting without knowing the specifications and tolerances for the setting.cal-8 AIAG apace Process Azcita ect anak atoms Version 2 Issued 01/2014 Al audit question responses should be: * for conforming, ‘No’ or ‘X? for nonconforming *Yes’ or The development of LPA questions should use objective criteria such as machine settings, detail in work instructions/standard work, error proofing verification, or specific customer requirements. LPAs are intended (o verify general work elements that have a direct impact on quality or are likely to vary day-to-day. Examples include: * Instead of asking “Is the operator trained?” verify that the operator is performing the task according to the established standard/instruction. If loading a part incorrectly is known to cause serap, a LPA question would validate the operator’s technique vs. the standard. + Instead of checking to see if Quality Alerts are posted, write LPA questions to verily that the content of the instruction is being practiced at that moment of the audit. ‘+ Elements that are not likely to vary suddenly or covered in other audits (e.g. calibration status, training status) do not add value to an LPA. Question Explanation: Many times auditors are not aware of a questions purpose or expected answer. To provide clarification to auditors, it is recommended each question have a defined purpose and an expected response. Answering the “Why?” about a question also verifies the value of the question and its relationship to KPIs, controls, and the process. For example, the question may be related to an ongoing warranty issue or to a variation in an associated technique that led to a significant scrap issue in the last quarter. juestion Reaction Plan: Questions should also have a reaction plan defining what to do as the first response if the item is found to be nonconforming. If the check sheet item is found to be nonconforming, the auditor shiould follow this pre-established reaction plan to prompt the responsible individual to correct the situation. If the nonconformance found creates a suspicion of nonconforming product downstream from the current operation, the responsible individual may take the decision to inment and sorting to protect the customer and then initiate corrective action require con analysis. Question Fine Tuning: After the questions are drafted, they should be reviewed with the Planning Team and tested with ‘one of two auditors conducting the audit in the process area. Their feedback should be used to fine tune the wording and often make the questions even more effective in detecting nonconforming situations. -17-= 18- cals Layered Process Auclts AIAG» aera neater 4.2 Train the Auditors Layered Process Audits are generally performed by people who may not have had auditor training, This allows multiple sets of eyes to verify processes from different perspectives. LPA auditors provide consistent surveillance and regular feedback to the facility's Top Management. LPA auditors do not need extensive training, but they do need to be oriented to the intent and mechanics of conducting an audit, Training content may be taken from this document and from applicable Customer- Specific Requirements related to LPAS. The best way to train auditors is with a brief overview of the LPA management tool followed by practice audits with experienced mentors, using the check sheet for the area(s) they may be responsible to audit Records should be kept to show evidence that auditors understand and can apply LPA concepts. 4.3 Communicate the LPA rollout to the process area As LPAs get implemented in different areas of the organization, management should communicate to employees in those areas the objectives of the LPA and how it might affect them, Employees who work in areas that will be audited should know that they don’t have to do anything differently; the process being audited, not the people. They continue to work according to standardized work instructions as before, but now periodically, different LPA auditors will be coming around to verify work technique, ‘machine parameters, and other process elements that are important to quality and other KPIs. After LPAs are implemented in the first few areas, success stories about improvement should be shared with areas that are considering how and where the LPA tool will help them.cal-8 AIAG» ee mec erp peace Vertlon2 Issued 01/2014 5 CONDUCTING THE AUDIT ‘Once the audit questions, nonconformance reaction plans, audit layers, and audit frequencies have been determined, the trained auditors can begin conducting Layered Process Audits. A significant part of the audit process is ensuring that the audits are performed according to a schedule and that the results of the audits are recorded. 5.1 Conducting the Audits and Recording the Findings When conducting an audit, the assigned auditor should follow these steps: I. Check the LPA schedule for audit assignment; date, time, process area. 2, Obtain the appropriate LPA check sheet (e.g, from person, physical, or server location). 3. Review the audit check sheet-before going to the area—to be familiar with the questions, any changes to the questions, and the evidence that you will be verifying. 4. All layers should verify the layers below them are current with their recent required LPA checks. 5. Perform the audit according to the questions on the LPA check sheet. Be sure to fill out all relevant header information, 6. Ifthe response to an audit question is ‘Yes,” document it as such and then the auditor will move on to the next question, 7. If the response to an audit question is ‘No,’ then the auditor has found a nonconformance that requires corrective action as defined in the Reaction Plan. In the Comments section the auditor should include any observations regarding the nonconformance. 8, The check sheet will provide the auditor with a reaction plan to follow if nonconformance is found for that question. If the problem is corrected during the audit, then actions taken are recorded on the check sheet. The issue is still recorded as a nonconformance even though it is corrected and added to the management summary. emtic issue that needs to be addressed. 9. Repeat issues may be a sign that there is a s 10, If the issue was not corrected, then it remains open pending a corrective action. 5.2 Observations and Personal Interactions The implementation of Layered Process Audits provides a unique opportunity for observations of the area being audited by individuals whose day-to-day tasks may not include interaction with the areas audited, ‘These observations can be opportunities for improvement. Auditors who normally do not work in an area can often see things that the frequent visitor overlooks. Auditors should be encouraged to include these observations on the Layered Process Audit check sheets Layered Process Audits also provide an opportunity for interaction among individuals. This tends to create a more cohesive environment among employees, departments, and management. Finally, even when no nonconformances or observations are found, all LPA auditors~ineluding Top Management~provide value by acknowledging people’s effort in following standard work. Its advisable that auditors provide positive feedback to the individuals with whom they interacted. Leaving people with positive feedback reinforces the message that everyone is responsible for good manufacturing practices and provides motivation to drive continuous improvement.cal-s Layered Process Audis AIAG.» Version 2 Issued 01/2014 Tre cats peat pares Positive feedback is a way to let employees know that LPA is intended to support the process and the people. ‘An Example of a completed check sheet is in Appendix E -20-cal-8 AIAG Layered Process Avelis cata pst aoe Version 2 Issued 01/2014 6 TOP MANAGEMENT REVIEW AND CONTINUOUS IMPROVEMENT OF LPAs 6.1 Top Management LPA Review ‘Top Management should conduct reviews of the LPA at planned intervals. These reviews will reinforce to the employees Top Management's strong focus on LPAs and allow management to make adjustments quickly, ifneeded. It is the responsibility of Top Management to review LPA metries (see Table 1), assess what's working well and what's not working well, and adjust LPAs as needed to improve Key Performance Indicators (KPIs). Additionally, these reviews will provide objective evidence to support Quality Management System and Customer-Specific Requirements for review of audit results LPA Review should: + be part of regular operational/quality review meetings + have a standardized agenda of review points + review actions assigned at the last review, and verify effectiveness of competed actions ‘© review data/metrics ( LPA metrics and organization KPIs) trends, repeat issues, LPAS updated/teviewed to address top internal issues and all customer concerns + develop actions to address issues and continual improvement based on the data reviewed ‘+ assign actions (individual ownership and deadlines) Outcomes of the Management Review of LPA should: + remove all barriers to effective LPA implementation ‘+ prioritize resources to leverage value from LPAs ‘expand LPAs to other areas ‘© reassess targets for continuous improvement of LPAs © document continuous improvement as a result of LPAS 6.2 Continuous Improvement of LPAs ‘After assessing the metrics and effectiveness of the LPA program, management should consider adjus LPAS to address any weaknesses and opportunities for improvement. Typically, weaknesses or ‘opportunities for improvement that should be addressed includ ng, © Lack of management review or lack of full support by Top Management ‘+ No consequences for not conducting audits © Check sheets too long o cumbersome © Questions that do not address the sources of process variation -21--22- = Ga Version 2 issued 01/2014 me cataet pant gotomarce No feedback to operators ‘+ Not grounded in daily routines + Disciplined problem solving not being used to get to the root cause of problems found. + Not dynamically assessing risk (e.g.: FMEA, Customer Scorecard, KPls, etc.) or ensuring they are covered in LPAs.AIAG» APPENDIX A - WHAT IS LPA? eM ecllaire Coe Coe |. Verification that processes and procedures are being followed, CcaQl-8 Layered Process Audits Version 2 ssued 012014 Pier eC urs 1. A quality audit of part characteristi 2. Owned by the operational group where the audit is conducted, (e-g.: Manufacturing). 3. Conducted by multiple management levels of personnel in a given facility, 2. Owned by any support group, (€.8: Quality). 3. Conducted only by an inspector or lab technician, 4, An audit consisting of quick, typically yes/no, questions, 4, An audit that requires measuring parts or other product characteristics. 5. A shott list of key and high-risk processes, process steps, and procedures. 5. Along “laundry list” of tems that include items not contributing to customer satisfaction. 6. Completed on a regula, pre-determined fequency 6. Completed whenever the auditor has spare time 7. Completed by the person identified in the audit plan in each layer of the organization, 7. Allowed to be delegated by the responsible persons, 8. Completed on-site “where the work is done.” 8. Completed in the auditor's office. 9. A method to verify and sustain corrective actions related to process 9. A method to determine corrective actions. 10. A method to verify that quality documentation (instructions, control plans, etc.) is being followed. 10. An inspection method fo add to the process control plan, IL. An audit with results that are reviewed by site leadership on a regular basis, 11. An audit with results that are filed away and not reviewed. 12. An audit where non-conformances are addressed immediately. jon-conformances are noted and or after a certain number have 12. An audit where addressed at a later been accumulated, 13. An audit typically planned for processes and procedures conducted by people. 13. An audit to validate the operation of a machine. 14, A method to facilitate communication between operators and management, 14, A method to identify the worst employees. 15. A method to stress the importance of complying with processes and procedures, 15, A method to show personnel that “we're watching you.” 16. An audit of selected processes and procedures / steps 16. A replacement for internal Quality Management System (¢-, ISO/TS 16949) audit -23-oan AIAG Layered Process Audits Version 2 Issued 01/2014 he tae pon pono APPENDIX B — RASIC Layered Process Audit Steps ‘Team Member's 1 Segre PA Proc: Ouro to Sar iden he PAMaming Tom Deep he ayred Process dt Gel sat 5. Tran iam on PA Procadace 8 ANS Chek see 7. Devaop an PAlnplenenationchaile conch Painenehares 9 Dewiop and implant rete cone 10. cod and review PAs nach ar 0 i v n n 15. Ste Top Maagenar idee “Fs &Promance Nis cpa ' t o D . 0 >l>l>|> 1. ale npn prea rome aust aetione 1, Ses Tp hangman conduct anager Ree alate HPs, Peformance Mais @ Grrl vee of Pe cae Tp aeons ore prov the Ps t als 15. Communicate stra ent fe ta Sosa ita r span Te psa ws anata ranparae odolerne ne festa. fa: ecoutabie-Te paion who hv inate woutbiy rd appro ato ner reve and sure gully and re te person ta whan" countable suppor he ean a eran) suppor the "ea work wth esses, neo ther materi ane ey ate omit t s compltn. i loreal Those who pov put nd must fred of rear ao ston bt ot een radon making. [conse hase who rave alle nt. TS paR oTcal-8 recat or pst Version 2 lesuad 01/2014 APPENDIX C - FREQUENCY OF AUDIT BY LAYER ‘Acme Automotive ‘Audit Assignment Matrix 1 ol fe an 1 hn —— -| | ressconeh | Tinconpiane] ie | sa] so. on l_on al a a_oacal aa ela eetRers on PaAwsi| 10 | 0 a] of HOA Audts| 46 -[ el ail ao! ail a] asl 2 Tear datnems ste] _aeo_| aso] v1] so] sil 50] 20] — ol —o0 ot emzinCompinnce{ ess | auf 907 —asel so] —aenl 23] ase] 5] Nowantomane| ¢ [Lat a st td a Customer once za si Pre rm Ce CC Tier) o-oo Sup Poa Ye o[ 16 erator ero oo 8 oc Corl o[ [8 Cibeatons al -28-cal-8 AIAG» Layered Process Audis Ina cash pak aramarce Version Issued 01/2014 APPENDIX G - GLOSSARY ystemic, independent and documented process for obtaining audit evidence and evaluating it objectively to determine the extent of which audit eriteria are fulfilled. Conformity: Fulfillment of a requirement Corrective Action: Action to eliminate the cause of a detected nonconformity or other undesirable situation. > NOTE: Corrective action is taken to prevent recurrence whereas preventive action is taken to prevent occurrence. Customer: The recipient of the organizations or supplier's product or service. Error Proofing: Refers to any devices and practices that prevent a failure mode from occurring, First Time Capability: Measures how many goods are produced correctly without flaws or re-work as Percentage of total units produced in a production process or value stream. This concept can also be easily applied to the service industry as a measure of service or orders delivered satisfactorily to customers the first time without any amendments, re-work, or complaints, Organization: Group of people and facilities with an arrangement of responsibilities, authorities and relationships, Performance Indicators: Key Outcome Indicator: KOI’s are metries that are tied to an objective, have at least one defined time sensitive target value and have explicit thresholds’ which grade the gap between the actual values and the target. > Key Performance Indicator: KPI's are those metrics most critical to gauging progression toward “objectives, KIs are metrics that are tied to an objective, have at least one defined time-sensitive target value and have explicit thresholds which grade the gap between the actual and the target. > KPI/KOI Scorecard: A specific application of a scorecard, a KOVKPI scorecard is used to measute progress toward a given set of KPIs or KOIs. Predictive Maintenance: Activities based on process data aimed at the avoidance of maintenance problems by prediction of likely failure modes. -29--30- cars AIAG Layered Process Audits Version 2 issued 01/20%4 macataat ene gortmarce Preventive Action: Action to eliminate the cause of a potential nonconformity or other undesirable potential situation. > NOTE: Preventive action is taken to prevent occurrence whereas corrective action (3.6.5) is taken to prevent recurrence. Predictive Maintenance: Planned action to eliminate causes of equipment failure and unscheduled interruptions to production, as an output of the manufacturing process design. Procedure: Specific way to carry out and activity or a process Process: Set of interrelated or interacting activities which transform inputs into outputs. Product: Refers to physical objects or services produced by the process. Quality > NOTE: “Inherent”, as opposed to “assigned”, means existing in something, especially as a permanent characteristic Degree to which a set of inherent characteristic fulfils requirements, Requirement: The specific requirement of the customer receiving the product, This requirement may be anything from a functional characteristic (e.g, spins freely) to a specific, quantified characteristic (e.2.; diameter must measure 10-15mm) Stake Holders / Interested Parties: Person of group having an interest in the performance or success of an organization, Supplier: Organization or person that provides a product. Top Management: Person or group who direct and control an organization at the highest level. Validation: Confirmation, through the provision of objective evidence, that the requirements for a specific intended use or application have been fulfilled. Verification: Providing of objective evidence that given item fulfills specified requirements.