Agile approach is changing the way companies manage quality. When becomes a company’s standard delivery methodology, it invigorate the way quality delivery, assurance and oversight is managed. This requires a significant shift in practices and behaviours that affect all parts of both the business and quality function. When well executed, Agile Quality Delivery will minimise quality risks, realise expected benefits, improve value delivery and cross functional collaborative management.
SSCG Insight: Agile Automotive Quality Governance and Oversight
1. Agile Automotive Quality Governance and Oversight
Creating growth competitiveness through assurance
and transformation to win tomorrow’s customers
AUTOMOTIVE INSIGHT
Eugene Nizeyimana February 2019
3. SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Agile is changing the way companies manage quality. When
becomes a company’s standard delivery methodology, it
invigorate the way quality delivery, assurance and oversight is
managed. This requires a significant shift in practices and
behaviours that affect all parts of both the business and quality
function. When well executed, Agile Quality Delivery will minimise
quality risks, realise expected benefits, improve value delivery and
cross functional collaborative management.
4. Introduction – Changing Automotive Landscape
4
The automotive industry is undergoing an unprecedented level of
transition with shifting demands, markets, business models,
products portfolios (brands, models and nameplates) and wider
mobility ecosystem overlaid with challenging economic conditions
and significant levels of disruption in technology.
The concept of what a vehicle is for is drastically changing. The
convergence of four megatrends electrification (e-mobility),
autonomous driving, connectivity and the sharing economy is
revolutionising today’s automotive businesses. Each one of these
trends is powerful on its own, but the combination of all four is
profoundly disruptive and creating the need for change.
In Today's dynamic business environment, the Original Equipment
Manufacturers (OEMs) dominance of the automotive industry is
diminishing as new players with customer-centric business models
and propositions are entering the industry breaking down entry
barriers and unlocking new sources of values. Customers’ mobility
needs and expectations, shaped by technology advancement,
experiences in other industries, Total Cost of Ownership (TCO) and
regulatory requirements are accelerating the transformation.
To be competitive in today’s marketplace, automotive companies
must reinvent in key dimensions: new business models to enhance
agility and quality to compete, customer-centricity and value driven
products/services. In addition, must deliver an exceptional
customer experience.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
5. Evolving Quality Delivery and Governance Assurance Best-Practices in
the Automotive Industry
5
Automotive companies are particularly strong at embedding quality
into operations. Have robust processes, standards, extensive
oversight and monitoring. They apply principles for critical processes
and follow structured and rigorous problem-solving approaches such
as 8D, Six Sigma and DMAIC. Beyond own operations, have extensive
supplier quality management across the supply chain.
In developing new vehicle models, companies identify and design
out previous quality issues into the new version. Rely heavily on
commonisation of design structures, platforming and parts. Reusing
proven structures also reduce risk and boost predictability. New
vehicle introductions follow strictly quality gates and leverage
several tools to ensure robustness.
However, tighter compliance regulations and changing customer
dynamics are challenging the industry practices in a variety of ways.
Only those that are quick to adapt may enjoy distinct competitive
advantage and growth. The traditional quality models are no longer
as effective as were designed in a different era and with a different
purpose in mind. Used primarily for control capacity with a limited
focus on customer centricity, early prevention and de-risking.
Compliance and quality risks have become two of the most
significant ongoing concerns for the automotive industry, the scope
of regulatory and assurance focus continues to expand. Product
recalls and compliance fines have dramatically increased relatively
over the years following the diesel gate crisis, resulted in
increasingly tight scrutiny across many other areas.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
In today’s fast-paced markets and environment with shifting
demands, challenges remains, especially with the globalisation of
production. Companies are working to maintain performance levels
across geographic locations and suppliers, and even across shifts
within factories. With the needs to shorten development cycle
period and speed up quick delivery to market, means engineers
often under pressure to launch quickly, and many do not use quality
gates effectively to ensure a scaled-up design for manufacturability.
Many companies are streamlining quality control processes, and
adopting lean practices to respond quicker, but most have yet to
reach best-practice levels. Are developing quality culture and
customer first principles to ensure employees and leaders
instinctively consider quality in their daily decisions and impact to
customers, rather than simply reacting to problems.
6. Key Megatrends Driving Transformation
Putting Customers First and at the Heart of the Business
6
To gain a competitive advantage, many automotive companies are
undertaking an unprecedented changes. Our research found key
drivers impacting the industry and likely to intensify the need for
improved and agile quality governance models and assurance
oversight are:
Solving product quality and operational challenges today, to create growth and resilience tomorrow.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Growth
imperative
Market
competitiveness
and complexity
Evolving
consumer
dynamics
Regulatory
change
Innovation and
technologies
Need for
shortened cycle
time and quick
go to market
7. Agility to Compete
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
8. Steering Towards Agile Quality Governance to Create Value and
Accelerate Relentless Delivery - The Case to Transformation
8
Amid this ever-evolving landscape, each industry defines quality
differently and priorities depend on the customers, products and
markets specifics. In the automotive, quality can be defined in
various dimensions, from “fitness for purpose”, “ability to meet (or
exceed) customer expectations” to “predictability in statistical
terms” and “Conformance of Production (CoP)”. To achieve this,
companies work toward Six Sigma levels of high predictability. In
addition to avoiding defects, also strive to maximise vehicle’s appeal
along more perceived quality criteria such as design, aesthetics,
touch and feel, and ease of use.
An Agile Quality Operating Model (AQOM) can provide benefits for
companies to deliver quality activities effectively and exceptional
value, fulfil objectives and delivery of superior products/services to
enhance customer satisfaction. Such a model is likely to enable the
leadership to organise an effective management structure, deploy
resources and the mechanisms by which governance is
implemented. By the same token, the lack of a robust operating
model and system may lead to an incomplete or faulty governance
structure, or to inconsistencies, overlaps, and gaps among
mechanisms. Such inadequacies may lead to failure to enact quality
policies and the achievement of goals resulting in revenue loss.
Agile delivery require a significant shift in behaviours that directly
affect governance, human resources, risk management, internal
controls and benefits management. Thus AQOM address both
customer and business needs while also enhancing management’s
capabilities and the controls to exercise proper oversight.
The sheer complexity of quality governance and the huge number
of related initiatives, procedures and other mechanisms in a global
automotive industry indicate a need for an AQOM to support
companies responding quickly to evolving markets. The elements of
such a model may exist within many companies. However, those
elements may not have been embedded, rationalised, and
organised to provide the consistent guidance and incentives that
the leadership, quality managers and quality engineers require. The
AQOM has the potential of addressing the needs and thus enhance
both the management’s and the assurance function’s oversight
capabilities.
To develop and deploy AQOM effectively, companies need to assess
current state, define desired future state, and identify the steps
required to achieve the latter, to effect implementation. An
effective quality governance approach must starts by defining
which requirements apply to the given products/services and
business processes, and identifying where exactly in the process
they occur (“breakpoint analysis”). Informed by the identified
process breakpoints, can then define Key Quality Indicators (KQIs)
that directly measure the performance and highlight residual
quality risk exposure in the early phase of development. This
approach will leads better understanding, reduced wastage and
changes, far fewer product tests and much more robust insights
into what the key controls and issues. Moreover, provides the
essential fact base to guide and accelerate the remediation process
and resource allocation.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
9. What is Distinctive About Agile Quality Governance and Delivery?
9
An Agile Quality Governance and Delivery (AQGD) is based on four
values which set the tone for successful quality achievement,
especially at a company level:
People centric over
process and tools
Embedded lean working
over hierarchical structure
and excessive
documentation
Solution delivery and
customer collaboration
over targets
Quick response and
delivery over rigid plans
and decision making
process
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
10. Plan
Produce
Manufacture
Test and
Inspect
Go to Market
Approval
Traditional vs. Agile View of Product Quality Delivery Process (PQDP)
10SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Planning Design and Development Industrialisation
Traditional
Agile
Plan
Product
Conceptualise
Evaluate
Concept
Approval
Gateway
Plan Develop
Product
Develop
Validate
Launch
readiness
Gateway
Quality Warning Indicators Risk management and review gateway
Sequential development process where all required activities in the phases is complete
Product development method based on iterative and incremental development encouraging rapid and flexible response to change
START FINISH
11. The Benefits and Challenges of Business Transformation
11
While the benefits of transformation can be great, they’re not
without significant risks and not all companies achieve expected
outcomes. When well deployed, agile quality delivery methodology
and a characterised AQOM has the potential to deliver benefits in
the following ways:
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Agile delivery has the potential and benefits to: Failure to implement Agile effectively can result in:
Alignment flexibility of quality activities and benefits
Create and deliver business value
Improve clarity and visibility on progress through the lifecycle
Accelerate robust management coordination and collaboration
Reduces complexity by breaking down long delivery cycle into
iterations, which increases effectiveness and efficiency
Support improved automation of processes to reduce waste
Support continuous improvement and quality checks
Minimise quality risks by providing the opportunity to mitigate
risks earlier in the delivery lifecycle through iterative delivery.
Misalignment between planned outcomes and strategic
objectives
Insufficient buy-in and acceptance
Inadequate project organisation and governance
Inappropriate deployment of the Agile techniques and tools
Ineffective risk controls tracking mechanisms
Inadequate level of change management necessary for a
successful Agile transition
First time introduction of anarchy rather than structure
Open to interpretation and the implementation.
12. Illustrative Defined AQOM
12
Dealerships
Quality Governance
Management
Assurance
Control
Inspection
MarketRequirements/Customers(Needs&Expectations)
Quality Policy and Statement
Strategic Plans, Goals and Targets
Marketing & Sales
Industrialisation (Manufacturing & Assembly)
Distribution
Engineering (Design &
Development)
Assembly Validation & EOL Tests/Inspections
QMS, Standards/Process/Processes
Improvement Progs
Insight,
analytics
& Data
Quality
Performance
& Risks
Talent/Skills
Infrastructures
Systems/Technologies
Business
Management
Analysisand
Improvement
Resources
Utilisation
ProductRealisation
Customer
Values
Orders
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Customer
Satisfaction
An effective QOM must embed Quality Management System (QMS) requirements into the process
13. Building AQGD Capability
Points for consideration to harness maturity and relentless focus
13
Vehicle development and quality assurance programmes are
complex series of actions of which companies see quality as an
ongoing process of continuous improvement as no vehicle is likely
to be ever built right the first time without any deviations or
remediation.
Companies with mature quality models and execution rely on
embedded processes, tight protocols and standard operating
procedures customised for respective concerns. They are also
known for extensive, systematic, and continuous learning that
allows them to address emerging areas of concerns.
L1 – Initial
•Undefined processes,
objectives,targets, poor
controls and reactive
L2 – Managed
•Strategy, policy, procedures
and objectives defined but
not well communicated
•Unstable characterised
processes
•Poor process integration
L3 - Defined
•Clear governance
•Well characterised
processes and objectives
•Lifecycle and integrated
processes
L4 - Measured
•Qualitativemanagement
and oversight
•Organised evidence based
quality reviews
•Quality targets/QPIs
L5 – Optimised
•Focus on improvement
•Prevention and control
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
SSCG have identified four structural drivers of a unified “House of
Quality” includes:
Building quality into the product and into functional processes.
Organising for quality in all functional areas and achieving
compliance and solid governance.
Factoring quality into strategy and performance management.
And instilling a quality mind-set and behaviours by developing
capabilities in everyone.
Becoming Agile
Agile Deployment
Maturity Dimensions:
Capacity management
Alignment with business lines
Product and value oriented
Autonomous process and teams
Embedded processes
Continuous improvement
14. Agility Framework
Key Top-Down and Bottom-Up Company Approaches
14SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Align Quality
Delivery with
Strategy
Accelerate
Process
Transformation
and Integration
Transform
People Cultural
Mind set and
Behaviour
Strengthen
Quality
Assurance and
Oversight
Becoming an Agile company is achieved through multifaceted
business activities ranging from aligning delivery with strategy,
enhancing capability, transforming peoples’ mind-set and
accelerating process execution. Agile Quality Delivery (AQD) is
effective when particular delivery controls are in place. Becoming an
Agile company primarily requires top-down and bottom-up change
to build new capabilities to mitigate risks early and often.
SSCG recommends following few considerations to help companies
reach each objective:
Evaluate company readiness and culture
Engage cross function team: Management, Quality, Risk
Compliance, Operation and Technology teams
Evaluate current delivery processes and controls
Evaluate transformation opportunities to Agile maturity
Identify Agile controls and effectiveness
Establish right skills, tools and technologies
Top-Down
Bottom-Up
Strategic Rapid
Adaptive Excellence
15. 15SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Companies that aim to becoming Agile must start with aligning
quality delivery with strategic objectives and plans. However, key
questions must be answered at the initiation phase are:
Is the company ready to embrace an Agile transformation?
Does the leadership style support it?
Are the delivery team and Internal Audit ready to embrace Agile?
Agile is about preparing a company for cross-team collaboration and
quick response to fast paced business needs. Having an
understanding of its readiness is an important first step.
Here are a few considerations to help companies start preparation
for agile transformation journey:
Prioritise projects and stories based on business value in
alignment with strategy.
Decentralise decision making to reduce delays and achieve fast
value delivery.
Provide greater visibility through periodic monitoring of Velocity
and burndown charts to assess delivery risks.
Minimise risk through frequent demos and encourage
stakeholder feedback.
Empower the product owner to make the go/no-go decision for
each product release.
Align Quality
Delivery with
Strategy
Accelerate Process
Transformation and
Integration
Transform People
Cultural Mind set
and Behaviour
Strengthen Quality
Assurance and
Oversight
16. Integrating the management and delivery of quality into the main
operation processes, risk governance and regulatory affairs offers
companies tangible benefits.
• First, it ensures the company has a truly comprehensive view of
customer requirements, performance and portfolio of risks and
visibility into any systemic issues (cross-products and cross-
processes), and that no material risk is left unattended.
• Second, it lessens the burden on the company (duplicative risk
assessments and remediation activities) as well as on the control
functions (no separate or duplicative reporting, training, and
communication activities).
• Third, it facilitates a risk-based allocation of resources and
management actions on quality risks remediation and investment
in cross-cutting controls.
• Align quality assurance and risk management to address needs in
an integrated, globally coordinated manner
Functional built-in and integrated
quality process can help
companies accelerate agility
16
The following practical actions can help the companies firmly
integrate and manage product and service quality:
• Establish clear governance processes and structures with
mandates that span across quality management and support
functions, and that ensure sufficient accountability, ownership,
and involvement from all stakeholders, even if issues cut across
multiple functions.
• Develop a single and centrally integrated quality assurance and
oversight system.
• Develop and centrally maintain standards, process flow,
procedure, product and service quality specifications, and
control taxonomies.
• Define clear roles and responsibilities between quality operation
and assurance functions at the individual level to ensure there
are no gaps or overlaps, particularly in “grey areas” where
disciplines converge.
• Develop and jointly manage integrated training and reporting
programmes.
• Consistently involve and timely align senior quality stakeholders
in determining action plans, target end dates, and prioritization
of issues and matters requiring attention.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Align Quality
Delivery with
Strategy
Accelerate Process
Transformation and
Integration
Transform People
Cultural Mind set
and Behaviour
Strengthen Quality
Assurance and
Oversight
17. Company capabilities are multidimensional and embodied in the
values and norms, managerial systems, skills and knowledge, and
techniques and tools. Changes can be expected to all of these
dimensions when first embracing Agile Quality Delivery (AQD). In
most cases companies need to transform the role of their quality
assurance departments from that of an adviser to one that puts
more emphasis on active quality risk management and monitoring.
Redefining the role of Agile Quality Team to active ownership of the
quality risk and control framework can deliver improved benefits. As
a result, quality team are moving away from their old “policeman”
role of inspection and playing a more integrated role in the design of
the vehicles. They support product planning and defining required
specifications by detailing quality deliverables. And with more than
60% of a car’s value coming from suppliers, much of the quality
company’s focus is now on improving suppliers’ quality systems.
Effective execution of these expanded responsibilities requires a
much deeper understanding of the company processes by the
Quality Delivery and Compliance Team.
Developing Agile Quality Delivery
and Assurance Team Capability
17
Given this evolution, responsibilities of Quality Delivery and
Assurance Team are expanding rapidly may include the following:
Generating practical perspectives on the applicability of quality
standards, product design rules, and regulations across the
company and processes and how they translate into
operational requirements.
Creating standards for quality risk materiality.
Developing and managing a robust risk identification and
assessment process/tool kit.
Developing and enforcing standards for an effective risk-
mediation process to ensure it addresses root causes of quality
issues rather than just “treating the symptoms.
Establishing standards for training quality programmes and
incentives tailored to the realities of each type of job or work
environment.
Ensuring that the front line effectively applies processes and
tools that have been developed by compliance.
Performing a regular assessment of the state of the overall
compliance program.
Understanding the bank’s risk culture and its strengths as well
as potential shortcomings.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Align Quality
Delivery with
Strategy
Accelerate Process
Transformation and
Integration
Transform People
Cultural Mind set
and Behaviour
Strengthen Quality
Assurance and
Oversight
18. 18SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Agile Quality Delivery (AQD) Team Agile Companies Should Incorporate Tools and Techniques to:
When properly established, AQD team includes dedicated
members and stakeholders who fully
Understand Agile Delivery culture, governance, product quality,
tools and techniques.
Will best deliver value when they are cross-functional, e.g.
leadership, engineering, quality, operation and marketing.
Cross-functional teams are more resilient and increase
efficiency by reducing hand-offs.
Demands a high level of personal interaction and frequent
informal communication, teams are most likely to succeed
when members are co-located.
Clearly establish and allocate roles and responsibilities is
important.
Continuously prioritised backlog.
Clearly define and socialise (enterprise) ‘Definition of Done’.
Define clearly a set of acceptance criteria prior to the start of
vehicle programme development.
Facilitate daily review of quality to enable expedited code
deployments.
Efficiently ceremonies to support and enhance AQD.
Ensure structured review, approval and prioritisation of user
stories/ requirements by the product owner.
Support automated testing and continuous integration - This
ensures that the features are developed in accordance with
priorities, minimising risks and increasing business value.
Continuously prioritises, consumes and delivers the most
valuable stories (requirements) during each iteration.
Align Quality
Delivery with
Strategy
Accelerate Process
Transformation and
Integration
Transform People
Cultural Mind set
and Behaviour
Strengthen Quality
Assurance and
Oversight
19. Automotive companies can maximise the impact of the
transformation by rigorously measuring progress against desired
outcomes. Most companies track common production metrics such
as first-pass yield, deviations, rejects and rework, compliance
failures, recalls, as well as customer complaints. These metrics are
often lagging, not leading indicators, and are often followed
inconsistently across sites. More important, companies generally
lack reliable systems for measuring the true cost of quality and tend
to miss or underestimate costs. That leads to decisions on quality
investments that are made without understanding either the full
cost or the financial value of improving quality.
Transformation assurance is an essential aspect of effective Agile
Quality Delivery. It provides with unbiased visibility, forward looking
issue and risk warnings to help quality activities stay on track to
deliver expected business benefits. Specific control mechanisms can
provide touch points during Agile Quality Delivery. These must
concentrate on key aspects on the programme lifecycle.
19
The key principles outlined imply a multifaceted transformation of
quality assurance function. Assuming one point for each of these
requirements, companies with inadequate quality management
infrastructure or poor customer satisfaction may require a
significant transformation. Applying following point scorecard can
help companies accelerate AQD team excellence:
Demonstrated focus on the role of quality and its stature.
Integrated view of customer needs with operational behaviour.
Clear tone from the leadership and strong quality culture,
including evidence of senior-management involvement and active
board oversight.
Robust quality operating model and system with shared
horizontal coverage of key issues and a clear definition of roles
versus the first line of defence.
Comprehensive definition of quality objectives, goals, rules,
standards and compliance requirements in place to drive a risk-
based quality-risk-assessment and transformational programmes.
Use of quantitative metrics and specific qualitative risk markers
to measure quality risks.
Quality management-information systems providing an integrated
view of performance and business risks taxonomy.
Evidence of early cycle programme quality prevention actions
taking, ownership allocation and control issues.
Adequate talent and capabilities to tackle key requirements, risk
areas and a working knowledge of core-business processes.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Align Quality
Delivery with
Strategy
Accelerate Process
Transformation and
Integration
Transform People,
Cultural Mind set
and Behaviour
Strengthen Quality
Assurance and
Oversight
Measuring progress and delivery
confidence- Outcomes that Matter
Accelerate AQD Team Excellence
20. Regardless of the delivery method used, AQD programmes are
prone to risks. Mitigating risk upfront and continuously throughout
the programmes is what makes AQGD and AQDM methodologies
the right approaches.
AQD is effective when particular delivery controls are in place. Thus
becoming an Agile company requires top-down and bottom-up
company change to build new capabilities to mitigate risks early and
often.
Specific control mechanisms provide touch points during AQD.
These concentrate on key aspects on programmes lifecycle, as
outlined:
Strategy and governance planning review
Requirements review/s
Build and test review/s
Readiness and release review/s
Post implementation reviews/Project retrospective
Agile portfolio maturity assessments
20SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Align Quality
Delivery with
Strategy
Accelerate Process
Transformation and
Integration
Transform People,
Cultural Mind set
and Behaviour
Strengthen Quality
Assurance and
Oversight
Control and accelerate risks
assurance early and often
Successful AQD requires a highly-disciplined and focused
management and governance approach that provides near real
time risk assurance through a range of Agile ceremonies, such as:
Release planning and iteration planning, daily stand-ups reviews,
retrospectives and product backlog refinement.
In order for these controls to be effective, changes must occur
top-down by leadership and bottom-up by the programme and
operation teams. A company will need to assess and revise its
programme delivery controls, including:
Creating a modular approach to governance procedures to
align with increment, release and roadmaps.
Updating the change management process and defect
management process to align with product backlog and risks
maintenance.
Treating Agile meetings as a form of a self-organising team
approval to move forward periodically with programme
activities.
Updating reports that tracks progress for budget and schedule
estimations.
Ensuring that the stakeholders and the Agile team are receiving
the proper training to be effective.
Frequent audit will play an important role in this process,
providing an independent view of quality programme status and
effectiveness with respect to commonly agreed-upon
transformation objectives.
22. What is and Why Customer-Centricity
22
Customer-centricity focuses on defining and considering products
from the customer’s viewpoint. Most of companies understand that
customer expectations and requirements are firmly key competitive
and driving factors when defining product quality attributes as
customers pay close attention to quality and often weigh it equally
with price and performance. Winning companies also understand
that treating their customers with respect, with great service, and
built a relationship is also important.
For automotive customers, quality is much more about product
appeal, performance and reliability than complying with regulation.
As vehicles suffer wear and tear over a period of many years,
customers expect safe and reliable operation, low maintenance
costs, and infrequent repairs. Because of these competitive
concerns, automotive companies excel in understanding the voice of
the customer. They have become adept in defining quality
strategies, establishing targets to achieve them and implementing
strong functional quality processes along the value chain—design,
development, engineering, production, supplier management, sales,
and after-sales.
Companies design for reliability over the life cycle so that buyers of
second-hand vehicles have a positive experience as well. With
quality a priority for more than 10 years, it has become an
entrenched part of management at all levels.
As market becomes more complex and competitive, likewise
customers are becoming more selective in brand choices.
Acquiring new customers is also becoming more difficult.
Therefore, more companies are investing more in retention
instead of acquisition as:
New acquisition can cost up to 5x more than retention.
2% increase in retention has the equal effect on profits as 10%
in cost cuts.
On average, companies lose approx. 10% of its customer base
each year (customer churn).
Companies with a high retention rate grow faster.
The challenges of becoming a customer centric companies range
from:
Functional silos prevention of customer data sharing.
Misalignment of culture around customer needs.
Inadequate customer insight and data management technology
platforms.
Lack of standardised definition of customer and centricity.
Inadequate support and empowerment to manage customer
issues.
Insufficient expertise.
High focus on sales than customer satisfaction.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
23. Evolving Customer Dynamics
23
These experiences are shaping customer expectations across the
automotive industry:
• Customers are looking for value to be clearly demonstrated, reflecting a
balance of price, product features and service tailored to their needs. They
prefer to buy more products from companies they trust.
Consumer demands and expectations
• Recognising the value of the customer relationship is vital.Influencing persistency and retention
• Product performance and reliability, service quality and product transparency.
Auto companies and products failing to meet
customers’ expectations
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
24. Customer Experience Analysis and Design Framework
24SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
25. Developing Customer Centricity Strategy to Transform and Eliminate
Blind Spots - Best practices to get it right
25SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
A successful customer centricity strategy starts with an aspiration
centred on what matters to customers and empowering frontline
team to deliver. Company must anticipate customers’ needs and
delighters to able to provide the right products, experience and
meet expectations.
To build internal momentum for initiatives to develop this unique
customer experience, a company must understand how that helps it
perform distinctively in the market. The conviction and shared
aspiration that stem from understanding customer experience and
company wants to deliver can not only inspire, align, and guide it
but also bring innovation, energy, and a human face to what would
otherwise just be strategy.
The shift towards becoming a truly customer centric company is
both complex and long due to evolving markets and customer
dynamics. Being a customer centric company is the Holy Grail
towards unlocking the true potential of customer value.
Speed, quality, prioritisation, discipline and adaptability are all key
qualities that will engage customers and other stakeholders to use
products or services and build lasting relationships.
Becoming Customer-Focused
A customer-centric company builds an operating model around a
deep understanding of its customers, what they value and the
contribution each makes to the profitability of the company. This
requires:
Designing business processes that recognise different customer
segment needs.
Delivering a positive and seamless customer experience at
every touch point across the customer life cycle.
Maintaining an active dialogue with customers (and acting on
feedback).
Fostering a culture that places the customer at the heart of the
decision-making process.
Our research found that several key questions commonly
underpin successful strategies:
Company’s appetite for change in the near term? Is the goal
to change the customer experience fundamentally or simply
to improve it at the margins?
The gap between the needs and wants of customers and
what they actually experience?
How can the company gain a customer-experience advantage
against competitors?
At which point in the experience should the company
concentrate to have a real impact?
How do the overall capabilities of the team support the
customer experience the company wants to provide?
26. Customer Focused
Leadership
Shift from acquisition
to retention share
Experience design
Feedback Drives
Continuous
Improvement
Empowered
Frontline
Metrics
that
matter
Develop - Value
Propositions
Generate -
Customer
Engagement
Programmes
across Lifecycle
Start - Customer
Acquisition
Experience and
Learn
Focus - Royalty
and Share Of
Wallet (SOW)
Define - Deep
Understanding
of the Customer
A Customer-Centric Company Build a Virtuous “Customer Wheel”
Strategy to Align Process, Products and People
26SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Market Insights and
intelligence
• Customer dynamics
• Target customers,
requirements and
expectations
• Standards/Legislation
• Anticipate customer
changes in life stage
Integrated systems
and platforms to
facilitate successful
delivery on promise
and best in class
customer care
Customer point of sale feedback
27. Instilling Customer-Centric “Mind-set and Behaviour” Best Practices
Into the Company Fabric
27
Customer centric companies creates products, processes, policies
and a culture that are designed to support customers with great
experience as they work towards their goals. The required change in
culture must be driven from the top down. Senior management
must instil and clearly communicate a corporate strategy focused on
customer-centric innovation and recognise and reward efforts to
deliver this. Collaboration and empowerment of teams to spot
customer improvements and act upon them must become the new
norm, as well as physical spaces such as customer excellence
centres to help develop and incubate ideas.
Protecting the core is about getting the basics right, becoming more
customer centric and, where appropriate, adopting the leading
practices that competitors or other industries have demonstrated.
Some of the key practices that can assist companies advance
customer-centric thinking and considerations amongst their teams
includes:
• Passion and true believe in customer first.
• Focus on what the customer wants and needs, and develop
products and services around that.
• Focus on building relationships designed to maximise the
customer’s product and service experience.
• Analysis, planning and implementation of carefully formulated
customer strategy that focuses on creating and keeping profitable
and loyal customers.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Customer Service Customer Centric
• Profit Driven
• Customer is Right
• Product is the Focus
• Design Starts with features
• Service = Frontline
• Friendly
• Reactive
• Make it Right
• Test New Ideas with the
Customer
• Purpose Driven
• Anticipate Customer Needs
• Customer Experience is the
Focus
• Design Starts with the
Customer
• Experience = Everyone
• Real
• Anticipatory
• Get it Right
• Design New Ideas with the
Customer
Companies that put customers first
are 60% more profitable that their
competitors
29. Best Economics Product Development
Creating Company and Customer Value through AQD
29
To survive in today’s environment of competitiveness, low growth
and rapid product life cycles, companies need to consistently deliver
products that provide both the greatest total value to customers and
the most attractive economics over the entire life cycle.
Through design thinking, creativity and innovation companies can
enhance product lifecycle management to solve complex strategic
issues while also delivering high level value. Focus their innovation
efforts on the features that customers are willing to pay for and to
select cost optimisation approaches that will improve and protect
long-term profitability.
A collaborative approach to concept definition, design and
development steers the creation of new products and services.
Companies should consider deploying approaches which combines
customer, technology, operations and market insights early in the
development cycle. Create exciting portfolios of new products and
services that deliver superior quality products and the right
experience for customers.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Methodologies for Optimising Cost and Increase Value
Design for
Excellence
(DfX)
Quality by
Design (QbD)
Value Driven
Design (VDD)
Design to
Value (DtV)
Design-to-Cost
(DtC)
Time
Quality
Cost
Poor
Quality
Slow
Delivery
High
Cost
Scope
Change
30. 30
Design for Excellence (DfX) methodologies focuses at optimising
quality, value and reduce cost in product design/redesign phase.
Companies deploy DfX for its proven effectiveness to systematically
examine the whole product value chain to identify areas for
improvement in return on investment and margins.
The DfX methodology focuses and consider each and every factor
that can influence a product’s value or cost – from concept to
delivery – and identifying the ‘golden’ combination that will deliver
the very best results at the lowest possible investment.
The DfX approach ensures that optimal product architecture
decisions are made from the very start. Deploying DfX in the earliest
concept and design phases can pave the way to creating the easiest
and most ideal business situation: maximum simplicity in design
with as few building blocks as possible – but can still be segmented
without much difficulty.
DfX is an extremely multidisciplinary and collaborative exercise. The
focus is on tapping into the insights – and stimulating the creative
ideas – of people within the company who are involved in bringing
the products or services to the market.
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
How is Design for Excellence
Performed?
Design for
Excellence
(DfX)
Quality by
Design (QbD)
Value Driven
Design (VDD)
Design to
Value (DtV)
Design-to-Cost
(DtC)
Design for
Excellence
Design
Quality
ProcurementSupply Chain
Marketing
+ Value/Benefits
- £ Cost
Integrated and
interconnected work
streams
Increase value and
margin and reducing
costs
31. 31
Quality by Design (QbD) is a systematic approach of building quality
into a product and throughout its life cycle by understanding Critical
Quality Attributes (CQAs) and optimizing Critical Process Parameters
(CPPs). QbD begins with predefined objectives and emphasises
product and process understanding and process control, based on
sound science and quality risk management. QbD support
companies to improves safety and efficacy, increases manufacturing
efficiency and reduces cost.
QbD is a multidisciplinary and collaboration exercise. The
implementation will lead to a better understanding of the process.
QbD elements includes:
Quality target product profile (QTPP) that identifies product
CQAs.
Product design and understanding including identification of
critical material attributes (CMAs).
Process design and understanding including identification of
CPPs, linking CMAs and CPPs to CQAs.
Control strategy that includes product specifications as well as
controls of the manufacturing process.
process capability and continual improvement
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Design for
Excellence
(DfX)
Quality by
Design (QbD)
Value Driven
Design (VDD)
Design to
Value (DtV)
Design-to-Cost
(DtC)
Market Insights and
Requirements
• QTPP
• Regulatory
• Standards Product Design
• CQA
• QMA
• DFMEA
Process Design
• CPP (DoE, PFMEA,
Process Validation,
Control Plans)
Control Strategy/Plan
• Risk Assessment and
Oversight
• DoE, DVP&R
Manufacturing
• CP, CPk, Yield, FTT)
Continuous
Improvement
Quality by
Design
(QbD)
32. 32
Value Driven Design (VDD) strategy approach can be
integrated in the product development to help
companies obtain clarity on multiple perspectives:
Customers insights
Competitors offering insights
Manufacture and distribution cost
VDD approach:
Prioritise high-level needs (or system features)
based on the perceived business value each
would deliver.
Improve the development of complex engineering
programmes and systems such as vehicle
development by reducing or eliminating cost
overruns which are a major problem
Enable the assessment of a value for every design
option so that options can be rationally compared
and a choice taken.
Facilitate design optimization by providing
designers with an objective function (attributes)
and eliminating those constraints which have
been expressed as performance requirements.
Ensures design choices are made to maximize
system value rather than to meet performance
requirements.
Competitor Offering
Insights
•Global markets
•Tear-down analysis (De-
formulations of products,
comparative performance
and packaging analysis)
Manufacturing
and Distribution
Insights
•Clean sheet analysis
•Activity based
costing
•Cost, attributes and
delivery trade-offs
Consumer
Insights
•Attributes values
•Willingness to
pay for
comparative
•Ethnography and
sensory
Value
Attributes Design
Variables
Configuration
Evaluate Optimise
Analyse Define
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Design for
Excellence
(DfX)
Quality by
Design (QbD)
Value Driven
Design (VDD)
Design to
Value (DtV)
Design-to-Cost
(DtC)
33. 33
Design to Value (DtV) help companies identify product features that
consumers value most, as well as those that generate little market
interest. With this knowledge, they can redesign their products,
adding features that promote sales while eliminating unnecessary
attributes that only serve to drive costs. DtV also helps companies
optimise efficiency in product design and manufacture by
highlighting areas for improvement.
By using the DtV methodology, many companies have optimised
their product portfolios and uncovered significant savings—often in
unexpected areas.
Across sectors, DtV stimulates growth, improves customer
satisfaction, and optimises brand positioning by keeping the focus
on product features that customers value. This results in impressive
financial benefits—on average, our clients achieve a 10 - 40%
increase in gross margin and a 10 - 40% reduction in product and
supply chain cost. DtV also helps products reach consumers faster by
reducing design complexity and time-to-market, and the improved
positioning typically helps them gain additional market share as
well.
Making DtV critical for optimisation can deliver multiple benefits
early in the design phase while generating significant value:
Holistic View
• Understanding of customer and competition requirements
• Holistic view on lifecycle costs
Lifecycle cost optimisation
• Simplification, standardisation, cost-effective substitution to
reduce production/implementation costs without impacting
quality value
• Optimisation of post-production lifecycle cost including operating
costs, maintenance, modernisation and disposal costs.
Value generation
• Increase of customer value through pricing optimisation
• Lead time reduction due to design changes
• Increase of customer retention/royalty
Extended Know-how
• Stimulate creativity
• Leverage all possible sources of knowledge base
+Value/Benefits
- Design
Complexity
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Design for
Excellence
(DfX)
Quality by
Design (QbD)
Value Driven
Design (VDD)
Design to
Value (DtV)
Design-to-Cost
(DtC)
34. 34
Design-to-Cost (DtC) provide a systematic approach to optimise
product portfolios that uncover cost savings and increase margin.
As part of cost management techniques, DtC describes a systematic
approach of controlling costs of product development and
manufacturing. DtC ensures that costs are designed "into the
product“ from the earliest concept decisions. Thus costs are seen as
an equally important parameter besides feature scope and schedule,
the three taken together yielding the well-known project triangle.
+
Benefits/Value
Over Time
- £ Design/Product
Cost
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Product Requirements
& Market Analysis
Design & Cost
Estimates
•Design Alternatives& Costs
Analysis
•Process Design & Cost Estimates
•Make & Buy Analysis
•Supplier Costs & Estimates
•Quality and feature attributes
Manufacturing Continuous Cost
Reduction
Design for
Excellence
(DfX)
Quality by
Design (QbD)
Value Driven
Design (VDD)
Design to
Value (DtV)
Design-to-Cost
(DtC)
35. Conclusion
35SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Many companies are not keeping pace with changing markets and
consumer dynamics and are far behind in adopting Agile Quality
Delivery methodologies and meeting customer expectations. To
succeed in this fast-changing environment and achieve sustainable
top-line growth, companies need to focus on redefining quality
strategies, customer relationships, transforming business models to
embrace agility and introducing an innovative culture in support of
strategic decision-making.
Achieving superior customer centricity is less about implementing a
grand vision than about building cadence today, and in the future.
But the time has come when the journey is a strategic necessity, and
all automotive companies need to be clear about current position
and future priorities.
36. Discover how we're helping the
automotive industry transform
to win tomorrow’s customer
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
37. SSCG provides a wide range of quality management consulting and
advisory services globally, to the automotive, manufacturing,
business services and engineering sector. Throughout industries
and entire value chains, we help clients drive productivity, growth
and operational excellence.
In a time of rapid disruption, consumer transformation and market
evolution, We help our clients shape and deliver transformation
programmes across their operations from strategy, product
planning, development, manufacturing complexity to operating
model re-structuring and aftermarket quality improvement.
Learn More About SSCG's Global Automotive Practice
37SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
38. Agile quality transformations are complex. Successfully
development, adopting and executing an Agile transformation
requires significant planning, review and company readiness.
We guide the creation of a streamlined next-generation agile
quality operating model, characterised by customer journeys. By
designing agile processes, we help clients reduce leakages and to
sustain performance to meet future needs, achieve significant and
sustainable improvement in their quality performance, customer
satisfaction, and regulatory compliance.
Our Quality Consulting Services Can Help You
38
Redefine business
positioningin competitive
markets and unprecedented
time of change
Define strategies for growth
and profitability
Define Voice of Customers
(VoC) , quality vision,
objectives,standardsand
goals
Access current programme
lifecycle maturity to perform
risk assessment
Establish Quality
Management System(QMS)
and controlframework
Develop and deploy quality
system, process, procedures
and tools: QMS, FMEA, Kano
Model, APQP, PPAP, TQM,
Six Sigma
IATF 16949/ISO9001
complianceand audit
oversight
Quality project management
assistance
Help control product quality
management: Planning,
prevention,detection and
risk oversight
Cost of poor quality
reduction and return on
investment
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight
Here's how we can support your company on this journey:
39. Contact Us
39
Eugene Nizeyimana
Principal Consultant, Automotive Products, Process and
Programmes Quality, SSCG Consulting
Phone: +44 7879150562/+44 1902 752758
Email: Eugene.Nizeyimana@sscg-group.com
SSCG AUTOMOTIVE INSIGHT | Agile Automotive Quality Governance and Oversight