cals AIAG ee aaa a carays rp peo Version Issued 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 quality; promote corporate responsibly, health, safety, and the environment; and) ‘optimize speed to market throughout the supply chain, AIAG Organization AIAG is made up of @ board of directors, an executive director, executives on loan from member companies, associate directors, a fulltime 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. AIAG Projects. AIAG promotes objectives primarily by publishing standards and offering ecucetional conferences and training, Member companies donate the time of volunteers to work at AIAG in a non-competitive, open forum that is intended {0 develop recommendations, guidelines, and best practices for the overall good of the industry, A listing of current projects can be found at weww.aiaa org. “AIAG PUBLICATIONS {An AIAG publication rollects a consensus of those substantialy concemed with its scope ane provisions. An ‘AIAG publication isintended a3 a guide (0 ald the manufacturer, the consumer, and the general pubic. The existance of an AVAG puticaton does notin any respect preclude anyone from menuTacturng, marketing, purchasing, or using products, processes, or procedures nt conforming tothe publication. DISCLAMER The Publisher does not make any representation or waranty, express or imple, in ration to any information ‘tom tis publeaton, and the Publisher does not assume any legal labilly fr the accuracy, completeness, or Lusefuness of any information from this publication. (CAUTIONARY NOTICE AIAG publications ere subject to periodic review and users are cautioned f obtain the latest editions. MAINTENANCE PROCEDURE Recognizing that this AIAG publeation may ret cover al creunstances, AIAG has estabished a maintenance procedure. Please refer o the Maintonance Request Form atthe back of his document to subralt @ request. ‘Published ‘Automotive industry Action Group "26200 Lanser Road, Suito 200 ‘Southfele, Michigan 48033. Phone: (248) 950-3670 + Fax: (248) 368-2259 APPROVAL STATUS The AIAG Qualify Steering Commitee and designated slakeholders approved this document fer pubeation in vJarwary 2014. AIAG COPYRIGHT AND TRADEMARK NOTICE: (© 2014 Automotive Industry Action Group, excep hat copyright i rt claimed as fo any part ofan onginal work prepared by 8 US, ‘or state goverment officer or employee as part ofthe person's officiel duties Except as noted above, al ight are reserved by AIAG and no part of ese materials may be reproduced, reprinted, stored in @ retrieval system or ransmited, in any form or by any means, electron, photocopying, recording, or lherwise, without the pice \wnten permission of Automotive Indust Action Group. Copyright infingement isa vation of federal fw subject to criminal and ‘iv penalties. ‘AIAG and Automotive Industry Action Group are ristored service marks ofthe Automotive Industry Action Group. Automotive Industry ction Group makes no claim to ary vademark of tid pany. Trademarks of thid partes nuded in teze materials are the property of thelr respective owners (© 2014 Automotive Industry Action Group Isen#: 978 1 60534-3006CcQl-8 Layered Process Audits ‘Version 2 Issued 01/2014 AIAGAIAG» Layered Process Aus ecays or pk eranrn Version 2 Issued 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. At its 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 tesult of this minimal effort is tighter alignment toward organizational goals ~ which is a key to suecess in this highly competitive global marketplace. Ifyou'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 ¢ 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 Ifyou'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 i inthe 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 suceess factors for a value-add LPA are addressed in this revision of CQI-8: Top management support ‘+ Communication of the value to employees ‘+ Impactful auditscal-8 Layered Process Audits Version 2 Issued 01/2014 ACKNOWLEDGEMENTS AIAG. Bryan C. Book It Chrysler Group LLC Robert D, Francois IIL 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 Audis acarya opposes Version 2 Issued 01/2014 TABLE OF CONTENTS ABOUT AIAG. 1 FOREWORD 3 ACKNOWLEDGEMENTS 4 ‘TABLE OF CONTENTS, . 5 INTRODUCTION. 7 1.1 LPA DezITION AND PURPOSE... 7 2 VALUE OF THE LPA MANAGEMENT TOOL snes 8 2.1 HOW Wit LaveeD PROCESS AUDITS BENEFIT THE ORGANIZATION?. 8 3 TOP MANAGEMENT PLANNING . 9 3.1 LPA PROCESS OWNER... 8 3.2 LPAPLANNING Team 10 3.3 LPAScope eee sed 3.4 CusTOMER-SPECIFIC REQUIREMENTS on cans ei : 1 3.5 PROCESS PRIORITIZATION, rm 3.6 AUDIT LAYERS res = 12 3.7 DEVELOPING TeMPLATES FOR AUDITING AND REPORTING sont vn 12 3.8 DEVELOPING METRCS FOR LPA E-FECTIVENESS, nee el, 3.9 PA PROCEDURE sae nites hanannnannsnnnnae rea 3.10 STAKEHOLDER BLY-IN 14 4 DEPLOYMENT. 4.1 LPA imPcemenavion Tea WORKSHOP. “ asa peerieeks 4.2 TRAIN THE AUDTIORS nine 18 4.3 CommuNich Te THE LPA ROLLOUT To THE PROCESS AREA 18 5 CONDUCTING THE AUDIT.. 5.1 CONDUCTING THE AUDITS AND RECORDING THE FINDINGS. 49 5.2 OBSERVATIONS AND PERSONAL INTERACTIONS, 49 6 TOP MANAGEMENT REVIEW AND CONTINUOUS IMPROVEMENT OF LPAS, 6.1 ToP MANAGEMENT LPA Review. . i 6.2 CONTINUOUS IMPROVEMENT OF LPAS. 2 APPENDIX A - WHAT IS LPA?. APPENDIX B ~ RASIC.. APPENDIX C ~ FREQUENCY OF AUDIT BY LAYER.. APPENDIX D ~ AUDIT SCHEDULE ‘APPENDIX E- EXAMPLE CHECK SHEE} APPENDIX F ~ REPORTING EXAMPLE. APPENDIX G - GLOSSARYCcaQl-8 Layered Process Audits Version 2 Issued 01720%4 AIAG.»Ccal-8 Layered Process Audits Version Issued 0172014 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 are Machines/Equipment, Materials, Methods, Manpower, and Measurement. Nonconformances such as costly recalls, warranty issues, and customer and employee dissatisfaction are often caused by poor process control or by failure to follow the process instructions. Employees often complete process steps fiom memory, When necessary process changes are identified, employees must re-leam 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 nota control but a verification ofa 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.oe AIAG Layered Process Audits Version Issued 0172014 Ino cotas ek atemerce 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, ete.) © Reducing waste ‘+ Improving eash flow ‘© Improving product quality and customer satisfaction Reducing quality incidents (errors, serap, rework, ete.) Increasing First Time Capability © Measuring and encouraging work process standardization ‘© 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 ‘© Enabling management to implement corrective action and pursue continuous improvement + Institutionalizing training and process knowledge * Reducing the overall cost of poor quality While these are 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.AIAG» Cmte Lay Pace Ral ‘acts pa porarce Version Issued 01/2014 3 TOP MANAGEMENT PLANNING In nearly 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? 5. 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? Development of Audit and Reporting Templates ~ What will be the format for conducting the LPAs? For reporting results and actions? 8. Developing Metries 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 shoutd 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 LPAS; * Creating minting and updating, a equted, the LPA procedure(), 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 lesued 0172014 AIAG 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 member Corrective actions for issues in their areas are 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 minitnum—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 reinforee 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 ctitical to customer satisfaction, satisfying government regulations, or the performance of the organization. Layered Process Audits performed on low-riskAIAG 2m se Layered Process Audits ‘Toca pea potorarce 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 “Ifa 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 reduee the LPAs* effectiveness. Note that in no citeumstances 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 inelude 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.” If the 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-tisk or high-severity items from the PEMEA High scrap rate / low First Time Capability (PTC) * Low machine efficiency or high downtime / maintenance ‘+ Process nuns 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 characteristics, 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 (such as stopping the shipment of a product or resulting in a warranty field campaign). * Process is regulated by government standards, especially safety or environmental. ~ili-car AIAG 2 Layered Process Audits Version? Issues 012014 Tecate erzatcaerrnce ‘+ Process is critical to the funetioning 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 required to take part in the program. Auditors should come fiom every area of the ‘organization because someone unfamiliar with a process will tend to objectively review evidence and can have new insight to how itis 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 eritical items. This facilitates communication between management and the working-fevel team members. ‘The Layered Process Audit also demonstrates fo 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 consisteney across 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’s 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, stch 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 F.& 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cal-i AIAG neces acta pk peor Version? Issued 0112014 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 UT WCE CE) 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) | On-time completion of Comective Actions Repeat Non-Conformance in LPA Effectiveness of Corrective Actions (e.g, 8D3) KPls (see section 2.1) Effectiveness of the LPA program (e.g., effect on operating metrics) (See Appendix F for an example) 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: '* Conformance with Customers ‘© 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: pecifie Requirements '* Process Prioritization List =1314 CcaQl-8 Layered Process Audits Version 2 lssued 01/2044 ‘© 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-i ‘The Planning Team shall ensure buy-in from all stakeholders of the Layered Provess Audits. All stakeholders should commit to follow the process by performing audits as scheduled, reporting results, developing corrective and preventive actions for discovered isstes, 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 © Planni © Top Management (including the top manager in the facility) * Corporate Management ‘Team members 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,cals AIAG 2» Loyerad Process Au recat pat poten Version 2 Issued 01/204 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'a 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 Area 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(s)/staff 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 areas 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 metries. While LPAS are often used to drive improvement in a KPI, LPAs can also be used to maintain a KPI that is performing well. ~15-= AIAG 2m Layered Process Audits Version 2leeued 0172014 Tecate reed perenne 4.1.3 Develop audit check sheet questions (One of the mast critical elements of LPA implementation is defining the questions which will 0 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 Cheek Sheet Questions Question Explanation Reaction Plan 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 a specific process, not product, to ensure itis free of unwanted variation that could negatively affect the area’s selected KPIs. That said, it is not reasonable to verify all aspects of a process every day ~ there just isn’t enough time. As a general rule of thumb, a Layered Process Audit in an area should take 10 to 15 minutes (S 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. Question Creatio 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, SDINCR, Customer Concerns, Control Plan, Error Proofing verification, Lessons Learned, ete.), 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 itis recommenced 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, i 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 2 ‘proper’ setting without knowing the specifications and tolerances for the settingCcaQl-8 AIAG» ealiectac as 7 Version 2 Issued 01/2014 All audit question responses should be: * for conforming “No” or *X? for nonconforming ‘The development of LPA questions should use objective criteria such as machine settings, detail in work instruetions/standard work, error proofing verification, or specific customer requirements, LPAS are intended to verify general work elements that have a direct impact on quality or are likely to vary day-to-day. Examples include: *Yes’ or * 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 scrap, 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 verify 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. Muestion Reaction Pla 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 should follow this pre-established reaction plan to prompt the responsible individual to correet the situation. Ifthe nonconformance found creates a suspicion of nonconforming product downstream from the current operation, the responsible individual may take the decision to require containment and sorting to protect the customer and then initiate corrective action analysis, ‘Question Fine Tuning: After the questions are drafted, they should be reviewed with the Planning Team and tested with ‘one or 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. “We=18- cars AIAG Layered Process Audits Version 2 Issued 01/2014 recta rok eremac8 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 is 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 too! will help them,AIAG 2a cars orp poorae Version 2 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: |. Cheek the LPA schedule for audit assignment: date, time, process area. 2. Obtain the appropriate LPA check sheet (e.g., fiom 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. to fill out all Perform the audit according to the questions on the LPA check sheet. Be su relevant header information. 6. If the response to an audit question is *Yes,” document it as such and then the auditor will move on to the next question, 7. Ifthe response to an audit question is ‘No,’ then the auditor has found a noneonformance 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 a nonconformance is found for that question. Ifthe problem is corrected during the audi, then actions taken are recorded on the check sheet, The issue is still recorded as a noneonformance even though it is ‘corrected and added to the management summary. 9. Repeat issues may be a sign that there is a systemic issue that needs to be addressed. 10. I 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 thatthe 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~including Top Management--provide value by acknowledging people’s effort in following standard work. It is 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.-20- cal-8 Layered Process Audits Version 2 Issued 01/2014 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AIAG_&» cae Layered Process Aus 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, if needed. It is the responsibility of Top Management to review LPA meties (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-Specifie 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 completed actions * review data/metries ( LPA metries and organization KPIs) — trends, repeat issues, LPAS updated/reviewed 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 adjusting LPAs to address any weaknesses and opportunities for improvement. Typically, weaknesses or opportunities for improvement that should be addressed include: ‘+ Lack of management review ot lack of full support by Top Management + No consequences for not conducting audits ‘© Check sheets too long or cumbersome © Questions that do not address the sources of process variation= AIAG 2 Layered Process Audits Version 2 Issued 0172014 The cath peak pomere '* 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, KPIs, ete.) or ensuring they are covered in LPAs.AIAG» APPENDIX A - WHAT IS LPA? followed. CQI-8 Layered Process Audits Version 2 Issued 01/2014 Perches 1A quality audit of patt characteristics. 2. Owned by the operational group where the audit is| conducted, (e.g.: Manufacturing. 2. Owned by any support group, (e.g: Quality). 3. Conducted by multiple management levels of personnel in a given facility, 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 pars or other product charactersties, 5. A short list of key and high-risk processes, process steps, and procedures, 5. A long “laundry list” of items that include items not contributing to customer satisfaction, 6. Completed on regular, pre-determined frequency. 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 to add to the process control plan, TI. 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 12, An audit where non-conformances are noted and addressed ata later time or after a certain number have 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 waiehing, a 16, An audit of selected processes and procedures / steps. 16. A replacement for internal Quality Management System (e.g. ISO/TS 16949) aucits-24- Ccal-8 Layered Process Audits Version 2 issued 01/2014 APPENDIX B — RASIC Layered Process Audit Steps 3 5 2 é AIAG» iden he PAPanning Tosh conte Palm evch are 9 Desay andimplenan crete eons 17 raya ne periormance els gy eqatesptenie aut ane aeons 7 Aias Top Waregpnent condo Warogimor Ravew™ [cfesomse The person wh Binaay spon for deivering he 8 fo: csunabie Th person who Fas imate asuniy rd approval thar Jnereview and ante es anaare the aan to hor evecare fs: Senpertve Tetum o person upporing the rea work with reser mater benef They we wmmitesto completion sen bt ot voted il econ ing, Tl bingecal-8 Layered Process Audits Version 2 Issued 01204 APPENDIX C —- FREQUENCY OF AUDIT BY LAYER ‘heme Automotive Audit Assignment a T T ] eile ee | HH OH Of OG mere ‘Supentsor 1 Own Dept i persnim 1 pershin nes toco va owe seins bein eed pei oa eee ‘Area Manager 1 Gwn Area 5 2 caps par week ——> ice steer —— ciara fess I Sate ie mui Saanee oat eaiee ieee ae pa ee een tonne a oe ee oe 3) eos oe Se von eae-26- cal-8 Layered Process Audits Version 2 lssued 01/2014 AIAG.» Iecarye orp paromarce APPENDIX D — AUDIT SCHEDULE Week of July 19 Layer Statt Member Sve, lant Manager Narco, Contater ano, HR Clas, Purchasing Lu Engineer ‘Acun, Quay | “otal Plant Checks forthe week Acme Automotive LPA Staff Level Audit Tracking Form ‘Rong 6 wok sched (arp and add our woeks every mont) ‘Aust Frequency Requires ‘1 per week 1 por wack 4 por w 1 por wook 1 per week 1 per week . Incomploto Audit Completed Auaitcal-8 Layered Process Audits Version 2 Issued 01/2014 APPENDIX E - EXAMPLE CHECK SHEET ‘Acme Automotive LPA- Process Cortrol Audit Pca, igtetaetbeanannduthacict’ ane {ntti opningdnnhrlar a naar dedewnvcor needs ha proceitine Dept O Week Beginning: osomeegans 048 05 XF oer Word Motors shit say a chshebges ra a eye tier frat nose sass ¢ Ta Toe [ee [re [a on] ce | Sa [oyna ee RET TOT soe soe tu | sve [rete oe rn bss neon eesti bend ma ea wes Tshadsera ane ee CPA fs 0. / ena] ROBB ea in aloe cr eas Ny} Vv 4) v peers, Iecoeemwauiteonnnenm sry orenae oy tn cpmmrchcing hee tent wo sn ana tep et lo fsa2 —Javtrcouoie xe mana trae stent andhente say ana Sptooi ova’ neueert nal ¥ na | [Priors sae Sa or gutta Se aow aac ra = ee eae ‘ntnanbe sth chs sun ue Plas Is an atonal quly or manutctring ane Bhcal-8 Layered Process Audits Version 2 Issued 01/2014 APPENDIX F — REPORTING EXAMPLE Layered Process Audit Results 2013 Annual Non Conformances % In Compliance ame | semmerconems | | sseun 000 | soon score lan feb Mar Apr Stay din Wl Aw S49 Om Nov Ow | in Corplnes] 99.1% | 98.6] 96.08] 95 98 ri] aa 8] esc] oa ri] vetRemeon WPA Audit) 10 a) a) 20 19h soripasuais| a5 | af ail ao] aif aol a) a “otal Wo nam aucted!—46o_| esol sto] 00] aio] 330) 00] apo] ae] Hof ers in Comptence| 456_| 433] soo] sas] 05] anal ase] 5] as on conformance) 4 a fata ta ononfowmances ian fet ar__ for May nop Seo Gover eu (Gostomer Concer] 0 i r ra 2 1 5 Taste 0 r 2 Setup Poa Yrs} 0 0 z ‘peat instrcions o o r roars Control 2 z t Calbatons © 2 2 Pac o ° °cals AIAG pede ecole & pat potas Version 2 Issued 01/2014 APPENDIX G - GLOSSARY Audit: Systemic, independent and documented process for obtaining audit evidence and evaluating it objectively to determine the extent of which audit criteria are fulfilled, Conformity: Fulfillment ofa requirement Corrective Action: Action to eliminate the cause ofa 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 produetion 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, oF complaints. Organization: Group of people and facilities with an arrangement of responsibilities, authorities and relationships. Performance Indicators: Key Outcome Indicator: KOI’s 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 values and the target. » Key Performance Indicator: KPI’s are those metrics most critical to gauging progression toward objectives. Ks 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. > KPIKOI Scorecard: A specific application of a scorecard, a KOVKPI scorecard is used to measure progress toward a given set of KPls or KOls. Predictive Maintenance: Activities based on process data aimed at the avoidance of maintenance problems by prediction of likely failure modes. -29--30- caQl-8 Layered Process Audits Version 2 issued 01/2014 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 fo 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: Degree to whieh a set of inherent characteristic fulfils requirements. > NOTE: “Inherent”, as opposed to “assigned”, means existing in something, especially as a permanent characteristic. 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.g.; 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 a given item fulfills specified requirements.1-8 AIAG» Lapis ct a rocatyet orp prone Version? Issued 0172014 MAINTENANCE REQUEST FORM Name of Submitter: Date: Company: Company Address: Phone: Fax: E-mail: Resse sss Page Number of Change: Document Currently Reads: Recommended Changos/Should Read: Reason for Change (Use additional sheets if necessary): Signature of Submitter: PRS sro ‘Manager's Recommendation: Final Disposition: Comments: COMM eee er ‘Automotive Industry Action Group + 26200 Lahser Road + Suite 200 = Southfield, MI 48033, Telephone: (248) 358-3570 + Fax: (248) 358-3253 ‘Web: www.aiag.org -31-