a case study: best practices for automotive parts import safety bradley a. pritts the bradley group...
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A Case Study: Best Practices forAutomotive Parts Import Safety
bradley a. prittsthe bradley group
detroit, michigan [email protected]
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetyScope of Presentation
• National Highway Traffic Safety Administration-- Regulatory Approach, with focus on import safety
• Company Case Background & Goals– HDBrakes Company engaged in manufacturing/
Importing/ Assembly – Heavy Duty Truck Drum Brake components (Disguised case)
– Specific focus: Ensuring product safety for imported components
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import Safety
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Products Heavy duty brake components – brake shoes, friction material, “hardware” – springs, rollers, clips, fasteners
Best Practices for Automotive Parts Import Safety
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Suppliers Organization’s own factory, plus 7 small to medium size Chinese factories
Best Practices for Automotive Parts Import Safety
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
End Products -- “Wheel end kit” – all parts needed for brake shoe replacement
-- Individual parts available separately (unlined shoes, friction, hardware)
Best Practices for Automotive Parts Import Safety
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Experience Manufacturing over 50 years.
Importing from China for 10 years
10 – 20 cargo containers per month imported
Best Practices for Automotive Parts Import Safety
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetyImport product hazards gain visibility
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Product Hazards – All Products
Big increase in visibility in mid 2000’s, particularly as imports from China increased
Best Practices for Automotive Parts Import SafetyHazardous import incidents
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
•2004: Drywall with hydrogen sulfide emission
•2006: Pesticide/ Drug Residues in farm-raised seafood lead to import alert requiring compliance testing
•2007: Melamine in pet foods, killing some pets
•2007: Toothpaste contaminated with diethethylene
glycol (identified and contained before any casualties)•2007: Toys with lead paint, other lead content (some exposure, effects unclear)
Best Practices for Automotive Parts Import SafetyGovernment Response
President Bush convenes a cross-agency task force (CBP, FDA, CPSC, EPA, NHTSA, ATF…)
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import Safety
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import Safety
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Approach Continue reliance on private sector, with increased education, preventive efforts, and enforcement
Best Practices for Automotive Parts Import SafetyNational Highway Traffic Safety Administration Background
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Created by Congress and chartered to improve highway safety, through attention to highways, vehicles, drivers, and related jurisdiction
(Coordinates with EPA, who regulate emissions issues)
Acronym: NHTSA (nit-sa)
Auto and truck enforcement includes responsibility for parts and certain equipment items (e.g. motorcycle helmets and infant safety seats), but the primary emphasis is on the full vehicle and its major systems
Goal is to minimize (and someday, eliminate) highway injuries and fatalities
Best Practices for Automotive Parts Import SafetyNHTSA Regulatory Approach
– Most of the standards apply to the vehicle system rather than individual components.
– Most standards are performance-based based rather than prescriptive
• Example: brake systems judged by stopping distance, hill hold test performance
– Primary responsibility given to manufacturer/ importer, who must warrant compliance and safety
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetyNHTSA Regulatory Approach
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Compliance testing: occasional random sampling, complaint/ defect investigation driven
No specific “good manufacturing practices” standards, as are used in FDA and certain other agencies
Private product liability litigation is very active, supplementing regulatory controls
Best Practices for Automotive Parts Import SafetyNHTSA Approach: How well is it working?
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Bottom line: transportation safety continues to improve!
While transportation volumes continue to increase, fatalities have been shrinking in both absolute and relative terms.
Best Practices for Automotive Parts Import SafetyNHTSA Approach: How well is it working?
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Total US Fatal Crashes and Casualties - 1999 - 2009
0
10,000
20,000
30,000
40,000
50,000
Fatal CrashesTotal Fatalities
Best Practices for Automotive Parts Import SafetyNHTSA Approach: How well is it working?
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
US Casualty Incident Rates - Deaths - 1999 - 2009
0
5
10
15
20
25
Per
100
,000
0
1
2
3
4
Per
100
Mil
lio
n M
iles
per 100,000 Population
per 100,000 Registered Vehicles
Per 100 Million Miles Traveled
Best Practices for Automotive Parts Import SafetyWhile any crash is bad…
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetyMajor safety problems are driver behavior issues
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Contributing factor Present
Not staying in lane/on the road
24%
Excessive speed 21%
Driver alcohol impaired 14%
Driver distracted 9%
Next 10 specific factors 31%
Best Practices for Automotive Parts Import Safety Major safety problems are driver behavior issues
– Drivers/ occupants unrestrained in 55% of fatalities
– Vehicle defects don’t even make the list!
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetyBut: vehicle safety picture isn’t perfect!
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Consumer complaints to NHTSA
30,000 per year
Recalls – mandated and voluntary (2006 – 2008)
524 recall campaigns
23.5 million vehicles affected
Best Practices for Automotive Parts Import SafetyBut: vehicle safety picture isn’t perfect!
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Ford Explorer – 203 rollover deaths 1990 – 2002
Best Practices for Automotive Parts Import SafetyBut: vehicle safety picture isn’t perfect!
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Toyota sudden acceleration related complaints: 89 deaths, 2000 - 2010
Best Practices for Automotive Parts Import SafetyBut: vehicle safety picture isn’t perfect!
Parts imports: Some NHTSA activity, but infrequent (and often initiated by the private sector: e.g. passenger car brake rotor concerns raised by domestic brake manufacturers)
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetyNHTSA’s response to import safety:
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
No new regulations established. (Current regulations already impose strict liability.)
Continue international discussions on safety regulations, particularly toward harmonizing existing regulations across nations
Study and educate industry on their existing legal obligations and best practices for performance and compliance
Best Practices for Automotive Parts Import SafetySummary of the Best Practice guidelines
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Fully understand the Importer’s Obligations under US law
Exercise great care In Selecting Manufacturers and Establishing Business Plans
Inspect foreign manufacturing facilities, evaluating the company, factory and staff
Inspect Goods (either before they are exported or distributed)
Identify the product
Establish a Customer Service Program
Best Practices for Automotive Parts Import SafetyBest Practice guidelines as published
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetySummary of the Best Practice guidelines
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetyExample detail – Section 2 (Excerpt)
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
…
(i) Establishing a Business Plan
International trade presents unique risks. A company engaged in importing
foreign manufactured goods or considering becoming an importer
should have a complete and detailed business plan. The plan should reflect
careful consideration of the following questions:
• Who will determine the specifications for the product?
• On what basis will the product specifications be developed?
• Who will design the product?
• Who will verify the product’s design?
• What laboratory and field tests will be undertaken?
• Who will test product prototypes? ….
Best Practices for Automotive Parts Import SafetyOriginal Text Example: section 2 (Excerpt)
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
(iii) Product Design Considerations
It would be advisable for the importer to focus on the specifications for, and design of, the product and the requirements of all applicable FMVSS covering the product that it wishes to import before beginning negotiations with a prospective overseas business
partner. The importer should be well informed about U.S. import regulations and any FMVSS requirements that cover
the products the importer intends to import. Before discussions take place with a prospective fabricating manufacturer, it may be worthwhile for the importer to have translated into the
language used by that manufacturer the FMVSS that are applicable to the product and the agency regulations pertaining to manufacturers located outside the United States.
Best Practices for Automotive Parts Import SafetyRestatement example – section 2 (Excerpt)
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Original Text Restatement
International trade presents unique risks. A company engaged in importing foreign manufactured goods or considering becoming an importer should have a complete and detailed business plan. The plan should reflect careful consideration of the following questions:
A company engaged in, or considering, importing foreign manufactured goods should have a complete and detailed business plan. The plan should reflect design/ development responsibilities as follows:
- Who will determine the specifications for the product?
Responsibility for determining specifications should be established.
-On what basis will the product specifications be developed?
A method for developing specifications should be established.
Best Practices for Automotive Parts Import SafetyRestatement – section 2 (Excerpt)
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Original Text Restatement
On what basis will the product specifications be developed?
The method for developing specifications should include (Design input):
-FMVSS requirements
-Legal import requirements
-A study of the OEM part, if any
-Product performance objectives
-Accepted national/ international product standards, if existing
Best Practices for Automotive Parts Import SafetyExample detail – section 2 (Excerpt)
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Restatement Self-Assessment
Responsibility for determining specifications should be established.
HD Brake maintains responsibility for determining specifications.
A method for developing specifications should be established.
HD Brake has a series of procedures for determining specifications which includes FMVSS requirements; product functional requirements and performance objectives…
Best Practices for Automotive Parts Import SafetyExample detail – section 2 (Excerpt)
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Self-Assessment Improvement Goals
HD Brake maintains responsibility for determining specifications.
None required.
HD Brake has a series of procedures for determining specifications which includes FMVSS requirements; product functional requirements and performance objectives…
Need to develop a routine means for scanning FMVSS and other
industry requirements for changes.
Best Practices for Automotive Parts Import SafetySelf-Assessment Summary
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Practice 1. Fully understand importer’s obligations
Strengths Long familiarity with regulations; evidence of consistent compliance
Areas for Discussion
Need for ongoing monitoring of regulatory activity
Improvement goals
Designate responsibility and quarterly review of regulatory/ legal activity.
Best Practices for Automotive Parts Import SafetySelf-Assessment Summary
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Practice Exercise great care In Selecting Manufacturers and Establishing Business Plans
Strengths Depth of engagement with supplier factories (as well as competition and potential suppliers); well established approach
Areas for Discussion
Corporate/ company structures are not always transparent, and may not be fully understood.
Improvement goals
Expand our attention to corporate-level issues: company ownership, land “ownership”, local position and references
Best Practices for Automotive Parts Import SafetySelf-Assessment Summary
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetySelf-Assessment Summary
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Practice Inspect Goods (either before they are exported or distributed)
Strengths Third party inspections to demonstrate factory competence; random checks once competence shown; ongoing shop floor process audits
Areas for Discussion
Ongoing inspection program focused on low cost, easy to measure characteristics, may be neglecting important attributes
Improvement goals
Establish annual re-verification of FMVSS compliance
for friction (need to agree on financial responsibility)
Best Practices for Automotive Parts Import SafetySelf-Assessment Summary
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetySelf-Assessment Summary
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Practice Identify the product
Strengths Friction, brake shoes identified with lot codes. All legal requirements for identification in compliance.
Areas for Discussion
Brake hardware identified only at the kit (package) level; records do not clearly show factory of origin
Improvement goals
Develop recordkeeping system to track lots by factory
of origin.
Best Practices for Automotive Parts Import SafetySelf-Assessment Summary
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Best Practices for Automotive Parts Import SafetySelf-Assessment Summary
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
Practice Establish a Customer Service Program
Strengths Close customer contacts through customer service personnel; history/ reputation addressing product issues; experience with containment
Areas for Discussion
Current lot control system depends on customer packaging for lot information (for brake hardware)
Improvement goals
Consider establishing recordkeeping of specific lot codes during shipping process (depends on new
warehouse management software, under study.)
Best Practices for Automotive Parts Import SafetyLessons Learned – Company Perspective
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
-The original document as issued by NHTSA is conversational in style; this helps its readability but does not support systematic self-assessment.
-A restatement for self-assessment can make the process more effective.
-While the company has done numerous full management reviews of the QMS, a safety-focused review brought new insights.
Best Practices for Automotive Parts Import SafetyLessons Learned/ Observations – National viewpoint
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
- The overall record of vehicle and component safety has continued to improve; it is too soon to say whether the NHTSA effort has made positive contributions but at the very least there is no evidence of unfavorable trends.
- During informal discussions, few quality professionals were aware of the document’s existence. More promotion of the document could be beneficial.
Best Practices for Automotive Parts Import SafetyPotential Research Questions
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts
- Different agencies pursued different strategies – promoting best practices, increasing inspections, emphasizing international standardization. Comparison of the overall results could give useful policy guidance.
- Broader study of a sample of automotive importers could provide an overall perspective on actual deployment of these practices, and corresponding risks.
Best Practices for Automotive Parts Import SafetyWrap-up!
Thanks for your attention!
For more info, contact: Brad Pritts …… [email protected]
001 734 834 3675
19th Annual International Conference on ISO 9000 © 2011 Bradley A. Pritts