Volkswagen China airbag recall – what can be learned from process failure
Systems that underpin relationships between carmakers and part suppliers can be improved to prevent serious incidents happening in the future, say process excellence experts
German car giant Volkswagen last month recalled 4.8m vehicles in China that had faulty front airbags made by Japanese parts manufacturer Takata following concerns about safety.
The Chinese government’s safety watchdog had previously expressed similar concerns about Takata airbags installed in General Motors and Mercedes-Benz cars on the back of fears they could explode emitting shrapnel.
Volkswagen has been beset with quality issues in China this year. Also this September, 1.82 million vehicles were recalled because of fuel pump problems and in March the carmaker recalled 680,000 vehicles on the back of concerns that coolant problems could lead to engine fires.
Process excellence experts said that the business processes that underpin relationships between car manufacturers and suppliers can be improved to prevent such incidents happening in the future.
Lack of transparency
Rinkal Desai, an expert in manufacturing at the University of Warwick, said there was an institutional reluctance among part suppliers to make inspection data available to larger manufacturers purchasing their products. However, if a more transparent relationship between maker and supplier was introduced then farcical widespread product recalls like the one that arose in China can be avoided.
“Suppliers are hesitant to provide inspection data,” Desai said. “But [this hesitation] can ultimately lead to the catastrophic failure of the product.”
“Both sides – supplier and manufacturer – end up asking whose fault is it when it goes wrong.”
“The supplier will be at fault for providing defective components and the customer – in this case Volkswagen – will also be at fault for not inspecting the components at their side,” adds Desai.
Concerns about Takata’s airbags date back to 2008 and may have been linked to 18 deaths and 180 injuries worldwide. The Japanese automotive part maker bankruptcy in June this year and is in the process of restructuring its business in the face of tens of billions of dollars in liabilities.
There is also an institutional unwillingness at many large manufacturers and suppliers to admit mistakes and swallow the resultant costs which is why the recall process is often delayed – which can exacerbate the problem, said David Collins, chief operating officer at China-focused industrial consultant China Manufacturing Consultants.
“There is not much margin on a car; it’s not a profitable business. Carmakers make a decision on cost compared to cost – for example how much it costs to recall versus how much it costs to settle lawsuits.”
Manufacturers need to “develop a culture that values the person who brings the bad news,” Collins said. He also said supplier industries should be more open-minded when addressing quality concerns and recommended looking to other industries for solutions. “In the case of the Takata airbag, the problem was not as much an engineering issue but a chemistry issue. It would have been a good idea to go to sources in the automotive industry and or explosive, chemistry and other industries that use that type of system,” he said.
Better process standards
The Production Part Approval Process (PPAP) is the standard used by the global automotive supply chain to ensure the quality of third-party components. The standard sets rigorous rules about how parts are tested and documented and relies on the supplier’s involvement at every stage of the testing process.
Desai speculates that a failure to adhere to the PPAP may have occurred because of the large amount of resources suppliers [such as Takata] need to meet every element of the standard. He suggests more employees may need to be trained in PPAP standards so that its expectations are understood at all levels.
"A focus on process control by suppliers is absolutely paramount… so that variation is detected at a very early stage”
“Putting in place additional inspections would reduce the number of defects but this would be very time consuming and come at a cost,” Desai said. “Nonetheless, a focus on process control by suppliers is absolutely paramount… so that variation is detected at a very early stage,” Desai added.
“Ultimately, to reduce the potential for a defective product being produced, a more transparent and cooperative relationship between carmaker and supplier is essential. Not only to build trust into the system but to assure each party that what is being developed and eventually produced is compliant and to the agreed specifications.”
A Volkswagen spokesperson said that following the recall of airbags in China the automaker has set up a large-scale analysis program to assess company processes.