When Jd Marhevko speaks about how to measure performance, apply solutions and improve overall quality, suppliers listen.
Currently, Vice President of Quality for a major Tier 1 automotive supplier, Jd built her reputation over decades in the automotive industry. Starting college at just 16, Jd studied engineering, which she saw as a road out of poverty. Around the same time, she rebuilt her first engine on a fishing trip with her grandfather, a Chrysler employee and operations expert, after she accidentally dropped their boat’s motor in the water.
The award-winning quality guru offers her sage advice on this episode of Automotive Supply Chain Prophets. She believes that silos — whether good or bad — are culturally dependent and that without looking at leading indicators, lagging indicators can create a reactive environment.
Themes discussed in this episode:
- The effects of recent supply chain disruptions on problem-solving for OEMs
- How offshoring has given suppliers leverage in a time of shortages
- Quality and delivery as a single, intertwined metric
- The importance of geographic diversity when it comes to supply chain contingency planning
- Why automotive supply chain leaders need to apply lean management to their systems
At the heart of The Prophets’ vision are “The 24 Essential Supply Chain Processes.” What are they? Find out, and see the future yourself. Click here
Featured on this Episode
Name: Jd Marhevko
Title: Vice President of Quality, Major Tier 1 automotive supplier
What she does: Jd is a revered expert in Quality, working in Operations and LSS efforts for almost 30 years. Jd is an ASQ Fellow, Shainin Medalist and in 2016, was recognized as one of the top 100 women in manufacturing by NAM. She holds an ASQ CMQ/OE, CQE, CSSBB and is an ASQ Certified Trainer. Jd has co-authored 5 books on Quality and Lean Management systems.
Timestamped inflection points from the show
[1:00] A standout: Quality expert Jd Marhevko is an ASQ fellow, a Shainin medalist, was named a “Notable Woman in Manufacturing” by Crain’s Detroit in 2018, and in 2020, was inducted into the Women in Manufacturing Hall of Fame.
[2:31] Early exposure: Jd grew up working with her grandfather, a tool and die maker for Chrysler for 46 years and an operations expert. At his behest, Jd rebuilt her first engine after she accidentally dropped their boat’s motor into the water while they were fishing.
[4:35] A realignment: Jd’s most recent assignment was remote and globally distributed. Of the many disruptions the industry has experienced in recent years, Jd says the cumulative effect hasn’t been negative but has forced “an intensive readjustment to Agile problem-solving.”
[6:52] Delivery is the sum of its parts: Jd sees quality and delivery as inseparable metrics in that “delivery incorporates and includes quality of that product in that definition of delivery.”
[10:51] Transactional analysis: Jd thinks the most effective tool to break down silos in an organization is, “value stream mapping of the transactional activities.”
[13:46] Preventing a reaction, preparing a response: Organizations should track lagging and leading indicators. Jd says that only tracking lagging indicators fosters, “a very reactive environment.”
[15:09] Some favorite leading indicators: Leading indicators Jd recommends OEMs track include operational equipment effectiveness (OEE), maintenance KPIs and the upfront supply chain.
[18:38] Check your sources: If COVID taught us anything about contingency planning it’s that, as Jd predicts, manufacturers will make sure not all of their suppliers are located in one region (i.e. Asia).
[20:18] The one thing: The one action automotive suppliers must take now to improve delivery performance from a quality perspective is to apply Lean Management to their systems because it will enable them to understand what their exact position is, “and what they can do from an Agile perspective,” Jd says.
[8:49] “The shortages are real but keep in mind that the supply chain themselves, this is their cash cow, this is their heyday. They are allowed to manage pricing with very little [accountability], and it’s not necessarily something that they’re looking to say, well, let me flood the market now, so that they can devalue and commoditize their component tree, and it puts the downstream teams in a very precarious position.”
[10:51] “The strongest process that I’ve seen is value stream mapping of the transactional activities. Many people are really good at doing it in the production environment, on the floor, in the cellular manufacturing, but they very rarely lay out the transactional processes and how things interact with each other, and that’s absolutely key in busting silos.”
[12:55] “As I work with teams, one of the key things that I have to have people remember is that you want the data to work for you, and in doing this you need to be very editorial in terms of what that output should be. You want that data coming in at the lowest level of the business as possible from a leading indicator perspective. ”
[13:46] “If you’re only tracking lagging indicators, which I find many companies do, it forces a very reactive environment.”
[15:19] “If OEE (Operational Equipment Effectiveness) is not functioning well, you can’t deliver. The other key leading indicator that I look at are the maintenance KPIs, and then a third of course, is the upfront supply chain.”
We really can’t predict the future because nobody can. What we can do though, is help auto manufacturers recognize, prepare for in profit from whatever comes next. Auto Supply Chain Prophets gives you timely and relevant insights and best practices from industry leaders. It’s all about what’s happening now in the automotive supply chain and how to prepare your organization for the future because the auto supply chain is where the money is.
Jan Griffiths: 00:40
Hello and welcome to another episode of the Auto Supply Chain Prophets podcast and today we have a recognized quality guru in the automotive industry joining us. Yes, we’re gonna be talking to JD Marhevko and don’t take my word for it that she is a quality guru. She is an ASQ fellow. A shaman medalist. Keep in mind that that is an esteemed distinction awarded to just a small number of people. She was recognized by cranes as a notable woman in manufacturing and in 2020. JD was inducted into the inaugural USA women and manufacturing Hall of Fame to name but a few of her awards and accomplishments. In this episode, you will learn about the relationship between quality and delivery. The readjustment to agile problem solving in the world of disruption, and why we need to use the essence to break down silos. JD, welcome to the show.
JD Marhevko: 01:50
Thank you so much, Jan.
Jan Griffiths: 01:53
JD, what’s your story?
JD Marhevko: 01:56
Once upon a time in a land far, far away. I grew up really poor. All of the kids had to work to bring money into the household and I started almost full time work as a paper route during the bicycle’s throughout. And I knew growing up, I didn’t want to be poor again. So the most likely avenue to do that was to be some kind of an engineer. So I had that well established that I needed to be an engineer, so I could have what I wanted to have as an adult. As I went through my college years, I started college at the age of 16. I actually did a lot of work with my grandfather, who was an operations expert. He was a tool and die maker for Chrysler for over 46 years. And we used to go fishing a lot. And one day I dropped the engine, the boat motor into the lake. And grandpa made me rebuild the engine that day, not one of my finer moments. But that was the first time I rebuilt an engine. Fast forward 16 years later, I’m running my first engine plant. And in doing so, it gave me a lot of these to call it chips in your shoes, hands on physical experience in working with operations and people throughout the processes and learning to listen to understand, so that as people were telling me what they needed to do their jobs well, I was able to be put into a position to help remove barriers to provide those activities. I have now had more than 30 years running various forms of operational levels, positions, manufacturing facilities, quality and lean systems maintenance. And in all of those roles, I continue to learn just so many new things. And I’m blessed with all of the team members and the mentors that I’ve had throughout my career. So I tried to give back. I heavily volunteer through the professional societies like American Society for Quality, AME, the Association Manufacturing of Excellence, Cadia. There’s just so many organizations that we try to help be a part of, so that we can make a difference in how we give back through the world.
Cathy Fisher: 04:08
JD You are such an awesome representative of quality and manufacturing, especially women pursuing those careers in the automotive industry today. We’re curious to know your perspective on what’s going on with all of these disruptions that have impacted all industries, but in particular, the automotive industry over the past several years. How have you seen this impact? from a quality perspective? What has been the impact?
JD Marhevko: 04:35
It’s been interesting. The most recent role I took on I didn’t meet a single leadership team member. I didn’t meet my boss. I didn’t meet anybody for over six months. So I was completely working virtually. And I have to say and it’s a global team that that we have in my current environment. And with that, we have been able to positively affect every single key metric. So as I look at the effect that this has had on quality and quality systems, it’s not so much a negative, per se, on the product deliverables. What has happened is that there’s been an intensive readjustment to agile problem solving. How do we get rapidly to the teams that are there doing the work in the moment, so that we can remove whatever barriers are in their way so they can be effective. We’ve had to rapidly adapt and redesign our validation testing processes, and through product and process deviations going out throughout the world, on a variety of products and processes to manage wide scale substitutions. Because today, it’s here and tomorrow, I can’t get any of those. And in the act of doing these activities, it’s it’s been really crucial to keep that end user in mind and how that product is being used. Because the subject matter experts can’t get to these locations, or they haven’t been able to get to those locations to help the people that are implementing the changes. So it’s just been a huge reshuffling of how you do your work in an agile manner. That makes a difference.
Cathy Fisher: 06:12
You know, we’ve seen that many organizations when it comes to describing quality or supplier performance, they look at quality from both the perspective of the product quality itself as well as delivery, which should be part of the equation, certainly. But one of the disparities that Terry and I have recognized is that on supplier scorecards, typically, quality is given, you know, the say the majority 80%, or more of the balance and delivery on time delivery is only about 15%. Why do you think that there’s not that equivalent view of delivery at the same level of product quality?
JD Marhevko: 06:52
I think there’s a synonymous term with delivery. Delivery incorporates and includes quality of that product in that definition of delivery. So I don’t think it’s any less important, you have to have both you need it on time, or you can’t deliver anyway. But you also need it to work well. And the point is, is that so many companies are have been very, very successful with their forms of lean systems, using the level loading and Heijunka systems and various forms of just in time. And those are all critically dependent in many of our high volume production processes. And there’s a higher dependency even more on delivery, especially when you have very complex manufacturing processes. For example, in the world of printed circuit boards, you can have hundreds to 1000 components on a single board. And if one piece doesn’t show up, you can’t build anything, you’re just stuck. So with that said, delivery is a key critical component. Nevertheless, it still has to be right.
Cathy Fisher: 07:58
It’s interesting at the start of the COVID disruption that the automotive industry experience. As the OEM started talking about really starting their operations and suppliers were saying, Okay, where are we going to get some breathing room, some liberty. Immediately, the OEMs came out and said, product quality is not negotiable. And we still wonder like, when is the the delivery situation in the automotive industry going to rectify itself? And do we need to put more pressure on the supply base to give attention to the delivery? How do you think about that?
JD Marhevko: 08:34
Yeah, that’s a challenge. The the barrier to entry on some of these products and processes is yours. And it’s an extensive capital layout. So it’s not like flipping a switch and having these products made available to you right away. The shortages are real. But keep in mind that the supply chain themselves, this is their cash cow This is their heyday. They are allowed to manage pricing with very little impunity. And it’s not necessarily something that they’re looking to say, well, let me flood the market now. So that they can devalue and commoditize their component tree. It puts the downstream teams in a in a very precarious position. From a United States perspective, we’ve offshored so many things, and we don’t have the infrastructure in the US. We don’t have the knowledgeable labor. In the US, we have our older you no baby boomers leaving for retirement purposes. And we don’t have the replacement pool of effective personnel coming in underneath. It’s a complex situation. There’s a lot of moving parts there. Nevertheless, the opportunity is for people to be more forward looking.
Terry Onica: 09:48
JD, we often see that quality supply chain and IT are siloed in a lot of organizations, and with all that’s happened over the past couple of years, but Cathy and I really feel this has to change, we have to break down those silos and start working together. What would you recommend organizations do to attempt to break down the silos and remove them.
JD Marhevko: 10:09
Silos to me seem to be culturally dependent, whether good or bad. I’ve been in a lot of different companies throughout my career. And I have seen matrix organizations, hierarchical based organizations, functional based organizations, both be very siloed, or be very transactional in their approach. So it’s the culture and how, in my mind, and what I’ve seen how they approach lean. When you have companies that are focused on lean systems and process flow, the leadership in those organizations are often very well educated, and they’re able to understand and apply those precepts themselves to create that fluid cross functional flow. The strongest process that I’ve seen is value stream mapping of the transactional activities. Many people are really good at doing it in the production environment, on the floor, in the cellular manufacturing, but they very rarely lay out the transactional processes and how things interact with each other. And that’s absolutely key in busting silos. You’ve got the team together, whether they’re cross geographies or not, but then they understand what they need to provide to each other and how they can help each other do a more effective process. And this is the “Make It or Break It” tool that I’ve seen, that’s been very, very effective here to bust silos.
Cathy Fisher: 11:29
Yeah. JD I love that, you know. Value Stream Mapping is such a valuable tool. And it’s an it’s a simple tool for really getting a perspective on your processes, we oftentimes find that organizations tend to focus the application of Value Stream Mapping simply on the shop floor, and they miss the overall supply chain or value chain, from end to end. So that’s really, you know, one of the things that we’re encouraging organizations to look at is, you know, breaking down those silos is recognizing the overall value chain and the flow of information, as well as the flow of product through their operations as well. We’re curious to know, what you have seen as far as best practices and applying technology to manage these value streams, in particular, from the standpoint of being able to communicate information in real time, data capture, data analysis for decision making. What are your experiences, from the technology perspective?
JD Marhevko: 12:19
There’s just a tremendous movement and what they call, you know, industry 4.0, quality 4.0, whatever 4.0 version you want to hang on it, and the digitization of data, and enabling that data collection, management and translation are so critical in today’s world that we need. And a challenge is that teams really need to manage that influx of information that they’ve got, you see, tons and tons of KPIs now that have to be managed, and people are so overwhelmed. Because it’s so easy to program something and just make lots of data come out the back end. So as I work with teams, one of the things that key things that I have to have people remember is that you want the data to work for you. And in doing this, you need to be very editorial in terms of what that output should be. You want that data coming in at the lowest level of the business as possible. From a leading indicator perspective, Benjamin Franklin said, if you manage your your pennies, your dollars will take care of themselves. And I take that as a leading lagging indicator. If you manage the things underneath the the details, then you don’t need to worry about the big stuff that’s coming out the out of the process.
Cathy Fisher: 13:34
I was just going to mention that that’s so true. Because what we find ourselves in with this delivery disruptions is the result of not taking care of the systems.
JD Marhevko: 13:43
Yeah, it is a little bit ironic there. But but if you’re only tracking lagging indicators, which I find many companies do, they create a forces of a very reactive environment. If my margins bad, well, what can I do about it, it’s bad. Trying to peel that out and find out the underlying causes, it’s already too late. If my PPM, my part per million, or my on time delivery are poor, again, those are lagging indicators. And all I can do is react to those. And it’s, I find, as I’ve gone through my career, I usually like a two to one ratio of two leadings per every lag. And that helps me when I’m setting up our strategic plans, when we’re working with our functional teams, so that we’re focusing on it as low in the business as possible, what we can fix what we can adjust, so that we can influence that lagging indicator. And don’t get me wrong, lagging indicators are critical and necessary. It’s how our customers compare us against our competitors. They have that that’s the only measure they have, but I can’t influence a lagging indicator.
Cathy Fisher: 14:48
JD, I want to go back to something you were mentioning about the leading versus lagging indicators, and we all would agree certainly that on time delivery is a lagging indicator. What would you recommend could be one or two leading indicators inside of organizations relative to that lagging indicator of on time delivery. What should they be measuring?
JD Marhevko: 15:09
OEE is a very strong leading indicator for me operational equipment effectiveness. It’s a three part measurement in terms of equipment, availability, yield and quality. If OEE is not functioning well, you can’t deliver. The other key leading indicator that I look at are the maintenance KPIs. So of the meantime to repair, meantime, between failure, I have a measurement that I’d like to consider. I call it the firefighting metric. So I always one of the first questions I asked the maintenance guys, when I go into a shop is, if you had 100 hours of work ahead of you today, how much of it is planned versus unplanned? And I usually getting 80 to 90%, unplanned versus planned. So that’s telling me that they’re, that things are unbalanced and need to be rectified. And then a third, of course, is the upfront supply chain.
Cathy Fisher: 16:00
Yeah. And you know, we actually see the same thing. In fact, Terry’s always talking about how historically supply chain has been managed mainly through firefighting.
Terry Onica: 16:09
JD, what would you recommend to people listening out there on how to really get their organization to embrace breaking down the silos, working together, leveraging IT. So many companies still struggle with that . Old versions of ERP, they’re using spreadsheets? Do you have any recommendations to people listening in and how to approach it to get your management and executive management to buy into that?
JD Marhevko: 16:38
I look at three things in overall value stream mapping is key and critical, you have to have a full understanding of how that process is flowing. The second thing is leveraging that data that you have available to you. Getting it digitized so that you’re not spending all that time and crunching. The digitization is absolutely key, but making sure that it’s in a leading indicator level, and giving you information on what to do next. The third thing that I like to see is now that planning of the catastrophic planning that we have to do, so that we can be more more flat in our global approach and not geocentric.
Cathy Fisher: 17:21
Yeah, and that really necessitates having good visibility, transparency, and real time data in order to understand that, and I want to tie back to what you were mentioning about the plan and kind of the risk planning. And I want to say contingency planning. This is one of the areas that we have found through the work that we’ve been doing with our 24 Essential Supply Chain Processes talking with suppliers, when we ask them, okay, pick the one, two or three, pick the top three of those 24, that are the biggest opportunity for your organization to improve from a supply chain performance standpoint, invariably, contingency planning is the number one. And it would be interesting to hear from your perspective, how you feel organizations are doing on this other side of COVID. Because everybody talked about contingency planning, of course, when COVID hit, we were all sitting at home waiting to restart operations. And they all committed, Yeah, we’re gonna improve our contingency planning. But we’re not seeing a whole lot of that. Are you seeing something different than us?
JD Marhevko: 18:21
I don’t think you’re going to see it very fast because of the the barriers to entry that exist. First of all, it’s 100 year kind of cycle, when you have these kinds of pandemics. So it’s not going to happen in their lifetime, or in their kids lifetime. So it’s, it’s past us. But what I do think we’re going to see is more of a build up of resiliency in making sure that they have more than one place to get products from not everything’s going to come out of Malaysia or Taiwan, or or China. There’s so that should should something whether it’s another pandemic, but a fire or tsunami, any other type of natural disaster happens. There’s there’s more flexibility and choices.
Cathy Fisher: 19:03
Yeah, I’m glad to hear that. Because we would really hate for as an industry, that we missed this opportunity to improve our contingency planning, and therefore the resilience of our organizations going forward as well.
Terry Onica: 19:16
One of the other things that always come up in our research too, is supplier performance. That’s another key topic. When you ask for the top three, do you have anything to share with us on supplier performance. What you’re seeing how it can be improved?
JD Marhevko: 19:29
I think the biggest challenge is open communication. There’s so challenge with human resources as well just like everybody else’s. So who can you talk to communicate with and there’s a there’s a balance that needs to be restruck to enable those community those lines of communication to be reopened so that people can get back to the original condition of of really sharing and be partners.
Jan Griffiths: 19:54
JD, we have to ask you this question. Given your vast amount to have experience and knowledge, what is the one action the one thing that automotive suppliers must take now to improve delivery performance through your eyes from a quality perspective? The one thing.
JD Marhevko: 20:18
The one thing. To me the the Lean management of their systems would allow them to understand exactly where they’re at and what they can do from an agile perspective. Having be able to plug and play different processes to plop and drop to lift and relocate to other locations if they need to. Having their processes very modularized or systematized so that they can be up and running in other locales, when when one locale is not an option.
Jan Griffiths: 20:48
Excellent. JD, thank you so much for your insights today.
JD Marhevko: 20:53
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At the heart of The Prophets’ vision are “The 24 Essential Supply Chain Processes.” What are they? Find out, and see the future yourself. [ DOWNLOAD OUR WHITEPAPER ]
Are you ready to find the money in your supply chain? Visit www.autosupplychainprophets.com to learn how.