On Jan 10, 2002, Tetra Tech’s first IMDS training took place, with the first registrant being Mr. Randy Van Duinen of American Metal and Plastics, Inc. Since that time, we have trained an additional 7,895 individuals in our 8 hour classroom trainings. That is 63,168 hours of IMDS classroom training; or 7 years, 2 months and 2 weeks of learning. No wonder our trainers seem to know all the answers!
Our projection is that in the late summer or early fall of 2018, we will welcome our 8,000-th trainee in the door. We are planning a special recognition for that person upon their arrival at the training. And a prize! Hint: it will have something to do with the number 8,000!
This commemoration, however, is meant to recognize all of our trainees and express our appreciation for your loyalty through the years. We especially appreciate those of you who valued your experience enough to return for refresher courses (yes we counted you twice – people change – you are not the same person you were in the past!)
A big thank you goes out to all of you!
The automotive industry’s IMDS reporting process for documenting global regulatory compliance is based upon the premise that an entire multi-trillion-dollar industry can successfully share common tools, processes and approaches to provide mutual benefit for all industry stakeholders. It is an immense effort and doesn’t happen without full engagement up and down the supply chain. This article discusses three ways that its large user community is now creating its own tools, and rapidly changing the face of the reporting landscape.
Is the Scale of IMDS Reporting a Blessing or a Curse?
With all its complex moving parts, the entire IMDS reporting mechanism doesn’t always operate as a well-oiled machine. The challenges of communicating and enforcing requirements through multi-tier supply chains is one notorious proof of this. However, there is another perspective that can be adopted regarding the massive scale of the IMDS reporting endeavor; and that is the viewpoint of recognizing the hidden potential for crowd-sourcing solutions to common IMDS reporting challenges.
The IMDS user community constitutes a decentralized workforce of tens of thousands of subject matter experts who have encountered every conceivable data reporting challenge over the course of the two decades that IMDS has been in operation. This user community finds itself closely orbited by an array of service providers eager to offer them support with IMDS reporting efforts, including: software vendors, consultants, trainers, program managers, systems integrators, and industry organizations.
Three Grassroots Campaigns Taking Root
There has recently been a groundswell within the IMDS user community to crowd-source niche solutions for boosting the efficiency of IMDS reporting processes for the everyday IMDS user. One example is the upcoming April 17th IMDS Workshop. That event’s agenda (below) was essentially crowd-sourced directly from input provided by everyday users battling on the IMDS front lines. The content is based on users’ intimate knowledge of their own practical needs. Another example is a 2018 multi-stakeholder survey which mapped out the 24 most frequently recurring IMDS errors and is being used to streamline IMDS reporting throughout the supply chain.
Figure One – Workshop using a Crowd-sourced Agenda
Below are three other examples of emerging “Open Source” initiatives being driven from the bottom-up by stakeholders at every level of the supply chain. These efforts are perhaps not well-known yet as they haven’t been subjected to the marketing hype which invariably accompanies more customary approaches. Nevertheless, some of these initiatives are likely to very soon lead to disruptions (in the positive sense of that word) in the IMDS reporting space
1. IMDS Training Video Tutorials
There have been IMDS classroom and web-based training options available since at least 2001 in most parts of the world. There will always be a demand for full-fledged trainings as new staff cycle into IMDS roles and as new requirements emerge. However, a rapidly emerging trend is the use of modular videos to address very specific technical issues. Very focused, practical, user-generated videos of 5-15 minutes duration in all sorts of languages are aimed at quickly walking viewers toward a solution that may have otherwise taken hours of trial and error to discover.
As an analogy, there is almost no household appliance that you can’t fix now after a 15 minute investment of time in watching a Youtube video. Perhaps this is not good for demand in the handyman industry. But overall it is a huge net benefit for homeowners.
Figure Two – Modular IMDS Tutorials are widely proliferating, but hard to locate
Similarly, the tens of thousands of IMDS subject matter experts in the user community are beginning to provide niche problem-solving content that barely existed as recently as two years ago. Conduct a Youtube or Vimeo search using the right keywords, and you will see them. The main challenge, however, is that the decentralized and uncoordinated nature of these approaches currently makes it quite difficult to find what you are looking for.
Tetra Tech is indexing this content and will be facilitating access to a centralized repository of IMDS training video tutorials within the next month. User-generated content is growing so rapidly that it is a challenge to find and organize it all, but as in the household appliance repair space, a lot of benefits will be realized once answers are just a couple mouse clicks away.
2. IMDS Data Collection and Reporting Templates
IMDS is funded by the major automakers as a free tool for the use of its supply chain. Suppliers just have to provide the labor to get material content data into IMDS. Many of the larger Tier 1 suppliers have supplemented the free IMDS software with investments in third party commercial applications designed to ease much of the heavy lifting involved in moving data from internal systems into the IMDS central repository.
However, there has always been a large gap in software resources for entities from the second tier on down. These Small-to-Medium-Enterprises (SMEs) are resource-constrained and generally cannot participate in the material content reporting software marketplace. Throughout the years, various software vendors have sought to craft and market workable, lightweight, affordable solutions that would capture that SME market segment which includes tens of thousands of prospective customers. But the numbers have never really worked out for the vendors or for the prospective customers. If you recall Economics 101 class, picture in your mind the graph where the Supply and Demand curves fail to intersect, and where everybody loses.
The failure to create a market for affordable tools for the SME segment means most data goes into IMDS the old-fashioned way – manual data entry. For the automotive industry as a whole, this imposes large labor costs and contributes to delays in reporting and poor data quality.
Recently, the middle levels of the supply chain have stopped waiting for the day when “they” will swoop in and rescue suppliers from these problems and have taken matters into their own hands. They have finally realized that “There is no They”. A few examples of the types of tools being developed are illustrated below.
Figures Three, Four and Five – Open-Source Templates: Good news for SMEs
It is possible that some of the emerging templates may prove mildly disruptive in the material content reporting space for some software vendors, but since the SME market segment is currently virtually nonexistent this will probably not be a significant threat for these solution providers.
3. Automotive Industry Global Regulatory Tracking
There are at least two dozen commercially available global regulatory tracking platforms on the market, a few provide some level of ability to filter results for automotive industry-specificity. However, some simple math will demonstrate why there is no commercially feasible solution for the entire industry to use in a truly comprehensive manner.
The IMDS Basic Substance List contains approximately 13,000 substances. Automobiles and automobile components are sold and/or manufactured in 195 countries. The concept of Producer Responsibility (a less ominous-sounding euphemism for Producer Liability) means that if your vehicles contain all of these substances and you (or your customers/downstream users) sell worldwide you have direct or indirect responsibility for at least (13,000) x (195) = 2.535 Million combinations of Substances/Jurisdictions.
Oh, I forgot to mention that many of those countries have internal regional jurisdictions with separate regulatory regimes. And that the restricted substance lists change periodically for each jurisdiction.
Several organizations have tried to tackle this problem only to see their valiant efforts collapse due to prohibitive costs, and due to organizational inertia dragging progress out for literally years. But what if you had an army of volunteers with responsibility for their own corners of the world? For example, if you lived in California; or in the Basque provinces; or in Guangdong, and were responsible for understanding only the chemical regulations which pertained to automobile manufacturing/importing within your local region, would that not be a manageable task? If your job title contains the word “Environmental” might that minimal level of vigilance perhaps even be considered a basic pre-requisite for you to merit drawing a paycheck?
Okay, so are there 194 other people in the world like you with properly functioning regulatory antennae? Are you and those 194 others opposed to sharing publicly-available information which you are already routinely gathering as part of your day job? Do you see where this is going now? Hint: several well-known 100,000+-member organizations have taken on this challenge for the automotive industry. 100,000 is a lot more than 195.
Caveats and Conclusion
These examples provide a glimpse of the power of crowd-sourcing when there exists a user community with sufficient scale and expertise. There are of course important considerations to keep in mind. In the real world, incentives matter. The vast majority of solutions to business problems are driven by old-school business motivations.
Market Share. Earnings. Intellectual Property. Raises. Bonuses. Stock Options.
This is not going to change. Altruism is a wonderful thing, but I would still advise placing the majority of your bets on enlightened self-interest, at least in economic matters.
Decentralization offers flexibility for rapid problem solving. Without the need to spend hours in committee meetings, the above-mentioned tools and solutions are being developed at a much faster pace than more customary methods would allow for.
But there is a need for coordination and quality control. Not a week goes by that I don’t hear someone qualify some fact with the caveat “..now my source is Wikipedia, so…..” Which tells me two things. One – you really do need to take some information with a grain of salt; and Two – people are consulting Wikipedia in their daily work with incredible frequency, so obviously it is providing significant value for them.
Perhaps most people do the mental calculation and figure that if a free, convenient resource saves them an hour of their time and is 95% accurate, that tradeoff will suffice for most purposes. If, and when, an actual decision needs to be made, they will then proceed to invest the time and/or money in consulting more authoritative sources. Perfection in this world being relatively rare, this is not a bad approach.
Let’s go back to consider the original premises of the whole IMDS reporting strategy. Crowdsourcing was not really a “thing” in the 1990s when the founders of the IMDS concept met to lay the foundation for what we have today. But clearly these leaders had a vision of what was going to be required in order to generate the many millions of disclosures that have occurred since then. Time has validated the clarity of their vision. Just compare the automotive industry’s level of material content disclosure documentation relative to some other industries. Today’s technology now presents the opportunity to expand upon that progress and take that vision to the next logical level.
Stay tuned: More detailed information, weblinks and calls to action for each of the above three emerging efforts will be provided in upcoming articles.
It’s not all in your imagination. Despite having an IMDS reporting process in place for many years the rejection rate for your company’s IMDS submissions is rising. Some of the rejections are based on all-too-familiar, chronic issues your team has always struggled with. Some appear to be entirely new – and somewhat puzzling- new OEM requirements. Regardless of the specific technical issue, this situation is always frustrating. Unhappy customers, unhappy staff, PPAP delays, and increased costs are just some of the consequences.
From a tactical standpoint, most organizations do know what is required to fix the problems and to halt the submit/reject/re-submit/re-reject Do Loop . Most of the fixes are straightforward and are described in various guidance documents (see Top 24 Rejection Reasons). So it’s mostly just a matter of executing these instructions (a.k.a. Read the Manual). To be fair, if you have a large program and/or a diverse customer base, there are perhaps challenges with finding and keeping track of all these numerous and frequently changing requirements**. **As a side note, an upcoming event will be addressing that particular dilemma – and some very innovative and possibly even game-changing solutions will be unveiled.
But if the information is all available and the problem is in the execution, how can an organization address the root causes of failure? By assessing the strategy and ensuring the quality controls are sufficient to allow the tactical team to succeed in delivering on its IMDS commitments. Below are what we have observed to be the most common sources of systemic IMDS quality issues, based on real-world IMDS programs that Tetra Tech has assessed.
- Staff Turnover
Tetra Tech has had over 8,000 individuals sit through our IMDS classroom trainings so we have a decent sample size to assess staff turnover dynamics. Based on our dataset, we estimate job turnover for IMDS professionals to be well over double the average turnover rate for similar data entry positions in the automotive industry. This is based on the percentage of trainees who indicate that they are replacing a recent predecessor who held IMDS reporting duties but moved on, either to another employer, or to another position within the company.
The reasons for this turnover are undoubtedly complex, but anecdotally appear to include: burn-out, perceived lack of viable career pathways, and limitations based on part-time employee status. Recently, the turnover problem is being even further exacerbated by a robust job market which is giving employees more options than usual.
- Lack of Internal Buy-in
IMDS requirements have varying levels of visibility within organizations. No doubt the incorporation of the requirement into the PPAP process raised awareness. So the good news in the automotive industry is that senior management is generally aware of the requirement but not often aware of the need to treat it as a true quality issue, rather than a “check the box” activity.
So, while there is a commitment to doing IMDS, sometimes there may not be a full understanding of what it means to do it right. In fact, that shortcoming is often one of the contributors to the turnover problem previously mentioned. We have had many conversations with IMDS professionals who are asked to meet aggressive customer deadlines but not provided the full support and backing from senior management to make sure the quality of the submissions is meeting those customer requirements.
That support is sometimes financial, but more often just involves an internal champion who is effective at enforcing cross-functional support for the effort. For example, many IMDS professionals struggle to obtain good data and support from their own purchasing departments in order to help them solicit IMDS data from their own supply chains.
- Poor Offshoring Strategy
For organizations with enough scale to offshore the routine tasks of an IMDS program, major cost benefits can be realized. And there are many success stories in this regard when this has been done correctly. Unfortunately, some of the most vexing data quality issues can be directly attributed to poorly conceived, managed and executed offshoring approaches.
And since when you are offshoring you are usually doing it on a sizable scale, the scale of the quality issues can rapidly become enormous. Since your offshore team is cranking out massive amounts of data, the faster they go the worse things get; kind of like throwing your car into reverse and stepping on the gas. You are moving fast but in the wrong direction.
No one wants to admit to complacency. If there is a list somewhere of the Seven Deadly Sins of business, complacency is definitely on it. But it is clearly in human nature and, almost by the definition of the concept, it’s something that creeps up on organizations and blindsides them without warning. IMDS has been a requirement for many companies for nearly twenty years. The positive side of that is that IMDS is viewed as just another requirement for doing business in the automotive industry so it is in fact getting done.
But when few people question a requirement, there is a tendency to forget about the “why” of the requirement and the processes and procedures can take on a life of their own. The Check the Box mentality takes over. Take an honest look at your program; get an outside assessment/audit; get together with a peer organization and benchmark what they are doing right and doing wrong. Even if everything “seems” to be going well, don’t be afraid to step in and disrupt things every now and then.
- Increased OEM/Tier 1 Scrutiny
Finally, one of the major reasons you are seeing increased IMDS rejections is perhaps unrelated to internal quality issues but simply to the fact that OEMs are scrutinizing submissions more closely. Increasing regulatory pressure and expansion of the scope of regulations covered in IMDS stands behind some of that renewed focus. Other factors are, for some OEMs, they have been spending years just catching up with the mountain of data IMDS has provided and are only just now getting around to digging into the details of how accurate and useful the data actually is. For this reason, customer communication is more important than ever. Although it doesn’t always feel like it, your OEM and Tier 1 customers are completely aligned with you on what they want: as few rejections and re-submissions as possible.
From the discussion above, here are some important take-home messages. Hopefully they will help you break free from the submit/reject/re-submit/re-reject cycle.
- Make sure your IMDS team has sufficient training and bench depth to weather the challenges of staff turnover. Also, many of our IMDS training attendees have mentioned low job satisfaction and not feeling a part of the broader team. They need to feel valued and part of an important effort.
- Enlist a corporate champion from senior management (i.e. VP level) to communicate the importance of IMDS to your customer relationships. Create a cross-functional team to support the core IMDS team. This cross-functional team could draw from Purchasing, IT, Engineering, Sales, Quality and other departments who are ancillary to the success of the core team.
- If you are offshoring, make certain that the team has sufficient oversight and quality control. Because offshoring usually involves a significant scale of effort, it is particularly important to catch quality issues early before they spiral out of control.
- Get an assessment or audit of your program. Get together with peer companies and benchmark best practices. Industry organizations, such as Suppliers Partnership, who work on IMDS issues can be useful for brokering these opportunities.
- Communicate, communicate, communicate with your customers. Do not be passive and waiting for them to approach you with problems. They will value your proactive approach which will create goodwill for you, both in the IMDS arena and elsewhere in the business relationship.
For the past 15-20 years, it has been a requirement for the automotive industry to report material content of vehicle components into the International Material Data System (IMDS). In preparation for an upcoming industry-wide IMDS workshop, Tetra Tech is currently working on an extensive categorization of IMDS data quality issues. One of the fruits of our labors is an anecdotal list of some of the top reasons for rejected IMDS submissions. We are now sharing the most frequently-occurring rejections, and information on resources for most efficiently fixing those rejected submissions.
The below list outlines the Top 24 rejection reasons based on an informal survey of several major automotive OEMs and Tier 1s. Figure One references the publicly available resources available for fixing each of these rejections. While we did not survey all global OEMs, the cross-section of companies does represent the majority of all the IMDS submissions made in North America in 2017. The survey is not a formal representation by any company of its IMDS priorities; however it is a good starting point for understanding some of the major causes of IMDS problems which are contributing to submission delays and poor data quality.
Consulting the Top 24 list and referring to the resources cited below in Figure One can save suppliers countless hours of iterative submit/reject/re-submit/re-reject cycles, and avoid the potential damage to customer relationships that results from poor data quality.
TOP IMDS REJECTION REASONS – by approximate frequency of occurence (Tetra Tech’s Feb. 2018 OEM/Tier 1 Survey)
Figure One – Resources Where Fixes can be Found for these Rejections
Figure Two below aggregates the data from Figure One and demonstrates that the larger percentages represent rejection issues that are addressed by available guidance documentation within the IMDS website. For those reporting in IMDS, it is important to know how to access Recommendation 001 which is the Rules and Guidelines for creating Material Data Sheets (MDSs). IMDS’s OEM Specific Information is the next source to consult as it provides additional information specific for each OEM. The OEM information goes beyond the basic rules and guidelines found in Recommendation 001 such as:
· Recipient Data Page required information
· Resubmission / Update requirements
· Rejection Code explanation
· Prohibited substance use
In 2018 the supply chain may be seeing dramatic changes in IMDS data quality expectations. Primary contributors to these new requirements include changes within the automotive supply base; more “bells & whistles” included in today’s vehicles; as well as additional legislative reporting requirements. OEMs are using their IMDS data to report not only for EU’s ELV Directive but other types of compliance reporting as well.
In the end, automotive suppliers need to be aware that IMDS provides the basic guidance that will help minimize rejected datasheets. OEMs are now, more than ever, paying attention to the quality of the data received by their supply base. They also provide updates to their specific requirements; generally, on an annual basis, to help the automotive supply chain stay up to date with their data reporting requirements.
If you are interested in learning, in much more detail, how to fix these, and other, data quality issues, please consider attending the April 17, 2018 OEM IMDS/CAMDS Workshop in Novi, MI. More information is available at www.imdsworkshop.eventbrite.com.