Nonprofit AIAG Looks to Evolve in Pace With Industry

The nonprofit group tasked with developing supply chain best practices and efficiencies is looking to help smooth the bumps around the transformation to battery-electric and software-defined vehicles.

Dave Zoia

May 14, 2024

4 Min Read
AIAG intensifying focus on supply chain best practices for electric vehicles, software.
AIAG intensifying focus on supply chain best practices for electric vehicles, software.Getty Images

The Automotive Industry Action Group, a nonprofit organization tasked with driving standards for process efficiencies and quality control, is retooling.

Under the direction of CEO Matt Pohlman, who has stints in purchasing and supply chain at Tier 1s Federal Mogul, Delphi and ZF on his resume, AIAG is moving in lockstep with the dynamically evolving industry, putting new emphasis on the transition to electrification and the software-defined vehicle, as well as looking to reduce the time it takes to propose and implement the new standards to assist in that evolution.

Based in Southfield, MI, AIAG dates back to the early 1980s, over which time it has drawn more than 4,400 member companies, including Ford, General Motors, Geely, Honda, Stellantis, Toyota, Volkswagen and 25 other vehicle manufacturers. It is staffed by about 50 employees and backed by more than 600 volunteers.

AIAG says its work or more than 300 projects over the past 40 years has helped save the auto industry billions of dollars.

Pohlman, who joined the group almost two years ago, says the primary objective is to put some order to the chaos around the industry’s move toward these new technologies, including the electrification shift that has spawned new automaker entries and expanded the supply chain beyond its traditional boundaries.

“There’s all these new suppliers, there’s new OEMs,” he says. “They’re doing all this new stuff. If there’s not a standard approach to how you’re doing that, it causes chaos through the value chain and that value stream. And it causes a lot of extra costs and a lot of redundant activity.

“I think we have 18 EV-specific companies,” he adds. “And if those each are telling somebody to do a standard or something in a different way, then (suppliers) end up having all these added costs. So that’s where they want us to come in and help.”

And because this shift is occurring quickly, speed in developing new standards and protocols also is of the essence, Pohlman says.

“It used to take us two years to do a project, now we’re trying to do it in a year, 15 months,” he says. “We’ve had to redefine how we do work and how we’re trying to create those standards.”

Taking a page out of the tech industry’s playbook, getting it perfect the first time is no longer the priority, Pohlman adds. It’s about getting it as good as possible in the time allowed, then revising along the way.

Software is another area AIAG is helping automakers and suppliers wrestle with. The industry’s struggles in the effort to become more software-oriented are well documented, and some of the challenges faced have to do with how the newly emerging ecosystem functions.

“You could have a Tier 4 delivering something to an OE (or) you can have a Tier 4 delivering it to a Tier 2,” Pohlman says. “There wasn’t a standard written about the process for that.”

A new software-assurance approval process (SAAP) roadmap, expected to be delivered in Q3, will begin to lay the groundwork for that, he says. It will cover the steps needed to ensure a quality release and, ultimately, reduce recalls and warranty claims.

“We’re keeping it fairly narrow and not too deep,” he says of the written standards. “But we’ll continue to strengthen that as we go forward.”

Another project AIAG is knee-deep into revolves around the changes required in vehicle wiring harnesses as a result of vehicle electrification.

“A document (is) being developed to increase the level of quality control during the manufacturing process to reduce warranty (claims) in the build process,” he says, predicting the proposed protocols should be ready for review within the next couple of months.

Similar projects are underway regarding battery manufacturing, where Pohlman says “standards are changing so fast and the technology is changing so fast, we absolutely have to go fast.”

Once standards and best practices are derived, the task is to get the industry to implement them.

“It’s not easy,” Pohlman admits. “(But) we’ve got a history of doing this. We have a legacy of leading projects with this type of scale. What’s changing is just the speed – and there are a lot of newcomers (to the industry).

“So, we’re shifting to make sure we’re relevant in that EV space that’s there today,” he says, adding that effort includes looking for nontraditional suppliers and automakers to get involved with the group, including potentially taking seats on its board. An EV-specific advisory board has been set up to assist with such recruitment.

“We’re still as relevant in the automotive industry today as we ever were,” Pohlman sums up, noting the new players and new industry directions mean “it’s just a matter of reintroducing ourselves.”

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