It's the four-letter acronym the auto supply industry hates: PPAP.
While created as a quality-control measure, the Production Part Approval Process has turned into a headache that complicates product launches, ties up engineers on paperwork and can delay payment for parts for weeks or even months for companies lower down on the supply chain.
It also is a part of the price for doing business in the auto industry.
``On plastics, especially, getting final PPAP approval can be very complicated,'' said Matt Keil, a vice president with consulting group Stout Risius Ross Inc., who works with companies on their PPAP programs. ``It's a very lengthy process. You would fill a 4-inch binder with data for just one small component.''
Auto suppliers are increasingly citing issues with PPAP as liabilities while they struggle to keep their firms above water.
While a few companies outside the auto industry have adopted a version of PPAP, it is mostly limited to automakers and especially the North American Big Three of General Motors Corp., Ford Motor Co. and Chrysler LLC. Asian and European automakers also have quality-control systems for their parts, but they do not have the same issues as PPAP has created, Keil said.
PPAP is basically designed to have molders and other suppliers make parts with the same material and on the same machines they will use in final production and show it matches the engineering data from the original bid. They then make parts at full-production level to prove that they can turn out quality parts at the same quantity the automaker needs.
Standard approval can take 24 to 36 weeks, if things go according to plan.
To complicate matters, each of the automakers has its own list of PPAP requirements, meaning that companies cannot easily transfer data from one part for Ford, for instance, to one for GM.
``A lot of smaller suppliers underestimate the cost to PPAP a job,'' Keil said. ``It's a giant process of minutiae.''
More problems crop up when something along the line runs into problems. Last-minute engineering changes to tweak the gloss or grain on an interior part or the paint on exterior trim could mean that the part ready for production no longer matches the original specifications. As a result, the PPAP paperwork is backed up and suppliers could launch full production of approved parts, but without the required approval for PPAP paperwork that allows them to be paid.
``You could have 19 out of 20 parts with approval and ready to go, but payment doesn't go through until the last part is approved,'' said Jeff Mengel, a partner with consulting group Plante & Moran PLLC in Chicago.
If the molder needs to move production to a new press, that company must get PPAP approval for that press.
One mid-sized molder noted he has been in full production for more than six months on a part without getting paid yet because of a hold-up in the PPAP approval. The maker of injection mold tooling will not get paid until its customer - the molder - gets PPAP approval.
Under normal conditions, PPAP headaches would be difficult, but with the auto industry in turmoil and production slowing, it is becoming harder for molders and mold makers alike to handle.
``For tooling people, PPAP is becoming an issue because of payment delays,'' Mengel said. ``For processors, it's because of the cost issue with it adding several thousand dollars to their costs.''
