2008 Keynote Address

How to Make Reliability Engineering a Cost Competitive Advantage for World Class Quality

Allan Rae, Executive Director of Business Systems for American Axle & Manufacturing (AAM)

In today’s competitive marketplace, there are key drivers that distinguish successful companies, beginning with a product that totally satisfies the customer in terms of features, safety, cost, quality and long-term reliability. In this Keynote Address, we will talk about the warranty situation in the automotive industry today and the challenges that auto companies are faced with when it comes to poor quality, the change in warranty policies and the focus on the bottom line, as well as the need for more reliability testing and how that affects the customer.

To gain a cost competitive edge over off-shore companies, North America should be concerned about not only "Product Quality" but as Dr. Deming talked about, must also focus on the "Total Cost of Doing Business." At the same time, Dr. Juran has talked about the "Cost of Quality" and all of the phases of cost starting with testing the product before it gets to the customer or even manufacturing. Over the years, what has emerged is the "Total Cost of Quality" and the bottom line look at the relationship from Wall Street "earnings per share," the effect on a company’s profits (which really is the bottom line) and even the overall report card of a company’s performance.

This discussion will focus on the bottom line, how to get top management’s attention and a leadership approach to world class quality and cost.

Allan Rae has worked in the automotive industry for 34 years, including over 20 years with Chrysler and DaimlerChrysler in various senior-level executive positions. He is currently the Executive Director of Business Systems for American Axle & Manufacturing, reporting to David C. Dauch, the Executive Vice President & Chief Operating Officer.

During his career, Allan has had experience in both Manufacturing and Corporate Quality Office positions, interacting with Sales & Marketing, Engineering, Advanced Manufacturing Engineering and Manufacturing Plants around the world in the U.S., Canada, Mexico, China, Japan, Thailand, Austria, Germany, Brazil and Poland. He has delivered training for over 40,000 executives, managers and employees at all levels and has worked with major unions worldwide.

Over the years, Allan has contributed to a number of highly successful improvement initiatives and has received prestigious industry awards to recognize his achievements. In 1991, he coordinated the effort for the Chrysler Minivan Plant to be the first automotive company to win the Canada Quality Award for Business Excellence. In 1992, he received Lee Iacocca’s Chairman Award as well as the ASQ Automotive Division Judson C. Jarvis Service Award. In 1993, he became one of the founding members of the Michigan Quality Council, in conjunction with the Governor of Michigan at the time (John Engler). And in 1995, he participated in the development of the Chrysler Operating System, which was rolled out worldwide to 57 manufacturing locations in 9 countries.

Throughout his career, Allan has increased his knowledge by studying under experts in the field and also has been sought-after to communicate his knowledge and experience in multiple settings. Among other experiences, he studied with Dr. W.E. Deming during the 1980s and was a member of the Detroit Deming study group for six years. He also worked with Shin Taguchi from the American Supplier Institute and studied Lean Manufacturing Principles with the Shingijutsu Group (originators of the the Toyota Production System in Japan). Allan has provided his expertise to many major companies, organizations and universities, including service as a board member for the McGill University Master in Manufacturing Management Program and as a visiting lecturer for the MIT Leaders for Manufacturing Program.