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In this episode of the Auto Supply Chain Prophets Podcast, hosts Terry Onica and Jan Griffiths interview Matt Pohlman, the CEO of Automotive Industry Action Group (AIAG). They discuss the organization's response to the rapidly changing automotive industry and how AIAG is keeping pace with technological advancements, regulatory changes, supply chain challenges, and the rise of EV OEMs.

They explore the role of AIAG in setting industry standards and providing essential training for supply chain professionals. Matt highlights AIAG's collaboration with Wayne State University and offers their innovative training programs. Matt emphasizes the significance of adapting to new challenges while maintaining tried-and-true practices. 

Matt stresses the importance of sustainability and corporate responsibility in today's automotive supply chain. He emphasizes AIAG's commitment to addressing environmental, social, and governance (ESG) concerns in the supply chain, particularly in light of forced labor regulations and other risks.

Matt advises supply chain leaders to acknowledge the need for change. He emphasizes the importance of agility, flexibility, and collaboration within the industry. He also encourages the listeners to embrace progress over perfection and engage with AIAG to stay informed and proactive in addressing industry challenges.

Themes discussed in this episode:

• The significant transformation of the automotive industry
• The role of organizations such as AIAG in industry evolution
• Updating standards and practices for supply chain adaptation
• Empowering supply chain leaders to prepare them for the future
• The importance of MMOG/LE in enhancing supply chain processes
• Environmental, social, and governance (ESG) considerations
• Collaboration with EV OEMs and startups
• Embracing agility and flexibility 
• Understanding the cultural impact of technological changes on the auto supply chain

Featured on this episode: 

Name: Matt Pohlman

Title: Chief Executive Officer, Automotive Industry Action Group (AIAG)

About: Matt is currently serving as the Chief Executive Officer of the Automotive Industry Action Group (AIAG). With over 30 years of experience as a Global Supply Chain Executive, Matt has a proven track record of success in leading global supply chain organizations, processes, and transformations. His expertise lies in driving a culture of change, generating significant cost savings, and aligning enterprise goals with strategic business direction. Matt excels in leveraging enterprise operating system models to integrate and connect supply chain teams, processes, and functions while also employing lean techniques to drive transformative change and improve operating results and team performance.

Connect: LinkedIn

Mentioned in this episode:

• Supply Chain Management Steering Committee 
• (MMOG/LE) Global Materials Management Operations Guideline 
• Essentials of Supply Chain Management Online Course 
• Certificate in Purchasing & Supply Chain Management 
• Tomorrow's Leaders Today
• (APQP) Advanced Product Quality Planning
• Automotive Guiding Principles and Practical Guidance 
• Uyghur Forced Labor Prevention Act
• Supplier code of conduct
• Automotive Core Tools
• AutoCulture 2.0: Leading with Gravitas

Episode Highlights:

[02:14] AIAG’s Transformation: Discover how the world's largest automotive industry group is changing to keep pace with industry changes.

[04:29] CEO Role: Learn about the CEO's responsibilities, highlighting Matt's role in AIAG’s leadership amid industry transformation.

[07:39] AIAG Initiatives: Find out about the initiatives AIAG is taking to keep up with the rapidly changing automotive industry landscape.

[14:04] Working with EV OEMs: Explore AIAG's strategies for working with electric vehicle OEMs and adapting to the growing electrification trend.

[18:54] Environment, Social & Governance: The significance of environmental, social, and governance factors in the automotive industry and how AIAG addresses them.

[26:03] Advice to Supply Chain Leaders: Matt advises supply chain leaders to recognize the necessity for change. He encourages leaders to maintain an agile, flexible approach and prioritize progress over perfection.

Top Quotes:

[03:57] Matt: “We have to continue to make sure we're bringing new people in, bringing new ideas in, and making sure we're finding a way to start working on the newer challenges. It's too easy to work on the old stuff. Because it's tried and true, and it's easy. We know how to do that. But working on stuff involving EV batteries or working on software, working on ESG things, all of those things are hard.”

[06:59] Matt: “Our membership has to want to come to us to solve problems. And we have to be viewed as problem solvers. We've got a great history of that and legacy of that, but we've got to get in this new space because a lot of people think of AIAG as maybe an automotive gas or diesel company, and we're not. We are many more things than just that. And we're broader than just quality. We were in the ESG space, the supply chain space; we do a lot.”

[12:14] Matt: “AIAG is dedicated to empowering supply chain professionals and making sure that we're doing what we can to make sure they're ready for the challenges of the future.”

[26:39] Matt: “You have to acknowledge that we're in an unprecedented time of change. I think it's really important to understand what the cultural impacts that it’s going to have on your organization, your product lines, how relevant are you going to be in the future.”

[Transcript]

Let's check in with my co-host, Terry Onica. Terry, what's going on in your life?

Matt, welcome to the show.

There is a transformation we're going through. We're trying to make sure we're relevant. We've been around 41 years. My goal is how to make sure we're relevant the next 41 years. So, there's a lot of tried and true processes that are out there. There's a lot of things happening in the EV space and everything. It's going to require us to change. A lot of activity that we do is setting standards, you know, those are a lot of processes and a lot of meetings to get agreement on that, but we have to find a way to go faster because the industry and the world is making changes much faster. If we take two years to develop something, by the time we roll out with it, it's already outdated and irrelevant.

So, we have to find a way to go faster. We have to change the way we do work. We have to find a way, different ways of getting ideas. There are a lot of things we have to do, but at the end of the day, AIAG we're the largest automotive industry group in the world. We have 40 OEMs; we have 5,000 tiers. Our strength is in how we pull those groups together and work on standards. So, we have to continue to make sure we're bringing new people in, bringing new ideas in, and making sure we're finding a way to start working on the newer challenges. It's too easy to work on the old stuff. Because it's tried and true, and it's easy. We know how to do that. But working on, you know, stuff involving EV batteries or working on software, working on ESG things, all of those things are hard. So, yeah, we're trying to reflash ourselves into something newer and better, but we're living on the principles that we've had in the past.

We just updated the APQP standards. We just this week launched the new standards for that. And it's very relevant to the old way of doing things but it hasn't been updated in 14 years, and we've spent a lot of time focusing on the software side of things and many other spaces. So, it's been updated to be relevant to the EV space that there is today. And it's very important that people go out and there's training associated with it. We're launching it in multiple languages, and all that happened this week. It's very relevant to the space that we're in today. And companies are saying that's required for my supply chain. You follow those procedures; BYD and Geely are also requiring that of their supply chain. So, it's a tried and true piece that's been brought up to speed with the newer ways of doing things. It's updated and it's ready to go. And it's been vetted by, we add 30 or 40 OEM tier one companies, making sure they were looking at it and reviewing it, making sure it was relative.

You have to understand your first tier now, more than ever, and you've got to drive that down. So, I see supplier tracking. If you're not doing it today, you are going to be in trouble because you won't know where these issues are going to happen. You're not going to know if your suppliers are meeting all of these compliance initiatives in the industry. Do you think the same thing? Do you see that need to really understand your supply base now more than ever?

I would say, as a commercial, bring your problems to AIAG, not your specific product problems, but your industry problems; bring those things to us. Work with AIAG and be a volunteer. If you're doing those things, you'll hear about the current issues in the industry. You'll learn from peers about the best practices on how to maybe do some things differently. All those things allow you to be part of the solution. And we talked about this today as well. There are standards that exist today that are really good. Don't ignore some of the tried and true standards that are out there, like APQP core tools, IATF; there's things that work. And my final piece that I would recommend to folks because I talked about culture earlier, right? I would highly recommend those of you listening to go out there and purchase a book called Autoculture 2.0: Leading with Gravitas. I had the opportunity to be somebody involved that got to read an advanced copy of that. It was a good read, it was a quick read, and it's relevant to the industry today. So, this is a very interesting book on culture change. I think it's a fantastic thing. And one of the things I am already embracing from that, and I love it, Jan, you had three critical leadership lessons that you gave out of that. And the third one is embracing progress over perfection. I think that's critical for how I'm looking at AIAG. We can't try to do things perfect because it'll take too long, and things are changing too fast, and it's too dynamic. How do we get things? How do we progress? How do we put a standard out there that's relevant for now? And then keep updating it six months or a year from now to make sure we're keeping pace. So, I would say, you know, get out there and get a copy of the book. I'm sure it's available by the time people listen to this and take advantage of the lessons learned by Jan in her book.