CEO Insights: The Trust Gateway of the 'PPAP' Supply Chain

In the early days of Model S mass production in 2012, Tesla was still pushing forward under delivery pressure. However, internal and external test documents simultaneously revealed a potential leak risk in the battery cooling system. The factory, in a rush to launch, made numerous stopgap fixes without a deep analysis of the root cause of the problem.((Business Insider))

The incentive for delivery often severs the responsibility for quality verification.

And PPAP is precisely that "gateway" that should have linked the two back together.

The Essence of PPAP: A Risk Gateway Before Mass Production

Production Part Approval Process, or PPAP (not the Pen Pineapple Apple Pen danced by that yellow-bearded uncle 😂), has a simple core logic: before mass production, the supplier must prove that their process can consistently produce parts that meet specifications. AIAG defines PPAP as an industry standard process used to ensure design specifications and process capabilities are met.

Based on common requirements in many automotive supply chains, PPAP typically involves:

Design and process document submission
Process capability and statistical validation, such as Cpk threshold requirements
Measurement and evidence preservation using consecutive samples, a common practice is to take 30 consecutive samples for initial capability validation

What is Cpk? (A key indicator of manufacturing process capability)

Cpk (Process Capability Index) is a metric used to measure a manufacturing process's ability to consistently produce products within specification limits. It compares the actual distribution of the process (mean and variation) with the upper and lower limits of customer/engineering specifications, quantifying the degree of "yield and stability."

Simply put: if the distribution of manufactured part dimensions is highly concentrated and the mean is not skewed towards the specification boundaries, Cpk will be high; meaning most products are within acceptable range. Conversely, if the distribution is wide or the mean is skewed towards the boundaries, Cpk will be low.

Interpretation Criteria (commonly used industry thresholds):

- Cpk ≥ 1.33: Generally acceptable for mass production, a common threshold for automotive industry PPAP requirements.

- Cpk ≥ 1.67: Better process with robust margin.

- Cpk < 1.33: Requires improvement (reduce variation, correct center, optimize process, fixtures, and measurement).

Business and Quality Significance:

- High Cpk means fewer defects and rework, more stable delivery times, and lower total costs (COPQ).

- In the automotive supply chain's PPAP (Production Part Approval Process) and customer audits, Cpk is a core quantitative evidence, often used to decide whether to proceed to mass production and maintain qualified supplier status.

Common practices to improve Cpk:

- Ensure measurement reliability with MSA (Measurement System Analysis) and calibration.

- Stabilize variation with SPC (Statistical Process Control), adjust process parameters and fixtures.

- Conduct DOE (Design of Experiments), root cause analysis (5 Why/Fishbone), and continuous improvement (Kaizen).

Cpk transforms "whether a process is ready for mass production" into a negotiable and decidable number. For CEOs/Procurement/Quality, understanding and requiring Cpk metrics for key characteristics is fundamental to risk reduction and delivery assurance.

This is why it takes time. For established automakers, it's part of the rhythm. For cash-strapped startups or rapidly expanding organizations, it's often seen as a "process that slows everything down."

Do Power and Incentives Overthrow PPAP, Rendering It Ineffective?

Many companies fail not because they don't understand PPAP, but because when the organization makes decisions, what is truly rewarded is not "containing risks before mass production" but "achieving delivery numbers."

You'll see a very typical decision tree:

Option A: Complete full PPAP, delay delivery, quality risk decreases
Option B: Minimize PPAP or skip it, meet delivery first, leave risks for the future

Under short-term financial and market pressure, B often appears more "rational" quarterly. (Business Insider's investigative article described), Tesla, during its 2012 production ramp-up, had very strong internal rhetoric regarding delivery pressure, even pushing it with the sentiment of "If we don't deliver these cars we're fucked!"

Hidden within this are three structural problems:

Separation of Responsibility and Authority Delivery targets are held within sales and operational rhythms, but if quality's veto power isn't strong enough, PPAP can easily be "removed."
Short-term Incentives Override Long-term Consequences Quarterly delivery is an explicit KPI, while reliability and warranty costs two years down the line are often not on the same evaluation sheet.
Suppliers Caught in a Dilemma Customers demand speed on one hand and full verification on the other; suppliers are most likely to resort to "superficial compliance"—documents are in place, but risks are not truly contained.

Tesla's Issue Was Not "Lack of Quality Understanding," But Neglect of "Corporate Governance"

Early Tesla Model S Cooling System Controversy

In the early days of Model S mass production in 2012, Tesla experienced signals of leak risks related to the cooling system, with external tests and internal documents disclosing this. Years later, the reliability ratings of the Model S also fluctuated in Consumer Reports' evaluations, and media reported in 2018 that the Model S had again lost favor, citing reasons related to Tesla's declining quality reliability.

The point is not "whether PPAP was entirely neglected back then." What's truly worth noting is: When the delivery date becomes an unshakeable constraint, any process that could lead to "non-approval" will be systematically weakened.

Ford Integrated Six Sigma and Quality Governance into a Company-wide System

In the 2000s, Ford promoted Consumer Driven Six Sigma, integrating it into its overall management system. In terms of results, Ford publicly shared the financial contributions and customer satisfaction improvements of Six Sigma projects, for instance, an early Quality Digest report mentioned its projects' estimated bottom-line contributions and satisfaction boosts. WardsAuto also reported in 2004 that Ford stated it had accumulated documented cost savings since its launch in 2000.

Ford's insight lies in this: it didn't just treat quality as "something to remind everyone to pay attention to," but rather made quality verification a mechanism that could halt decisions. In other words, it upgraded PPAP-type gateways from compliance forms to governance design.

Why Does PPAP Often Degenerate into a Document Game?

Distorted Incentive Structure Everyone is rewarded for speed, yet few are rewarded for delaying mass production to avert future risks.
Asymmetrical Client-Supplier Relationship When "speed" is implicitly an undeniable demand, suppliers naturally deliver with minimal cost.
Insufficient Inspection Depth PPAP items can be inspected superficially or very deeply. PPAP without on-site verification is often just an exchange of documents, not an exchange of trust.

PPAP Actually Solves a Governance Problem

To put it more plainly, the effectiveness of PPAP depends on four things:

Who holds the veto power (can quality control genuinely say no)
The time horizon of executive incentives (whether long-term quality consequences are factored into evaluation)
The rhythm co-established by suppliers (is the timeline negotiable, are delays permitted)
The depth of evidence verification (paper-based verification, or on-production-line verification)

When these four conditions are met, PPAP transforms from a "process" into a "mechanism of trust."

Call to Action

If your organization is using PPAP, but quality issues recur, you might start with three diagnoses:

Is the quality department an approver, or merely a consultant If it only has advisory power, PPAP is easily diluted by schedule pressure.
Do your executive incentives include long-term quality metrics Such as warranty costs, reliability trends, customer complaint structure, and not just quarterly deliveries.
Do suppliers dare to speak the truth on the PPAP timeline If delays are implicitly equated to failure, what you'll get is an appearance of compliance, not credible proof of capability.

If you are establishing PPAP, "starting with the most critical elements first" is usually more practical than implementing everything at once. For example, begin with high-leverage items such as design records, process capability evidence, initial sample testing, and FMEA, allowing them to first become a gate that influences decisions. ((SL America))

Quality Needs Systems Because It Often Loses to Short-term Incentives

I've always felt that Tesla's story reminds us of something very human: many people actually know what the correct practices are, but when quarterly pressure mounts, knowledge can be overthrown by incentives.

Ford's case, on the other hand, suggests that what truly safeguards quality is not slogans, but placing veto power in a position that won't be held hostage by short-term deliveries, allowing it to genuinely halt decisions.

PPAP is not about making you work harder on documents, but about your organization's willingness to use governance to protect the future, preventing it from being destroyed by incentives rooted in short-sighted, opportunistic organizational strategies.