Development and Challenges

• Assumes at least a proportion of warranty product can be returned to Tier 1

for analysis and products are replaced rather than repaired.

• Resource is required to manage the warranty process and analyse the data
to reduce it.

• Quality facilitate process and a ‘Warranty Co-ordinator’ is assigned. Specific

assignment (by customer etc…) and level of resource allocation dependant
on level of warranty experienced.

• However - must have cross functional involvement.

• Requires ONE central location to record, report and analyse data.

• Must be a process that effectively ‘Reacts’ but that ultimately

builds a pro-active ‘Prevention’ ability that reduces and Plan

ultimately eliminates reaction.

Act Do

Check
• Process is broken down into two parts:
Lessons
• Reactive Claim Processing & Action: Learned

OEM Corrective
Initial Logging Closed
Warranty Part Analysis Action & Claim
& Reaction Decision
Claim
Claim
Root Cause
Code

• Data Analysis and Warranty Reduction:

Central
Warranty Warranty
Monitoring and Database
Reduction Data Analysis
Measurement
Activities

• Specific Engineering Concerns

• Strategic Concerns
 1. Warranty co-ordinator receives and logs claim in the warranty
database.

2. Warranty co-ordinator assess claim to determine if containment action

is required and at what locations (customer/supplier/local) and levels.

3. Co-ordinator determines failed part availability and arranges

collection/return.

4. Process moves to Product Analysis Phase.

Critical Success Factors: Challenges:

Inadequate or
Co-ordinator Knowledge of Knowledge of Severity and
Defined Warranty Policy indecipherable
Customer Specific Process possible extent
information about failure

Timely Processing & Knowledge of warranty Judgements on what % of

Availability of parts
Analysis history – Part/Customer parts to have returned
1. QA (with Product Engineering assistance) assess part(s) against design
records and specifications:

Functional Dimensional
Visual Tear Down

2. Inspection report written to confirm findings and logged in warranty

database against claim. Fault Code generated.

3. Most likely failure(s) established and root cause analysis carried out
using common problem solving tools (5 why analysis, Cause and Effect,
Design of Experiments etc..)

4. The output of part analysis is to determine the Primary Root Cause

Code(s):
These root cause
• Design codes can be
• Manufacture broken down
• Material/Component/Sub-supplier further, enhancing
• Customer/Usage analysis
Critical Success Factors:
Cross Functional
Resource Allocation
Involvement

Knowledge of Application Knowledge of Problem

and Use Solving Techniques

Challenges:
Allocation of Correct Root The unknown and
Cause Code(s) unknowable
Co-operation of Suppliers/
Unable to establish root
Customer/Dealers
cause!
• Once the root cause has been established, appropriate corrective
action should be implemented and communicated to the customer in
their required format (usually 8D).

• In the event of no root cause identification – appropriate detection

methods maybe acceptable.

• Claim is accepted/rejected on basis of part analysis.

• Root causes and warranty data also facilitates prevention of failure

occurrence in the future through lessons learned tools:

DFMEA Design
Reliability Capability Process
Analysis Capability
Design Focussed
Suppliers
Improvement PFMEA SPC Spec
Process Development
Design &
Validation Validation
Improvement
Customers
Validation
• Monthly or quarterly reviews – cross functional.

• Utilising the central database, warranty data can be analysed and

reported in order to target reduction activities to most prevalent
issues.

• Root cause codes form the central analysis point:

• Occurrence.
• Cost (including associated costs – labour, shipping, containment)
• Geographical Location
• Supplier/Customer Count of Claims by RCC
• Dealer Codes 400
300
• Model Lines 200
100
• Age/Mileage 0
Count

• Seasonal / Date of Occurrence/Claim

• Relationship with Fault Codes
• Analysis can drill to secondary (and possibly tertiary) root cause codes
for better drilling of root cause and action:

• Frequently occurring and costly warranty causes can then be targeted

first.
• Not just learning product specific lessons – systemic strategic focus can
also be made:
Competency Time
Sourcing Product & Pressures
Make or Process
Policy
Buy? Customer Development
Supplier Development Supplier Capabilities
/Involvement Resource
Capability Involvement
• Periodic review includes analysis of trends with time:

• Costs of Warranty related liabilities.

• Occurrence of specific Root Cause Codes
• Time to resolve claims (often contractual time limits)
• Costs of managing and administering the process (appraisals,
testing, analysis, implementation of improvement etc…)

• This monitoring of key measures determines:

1. Whether any reduction action is being effective or not.

2. That warranty process is effectively preventing repeat issues and
protecting customers.
3. Whether the process is cost effective.
• Warranty provides distinct opportunities:

• Valuable Voice of the Customer – Application, conditions,

expectations.
• Provides Product and System lessons learned.
• A metric to measure product, process and supplier
development/selection processes.
• Ability to prioritise improvement activity given resource
restrictions.

• But also has challenges:

• Predominantly Reactive – after the event.

• Resource – Financial, Human and Operational.
• Co-operation from Customer (support investigation) and Supplier
(warranty recovery)
• Managing varying warranty expectations between multiple OEMs.
• Elements beyond the organisation’s control.
• Overall Critical Success Factors for warranty process implementation
and effectiveness:

• Know OEM Specific requirements for both definition and

administration of warranty. Written agreements need to be
communicated!

• Establish whether OEM customer has on-line warranty systems

that allow supplier access for administration and information.

• Drill for information from OEM if required.

• Use the data collated – it’s a basis on which to make decisions.

• Cross functional involvement is critical. Especially for Root Cause &

Warranty Reduction.

• Establish good relationships with key suppliers and support with

written warranty agreements.
Thank you for your time, I will be happy to answer any questions you may have.