1. An Automotive Tier 1 Warranty Process
Development and Challenges

2. Initial Considerations
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 ultimately eliminates reaction.
Plan Do
Check
Act

3. Process Outline Process is broken down into two parts:
Reactive Claim Processing & Action:
Data Analysis and Warranty Reduction:
Specific Engineering Concerns
Strategic Concerns
Lessons Learned
OEM Warranty Claim
Initial Logging & Reaction
Part Analysis
Corrective Action & Claim Decision
Closed Claim
Root Cause Code
Central Warranty Database
Monitoring and Measurement
Warranty Reduction Activities
Data Analysis

4. Initial Logging & Reaction
Warranty co-ordinator receives and logs claim in the warranty database.
Warranty co-ordinator assess claim to determine if containment action is required and at what locations (customer/supplier/local) and levels.
Co-ordinator determines failed part availability and arranges collection/return.
Process moves to Product Analysis Phase.
Critical Success Factors:
Challenges:
Co-ordinator Knowledge of Customer Specific Process
Defined Warranty Policy
Inadequate or indecipherable information about failure
Knowledge of Severity and possible extent
Timely Processing & Analysis
Knowledge of warranty history – Part/Customer
Judgements on what % of parts to have returned
Availability of parts

5. These root cause codes can be broken down further, enhancing analysis
Part Analysis
QA (with Product Engineering assistance) assess part(s) against design records and specifications:
Inspection report written to confirm findings and logged in warranty database against claim. Fault Code generated.
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..)
The output of part analysis is to determine the Primary Root Cause Code(s):
Design
Manufacture
Material/Component/Sub-supplier
Customer/Usage
Functional
Dimensional
Visual
Tear Down
These root cause codes can be broken down further, enhancing analysis

6. Part Analysis Critical Success Factors: Challenges:
Cross Functional Involvement
Resource Allocation
Knowledge of Application and Use
Knowledge of Problem Solving Techniques
Challenges:
Allocation of Correct Root Cause Code(s)
The unknown and unknowable
Co-operation of Suppliers/ Customer/Dealers
Unable to establish root cause!

7. Corrective Action, Claim Decision and Future Prevention
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 Capability
Process Capability
Reliability Analysis
Design Improvement
Suppliers
Focussed SPC
PFMEA
Spec Development
Process Design & Improvement
Validation
Validation
Customers
Validation

8. Data Analysis and Warranty Reduction Activity
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
Dealer Codes
Model Lines
Age/Mileage
Seasonal / Date of Occurrence/Claim
Relationship with Fault Codes

9. Data Analysis and Warranty Reduction Activity
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 Pressures
Sourcing Policy
Product & Process Development Capabilities
Make or Buy?
Development /Involvement
Customer Supplier Involvement
Supplier Capability
Resource

10. Monitoring and Measurement
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:
Whether any reduction action is being effective or not.
That warranty process is effectively preventing repeat issues and protecting customers.
Whether the process is cost effective.

11. Summary 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.

12. Summary
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.

13. Q & A
Thank you for your time, I will be happy to answer any questions you may have.