Warranty is a statement of assurance or undertaking issued by the manufacturer of a product concerning the performance of the product and parts supplied by him by way of sale transaction to the customer, for a certain period as stated in the Warranty Card accompanying the product. In other words, it is a performance guarantee for the product given by the manufacturer. In case of any poor performance due to the nonperformance of any part or defect in any part of the product, will be made good by the supplier/manufacturer with either replacement of the part or product or repair of the product.Warranty Management is today a function of Service Parts Management Stream in the organization.Service Parts Management Teams and structure are the Service Support Delivery owners and function as primary contact points with the customer. At the first level Service, support teams comprise of Customer Desk, which is the first point contact for the customers to register the service request. Technicians and Engineers as front end site supports and second point contacts to the customers. Parts Support Managers oversee the functioning of the operations and take responsibility to close calls and for delivery performance.
Warranty Management and Claims Processing System are driven by the Internet and e-commerce enabled system application that generally consists of the following modules:
- Service Warranty Database and Tracker (Database information uploaded from Sales Module)
- Service Request Registration, authorization, service job ticket issue, job ticket closure & Report functions.
- Parts procurement request, parts issue authorization
- Parts Inventory Management, Purchase Order Management, Repair Management, Vendor Management etc.
Parts Procurement and Logistics may be handled by a single department or by separate teams depending upon the volume of business and the management structure. These functions manage parts procurement functions, inbound logistics, parts warehousing and distribution on the outbound cycle. Reverse Logistics functions managed by the team involve – Parts collection, parts segregation, inventory holding of defective parts, parts repair, warranty replacement with OE manufacturer, Re-Export, and Waste disposal or Scrapping functions.
IPTV (en. Incidents Per Thousand Vehicles)
Also known as the C1000. This indicator determines the number of problems reported by final customers visiting the dealer stations. This does not automatically mean the replacement of components. In this case dealer can for example, only update the software, lubricate interface elements, or perform their additional tightening. The starting point for defining the above-mentioned indicator is a joint work which is carried out by the customer’s engineering and the organization of the reliability plan, which corresponds to the implementation of APQP point 1.4. Product and process assumptions.
TF (Technical Factor – %)
Defines the percentage share of the organization’s financial responsibility for the parts replaced by the dealer that are covered by the warranty period. From the supplier’s point of view, this is a key indicator that directly translates into poor quality costs. Defining its value should start immediately after SOP (start of production) with the analysis of the first parts. Usually the first meetings with clients regarding defining of Technical Factor take place a few months after the project is launched. In this case is already analyzed several dozen parts (of course, it can be more which is more advantageous for the organization). To the final evaluation is taken into account:
- the number of parts analyzed in a given period
- number of parts for which a defect can be assigned for supplier responsibility
- the number of parts for which no defect from final customer has been confirmed
It is also worth remembering that TF is not an indicator that is defined once. Depending on the achieved quality performance, this value may be reduced (in case of actions implemented by the organization for identified defects) or increased. Second case will be related to chronic problem assigned to the process, subcomponents or design. Such issue should be analysed in automotive warranty management activity by organization with big attention.
NTF (No trouble found)
No confirmation of the defect. The term used when analyzing warranty returns, for which, after performing standard tests, no defects indicated by the end user were found. Depending on the customer (OEM) additional requirements related to NTF may be applied.
Months in Service (MIS)
Defined as the time period during which the vehicle is used by the end customer. The usual assumption is that 30 days of use is equivalent to the index unit (30 days = 1.0 MIS). When working with a Ford customer, it is worth remembering that it is referred to as TIS: Time-In-Service. The most popular time periods are: 3 months (3 MIS) when the incident occurred, counting from the date of vehicle purchase by the end customer until issue reporting to the dealer, 12 (12 MIS) and 24 (24 MIS) months. Nevertheless, customers such as VW, GM and Ford give the opportunity to see the performance even for one month.
In summary, each person in the organization who is responsible for managing warranty returns should familiarize themselves with the above terms in order to correctly understand the links between them and identify their impact on the potential financial invoices.
10.2.5 Warranty management systems
When the organization is required to provide warranty for their product, the organization must implement a warranty management process. The organization shall include in the process a method for warranty part analysis, including NTF (no trouble found). When specified by the customer, the organization shall implement the required warranty management process.
An automotive warranty management system is a structured and systematic approach used by automotive manufacturers, suppliers, and service providers to manage warranty-related processes, claims, data, and customer interactions. This system helps ensure that products meet quality standards, provides effective customer support, and addresses warranty claims efficiently. Here are the key components and functions of an automotive warranty management system:
- Warranty Policy and Guidelines: Define the warranty terms, conditions, and coverage for automotive products. Establish guidelines for handling warranty claims, including what is covered, claim submission deadlines, and customer responsibilities.
- Claims Management: Receive, process, and manage warranty claims from customers, dealerships, or other stakeholders. Verify claim validity, assess the nature of defects, and determine whether the claim is eligible for reimbursement or repair.
- Data Collection and Analysis: Collect and analyze warranty data to identify trends, patterns, and recurring issues. Use data insights to improve product design, manufacturing processes, and overall quality.
- Supplier Collaboration: Collaborate with suppliers to track and address issues related to defective components or materials. Work together to identify root causes and implement corrective actions.
- Customer Support: Provide efficient and responsive customer support for warranty-related inquiries, claims submission, and dispute resolution. Keep customers informed about the status of their claims.
- Documentation and Records: Maintain detailed records of warranty claims, including customer information, product details, defect descriptions, repair actions, and claim outcomes.
- Repair and Replacement: Coordinate and manage repair or replacement activities for defective products. Ensure that repairs are performed correctly and that replacement parts meet quality standards.
- Communication Channels: Establish clear communication channels for customers, dealerships, and other stakeholders to submit warranty claims, seek assistance, and provide feedback.
- Escalation and Approval: Define escalation procedures for handling complex or high-value warranty claims. Ensure proper authorization and approval processes for claims resolution.
- Reporting and Analytics: Generate reports and dashboards that provide insights into warranty trends, costs, claim processing times, and other key performance indicators.
- Continuous Improvement: Use warranty data and analysis to drive continuous improvement in product design, manufacturing processes, and quality control.
- Regulatory Compliance: Ensure compliance with relevant automotive industry regulations, standards, and laws related to warranty coverage, consumer protection, and data privacy.
- Integration with Quality Management: Integrate the warranty management system with quality management processes, such as root cause analysis, corrective and preventive actions, and process improvement initiatives.
An effective automotive warranty management system helps organizations enhance customer satisfaction, reduce warranty costs, identify quality improvement opportunities, and strengthen their reputation within the automotive industry. It aligns with the principles of quality management, customer focus, and continuous improvement, supporting the organization’s commitment to delivering reliable and high-quality automotive products and services.
Warranty part Analysis
Including warranty part analysis in the automotive warranty management process is essential for identifying root causes of product failures, improving product quality, and effectively managing warranty claims. This analysis involves a systematic examination of warranty-related data, including information about defective parts, to gain insights into the underlying issues that lead to warranty claims. Here’s how you can integrate warranty part analysis into your warranty management process:
- Data Collection and Aggregation: Gather comprehensive data on warranty claims, including information about the specific parts or components that have experienced failures. Collect data related to part numbers, quantities, failure descriptions, dates of failure, and customer feedback.
- Categorization and Segmentation: Categorize warranty claims based on the type of parts or components that are failing. Segregate claims by part number, product model, production batch, or any other relevant criteria.
- Root Cause Analysis: Perform thorough root cause analysis on each category of warranty parts. Use techniques such as the 5 Whys, Fishbone diagrams (Ishikawa), Failure Mode and Effects Analysis (FMEA), and statistical analysis to identify underlying causes of failures.
- Trend Identification: Analyze warranty part data to identify trends and patterns across different parts or components. Look for common failure modes, recurrence rates, and potential systemic issues.
- Supplier Involvement: Collaborate with suppliers to investigate and understand potential defects in the supplied parts. Share warranty data and analysis to jointly identify root causes and implement corrective actions.
- Quality Improvement: Based on the analysis, develop and implement corrective and preventive actions to address the identified root causes. Improve part design, manufacturing processes, quality control, and materials to prevent future failures.
- Feedback Loop: Establish a feedback loop between warranty part analysis and the product development process. Share insights from warranty data with design and engineering teams to inform design improvements and modifications.
- Documentation and Reporting: Document the findings of warranty part analysis, including root causes, corrective actions, and outcomes. Generate reports and dashboards that communicate trends and improvement initiatives.
- Continuous Monitoring: Continuously monitor the effectiveness of implemented corrective actions. Track changes in warranty part performance over time to ensure sustained improvement.
- Knowledge Sharing: Share insights and lessons learned from warranty part analysis across the organization. Disseminate information to relevant departments, including manufacturing, engineering, and quality assurance.
- Training and Skill Development: Provide training to employees involved in warranty part analysis to ensure they have the necessary skills and knowledge to perform effective root cause analysis and data interpretation.
- Alignment with Quality Objectives: Ensure that the outcomes of warranty part analysis align with the organization’s quality objectives and contribute to the overall improvement of product quality and customer satisfaction.
By integrating warranty part analysis into the warranty management process, the organization can proactively address product failures, reduce warranty costs, enhance customer satisfaction, and drive continuous improvement in product design and manufacturing processes. This approach supports the organization’s commitment to delivering high-quality automotive products and services and aligns with the principles of IATF 16949 and other quality standards.
NTF (No Trouble Found)
Incorporating NTF (No Trouble Found) cases into the automotive warranty management process is important to effectively handle warranty claims where no identifiable defects or issues are found with the claimed product. Handling NTF cases systematically helps maintain customer satisfaction, reduce unnecessary costs, and improve the overall warranty management process. Here’s how you can include NTF cases in your warranty management process:
- Clearly identify and segregate warranty claims that fall under the category of NTF. These are cases where no actual defects or issues are identified upon investigation.
- Thoroughly document the customer’s complaint and description of the issue. Capture all relevant details to ensure a complete understanding of the reported problem.
- Conduct an initial assessment of the claimed product to verify the reported issue. This may involve basic inspections, tests, or diagnostics to determine if any visible or obvious problems exist.
- Maintain open and transparent communication with the customer throughout the process. Inform them of the assessment results and the steps being taken to investigate further.
- If no immediate issues are found, conduct a more detailed analysis involving specialized testing, diagnostics, or collaboration with relevant technical teams.
- Apply root cause analysis methodologies to explore potential underlying causes of the reported issue, even if they are not immediately apparent.
- If applicable, involve suppliers in the investigation to ensure that the reported issue is not related to components or parts they have supplied.
- Perform validation testing under various conditions to replicate the reported problem and determine if it can be reproduced.
- If the claimed product was initially assessed by a dealership or service center, collaborate with the Dealerships to gather additional insights and observations.
- Provide feedback and training to service technicians, dealerships, and personnel involved in diagnosing and handling NTF cases. Enhance their ability to accurately assess and address such situations.
- Maintain detailed records of NTF cases, including the steps taken, analysis results, customer interactions, and any follow-up actions.
- Educate customers about the possibility of NTF cases, explaining that complex systems may exhibit intermittent or difficult-to-replicate issues.
- In cases where no defects are found, consider offering compensation, discounts, or additional support to the customer to maintain a positive relationship.
- Analyze NTF cases as part of your overall warranty data analysis to identify trends, improve diagnostic processes, and enhance overall product quality.
By including NTF cases in your warranty management process, you demonstrate a customer-focused approach to addressing reported issues, even when no immediate defects are found. This approach contributes to improved customer satisfaction, efficient use of resources, and ongoing enhancement of your organization’s quality management efforts in the automotive industry.
Customer specified Warranty Management Process
When a customer specifies specific requirements for the warranty management process, it is imperative for the organization to implement and adhere to these requirements. This demonstrates a commitment to meeting the customer’s expectations and ensuring that warranty-related processes align with the customer’s preferences. Review and analyze the customer’s specified warranty management process in detail. Ensure a clear understanding of their expectations, guidelines, and any unique requirements they have outlined. Document the customer-specified warranty management process, including all relevant details, instructions, and specific steps to be followed. Map out the customer-specified process and integrate it with your existing warranty management framework, if applicable. Identify points of alignment and potential gaps. Allocate the necessary resources, personnel, and tools to effectively implement the customer-specified process. Ensure that the required skills and competencies are in place. Customize workflows, procedures, and documentation to match the customer’s requirements while ensuring they integrate seamlessly with your overall quality management system.Provide training to employees involved in the warranty management process to ensure they understand and can effectively implement the customer-specified requirements. Facilitate open communication about the new process. Engage in ongoing communication with the customer to clarify any ambiguities, seek clarification, and address any questions or concerns. Validate the implementation of the customer-specified warranty management process through pilot testing or trial runs. Ensure that it functions as intended and produces the desired outcomes. Seek feedback from both internal stakeholders and the customer regarding the implementation of the specified process. Use feedback to identify areas for improvement and make necessary adjustments. Maintain comprehensive documentation of the implementation process, any changes made, and the outcomes achieved. Keep records of any communication with the customer related to the process. Continuously monitor the performance and effectiveness of the customer-specified warranty management process. Track key performance indicators and customer satisfaction metrics. Ensure that the implemented process is audited as part of your quality management system’s internal audit process to verify compliance with the customer’s requirements. Be prepared to adapt and adjust your processes as needed based on the customer’s feedback and changing requirements over time. By diligently implementing the customer-specified warranty management process, the organization not only meets the customer’s expectations but also enhances its reputation as a reliable and customer-focused partner. This approach fosters strong customer relationships, drives customer satisfaction, and contributes to the organization’s success in the automotive industry.