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Warranty management

Automotive warranty management – 8 tips to save money

Warranty management is usually not in focus at the manufacturing location – as long as the received monthly debits are within a certain acceptable limit.

Generally, when it is over a limit, it is too late to control or requires an enormous effort to minimize the risk.

We should always keep in mind that our product performance in the field has a significant impact on customer satisfaction. Every claim means a faulty part from a vehicle; the car must be taken back to the service to repair.

Here are some tips about the focus areas of a proper warranty management process.

  1. Be aware of customer-specific requirements

Sounds easy, right?

Based on my auditor experience, many automotive suppliers are not fully aware of these requirements’ details.

Each OEM has its additional customer-specific requirements, which describe how the warranty management works and what their expectations are.

Study these requirements carefully and ensure that the internal processes are fully aligned with them, including the NTF (no trouble found) process.

2. Plan the warranty analysis process

The supplier needs to be prepared for warranty analysis before SOP according to VDA Field Failure Analysis booklet.

Yes, before SOP.

This means that each newly developed product’s exact analysis process needs to be defined during APQP before the part is used in vehicle series production.

3. Collect and analyze the data from the customer

OEMs continuously provide comprehensive data about the rejected parts, including vehicle data, mileage, failure code, symptom, etc.

Use these data to understand patterns better, identify lifetime issues, predictions for the future failing rate / overall risk.

4. Continuously analyze rejected parts from the field

The supplier’s best interest is to continuously monitor the warranty performance, which ensures that new issues are identified and solved as quickly as possible.

The outcome of the analysis is the basis for Technical Factor (TF) agreements with the customer. That means an agreement about the percentage of the overall warranty cost, which the supplier needs to cover.

5. Keep the deadlines

Simple advice, but as an auditor, I have experienced many times that suppliers were debited just because the given deadline was not kept.

Even if the final analysis outcome was that the supplier is not responsible, if it is over a specific deadline, the debit would come.

6. Verify debit notes and the data behind

Sounds obvious again, but my experience shows it worth mentioning.

Do not accept the debit notes without fully understand the data behind them. Customers are making mistakes too – as the suppliers do as well.

Take the time to review the data and request a modification if something is not OK.

7. Continuous improvement

Warranty management is part of the continuous improvement process. Use the lessons learned for future product and process improvements.

Keep in mind, APQP Phase 1 includes a review of historical warranty and quality information.

8. Audit your field failure analysis process

Do not learn from your mistakes. Detect any lack of fulfillment of the requirements by conducting Field Failure analysis audits.

VDA Field Failure Analysis & Audit standard describes a uniform evaluation method.

The audit for the field failure analysis is an independent audit standard based on the field failure analysis process’s specific requirements.

VDA 6.3 process auditors can perform the audit if they have professional skills in the field failure analysis process.

Look for an experienced auditor and identify any issue on time.

As always, think in system with Pro Automotive.

If you are interested in reading articles about automotive quality management topics, best practices, case studies, follow Pro Automotive.


Train your own team!

Several years ago, as a quality manager, I found myself in a situation that I had to make a tough decision. I quickly needed to build up my customer quality engineering team due to responsibility changes within the organization.

I had two choices:

  • hire experienced quality engineers as quickly as possible
  • choose internal candidates without any experience within the customer quality field

I made several interviews, met some “quality stars” from outside who had lots of confidence, but I realized that they also had lack of technical knowledge as well.

Just because someone worked as quality engineers for years, unfortunately it does not necessarily mean they have the knowledge which is required for the task and the personality which is needed for the team.

Finally, I recognized that anyway I need to train my colleagues a lot and in mid term, it is much more important to have team members who are eager to learn and who are fitting into the team.

I decided to choose internal candidates who really wanted to learn and convinced them to take this challenge.

I personally made several trainings for them, focusing on problem solving and Core Tools, but only which were appropriate for them.

The best method to train your employees is to let them work on challenges – learning by doing.

When the first quality claim arrived (certainly on Friday afternoon – as always…), I took the lead in the claim handling and explained all steps and the reasons behind, I led the customer communication.

But they got small tasks within the claim handling process which they were able to solve.

From time to time they got more and more responsibility and they were able to manage it better and better.

Half a year later they were working independently, but they always came to me for advice if they needed, explained what they were planning, and weekly we reviewed the risks and the difficulties together. They were motivated and their skills improved a lot. Now one of them is working as a Quality Manager.

What else could be more motivating for a leader than to support candidates from the organization to develop themselves?

As always, think in system with Pro Automotive.

If you are interested in reading articles about automotive quality management topics, best practices, case studies, follow Pro Automotive.


Before the FIRE starts – Control Plan with additional referenced parameter lists

  • What is the revision date of this CP? – I asked the process engineer when I was performing a VDA 6.3 process audit at an automotive supplier.
  • Almost one year ago – the engineer replied and showed me the revision date of the document.
  • Was there any change in the process in the meantime? – I asked him again.
  • Nope – he replied immediately.
  • How about this machine parameter list? Which version is this? – I turned to him again.
  • Last update happened one week ago – the engineer said and proudly showed the revision list of the parameter list.

Finally it turns out that there were some changes in the process, but the CP has not been revised as “only” the referenced documents were updated. “Certainly” there was no change management activity, customer was not involved and by the way, the currently set parameters were not aligned with the defined parameters.

Typical solution at the automotive suppliers that there is a nice CP, several pages, contains mainly only product characteristics.

If someone takes a closer look, it is very difficult to find any process parameters in the document, but there are some reference documents linked to some machines, which are called as parameter lists.

These describes list of process parameters which need to be set to achieve the desired result: the product characteristics.

  • Is it the right thing to do?

From auditor point of view, I can not state that this is against the described requirements within the APQP/CP booklet or against any of the customer requirements as long as these referenced documents are part of the documentation system and protected and handled properly.

  • So why would this cause any issue?

Based on my experience, this is a method or the cause for the organizations to hide or make (without even recognizing) process parameter changes.

  • Oh, that is not always bad… Customer will not ask unpleasant questions, will not request unwanted documentations, samplings… who could wish more?

Not really:

  • It encourages line technicians, maintenance guys, process engineers to change process parameters without proper risk analysis whenever there is some problem in the process or with the products. Instead of proper root cause analysis, the process might be changed to the NOK parts.
    • The CP revision history will not even include such changes as only referenced documents has been revised.
    • Unauthorized process change could lead to escalation at the customer.
    • Great risk for customer quality claim, impact on lifetime.
  • Why is it a problem of changing some process parameters when the significant characteristics of the parts are checked anyway 100%? We are sure that the parts fulfill its dimension specification.

I was faced several times with similar questions in the past.

The reason is that the process parameters have been verified and approved by the organization and by the customer within the PPAP activity.

It has been stated and proved that the described controls (process and product characteristics) are appropriate to produce parts which meet the customer requirements.

If any of these parameters are changed (out of the specified range), risk analysis regarding the impact of the change needs to be performed according to the customer requirements.

Within change management process, supplier needs to demonstrate that the modified process will also produce OK parts, customer notification or approval might be needed in prior the change is implemented.

I would encourage all quality managers and the quality engineers to review the CPs and verify if the process parameters are listed properly. It is better to list all process parameters directly in the CP.

As always, think in system with Pro Automotive.

If you are interested reading articles about automotive quality management topics, best practices, case studies, follow Pro Automotive.

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