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Warranty management

Warranty claims? We have time for that…

Zero km claim means a customer complaint which occurred at the customers’ production line due to any issue with our supplied products. In case of a complaint, the customer states that the product provided is not according to the agreed specification.

The supplier has the task to prove if that is OK, or if it is confirmed as NOK, to identify the root cause and plan and implement robust actions that prevent re-occurrence.

In the meantime, the supplier must ensure that only good parts arrive at the customer production line; therefore, implements different containment actions.

In practice, it generally means internal and external sortings and additional actions depending on the case.

Even for one NOK part, we pay external sorting companies, block, and re-screen finished products, hold problem-solving meetings, and spend an enormous time to make sure we can entirely eliminate the re-occurrence possibility. Once again, due to one single complaint, maybe due to a single individual failed part.

This is part of the continuous improvement process and also a customer requirement as well (and it is the interest of the Organization too).

To fulfill this requirement, suppliers build-up analysis teams, invest in analysis tools, pieces of equipment, documentation. They also have customer quality teams and spend a lot of money on training the team; usually, they lead customer communication and problem-solving teams.

Of course, they have some other responsibilities, but the zero km complaint handling takes the majority of their time.

And there are claims from the field as well.

Here the customer behaves a bit differently. They do not shout at you when there is a new rejected part (unless it is critical, or they experience massive fallings on the field – but that is a different story).

They send some parts for analysis without informing you by separate e-mails or phone calls.

They will not highlight what and how they expect you to do. How to analyze the product? How to report it?

Some of them might not even send the failed parts if the supplier does not explicitly request it.

Debit notes will regularly land at the finance department, but fortunately not too high amount – at least at the beginning…

This can goes for months, almost a year, sometimes more.

Then the disaster begins; the bomb finally arrives.

A huge debit notes about millions of Euros – as the cost clearance for the last year. Or the finance colleagues notice that the debit notes amounts are higher and higher.

The alarm mode switches on finally. Investigation begins, the quality department is asked what was going on.

Then it can turn out that nobody knows. Engineers thought everything was going well. All returned parts were analyzed. “The customer never said it was not OK.”

Yes, this is right. And most of the time they will not say. It is written in the customer-specific requirements. It is the obligation of the supplier to understand and apply these requirements.

If these requirements were not kept during the analysis and reporting, the debit notes are valid, even if in reality, the supplier part was OK. No one cares that at that time. They will not change the amounts just because the deadlines were not kept either.

How is it possible that many automotive suppliers have big customer quality teams but mainly focus on zero km issues? Some of them do not even have warranty specialists in place.

How is it possible that they are not even aware of the specific requirements about field failure analysis? They invest a lot in eliminating (many times) individual zero km issues but miss the importance of the warranty’s focus.

If they only recognize that something is going on the field when the big debit note arrives – that is just too late. That will cost thousands of times more than the zero km claims.

As I described in my previous article, there are dedicated audits to verify the supplier’s warranty process’s compliance with these requirements, but it is rarely used.

Warranty impacts customer satisfaction more than the zero km issues as the final users (drivers, car owners) are involved and have an unpleasant experience with the car caused by the supplier.


It is highly recommended to focus on warranty.

As the cost can often be millions of Euros, suppliers should ensure their warranty processes are according to the requirements. Not only because it is an IATF 16949 requirements, but because it is the own interest of the suppliers, and it has a high impact on customer satisfaction.

It worth investing in the necessary resources, including the improvement of team competence.

Do not only believe that your warranty processes are up to the requirements but verify it by conducting specific internal audits.

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.

Problem solving

Who should the 8D sign off?

The customer or IATF16949 audit outcome: the problem-solving process is not effective, not according to the customer requirements, or you face re-occurred failures.

I have seen two typical reactions to such a non-conformance:

  • organize training for the whole team
    • HR will get the task, and they will send the team to outside or in-house training.

Job well done. The issue is close, right? (No, not at all as I already wrote about it in this separate article.)

  • The Quality Manager needs to sign the 8D before closing.

Unfortunately, this usually will not save the world, but we can have the next wildcard if this happens:

  • the  Plant Manager will also review and sign the reports before sending them out to the customer.

Why do we expect it will be an efficient solution to prevent insufficient 8D reports landing at the customer?

What will change from this action?

Let’s assume that the next level managers are really quality professionals and know what they should look for.  (I think it is not evident – and not a requirement –  that the next level manager will have the professional knowledge to identify the reports’ issues.)

If this is the case, we will still have the timing issue – it is not easy to find free time with a plant manager to review 8D reports. This can have a negative impact on our response time to the customer, which can initiate the next negative evaluation.

Imagine a big organization with many customer issues.  How long will the manager have the time and patience to review each case deeply?

What can we solve with the supervisor’s advance review?

In a short time, it can help.

We can detect obvious unlogic issues, no technical solutions.

We can also expect that the engineers will make more precise reports because they do not want to confront their managers. They try to avoid unpleasant moments. This positive effect will last as long as the manager will have the time and passion for closing reviews.

Is it not showing a lack of trust towards our colleague? How long do we plan to micromanage our colleagues?

Should we not understand the real root-cause behind the weak reports?

How about our Quality Management System (QMS)?

We have to understand the systematic root-cause.

What is the exact cause of insufficient reports?

Are we sure that it can only be a competence issue?

If so, which competence should be exactly improved? How exactly can be improved – besides the joker “send them for training!”?

How was the individual competence assessed before, and which actions were defined to improve?

Why did we not detect it?

How is it possible that the customer or the auditor highlights the incomplete 8Ds for us?

There are so many questions we need to ask ourselves.

8D reports signed off by managers can help in a short time, but that is not a sustainable solution.

Do not stop with simple answers without understanding the systematic issues behind.

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.

Problem solving

How to put your organization into escalation?

Many years ago, I continued my career as a customer quality engineer at a new company.

I wanted to show my abilities to the team to prove that I am a quality professional.

I did not have to wait too long. We received a new quality claim from the customer on Friday afternoon (as always).

⁃ Yes! I can do that! – that was my first thought.

The issue did not seem too complicated; one small part has not been properly fixed.

Among other containment actions, we immediately implemented some extra operations to make sure the parts are OK.

We discussed as a team; the defined actions were appropriate and safe.

Everyone thought we are finished until the claimed part arrived, and the root cause analysis can be continued.

But I raised the following question:

Is there a similar part for the customer where such an issue could happen?

⁃ Well, yes. – answered the process engineer. But that produced at a different line, that is another application, but the fixation method is similar.

⁃ Ok, in this case, the similar containment actions should be implemented as well. Let’s not wait until there would be the same type of claim from the customer. Use the lessons learned!

The team was not too happy, especially on Friday afternoon, but they accepted my decision.

Finally, all actions have been implemented for the other part number as well.

At the end of next week, the defected part arrived, root causes have been defined, corrective actions were scheduled, everything seemed to be normal.

Certainly, the containment actions remained in place till the final implementation and validation of the corrective actions.

Everything went smoothly till I have received an angry e-mail from the customer about a claim with the other application, but it affected more parts.

No, it was not the same improper fixation issue. That was a totally different function problem.

Due to that claim, we have received the escalation letter…

This happened in my first month, customer escalation, I had to start organizing my trip to present what happened.

Well, that was not the perfect opportunity for introducing myself, which I imagined before.” Warm” welcome could be expected.

I took that case very seriously. I organized 8D meetings by the line, involved all experts, including the operators, but we could not understand the root cause for occurrence.

Other containments were in place; therefore, the customer was protected from more failed parts, but it was not enough because we still found occasionally NOK parts.

Escape was clear, but how it occurred?

The team performed lots of experiments based on the fishbone analysis, but we did not get closer.

I addressed different operators from different shifts and spent enormous time on the shop floor, but still no success for weeks.

One day I got lucky.

I was on the shop floor again, chatting with the operator, but continuously watching what and how she was doing.

Suddenly, I recognized that one assembly tool got slipped while she was doing the extra operation I asked a long time before due to the different claim about the other part number.

The tool hit a sensitive part, and the set function was lost.


We did some trials, verified in the lab, and the failure has been successfully reproduced.

Now we could get out of the escalation after the risk has been eliminated by a robust action.

Several months later, I had to explain the whole story to the ISO/TS16949 auditor. We went to the line where he understood everything.

I will never forget what his comment was.

⁃ You did a good job. But I recommend that next time you use the PFMEA better.

What happened?

We introduced an action as a lesson learned to a different product without proper risk assessment.

The other product was smaller. There was less space for the assembly tool, which increased the risk of slipping the tool. The tool hit a sensitive part, and the already verified function got misadjusted.

Do not expect that one proven effective action will have the same efficiency on other products as well, even if they have many similarities. (And make sure the final test is really the final test.)

Lessons Learned?

You can make a mistake if you do not perform proper risk assessment while you implement lessons learned.

How can you even make a bigger mistake?

If you do not apply lessons learned at all.

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.

Problem solving

Speak the quality language!

  • This is bullshit! – shouted the customer and suddenly caught the ashtray from the table and dropped it towards my colleague. The massive object hit the head of the guy. Silence spread over the room.

This story happened a long time ago. I traveled to the Far-East to present our actions to the OEM customer. That time I did not understand what happened, how it could go so wrong.

No question, physical aggression is not acceptable, not even from the customer. However, this memory accompanied me over the years.

Why did not the customer understand us? How could he not see that we were explaining the real cause and the effective corrective action?

Indeed, the English could be an issue as none of us was a native speaker. But that does not explain everything.

The first reaction, which lasted several years: the customer did not have the patience to understand us, probably he had no idea about our manufacturing process.

Now I have a different opinion.

I still believe that the customer was rude and behaved unacceptably.

We can not change such people. However, we can change our communication.

I realized that as a quality expert, I only might speak about facts supported by data.

We have to rule out all emotions from our presentations about quality issues and the solutions.

Our intention should be to prove the direct connection between the root cause and the rejected part.

Saying that the root cause is XXX is not enough – we must have evidence about it, the best if we can reproduce the failure. Same about the corrective actions. Have a study behind the correction, which proves its effectiveness.

Use well-known quality tools, e.g., 5Why analysis (for occurrence, escape, and the system as well), fishbone but with verifications behind, capability analysis, MSA studies, etc.

I had customers from the USA, Mexico, Brazil, China, India, South Korea, and many European countries. They behave differently. They have their communication style, English knowledge, familiarity with the process, and product.

Many of them will shout first over the phone, they will explain how stupid and incompetent you, as a supplier are.

Our target should be to improve the relationships with the customer, therefore we must eliminate all emotions and unnecessary arguments without facts, which are not based on data.

They all speak the quality language. Customers will have their confidence in you and your implemented actions if you use the quality tools properly.

Do not try to change the customer. Change your communication.

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.

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