Ccal-14 Automotive Warranty Management: A Guideline for Industry Best Practices 3° Edition Insight om >> Expertise ~ 7 >» Results ee ee ee The Catalyst for Peak Performance AIAG 2cal-14 AIAG ire oe agement ‘Version 3 issued April 201 ‘Aforesve nest Aston Grou ABOUT AIAG Purpose Statement Founded in 1982, AIAG is a globally recognized organization where OEMs and suppliers unite to address and resolve issues affecting the worldwide automotive supply chain. AIAG’s goals are to reduce cost and complexity through collaboration; improve product quality, health, safety and the environment, and optimize speed to market throughout the supply chain. AIAG Organization AIAG is made up of a board of directors, an executive director, executives on loan from member companies, associate directors, a full-time staff, and volunteers serving on project teams. Directors, ‘department managers, and program managers plan, direct and coordinate the association's activites, Under the direction of the executive director. AIAG Projects Volunteer committees focus on business processes or supporting technologies and methodologies. They conduct research and develop, publish, and provide training on standards, conventions, standard business practices, white papers, and guidelines in the areas of automatic identfication, CADICAM, EDIelectronic commerce, continuous quality improvement, health focus, materials and project management, occupational health and safety, returnable contamers and packaging systems, ‘ransportation/customs and truck and heavy equipment. “IAG PUBLICATIONS ‘An A14@ publication reflec @ consensus of those substantily concerned wit is scape and provisions. An ‘AIAG pupicaion i intended 2s a guide fo ad the manufacturer, the carsumer and he general pune. The ‘ustenco ofan AIAG publeaton does not n any reepect preciuds anyone irom manufsctunna, marketing, purchasing. or using products, processes, or procedures not conforming fo te puaicaton CAUTIONARY NOTICE AIAG publications are subject to parade reviow and users are cautioned to attain th latest actions MAINTENANCE PROCEDURE Recognizing nat iis AIAG pubteation may not cover all ercumstances, AIAG has established a maintenance brosscure, Pizese refer to the Mantenance Requsst For atthe beck ofthis document fo subrmt a request. Published by: ‘Auromoive nausty Acton Group 126200 Lahser Road, Suite 200 ‘Souihfeld, Michigan 48033 homo: (248) 258-3570 » Fax: (248) 258-2253 APPROVAL STATUS The AIAG Qualty Steering Commitee, he OSA Warranty Managemen! Councl and designated stakeholders acoroved ths document fo publication dp, 2015, AIAG COPYRIGHT AND TRADEMARK NOTICE: © 2015 Automotive Industy Action Group, excect that copyright is not cisimed as to eny part of an orginal work prepared by a U.S. 0 aie government offcero” ermpoyee a5 par ofthe Derson's ofc) duties. Except as noted above, a ighis are reserved by AIAG and ro part of these matera's may be reproduced, reprinted, stored ina retneval system, or traremited, i any form or by any means, elecronc, photocopying recording. or efienase, wanout the por written permission of Auiomtve Indusiy Acton Group. Copyrigit infringement isa violation of federal law subject to criminal and cw penanies. AIAG and Automctne Inaustry Acton Group ate regstared service marks ofthe Automotve Indust Aeon Group. Autometve Industry Action Group makes no claim to any tadematk ofa third party. Trademarks othrd patie included in these materials ere the property oftheir respecte owners. © 2015 Automotive Industry Action Group ISBN: 976 1 60534 9297cai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Aor, 2015 Autorotve revety Aion Geum ABOUT OESA Purpose Statement Founded in 1998, the Original Equipment Suppliers Association (OESA) is a trade group that serves original equipment suppliers in the North American automotive industry. Membership encompasses suppliers of components, systems, modules, materials and equipment used throughout the industry. With over 400 member companies having global annual automotive sales exceeding $300 billion, OESA represents companies with more than 70 percent of North Amencan automotive supplier sales. OESA Mission OESA advancas the business interests of automotive original equipment suppliers by providing a forum to address issues of common interest, serving as a resource for industry information and analysis, promoting the interests of the OE supplier community, and serving as a voice and positive change agent for the industry OESA Organization ESA is operated by a skilled professional staff and management team, and is overseen by a board of directors made up of 25 industry leaders selected from the OESA membership. OESA is a market segment association of the Motor and Equipment Manufacturers Association, which leads OE SA's. lobbying activities in Washington, D.C OESA Projects Each year, OESA hosts numerous industry events and individual town hall meetings with OEM customers. In addition, OSA operates 13 peer croup councils, including a Warranty Management Council that addresses commercial and operational issues regarding the reduction of warranty incidents. The council is open to senior executives responsible for warranty at OESA regular member companies. For more information, visit the councils section of http:/Awww.086a.0rg. Original Equipment Suppliers Association 1301 W. Long Lake Road, Suite 225 Troy, Michigan 48098 Phone: (248) 952-6401 » Fax: (248) 962-6404 nttp:/www.00s2.0°gcal-14 AIAG Qe ior 4 Version 3 Issued Apr, 21 ‘Aforesve nest Aston Grou FOREWORD In December 2006, members of the AIAG Quality Steering Committee and the OSA Warranty “Management Council approved an AIAG-OESA Consumer-Centric Warranty Management project In February 2007, two sub-committees began work on: 1) warranty manval development and 2) No Trouble Found (NTF) reduction strategies, The defined deliverable for the combined project team was this guideline, Conswner-Centric Warranty Management: A Gutdelire for Indusiry Best Practices. This guideline, when coupled with applicable customer specific requirements, is intended to be an industry-wide suggested approach for managing ‘warranty processes with the consumer in mind. Best practices were identified and developed based on the collective experiences of team members in the North American, anfomotive original equipment, light vehicle market, Team members believe these concepts could be applied to other vehicle markets or industries. tis highly recommended that the entire supply chatn support the implementation of COF-14 ‘for the full benef and improved performance to be realized. Consumer-Centrie Warranty Management: A Guideline for Industry Best Practices has its roots in an ESA document, The Swppliers Practical Guide to Warranty Reduction, published in November 2005 Although the jomt project team agreed that the OES document provided a solid foundation, the team also agread tliat greater value could be realized for all industry stakeholders if warranty management was approached from the consumer's point of view. This newer guideline is intended to accomplish that goal Ttalso includes a visualization of recommended processes and a number of case studies that highlight the gtideline’s suggested approaches The project was desiened to drive value through increased consumer satisfaction from the implementation of recommended best practices by some or all of the industry stakeholders. The team considered infrastructure and resource challenges necessary to support warranty management throushout the supply chain Results of implementation may include: warranty incident reduction, reduced warranty costs, increased efficiency of resources, higher consumer loyalty. increased vehicle residual values and a more positive industry image. ‘With warranty impaet receiving high levels of visibility both inside the industry and in the general public, the AIAG Quality Council and the OESA Werranty Management Couneil determined that self-assessment to this guideline was a highly recommended proactive step required to help in the reduction of warranty incident rates as well as 2 step needed to strengthen public trust in the automotive industry Additionally, a more detailed OEM section has been added to this euideline to reflect the steps that the OEM can tak: to help the supply chain and its own organization address warranty issues more effectively.cai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Ap, 2018 Autorotve revety Aion Geum FOREWORD TO AUTOMOTIVE WARRANTY MANAGEMENT, cal-14, 3°° EDITION In the spirit of continuous improvement coupled with the experience gained from the 1 and 2™ edition, CQI-14 has been revised to sampl:fy the assessment and eliminate redundancies, and to include references to current technologies being used today in the automotive industry Assessment tool revisions include recognition of areas of responsibility. enhanced scoring adjustments and revised reporting formats The CQI-14 Consumes-Centric Warranty Management document has been renamed to Automotive Warranty Mragement to clarify the intent of the guideline With the implementation of these changes, the CQI-14 1* and 2* editions are obsolete ‘Note: Subject material is to be used as a guideline. Requirements are defined by individual OEMs and suppliers. This guideline does not replace or supersede customer specific requirements.cal-14 AIAG Qe ior 4 Version 3 Issued Apr, 21 ‘Aforesve nest Aston Grou ACKNOWLEDGEMENTS AIAG and OESA appreciate the contributions put forth by the many individuals that shared their ideas, discussed their own practical experiences and reviewed the nmmerons drafts of this document Many of the ideas raised by the reviewers have also been incorporated in the text. The following individuals from the joint project team dedicated considerable time and effort to the cause’ Paul Abemathy Federal-Mogul Corporation Charles Barnes Toyota Motor Engineering and Manufacturing North America, Inc Gregg Brinks FCA US LLC James Bruin. FCA US LLC John Chalifoux. Original Equipment Suppliers Association Joel Colombo General Motors Corporation Peter Cooney General Motors Corporation Krista Coy Metaldyne Corporation Mike Da Silva ‘Magna International Ine Steven Douglas DENSO Intemational America, Ine. Lamry Dreslinski ‘Magna International Ine Dennis Froehlich... Robert Bosch LLC Dale Hagan Dura Automotive Systems, Ine Kevin Kelly. Continental Corporation Dan Kim Toyota Motor Engineering and Manufacturing North America, Inc David Mims Toyota Motor Engineering and Manufacturing North America, Inc. Dan Paterra BorgWamer, Inc Mike Roberts Ford Motor Compeny Dan Roche ArvinMeritor, Ine Dave Sekata* Freudenberg-NOK General Partnership Craig Selman Delphi Corporation Jan Tucker ‘Bosal Intemational North America Mary Kay Watson....... Brose North America, Ine. Frank White GKN Driveline North American, Ine Pamela Wyatt. ArvinMetitor, Ine * Chairmancai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Ap, 2018 Autorotve revety Aion Geum ACKNOWLEDGEMENTS FOR CQI-14, 2X EDITION AIAG and OESA appreciate the contributions put forth by the many individuals thet shared their ideas and practical experiences, while reviewing the mumerous drafts of this document. The following individuals dedicated time and effort to the Consumer-Centric Warrenty Management, 2* edition: Core Members Gregg Brinks FCA USLLC Deunis Froebilich ...... Robert Bosch LLC Jan Tucker Bosal Intemational North America Steven Douglas DENSO Intemational America, Ine Supporting Members: Cherles Bomes Toyota Motor Engineering and Manufacturing North America, Ine James Bruin. FCA US LLC John Chelifoux. Original Equipment Suppliers Association Dave Sekata Freudenberg-NOK General Partnership Mike Roberts Ford Motor Company ACKNOWLEDGEMENTS FOR CQI-14, 3°° EDITION The following individuals dedicated time and effort to the Automotive Warranty Management, 3rd edition: Core Members: Paul Abemathy ul Corporation Emila Aganovi Lacks Enterprises Gregg Brinks FCA US LLC Peter Chhim, Tenneco Michael Hirt ADAC Automotive John Pitt Lacks Wheel Dave Sakata Frendenberg-NOK General Partnership Craig Sellman Delphi Corporation Supporting Members: Mark Alexander Ubiquiti Ine. Charles Bames Toyota Motor Engineering and Manufacturing North America, Ine Bill English FCA US LLC Dennis Froehlich... Robert Bosch LLC Mike Roberts Ford Motor Company Kevin Timmerman... Johnson Controls, Inc. Daniel Underwood... Nissan North America Gary VanWagoner.... Magna International Ine.cal-14 AIAG ire oe agement ‘Aforesve nest Aston Grou TABLE OF CONTENTS ABOUT ALAG ABOUT OSA FOREWORD. o vo . se FOREWORD TO AUTOMOTIVE WARRANTY MANAGEMENT, CQL-14, 9°? EDITION ACKNOWLEDGEMENTS... ACKNOWLEDGEMENTS FOR CQI-14, 2° EDITION, ACKNOWLEDGEMENTS FOR CQU-14, 3 EDITION, TABLE OF CONTENTS... INTRODUCTION: WHY AUTOMOTIVE WARRANTY MANAGEMENT: L ESTABLISHING THE BASELINE: INTRODUCTION TO WARRANTY... 11 BENCHMARK THE WARRANTY MANAGEMENT PROCESS 4s 1.2 SENIOR MANAGEMENT 16 1.3 GAnY ACCESS TO APPROPRIATE DATABASES 16 1 4 Ganv ACCESS TO WaRRANTY RETURN PARTS 7 1.5 LINK WARRANTY RETURNED PaRTS TO DATA 7 L@ ESTABLISH METRICS WHEN MONTIORING AND DISTRIBUTING WARRANTY INFORMATION 7 .00T CAUSE METHODOLOGY 7 TAL COMMITMENTS 18 2. CONSUMER EVENT AND DEALERSHIP ACTIVITIES 2 2.1 CONSUMER PRESENTS A CONCERN 2.2 DEALER DOCUMENTS THE CONSUMER CONCERN 2.3 DEALER VERIFICATION OF CONSUMER CONCERN. 2.4 DEALER. DECIDES TO REPAIR 2.5 A DECISION I MADE NOT TO REPAIR UNDER WARRANTY 2.6 DEALER FACILITATES REPAIR 2.7 DEALER DOCUMENTS WARRANTY CLAIM 2.8 DEALER REVEWS REPAIR WITH CONSUMER. 2.9 CLAMIS ENTERED N70 OEM WARRANTY SYSTEM. 2. 1D REPLACED PART DISPOSITION FOLLOWING THE LESSONS LEARNED IN PRE PROGRAM ACTIVITIES... AR 3. PROACTIVE PREVENTIO? 3.1 USE PAST PROGRAM THINGS-GONE-WRONG. 20 3.2 UsE SURROGATE PROGRAMS 28 3.3 USE PAST QUALITY PERFORMANCE 28 3.4 USE DESIGN AND PROCESS FAILURE MODE AND EFFECTS ANALYSIS (EMEA) 29 3.5 Use RELIABILITY. DURABILITY, AND MANAGED CHANCE INFORMATION. 29 3.0 REVIEW RECALLS AND CAMPAIGNS FROM GOVERNMENT AND OR OTHER RELEVANT SOURCES, 30 3.7 DESIGN FOR SIX SIGMA (DFSS) 30 3.8 PROGRAM RISK FACTORS. 34 3.9 SUPPLY CHAIN ACTIVITES 35 3.10 OEM SUPPLIER TRAINING FOR POTENTIAL NEW TIER I SUPFLERS 35 4. IMPLEMENTING LESSONS LEARNED: ADVANCED PRODUCT QUALITY PLANNING (APQP)...37 4.1 Use INPUTS FROM PRE-PROGRAM/LESGONS LEARNED 70 DRIVE FAILURE MODE EFFECTS ANALYSIS AND DESIGN VALIDATION PLAN AND REPORT 37cai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Aor, 2015 Autorotve revety Aion Geum 4.2 CONDUCT DEsica’ REVIEW BasED ON TEST RESULTS AND FAILURE MODES (DRBTR AND DRSFM) 38 4.3 DESIGN ROBUST ASSEMBLY, INSPECTION, DISGNOS'S, AND REPAIR PROCESSES, 38 44 APPLY DESIGN OF EXPERIMENTS FOR PROSLEN-SOLVING 38 4.5 USE END OF LIFE INSPECTION FOR CONSUMER USE POINTS 39 4.6 IDENTIFY ALL OEM TERED CUSTOMER ASSEMBLY CONNECT POINTS. TORQUE VERIFICATION AND IMPACT 39 4.7 DEVELOP PLANT AND DEALER TRAINING PROGRAMS 40 4.8 DEVELOP SERVICE MANUAL PROCEDURES 40 5. CONTAINING WARRANTY ISSUES: POST-START OF PRODUCTION a 5.1 PROACTIVELY RECOVER AND ANALYZE EARLY FIELD RETURNS AND RELIABILITY TEST PARTS. a 5.2 APPLY HIGH LEVEL ELECTRONIC WARRANTY DATA ANALYSIS. a2 5.3 DEEPDIVE CLAIMDATA ANALYSIS. 43 5.4 APPLY PARTNER ORGANIZATIONS PLANT AUDITS RELEASE ENGINEERING INPUIS 44 5.5 OBTAIN, MONITOR, CONTROL FIELD RETURNS AND ANALYZE REMOVED PARIS 4 5.6 INTERFACE WITK TECHNICAL CALL CENTERS FOR PRODUCT ISSUES. 45 5.7 REVIEW CONCERNED VEHICLE STUDY AT THE DEALER. 45 5 8 Gany ACCESS To VEHICLES 46 5.9 CONTAINING THE PARTS PIPELINE a 6, PREVENTING FUTURE WARRANTY EVENTS: ACTIONS/SOLUTIONS. 49 6 1 SHARE ANALYSIS RESULTS WITH PARTNER ORGANIZATIONS TO SUPPORT INPROVEMENT ACTIONS 49 6.2 UPDATE SUPPLIER AND PARTNER ORGANIZATION'S FAILURE MODE AND EFFECTS ANALYSIS (FMEA), CONTROL PLANS AND OTHER. QUALITY / ENGINEERING DOCUMENTS, 49 6.3 UPDATE REPAIR PROCEDURES INCLUDING TECHNICAL SERVICE BULLETINS (SBS). SERVICE MANUALS. IMPROVED DIAGNOSTIC TOOLS, AND CALL CENTER DIAGNOSTIC PROCESSES, 50 6.4 PROVIDE KIT PARTS FOR OPTIMAL WARRANTY PERFORMAN 50 6.5 MANAGE EARLY WARNING INDICATORS AND SYSTEMS 50 6.6 IDENTIFY ROOT CAUSES BEHIND NO TROUBLE FOUND (NTF) 51 6.7 SUPPLY CHAIN ACTIVITY 53 6.8 LOOK-ACROSS IMPROVEMENT IMPLEMENTATION 33 7. CONTINUOUS IMPROVEMENT: INSTITUTION ALIZING THE PROCESS ... 7.1 IDENTIFY POTENTIAL IMPROVEMENT TARGETS (ATTACK HIGHEST PARETO CHART IT 7.2 MONTTOR EARLY WARNING SYSTEMS. 7.3 CLOSING THE WARRANTY MANAGEMENT LOOP. 8, AUTOMOTIVE WARRANTY MANAGEMENT ASSESSMEN: 8.1 HOW To PERFORM THE CQI-14 ASSESSMENT a 3.) HOW To Get STARTED 2 8.3 SCORING 66 8 4REPORTING DECLINE 7 8.5 ASSESSMENT FORMATS. 8 APPENDIX SECTION I: EXAMPLE OF FAILURE MODE AND EFFECTS ANALYSIS (FMEA)... APPENDIX SECTION Il: EXAMPLE OF DESIGN VALIDATION PLAN AND REPORT (DVPSR). APPENDIX SECTION Il: EXAMPLE OF DESIGN REVIEW BASED ON TEST RESULTS DRBIR)....73 APPENDIX SECTION IV: EXAMPLE OF DESIGN REVIEW BASED ON FAILURE MODE (DRBFM)..74 APPENDIX SECTION V: MANUAL AND NTF CASE STUDIES, 76 WATER LEAKS AND WIND NOISE (201) n ‘SLOW MOVING GLASS (202). 79 ‘AIRVFUEL SYSTEM MISHRE (2203) 81cal-14 AIAG ire oe agement ‘Version 3 issued April 201 ‘Aforesve nest Aston Grou ©» SENSORS INOPERATIVE (2206) 83 FUEL DELIVERY SYSTEM WARRANTY INVESTIGATION (2207) 85 INOPERATIVE POWER WINDOW SYSTEM (ZZ08) 87 [NTF CASE STUDY ~ AFTERMARKET MODIFICATIONS (ZZ09) 89 DEALER. TRAINING INTERMITTENT FAULT CONDITIONS (ZZi0) st LOOSE SHIFT LEVER (ZZ11) 33 [REPLACE TRANSMISSION SOLENOIDS FOR WEAR. (ZZ12) 38 TRANSMISSION LOSS OF DRIVE (2Z13) 7 POWER FOLDING MIRRORS (2215). ‘TRANSMISSION FLUID LEAK (ZZ17) REAR SEAL / MAINBEARING CaP LE: HEATED SEAT INOPERATIVE ( DOOR OUTER BELT MOLDING MISALIGNMENT (ZZ21), (OEM OUTSIDE REAR VIEW MIRROR (OSRV) VIBRATION (2222) ‘WINDOW REGULATOR MOTOR INOPERATIVE (ZZ23) ‘TAIL LAMP WATER INGRESS (2224) POWER TRACK FLEX SHAFT (ZZ30) DEAD BAITERY DUE TO PROLONGED STORAGE AT DEALERSEE (ZZ38) ‘SHIFT HESITATION DUE 10 ENGINE COMPUTER SOFTWARE (ZZ40) ‘TIRE PRESSURE MONITORING SYSTEM (TPMS) POOR. CaPTURE RATE (ZZ41) APPENDIX SECTION VI: REDUCING RISK ON A GLOBAL PLATFORM LOCALIZATION PROJECT APPENDIX SECTION VI: DEEP DIVE ANALYSIS (2229), MBERS. OEM/TER | SUPPLIER/TIERED SUB-SUP®L 127 APPENDIX SECTION V APPENDIX SECTION IX: RESOURCES AND LINKS... EFINITIONS AND ACRONYMS.-10- caQl-14 Automotive Warranty Management ‘Version 3 Issued Ags, 2015, AIAG Autorotvoieuety Action Geup Table of Figures FIGURE 2: WARRANTY MANAGEMENT PROCESS FIGURE 3. WARRANTY CLAIM PROCESS FLOW. FIGURE 3: WARRANTY CLAIM PROCESS FLOW (CONTINUED). FIGURE 4: AUTOMOTIVE WARRANTY MANAGEMENT GUIDELINE SECTIONS. FIGURE 5: DESICNNFOR SIX SIOMA (INCLUDING NEXT 2 PAGES). FIGURE 6: EFFECTIVE PROBLEM-SOLVING PROCESS FIGURE 7: NO TROUBLE FOUND (NTF) DECISION TREE ANALYSIS TOOL FIGURE 8: WARRANTY MANAGEMENT CLOSED LOOP PROCESS FLOW. FIGURE 9: NTF DECISION TREE ANALYSIS TOOL EXTENSION FIGURE 11: WATER LEAKS aND WIND NOISE (ZZ01) FIGURE 12: SLOW MOVING GLASS (2202). FIGURE 13: AIR/ FUEL SYSTEM MISFIRE (2205) FIGURE 14° NO TROUBLE FOUND 03 SENSORS (2706) FIGURE 15: FUEL DELIVERY SYSTEM WARRANTY INVESTIGATION (207) FIGURE 16: POWER WINDOW SYSTEM WARRANTY INVESTIGATION (ZZ08) FIGURE 17: AFTERMAPKET MODIFICATIONS (2709) FIGURE 18: DEALER TRAINING ~ INTERMITTENT FAULT CONDITIONS (ZZ10) FIGURE 19: LOOSE SHIFT LEVER (ZZ11). FIGURE 20: REPLACE TRANSMISSION SOLENOD FOR WEAR (2212). FIGURE 21: TRANSMISSION Loss OF DANE (2213) FIGURE 22: POWER, FOLDING MIRRORS (2215) FIGURE 23: TRANSMISSION FLUD LEAK (2217). FIGURE 24: REAR SEAL / MAIN BEARING Ca® (2Z18) FIGURE 25: HEATED SEAL INOP (2220) FIGURE 26: DOOR OUTER BELT MOLDING (2221) FIGURE 27: OEM OUTSIDE REAR VIEW MIRROR VIBRATION (2222) FIGURE 28° WIDOW REGULATOR MOTOR FAmlURE (2223) FIGURE 29: Tall LAMP WATER LEAK (2224). FIGURE 30° POWER TRACK FLEX SHAFT (2730) FIGURE 31: EXAMPLE: CLAIM RATE VS. STORAGE TIME CORRELATION STUDY FIGURE 32: DEAD BATTERY DUE 10 PROLONGED STORAGE AT DEALERSHIP (ZZ39) FIGURE 33: SHIFT HESITATION DUE TO ENGINE COMPUTER SOFTWARE (ZZ40) FIGURE 34: TIRE PRESSURE MONITORING SYSTEM POOR CAPTURE RATE (ZZ4I) FIGURE 35: CLAIMS DATA ANALYSIS (2229)cal-14 AIAG Qe ior 4 Version 3 Issued Apr, 21 ‘Aforesve nest Aston Grou INTRODUCTION: WHY AUTOMOTIVE WARRANTY MANAGEMENT? Automobile manufacturers, their suppliers, and their dealers profit from increased production and sales volumes and reduced operating costs. However, consumer satisfaction and value, as defined by the consumer, are the real long-term drivers of individual company performance. So when a consumer experiences difficulty with his or her vehicle, the experience impacts that consumer's perception of, and satisfaction with, not only the vehicle but the selling and/or servicing dealership and the vehicle ‘manufacturer. In some cases, the reputation of the supplier is also at stake. Therefore. the reduction of field warranty claims 1s critical to improving consumer satisfaction, as measured by short-term inatial «quality and long-term vehicle durability and reliability As the industry continues to globalize its vehicle production and component sourcing footprint, the industry becomes more complex and warranty terms become longer term and more comprehensive. It also ‘becomes increasingly important fo have the ability to prevent, or quickly and effectively resolve, warranty issues so there is no recurrence in the same or fsture models, This guideline is designed to promote advances in consumer satisfaction and continuous warranty improvement by providing a tecommended, robust warranty management program that instills a consumer-centric approach in warrenty management. This approach begins with the end consumer in. ‘mind, providing tacties, techniques, and case studies for all constituencies, particularly vehicle manufacturers and their suppliers. The guideline is organized in steps that partner organizations can take to prozetively reduce warranty incident rates and risks associated with warranty events, The intended value for key industry stakeholders includes: + Consumers will benefit by realizing the reduced incident rates and faster detection-to- correction times that the deliverables, which are targeted for use by OEMs and suppliers, are intended to achieve + OEMS can “make it happen” and will benefit from reduced costs and improved quality production volumes and profit OEMs will use the project deliverables + Suppliers of all tiers, sizes and products can “make it happen” and will benefit from reduced costs and improved quality, which will lead to becoming or remaining suppliers of choice and increased production volumes and profit. Suppliers will use the project deliverables, + Dealers will benefit from increased consumer satisfaction and brand loyalty. Dealers, although not directly involved, may use the project deliverables The guideline includes a visualization of recommended processes and case studies that document how companies have successfully implemented these processes. These examples have been inchuded to provide the basis for understanding actions necessary for success, particularly for stualler suppliers that may not have extensive resources to address such warranty activities. For readers familiar with the automotive industry, there is a common term called No Trouble Found (sometimes called “Trouble Not Found” or “No Fault Found’). It is widely used at OEMs, suppliers, and even at dealerships. Because high levels of No Trouble Found diagnoses are generally recognized as key inhibitors to effective warranty resolution, this guideline provides a recommended methodology for acidressing issues as seen from the perspective of key constituencies, ie , OEMs, suppliers, and dealers, In practice, there can be more than one meaning to the term “No Trouble Found” Generally speaking, one common meaning refers to the situation where a dealer is not able to reproduce a consumer concer, “uecai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Aor, 2015 Autorotve revety Aion Geum e.g, when a consumer has an issue with an engine noise and the dealership concludes there is “No Trouble Found.” The more common definition applies to a part that is removed ftom a vehicle and subsequently found to be “good,” based on dimensional and normal fimetional evaluation test methods. The authors of this report believe the first term is better referred to as “Consumer Concer Not Duplicated” or CCND. The latter term fits the more standard industry definition of “No Trouble Found” or NTF While CCND is a recognized source of consumer dissatisfaction. the project team limited the scope of its ‘work in this area to NTFs. This scope was driven by the reduced influence the OEMs and other supply chain partners have on this mitial dealer assessment. However, monitoring of such CCND conditions 1s recommended as a possible input to a NTF concem and subsequent improved diagnostic approaches that would benefit both the dealer and the consumer CCND — Consumer Concern Not Duplicated ~ The designation applied to a consumer concem that, when investigated by the dealer service organization, camnot be reproduced. This does not discount the concer: rather, it indicates that the condition(s) that caused the concer was not reproduced and/or no data were captured by the in-vehicle diagnostic system indicating such a concern. NTF — No Trouble Found — The designation applied to a part (component. system, or module) replaced during a service event that, when analyzed by the vehicle or parts manufacturer, meets all requirements of a “good part.” This does not discount the concer: rather, it mcicates that the condition(s) that caused the concer was not a) reproduced or identified in the statement of requirements, b) qualification tests did not challenge the component sufficiently. c) no data were captured by the in-vehicle diagnostic system or part intelligence system indicating such a concern and’ or d) the true causal part was not correctly identified, so the wrong part was replaced. Consumer satisfaction is a key objective for all stakeholders in the warranty management process. Other key objectives include reducing incident rates, mitigating risk, and reducing financial exposure Based on these objectives, the authors have defined Automotive Warranty Management as follows A focus om claim rate reduction that aligns all value chain organizations to collaboratively and continuously approach warranty improvement through best practices, recommended tools, and a root cause culture, ‘Note that the general principles described in this document, while related to automotive terminology, could be applied to other industries.cal-14 DIAG de ier nagar cave ary aa ‘Adoretve nest Acton GO Figure 1: How to Use the Automotive Warranty Management Guidelineco. cQl-14 Ley Automotive Warn loagemancal-14 AIAG Qe ior 4 Version 3 Issued Apr, 21 ‘Aforesve nest Aston Grou 1. ESTABLISHING THE BASELINE: >» INTRODUCTION TO WARRANTY Objective: This section provides organizations the essential building A P blocks to launch an effective automotive warranty management process. a) 1.1 Benchmark the Warranty Management Process Insapononcons (Process owners: Organization) Organizations should review and understand established wenranty processes using OEM and supply chain ‘istts, trace seminars, and other opportunities. Through this benchmarking activity, organizations will gain an understanding of information technology, financial resources, tackuical skill sets, human perception, and ongoing training required to interface with OEMs or upper tier warranty systems and, staffs, thus leaming how to operete en organization’s warranty reduction process. canizations should have in place a warranty champion responsible for managing the warranty process ‘within the organization. This identified person(s) should guide the organization in the resolution of ‘warranty issues and be responsible for reporting results to supply chain partners To assist the warranty champion(s) and the organization's management, five self-assessment tools (OEM- Supplier Pre-assessment, OEM-Supplier Senior Management assessment, OEM assessment, Supplier assessment, OEM-Supplier Overall Effectiveness assessment) have been developed. These tools will assist the users of this euideline to assess organizational motivation and capabilities to support wananty ‘management activities. The intent of the assessment is to help focus efforts in areas the organization feels would improve warranty incident rates, ganizations should not focus on just improving average scores but use the Assessment Tools to identify these areas of improvement that add the most warranty performance value. Initially. low scores are anticipated and serve to identify gaps between the best-in-class, recommencled practices and current state Implementing many of the recommended practices identified in the guideline will allow more effective managing of warranty performance to meet the objective of continuous reduction in incident rates, The Pre-assessmient tool was developed as a high-level tool to enable any organization to quickly evaluate its Warranty management process. It does not take the place of the full assessments which are designed to be used to evaluate the entire organization's wanranty management systems and processes. The Pre- assessment tool allows users to understand what major gaps may exast within their organizations. The Assessment Tools ore divided into matching sections of Automotive Warranty Management Circumstence or Condition. An organization can assess itself in each category and apply a score from 0 — 5 with 0 being “Never” to 5 bemg “Almost Always —Benchmark Level” Please see section 8 for the Assessment.-16- cai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Aor, 2015 Autorotve revety Aion Geum 1.2 Senior Management (Process owners: Management) Automotive Warranty Management is intended to assist organizations to improve their warranty processes ‘through preventive activities, with reduced incident rate risk and improved effectiveness of claim repairs. OEM's and Tier I suppliers have not previously provided clear and consistent direction on the warranty management process, impeding the collaboration necessary to effectively anc quickly improve warranty performance A paradigm shift from a cost-focused process to a warranty incident rate reduction system is required for the organization, its partners and the industry as a whole to significantly improve performanee through collaborative efforts. The project team believes the ownership of this paradigm shift is with the Senior Management of the value chaun organizations ‘Improvement in performance requires the establishment of an organization wide process: and measures to gauge effectiveness and applicability. The project team determined that the best way to achieve successful implementation of the CQI-14 guideline throughout the indastry was to have organizations perform self assessment audits to the CQI-14 guideline. The fimdamental approach this document takes is defining a process of best practices that is preventive risk reduction focused to reduoe the incident rates. The appropriate roles and responsibilities within the onganization also need to be defined. The activities ‘will typically involve eross fimnctional tzams. In each of these cases, Senior Management can ereatly snfluence the activities by monitoring the warrenty process, the measure of effectiveness and leading the cultural change to being consumer-centnie driven. The continuous improvement PDCA quality approach requires relentless pursuit of root cause determination and implementation of comective actions that builds the Lessons Learned into fture programs and "Look Across" opportunities. Root cause analysis of events that do occur are critical and as studies have shown, No Trouble Found (NTF) can be the most challenging of these. A strategy on how to address NTFs is provided in this document. Warranty menagement and problem solving does require resources to conduct these actrvities ‘Yearly improvement targets, preferably with the organization's partners, should be set by management and pursued with periodic management reviews to support these improvement projects. The CQI-14 assessment conducted on a yearly basis, will allow continnous incremental improvements that will not only improve customer satisfaction but will ultimately drive lower costs for the organization. The success of an organization's ability to manage its warranty performance will therefore be driven by the Senior Management of that organization. Through implementation of an effective process, active participation in the setting and monitoring of warranty metrics and the establishment of resources, ‘raining and clear roles and responsibilities, successful performance and a consumer-cantric warrenty culture is possible. This Assessment Tool 1s intended to assist Senior Management i achieving these objectives 1.3 Gain Access to Appropriate Databases (Process owners: Supplier field service/warranty, design, and quality) Organizations must have access to customer databases to determine their initial warranty concems and to establish a flow of data to monitor ongoing performance. OEM/Supplier Quality Assuranee (SQA) andcal-14 AIAG Qe ior 4 Version 3 Issued Apr, 21 ‘Aforesve nest Aston Grou procurement teams provide the initial assistance to establish access to these database resources. This ‘would inchade warranty claims, diagnostic repository, quality performance reports, and report cards 1.4 Gain Access to Warranty Return Parts (Process owners: OEM warranty parts return, resident engineer, quality. design, supplier development, supplier field service/warranty, design, and quality) Organizations must have access to warranty returns to determine the root cause of issues. The OEM/ Supplier Quality Assurance (SQA) teams will help organizations make the appropriate contact (actual or digital) to access warranty retum ports. As a best practice the OEM/ supplier(s) should jointly develop a part retum strategy that comprehends factors such as the part return frequency, timing. eeographical and environmental considerations and logistics. Typically the organizations will see fewer than 5% of the actual returned warranty parts; although, additional quetities can and should be requested so that, statistically valid analyses cen be completed 1.5 Link Warranty Returned Parts to Data (Process owners: OEM warranty, supplier development, design, quality, supplier field serviceAwarranty, quality, and design) As will be discussed in future steps, the ideal method of identifying root cause, validating warranty claims, and providing Lessons Leamed for future procluct development is fo match refumed physical parts and warranty system data (including digital images) to establish a correlation of the failure modes to waranty claim deta, 1.6 Establish Met Information s When Monitoring and Distributing Warranty (Process owners: Management) By developing steps 1.1 through 1.4. an organization establishes its current wenranty standing. Establishing mutually understood metrics and reporting formats for monitoring and communication processes will enable Organizations to understand their warranty liability, gain knowledge of past performance, and be able to understand the warranty performance being agreed to when submitting a quotation. Reports/metries should be reviewed with the organization’s partners to verify the upper ‘ter/OEM expectation is understood. Ultimately, the primary objective is a reduction in the claim rate 1.7 Establish Root Cause Methodology (Process owners: Organization) Organizations need to establish the methods and processes to identify the root cause for warranty events AIAG's CQL-20 Effective Problem-Solving Guideline explains 2 number of problem-solving tools that can be applied to warranty problem-solving. Warranty data analysis is the first step in selectimg an investigative direction to help identify root cause. Organizations must determine what procedures and tools will be applied to analyze field retum products, systems interactions, and supply chain integrity as “17.-18- cai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Aor, 2015 Autorotve revety Aion Geum well as the organization's own quality performance to help determine the root cause and therefore allow a countermeasure solution to be determined. Ultimately. the objective is to be able to demonstrate the ability to tum on and tum off the concem condition to effectively verify the solution 1.8 Commercial Commitments (Process owner quality) A review process is required to verify the risks and responsibilities associated with warrenty support of partner organizations. Warranty-specific language in the Terms and Conditions and separate warranty agreements are part of the documents that a cross-functional team should review and approve at a senior ‘management level in the organization. Resources are required to support warranty management and clearly identify roles and responsibilities. An organization's senior management typically assigns this activity and therefore should be inciuded in the decision-making process as well as being aware of the risks associated with warranty commitwients ales, field service/warranty, design operations, legal, and Figure 2 illustrates the activities that the OEMS and supply chain organizations should follow with a continuous loop of activity to reduce the warranty incident rate. Consumer and dealer inputs drive the processcal-14 DIAG de ier agen env ary aa Aoretve Incsty Acton GO Figure 2: Warranty Management Process Warranty Management Qutout Consumer Inputs + NoCampagnsor Recals + OEM Warranty databases “+ Improved Customer Satstacton + OEM Release Engineer + Reduced incient Rates ‘= Customer pant quality + Reduced Costs Cost per Unit Other data sources + Warranty Manegement Targets Feedback to Dealer + Assessments © More Efective/Quicker Trang + Tech Assisiance Centers, > Aoplicable TSBs & pull up + improved DiagnostissToos Long Term + improved Consumer Management Satisfaction ° ne -19-co. cQl-14 Ley Automotive Warn loagemancal-14 AIAG Qe ior 4 Version 3 Issued Apr, 21 ‘Aforesve nest Aston Grou om 2, CONSUMER EVENT AND DEALERSHIP ACTIVITIES ‘Objective: This section describes the warranty event starting with the consumer ‘The intent is to give the reader insight to the consumer'dealer interaction that may © | dD (result in a warranty claim. Inchided is a high-level warranty process flow chart shown in Figure 3. This flow chart is organized info process owner “Swim Lanes for each zetivity to help illustrate which stakeholder would be involved at each step of the warranty event. It is possible that multiple stakeholders can be involved in the same activity. This is shown as a process activity that overlaps into eech stakeholder's column of activity. This section will describe the consumer and dealer involvement in the warranty process, steps A through L (Figure 3 ‘Warranty Claim Process Flow Diagram - see end of section 2) The remaining sections of this guideline vill describe the activities pertaining to the OEM and partner organizations The intent of the questions in this section is to help the OEM organization identify areas where it may improve the flow of vital warranty information to intemal groups 2s well as to the supply chain in an effort to reduce incident rates. Access to this information is necessary in order to reduce the amount of ‘ume required to detect and implement permanent corrective action. OEM warranty organizations can help themselves and their supply chain partners reduce warranty sncident rates by completing the OEM assessment section of the CQI-14 guideline. Areas identified by the assessment as possible opportunities for improvement should be evaluated and appropriate actions ‘mudartaken to improve the effectiveness of the organization in its ability to both, supply information to and gather information from the supply chain A section of the assessment (OEM tab) has been established to help evaluat2 OEM/dealership/supply chain interaction in the warranty process as well as steps which can be taken to involve supply chain partners in the diagnostic and service side of the warranty equation. The inclusion of supply chain partners im diagnostic and service information efforts will ultimately lead to improved vehicle service times and reduced misdiagnosis of consumer vehicles 2.1 Consumer Presents a Concern The consumer has a sufficient concem or has been alerted by the vehicle diagnostic indicators (including telematics) of a pending concem to take their vehicle to the dealer service center. 2.2 Dealer Documents the Consumer Concern The customer service manager (CSM) or adviser reviews the concern with the consumer, and asks for a deseription of the problem: where on the vehicle, for example, what kind of noise, when it happens, how often (e.. only between 2500 and 3500 rpm) and whether a dash mdicator (i.e., check engine light, malfunction indicator lamp, ete.) is involved This consumer verbatim mfonmation should be documented and made available for later use 2.3 Dealer Verification of Consumer Concern Consumer concerns may or may not be verified by the CSM at the time of the dealer visit. The CSM should make every effort to duplicate the concem while the consumer is present. This activity may imvolve a vehicle ride drive or demonstration, with consumer consent If the concern can’t be duplicated,cai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Aor, 2015 Autorotve revety Aion Geum the CSM should have further discussions with the consumer about the bast course of action. In some cases it may be advisable to have the consumer monitor the condition (such as an intermittent condition not verified) until the concem becomes more frequent or until more is leaned about the concem. All consumer discussions and agreements should be documented by the CSE. In most cases, itis not advisable to initiate vehicle repair activities ifthe consumer concem can’t be duplicated, as the repair ‘becomes guesswork that often leads to misdiagnosis and the subsequent replacement of “good components. 2.4 Dealer Decides to Repair ‘If repair is required based on the initial diagnosis of the consumer information, the CSM writes up a srepam order and completes consumer information regarding name, address, telephone, vehicle VIN (Vehicle Identification Number), date, and description of the consumer concem. Information describing the customer concem should be captured as clearly and concisely as possible, including, but not Limited to, vehicle condition, engine temperature, speed, ete. Inadequate or incomplete description of the consumers concem may impede diagnosis and repair, and make root cause analysis difficult The CSM verifies whether the vehicle will be under warranty coverage, service contract, dealer internal repair, outstanding recalls or warranty associated with the vehicle model and year, or customer pay. This information should be attached to the repair order, and discussed with the consumer as appropriate. The CSM also ehecks whether or not this is a repeat repair 2.5 A Decision is made not to Repair under Warranty The CSM may determine that no repair is required, a repair is outside the warranty coverage period, or the consumer concem is not verified. If no repair is required CSM should discuss options with consumer 2.6 Dealer Facilitates Repair The consumer concer and vehicle history are reviewed by the technician to verify the concer and determine if it can be duplicated. Before any work begins, the repair technician should check to determine sf there is any applicable OEM Service Information or Service Bulletins related to the consumer concem. If they do exist, the technician should follow the included instructions. IF not, a thorough diagnosis of what is driving the consumer concern needs to be performed. The diagnosis will recutt in identification of ‘the cause of the consumer concem and the appropriate repair procedure that needs to be executed. Based upon diagnosis a decision to repair or replace should be made. Additional follow-up questions to the consumer may oceur or the OEM and/or supplier may participate as neaded (2.2, consumer pay and/or OEM required prior approval) If on diagnostic review, the consumer concem cannot be duplicated or another cause is found, the vehicle could be road tested for review andior the CSM may contact the consumer for more information and approval if required. Ifthe technician determines that the Consumer Concem Not Duplicated (CCND). this information should be entered on the repair record. [If the repair technician determines that the vehicle has a history of retums associated with the same complaint, or that the complaint is “umustal or interesting” in nature, the technician should contact the OEM's Technical Assistance or Field Service organizations to request additional help. All contacts should be documented so the repair and diagnostic histories are known.cal-14 Version 3 Issued Apr, 21 ‘Aforetve Inca Acton Grou 2.7 Dealer Documents Warranty Claim ‘After the repairs are performed, a complete technical description should be written up, with accurate coding end any diagnostic information attached or inefuded in the repair order, together with any test data and replaced parts tnformation. The technician's write-up should include digital images, if they provide clear evidence of the trne root cause and would help the OEM better understand the problem (1. an image of a wire hamness pinch point that resulted in damage to a hamess, ete.) and all applicable Diagnostic Trouble Code (DTC) information, including code history information where applicable. Complete and thorough documentation will help improve the ability for partner organizations to reduce the frequency of these repairs. 2.8 Dealer Reviews Repair with Consumer The CSM reviews the repaired vehicle with the consumer for approval and signoff of the repair. The goal is to meet the consumer's expectations with a prompt, accurate resolution of the concem to drive consumer satisfaction, 2.9 Claim is Entered into OEM Warranty System The completed claim is entered into the OEM warranty system. 2.10 Replaced Part Disposition Following the Repair Replaced parts should be clearly labeled and stored by the dealer according to OEM warranty policy gtuidelines. The OEM may request the dealer to retum parts for evaluation by the OEM andor suppler Tf 2 part return is requested, the dealer should carefully package the part, so no damage occurs during shipment. A copy of al repair documentation should be included with the retum. Special care should be given to parts that may contain hazardous materials, so that the shipment complies with all applicable HAZMAT shipping requirements. Ifa retam is not required, parts should be property discarded after the OEM’ contractual retention perioday cal-14 Automotive Warranty Management ‘Version 3 Issued Ags, 2015, Figure 3: Warranty Claim Process Flow Autorotvoieuety Action Geup Enea Doster a Sapte = =D) Field Information Flow & Analysiccal-14 AIAG ire oe agement ‘Aforesve nest Aston Grou Figure 3: Warranty Claim Process Flow (continued) ‘Consumer Dealer eM ‘Supper ir ( Siseortew | ) t (C__Pemaarsasii rar pss seocean ya ee Spin OEM Ceara corsmer ) 7) Iearairg Lessons Learea € OFM Sippler eben ResekoncaQl-14 Automotive Warranty Management ‘Version 3 Issued Ags, 2015, AIAG Autorotvoieuety Action Geup Stakeholders are categorized by column and their respective warranty management process activities Each stepped activity is linked to the sections in the Automotive Warranty Management Guideline to help the user understand how each step influences subsequent warranty management activity. The guideline sections are shown in Figure 4, which follows Figure 4: Automotive Warranty Management Guideline Sections 5 Ecc incr Rapin ae Suni twenectunony een fp susie Det Pony noma Ss eetan raya eng cneens Pogontin race 4 troereg Lessons Leas: PF 1 SS ote tr nes Tooreanseten 1 Ean onan sae Paneg ane 1 Senay Saneetsnaizocese 45 Baning Fut Waray Ean Aten tao vnneanonnenoonenoe Sei eemepemes meee 2 2 Seine Fr 11 wt Peeper Ten Atheros atte) The following sections will proceed with detailed steps to both reduce the potential for a warranty event ‘through proactive measures and explain what to do when an event does occur. The focus, 2s mentioned previously, is a continned effort to reduce the frequency of warranty events. The approach taken in the Automotive Warranty Management Guideline is to apply the basic quality method of PDCA or Plan, Do. Cheeks Actcal-14 AIAG Qe ior 4 Version 3 Issued Apr, 21 ‘Aforesve nest Aston Grou 3. PROACTIVE PREVENTION: LESSONS LEARNED IN PRE-PROGRAM ACTIVITIES ‘Objective: This section provides an organization with the basic definitions and. tools used in the required “Lessons Leamed’ activities to reduce and eliminate future warranty exposure on components andior sub-systems It assumed that by completing section 1, an organization has established a methodology to ‘harvest warranty data through the various warranty data systems, is able to identify problems and analyze root causes, and has resources and processes to implement corrective actions to resolve warranty concems, The steps below generally apply to each of the actions in this section + Access and establish current warranty Levels + When possible, access verbatim, repair codes, and labor codes + Access and document current customer assembly plant issues + Access and document current serviceability issues. * Understand and document current manufacturing issues at each level within the value chain + Analyze field retums + Access warranty repair return centers for physical parts and data * Access extended service plan data. + Access third party resources The objective is to leverage past performance operational information as well as wanranty performance to minimize the risk of warranty events occurring after production launch Understanding what these Improvement actions are will provide more time to complete and verify the improvements before the project enters the more time-constramed product process development stage 3.1 Use Past Program Things-Gone-Wrong (Process owners: OEM and supply chain project organizations) ‘During the product development process. it is critical that the product and process engineering community acknowledge the design and quality concems identified by pest program performance and field warranty concems in order to allow improvement actions that prevent recurrence. This early data-harvesting phase of warranty analysis, review of past root-cause issues, and quantifying the undesirable product or process variation levels will establish a baseline of warranty perfomance risk. This baseline allows the planning of design and/or process improvements during APOP (reference FCA US LLC, Ford and General Motors APOP Manual or equivalent product development process) to eliminate defects that can lead to warranty events. This activity also helps identify potential hinitations in current functional and systems integration performance validation methods that will require improvement during the APQP process. (Note: We will refer to the Product Development Process as APQP for the remainder of this document ) An organization should have an established best practices process that archives these Lessons Leamed and makes them available to the entire organization (i¢., product engineers. designers, manufaeturing sites, ete.) for use with future programs. Organizations should have a formalized procedure that requires applicable Lessons Leamed be reviewed at each phase of the APQP process. The procedure shouldcai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Aor, 2015 Autorotve revety Aion Geum include a formal signoff by the program team to document the improvements that can later be used to reduce risk of recurrence for other programs. This activity should extend into supply chain partners An example is the case study “Reducing Risk on a Global Platform Localization Project (2219)" in Appendix Section VI Itis also recommended, when possible, to take photographs of conditions before and after a warranty ‘repair is completed and include them in the documentation of corrective actions that then can be part of this pre-program review. The total cost impact of the current design and/or process performance Imitations should be calculated to determine the risk to the consumer and therefore the potential value of the improvements that can be incorporated during APQP. This information can also be used to help justify the improvements and the incremental cost to implement them. 3.2 Use Surrogate Programs (Process owners: Organization and the supply chain project team) {If the component or system being considered for development cannot directly use the data and processes outlined above. information may be gleaned from surrogate programs to help an organization's product development process reduce risk. Past performance from ternal quality and warranty information 2s well as third-party consumer surveys, such as ID. Power and Associates, can also be brought into the review of preventive steps to be taken in the product development process. The objective remains to benchmark past product quality concerns of similar programs against proposed designs and processes for ‘the new programs before beginning actual project development. This objective can be enhanced by requiring warranty analysts fo participate in critical design reviews that consider incident rate risks. An example of a surrogate program would be ifa new 7-speed automatic transmission is being developed and the closest configuration would be 2 6-speed Benchmarking would look at a) the similansies as well as the differences that will establish a level of risk, b) areas for improvement, and c) areas that can camry over through Things-Gone Right Things-Gone-Wrong (TGR/TGW) and other Lessons Learned including ‘the warranty performance of the 6-speed unt. Pre-development screening tests or process improvement action plans could be part of this early risk prevention activity Warranty analysts who support all ofthe partner organizations’ warranty data should participate to help identify all failure modes that have occurred in the past, regardless of customer, that can be incorporated into acvance program design and process conceptualization. One example of the type of learning that can occur is for analysts to share the serviceability of components experiences from different customer organizations and how these experiences will impact diagnosis and repair for this new program. For example, using protective covers with different fastener specifications can significantly change component reliability and durability, service repair times, and repair kit part requirements. Bringing these issues into the early design phase of « component can lead to reduced incident rates and faster detection and correction at the dealers. 3.3 Use Past Qual (Process owners: Organization, the supply chain project team, OEM metrics and scorecards) An organization's quality defect performance is another critical indicator to provide Lessons Leamed that should be ncinced in the product process development assessment of a future program. Its possible that Performancecal-14 AIAG Qe ior 4 Version 3 Issued Apr, 21 ‘Aforesve nest Aston Grou some categories of defects may be the first indication or early waming of a potential furure warranty exposure. Ttis important that all defects and corrective actions occurring at the organization and supply chain manufacturing and assembly plants are identified for warranty risk and clearly documented for future problem-solving as well as current continvous improvement activity. These corrective actions should then be communicated across the entire engineering organization. allowing existing similar designs or systems, manufacturing methods, and assembly processes to be compared to the content of new program to determine if other potentials for warranty risk exist and therefore can be avoided 3.4 Use Design and Process Failure Mode and Effects Analysis (FMEA) (Process owners: Supply chain product and process engineering, OEM plant resident. quality engineering, and release engineering) “See Appendix 1 Also reference the FMEA reference manual from AIAG and customer specific requiremens. Design and Process FMEA (DFMEA and PEMEA) are critical tools for preventing warrantable consumer concems and unintended prformance variation by predicting and incorporating past failure modes into design and process improvements. This early planning activity 1s intended to review the appropriateness of using existing FMEAs or adding additional failure modes m an effort to reduce the incident rate Typically. corrections are made by modifying designs or processes and incorporating controls that address the potential to create a warrantable consumer complaint or performance variation. This may include a) implementing the appropriate error-proofing methodology that will detect a failure mode and prevent it from being shipped rf itis a process-related risk and b) identifying what causes performance vaniation to allow appropriate preventive action. These improvement activities should be recognized before bidding ona program, Due to the important nature of the FMEA fool, continual employee training is critical to reinforce the need to apply this teclmique in every product development process and to refresh employees” ability to continually apply this methodology. Training (eg. AIAG’s Core Tool training) of technical personnel should be institutionalized so that personnel developing new products and manufacturing methods apply the latest tools to complete their jobs efficiently. Organizations should develop PEMEA templates with failure modes that are identified or detected throughout the production process, mcluding logistics all the way to the assembly plant, to allow the appropriate risk assessinent and resultant planned improvement actions. These templates become part of the organization’s best practicas when potential failures and resultant consumer concems are considered and prevented in the design and process development phase of firture programs ‘The DEMEAs should include system interaction and serviceability risks 3.5 Use Reliability, Durability, and Managed Change Information (Process owners: OEM release. quality and reliability engineering, supply chain design, and warranty engineering) ‘Most components and sub-systems may be tested to a given level of duration equal to or beyond the expected life cycle or to equivalent mileage. In most cases this is an acceptable practice However, given the increasing consumer expectations of performance throughout the product life, due diligence testing iscai14 Automotive Wiranty Management AIAG ‘Version 3 Issued Aor, 2015 Autorotve revety Aion Geum recommended to confi reliability for the target life and beyond to ultimate failure. It is recommended that organizations understand a product's full life expectancy up to and including the point of failure to verify that predicted failure is consistent with actual failure (Weibull Analysis is commonly applied). This activity is suggested to confirm whether the field failure modes have remained consistent or have changed Further product or process improvements may be needed as a result of these studies Itis suggested that engineers apply tools such as Design Review by Test Results (DRBTR) (see Appendix Section IT) and Design Review Based on Failure Modes (DRBFM) (see Appendix Section IV) for ‘managed change activity to correlate results to failure conditions that provide methodologies of looking at part failure and understanding how they may relete to reliability and durability. These methodologies require engineers and other technical people to review the designs according to the nature of a fathure before/after a testis conducted or field reftum failure modes are studied. The engineering community should become knowledgeable in these new methodologies and receive continuing education to stay current. Organizations may elect « resident expert so thet it has access to the most current training ‘material 3.6 Review Recalls and Campaigns from Government and/or other Relevant Sources (Process owner Suppliers can reference additional governmental and customer resources early in the planning stage ‘before development begins or before designs mature and before the partner customer reaches final design and engineering approvals. This is particularly important im understanding the risk experiences of other systems that interface with a supplier's components or sub-systems that may have already started on a parallel development path. Applying these Lessons Leamed prevents costly changes to design direction once approvals have been received from the partner customer The U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA), Office of Defect Investigations (ODI), is an excellent data source for vehucle recalls and campaign information on specific commodities. However, there are cases where itis difficult to access and divest the data at a component and/or sub-system level to support a supplier's required decision-making process, Ithelps to have a benchmarking process in place to capture and understand what the NHTSA system provides so that appropriate conclusions can be formulated. supply chain design and warranty engineering) Suppliers may also use the OEM Campaign Prevention or Best Practices databases as a reference for ‘Lessons Learned for curent or surrogate programs. An example of another government source 18, www te ge-ca (Transport Canada'Vehicle Recalls). 3.7 Design for Six Sigma (DFSS) (Process owners: supply chain design and process engineering) Design for Six Sigma (DFSS) is a disciplined approach to identifying customer needs and wants early in the development phase. especially Six Siema capable performance with key parameters. Its ‘methodologies prioritize those wants into feasible consideration for inclusion into a design. DFSS incorporates a tool box of optimization tools that supports meeting the customer’s deliverables at desired capability with 2 high confidence level. DFSS is included in the pre-program stage because the process can require extensive activity that may exceed the available window for APQP. Recosnizing the DFSS ‘timeline of activities may result in a kick-off of activities prior to formal progrem commitmentcal-14 AIAG ire oe agement Version 3 issued April 21 ‘Aforetve Inca Acton Grou DESS tools are the following: cTQ ‘Value Stream Map QrD P DFMA. MSA VAVE ‘Hypothesis Testing cFT Regression Analysis Benchmarking Robust Design FMEAs. Parameter Design DOES. Poka-Yoke TRIZ Adaptive Controlcal-14 Le auemete et Aregen: ~=—- AAG a ‘Version 3 Issued Aor, 2018 MZ 5 Issued Apr, 20 ‘Automative héuety Raton Group Figure $: Design for Six Sigma (including next 2 pages)! Proactive DFSS Process Power Source FCA US LLC, printed with permission.cal-14 AIAG Automotive Warranty Management Sante oot Aura eye Or IDDOV Steps in DFSS na34 caQl-14 Automotive Warranty Management ‘Version 3 Issued Aor, 2015 Autorotve revety Aion Geum IDDOV and Problem Solving Process IDDOV Problem Solving Process Prevent defects of Elminate defects of ‘Future Products Current Proauction Yos Yes No No Note: Links to additional information on DFSS are provided in the Appendix Section IX 3.8 Program Risk Factors (Process owners: Organization and supply chain legal, commercial, design, manufacturing, quality, and purchasing) OEMs and supply chain organizations should recognize the risks associated with a new program before requesting/offering a bid or proposal by communicating expectations and requirements to the partners. Avvareness of these risks allows the orgenization to identify risk-reducing activities and establish a confidence level of achieving these, or even a potential decision not to pursue a program. The assessment requires the appropriate cross-fimctional memibers, including Legal, to understand the risk and what will be done to control this risk to protect the consumer. the partners, and the organization. These typically are: + Terms and Conditions obligations as they relate to warranty. + Warranty cost sharing agreements, if applicable + Risk assessment of the ability to fulfill expected project deliverables * Legal, regulatory, and/or legislative requirements The primary objective is to satisfy the consumer by minimizing the risk of incidents while meeting applicable regulatory and legislative requirements.