Design for Warranty/Warranty Predictions
Design for Warranty helps development teams identify and analyze the most likely and costly warranty events and then to develop product designs that maximize manufacturing and warranty cost reductions. The models and analysis methods are driven by a warranty event cost model that includes the cost of servicing an event by the support organization as well as material costs..
With warranty costs in the computer and high tech electronic industries passing $6.2 billion annually, warranty liabilities have an increasing impact on business profitability. Product development teams are being challenged to design products that are both less costly to fix and more reliable (AFR). When making design trade-offs, these teams need an effective way to evaluate design alternatives with an eye for how the support organization diagnoses warranty events and what service delivery process alternatives can be used to resolve the event.
Design for Warranty models and methodologies support the development team during the design phase to:
- Identify the most likely warranty events (failures) for a new product. Using the warranty cost model, projected warranty costs are calculated for each identified warranty event.
- Identify design alternatives for each warranty event that minimizes the total warranty cost. These design alternatives include component AFR reductions and utilization of less expensive support processes. Dependencies (such as new diagnostic tools and new support process capabilities), feasibility and risk factors are identified.
- Choice of design from alternatives based on development, manufacturing and warranty costs, as well as risks and feasibility. This information can be used by the Warranty Predictions Service. The estimated warranty cost of the final design is compared to business goals.
VALUE TO YOUR ORGANIZATION
There are two main benefits from Design for Warranty. First, the product is designed from the beginning to minimize warranty and service costs. Secondly, the diagnostic tools and service process capabilities needed to achieve the estimated cost reductions are identified early enough so that they can be realized prior to product launch.
An example of Reliability Integration during the Design for Warranty is as follows:
Reliability Models & Predictions and Failure Modes and Effects Analysis (FMEA) Service deliverables can be important inputs for developing the warranty event cost model.
In combination, these three services enable product teams to make fact based design trade-off decisions very early in the development process.
Warranty expenses are the business tangible of un-reliability. Investments to improve reliability performance result in lower warranty expenses. Design for Warranty and Reliability Predictions provide the basis for warranty predictions.
Warranty Performance Analysis Service often:
- Identifies the primary support processes (and their costs) used by a company.
- Develops current product warranty cost Pareto charts to use as an internal benchmark for new products being developed.
- (optionally) Develops the company’s overall warranty strategies and tactics that are used by Design for Warranty when making your design alternatives and choices.
A key to Design for Warranty’s methodology is the warranty cost model. This model constructs the cost of warranty events from the support process costs used by your company to resolve the event and from the event’s frequency of occurrence. The identification of commonly used support processes and their standard costs can either be estimated with the help from your support and finance teams, or may come from the results of the Warranty Performance Analysis Service.
The following case studies and options provide example approaches. We shall tailor our approach to meet your specific situation.
Designing a product for less costly support processes
A large commercial electronic products company was making excellent progress on reducing their product’s failure rates as measured by Annual Failure Rate (AFR). The problem was their warranty costs were only decreasing by 1/2 of what they expected. Using the principles of Design for Warranty, they identified the top 10 contributors to their warranty budget and determined that meeting the product’s warranty goals would require a shift to less expensive support processes for a number of the ‘top 10’ event types. They identified design alternatives that relied on both realistic AFR reductions and the use of new call center supported diagnostics with a new customer self-repair support processes. R&D developed the diagnostic tools as part of their development Plan of Record and support the deployment of the new support processes and procedures prior to product launch.
Warranty Performance Analysis
Some teams may choose to first perform a Warranty Performance Analysis on a current product that is similar in function and design and shares a similar target market. This gives them a warranty cost ‘benchmark’ to use in the concept phase of the product development process and for competitive benchmarking.