The optimization of General Motors' warranty system by reducing mean time to discover failure

Abstract

Warranty is an important part of many organizations. Warranty costs take money directly away from corporations' bottom line. General Motors Corporations warranty liability costs its shareholders upwards of billion dollars annually. General Motors currently uses RedX, a systematic design of experiments methodology, to try to reduce warranty costs. Although this approach has reduced warranty costs, it has not done so neither fast nor sufficiently as high costs remains. The General Motors' warranty system was mapped and diagnosed. Interviews were conducted with all involved parties with the warranty system. Competitors warranty systems were compared and contrast to General Motors' warranty system. Other factors considered were new quality methods. The major factors limiting General Motors goals to reducing warranty are time to discover the failure and the time the fix the failure once it is discovered. Another factor is the culture and the lack of team environment within the warranty organization. General Motors should use telematics, onboard diagnostics, signature analysis, and a systemic approach which involves integrating the design and warranty organizations to predict and quickly eliminate defects from its manufacturing facilities. This approach will either eliminate failures quickly or prevent them from even becoming failures in the first place.