Advances in Safety, Reliability and Risk Management Brenguer, Grall & Guedes Soares (eds)

2012 Taylor & Francis Group, London, ISBN 978-0-415-68379-1

Audit to a specific study scenario according to a reference framework

for the improvement of the warranty management
V. Gonzlez Daz, C. Parra Mrquez, J.F. Gmez Fernndez & A. Crespo Mrquez
Department of Industrial Management, School of Engineering, University of Seville, Spain

ABSTRACT: This study is intended to present to the reader a classification of different engineering tools,
focused on the improvement of the warranty management and product reliability, showing all this by its
application on a practical case. For that purpose, a first goal in this paper will be to describe a case study
of warranty assistances, analyzing its management in the framework of a manufacturing company which
provides deliverables during a specific period of time and following a certain scheduled distribution. Several
different types of warranties are suited for different products (consumer, commercial and industrial; standard versus custom built ...). From these, the kind of product that the paper will deal with is a custom-built
product. Once depicted the working procedure and the connections set between sections inside a generic
company, a reference framework will be proposed in order to manage the warranty assistance, using specific
and previously-developed engineering techniques found in the literature on similar processes. They will be
gathered in four sequential stages, where the different techniques will play a crucial role. Following this
scheme, a framework is presented as a sequence of activities in order to support the management of a warranty program. This proposed reference framework will be focused in the improvement not only of the product reliability, but also in the relationship between manufacturer and customer, offering a practical vision
of the set of actions which compose each organizational block. By reengineering of management processes
and by the application of a correct warranty organization it is possible to influence the product design and
manufacturing among others features, increasing its quality and reliability by enhancing the information
flow concerning product defects and their sources. After presenting the case study and the proposed management framework, they will be compared trying to identify some weak points in the case according to
the commented framework. Once these points to enhance have been detected, it will be possible to consider
some practical actions to improve the warranty program management and, in general terms, its decisionmaking process. After auditing the described study scenario regarding the suggested reference framework,
the paper finishes with the conclusions where the main topics are summarized. Further researches can be
focused on the identification of those good or bad practices followed by different businesses, in order to
round off the development of a complete audit and, consequently, the suggested framework.

1 InTroduction
Warranty is usually defined as the assurance policy
applied to all customers where the purchased goods
or services are (or shall be) as represented and, if
not, they will be replaced or repaired. This assurance is applied during a period of time after a product has been sold, The management of such policy
combines technical, administrative and managerial
actions during the warranty period of an item in
order to maintain or restore the item to a state in
which it can perform the required function, necessary to provide a given service. In order to apply an
effective warranty management, is critical to collect
the proper data and to exchange adequately the

ifferent types of information between the modules

d
in which the management system can be divided
(Lyons & Murthy, 2001). In this paper, our study scenario will be presented as a warranty management
system based on a several modules organization.
In the literature review (V. Gonzlez et al,
2009a), different interactions between warranty
and other disciplines have been observed, and how
they are dealt by the different models and authors.
Particularly and summarizing, four important
interactions can be considered:
1. Warranty and Maintenance: In many cases, the
warranty period is the time when the manufacturer still has a strong control over its product

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and its behaviour. Additionally, the expected

warranty costs depend normally not only on
warranty requirements, but also on the associated maintenance schedule of the product
(Dimitrov et al, 2002).
2. Warranty and Outsourcing: The warranty service or, in general, the after-sales department of a
company, is usually one of the most susceptible
to be outsourced due to its low risk and due also
to the fact that, among other features, outsourcing provides legal insurance for such assistance
services (Gmez et al, 2009).
3. Warranty and Quality: The improvement of the
reliability and quality of the product has not
only an advantageous and favourable impact
in front of the client; it also highly reduces the
expected warranty cost (Chukowa & Hayakawa,
2004).
4. Warranty and Costs Analysis: In reference to
costs estimations, there are nowadays methods
to estimate accurately the final cost of a specific
acquisition contract as, for instance, the method
denominated Estimate at Completion (EAC)
(D. Christensen, 1993), a management technique used in a project for the control of costs
progress.
2 CASE STUDY
The intention here is to synthesize a practical case
which transmits easily how a proper management
of warranty assistances helps to reduce costs, enables to take suitable decisions, and improves the
image of the company in front of the client.
Several different types of warranties are suited
for different products (consume, commercial
and industrial; standard versus custom-built ...)
(Murthy & Blischke, 2005). The case here exposed
will deal with a custom-built product where its
warranty management is negotiated with the
customer (V. Gonzlez et al, 2009b). The added
value of the case study here presented is just to
highlight the steps proposed as reference framework for the warranty management. Therefore,
it is not the intention here to develop deeply
this part quantitatively. Nevertheless, in case it
would be of interest to deepen in the case study,
it is highly recommended to look up the reference
(V. Gonzlez et al, 2009b). Other warranty case
studies can be found for instance in (Blischke &
Murthy, 2002).
2.1 Study scenario and warranty evolution
The case company is a large manufacturer in
the metal industry that operates worldwide. The
company designs, manufactures and purchases a

wide range of industrial vehicles (such as forest

machines, hydraulic excavators or track loaders)
for industrial customers, as well as other related
products like spare parts. Additionally to the
purchase of standard vehicles, nowadays is being
also often the customization of machines. Therefore, in our case the company must supply to a
client a specific amount of customized vehicles
following a defined schedule. In the contract is
included the assistance of warranty for the vehicles of the fleet during a period, starting when
each vehicle is delivered to the customer. To provide the after-sales service in a satisfactory way, it
is required the fulfilment of some conditions by
the company:
1. Teams formed by personal with appropriate
training.
2. Tools for maintenance/warranty tasks.
3. Materials and spare parts to carry out the
repairs.
The first two conditions are considered fulfilled.
Regarding the third condition, the necessary materials for warranty operations are obtained from
the same warehouse of the assembly line. By this
way, there are two possibilities to give back the
material:
When the piece is repairable, a spare part is taken
from warehouse being later put it back after the
repair of the disassembled piece.
When the piece is not repairable, a spare is also
taken from warehouse, but the material must be
restored by purchasing.
This situation is possible because the stock for
manufacturing allows the loan of material for warranty without risk to the necessities of the assembly line.
The problem in this scenario is defined as follows: Due to the fact that manufacturing and warranty assistance share the same warehouse, there
will be a moment when the manufacturing is very
advanced and simultaneously there are many
vehicles under warranty (t2). From this moment
onwards, every decision must be taken prioritizing
one of the two activities.
Apart from the above described context, the
study takes place during the lifetime distribution
of deliverables (t1). That means that, historical
data regarding costs, failured items etc. are available for the research. Summarizing, the described
scenario and the delivery schedule are as shown in
Figure1.
Here, the total amount of customized vehicles
to be delivered is 350 units, the warranty period for
each vehicle is 2 years, and the warranty expiration for last vehicle is march 2015. Additionally,
the graphic helps to illustrate some other details as

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Customized Vehicle

t1

400
350
300
250
200
150
100
50
0

Electrical System

t2

Disjunctor

Cable

Hydralic System

Valve

Pump

Mechanical System

Gear

Brake

Auxiliary System

Intercom

Navigator

Level 1

Level n

Figure2. Classification tree of components.

-0
6
p06
ar
-0
se 7
p0
m 7
ar
-0
se 8
p0
m 8
ar
-0
se 9
p0
m 9
ar
-1
se 0
p1
m 0
ar
-1
se 1
p1
m 1
ar
-1
se 2
p1
m 2
ar
-1
se 3
p1
m 3
ar
-1
se 4
p1
m 4
ar
-1
5

2.2 Spare parts management for warranty

assistances

se

Level 0

Warranty Evolution

ar

Amount of Vehicles

Monthly Delivery
Delivered Vehicles (Acumulate)
Vehicles in warranty

Month

Figure1. Data of the described scenario.

t2 (september 2011), when the already delivered

fleet285 unitswill have a maximum in the
amount of vehicles simultaneously under warranty 128 units(see yellow graphic line). In
this moment, we can observe how close the end of
the deliveries is (April 2013). Consequently, much
closer (and critical) is therefore the manufacturing
of such last vehicles.
In t2, our teams of maintenance/warranty technicians will have to assist a high number of vehicles
which will demands a huge amount of spare parts.
At the same time, the operators of the assembly
line will be requesting pieces for the production of
the last vehicles. The shared warehouse will have
then in store enough pieces for manufacturing but
no more, so the loan of any spare part demanded
by the after-sales personal must be decided taken
into consideration the importance of the material,
the time to repair the disassembled piece, and/or
the time to restore it by purchasing.
Therefore, every piece in the classification tree
(see Fig. 2) belonging to the lowest level (level
where materials can be procured), will have a
weight (or criticity) in order to be lent or not,
which changes with the time. Every piece will be
considered much more critical, as closer is the end
of manufacturing.
Therefore, and taking into account a costs analysis, it will be necessary to have in mind the investment of a minimum strategical stock in order not
to leave warranty claims unattended. The budget
for warranty depends on the company policy. Usually, it is determined as a percentage of the project
total cost. These cost data are not relevant in this
paper since the objective here is to check the warranty process.
Nevertheless, many cases can be found dealing
with costs, warranty data analysis (qualitative and
quantitative), etc., using also real data and providing more details. Two review papers on this topic
are, for instance, (Karim & Suzuki, 2005) and
(Lawless, 1998).

This paragraph is part of the logistics of warranty

servicing. The bibliographical reference (Murthy
et al, 2004) deals with various issues in this context.
In order to assure a correct warranty attention,
the proposed action is basically to acquire a lot
of reserves that allow reparations without delays
in the vehicles manufacturing and, simultaneously
during this process, to supply spares to the warranty service from the assembly line in a reasonable way.
According to the mentioned considerations, and
together with the collected data, the experience of
warranty/maintenance technicians, the knowledge
of the engineering department and of course using
the already developed techniques in maintenance,
is possible not only to elaborate a spare parts purchase plan for warranty, but also to improve the
business process of decision-making as well as to
contribute with improvements actions for engineering and manufacturing.
In general, the decision-making will be the result
of a process focused to a final choice among several alternatives. In our case, in order to lead the
company to a fast and adequate decision-making,
every department should know very clear what they
have to do and which the scope of their responsibility is. For our company case, we have adapted
the idea of a warranty management system divided
in modules (Lyons & Murthy, 2001), proposing
furthermore, certain interactions among different
departments inside the company.
These departments share the information, take
suitable decisions according to their responsibilities, and coordinate activities to a common and
profit goal for the whole company. In order to
illustrate such interactions, activities etc., see the
workflows in Figures 3 and 4. The considered
departments here (including the client) are:
Logistics Department (LD)
Manufacturing Department (MD)
Management Board (MB)
After sales Department (AD)
Quality Department (QD)
Purchasing Department (PD)
Engineering Department (ED)
Customer (C)

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Figure 3. Proposed warranty management process workflow (part 1 of 2).

Figure 4. Proposed warranty management process workflow (part 2 of 2).

The process starts when the customer detects

a failure in a vehicle and informs consequently
to the company. The communications can be
addressed to different sections of the company,
but the most appropriate way is to focus them
in only one communicator as, for example, the
Management Board or the Aftersales Department, who can also detect failures in the course of
its maintenance activities. Once the information
reaches the Aftersales Department, they analyse
the given information.
In case that the incidence is considered not
object of repair under warranty (for example,
when the cause of the failure has been a wrong or
bad utilization), they inform to the Management
Board who decides finally if, in spite of this, the
incidence is repaired as warranty.
If the incidence is discarded as warranty repair,
the Management Board should inform the customer about that. The customer can of course
disagree with such consideration.

Therefore, a list of interventions (those not

considered firstly as warranty) must be negotiated
between the parts. If the incidence is considered
under warranty conditions, the Aftersales Department must carry out a diagnosis of the incidence,
detecting the problem, analyzing its solution, and
determining the resources (staff and materials) as
well as the necessary time for its repair. In reference to the material, the warranty technicians must
identify between the repairable and the non reparable/consumable materials.
The global and general needs are communicated
to the Management Board who addresses the
actions to the corresponding department (Logistics, Manufacturing and/or Purchasing Department), in order finally to facilitate the material to
the Aftersales Department. At that point is when
the Management Board must take the most important decisions in terms of costs and manufacturing
prevision. Once the Aftersales Department has the
material (either by a loan from warehouse, a loan

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by cannibalization, or acquisition by purchasing),

it communicates to the Management Board (and
afterward to the client), its action plan.
The damaged material is sent to the company
where the Quality Department (together in some
cases with Engineering Department) analyzes the
failure. If the repair has been by replacement and
the material is identified as repairable, the Quality Department manages the repair, taking into
account the appropriate certification. The material,
once repaired and certificated, will be stored again
in warehouse for its use in the assembly line. In this
process, every data about the incidence, damaged
material, repair etc., gathered by Aftersales, Quality and Engineering Departments are introduced
in a Data Base which is followed-up and reviewed
by the Quality Department.
Once the incidence is solved, Aftersales Department communicates the closure of the assistance to
the Management Board, who transmits this to the
client. From the customer is important to receive
a document with the approval of the performed
tasks and the acceptance of the service closure.
The Data Base associated to these incidences and
necessary for their follow-up should include, not
only those incidences considered under warranty,
but also the data about preventive and corrective
maintenance performed on every vehicle, in order
to enable the analysis of, for example, repetitive or
systematic failures among others studies.
3 REFERENCE FRAMEWORK PROPOSAL
In this paragraph, we will briefly introduce blocks
and methods that may be used to improve the decision-making process. The reference framework proposed for the management of a warranty program
was developed and more detailed in reference (V.
Gonzlez et al, 2010). It is important here to emphasize that there are many other tools and techniques
very relevant, and not only the tools mentioned in
this paper. Here, it has been compiled strategies for
the improvement of current products as well as new
products yet to be developed. Due to the fact that
this scope is widely broad and is a challenge to integrate, this paper tries to outline in few words the
high amount of material. Other works on this wide
field are for instance the following sources: (Murthy
et al, 2008), (Murthy et al, 2009a, b and c).
3.1 First step: warranty program effectiveness
In order to avoid strategical contradictions between
the warranty program and the overall business
management, it is proposed the application of a
Balanced Scorecard (BSC) model. Basically, this
model considers targets and goals around four per-

spectives, which applied to the management of a

warranty program, can involve the following steps:
a. Strategical formulation for the warranty
program.
b. Translation of warranty strategic into middleterm reachable objectives.
c. Development of action plans.
d. Periodical review of performance and strategy.
Once the warranty program objectives and
strategy are defined, is necessary to determine
the product criticality. The Criticality Analysis is
understood here as how crucial is the complaint of
a client due to a failure and its consequences to
the business. Decisions and actions from the warranty program can involve the possibility of a certain deviation from business objectives (in terms
of profit losses, redirection of resources, possible delays, use of assembly pieces as spares, etc.).
Therefore, it is required the application of a technique which help systematically to decide which
assets should have priority related to the management of the warranty program, in accordance of
course with the existing program strategy.
Finally, when the strategy to follow has been
defined and the probable events have been prioritized, it is the moment to focus on those customers
complaints related to repetitive or chronical failures that supposes high priority events. If it is possible to find and to eliminate the causes of those
failures by a soon intervention, it will provide a
fast and important initial advantage of the warranty program strategy. There are different methods already developed to perform this analysis of
weak points. For instance, the Failure Root Cause
Analysis considers actions in order to discover the
reason of the appearance of a specific failure, and
how to correct its causes. A detailed root cause
failure analysis may consist of:
Determine a root cause of failure;
Proposing, testing and validating hypotheses;
Recommending preventive actions;
Implementing improvements;
Forming a team of experts;
Gathering evidence;
Analyzing the results and determining failure
causes.
3.2 Second step: Warranty program efficiency
To attend warranties with minimum waste, expense,
or unnecessary effort is necessary to design an
adequate plan for the warranty program. The plan
for a certain product will require identifying its
functions, the way these functions may fail and
then, to establish a set of applicable and effective
tasks, based on considerations of product safety

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3.3 Third step: Warranty program assessment

Once designed, planned and scheduled activities
of the warranty program using the above described
techniques, the performance of such tasks has to
be evaluated and assessed. As a complement of
the mentioned techniques, a study related to Reliability, Availability, Maintainability and Safety
(RAMS analysis) takes its importance due to the
huge amount of restrictions and conditions that
any complex product, currently on the market,
hold in itself. Its components or subsystems present
ranges of potential modes of failure that must be
considered from the initial state of design.
Some standards as the ISO 14224/2000 (ISO
14224, 2004), deal with this matter. In any case,
the RAMS analysis gives an approached evaluation of the product behaviour when it will be in
use. As a result of such analysis, one can obtain
a deep knowledge about the product capacity to
perform properly the functions expected from it,
under established conditions and during a specific
period of time. It is also possible to know in which
degree a system or component can be used during
a certain interval of time, or must be restored or
substituted. In addition to this, with an adequate
reliability and availability assessment, is possible to

Step 1: EFFECTIVENESS

Step 4: IMPROVEMENT

Balance Score
Card

Criticality
Analysis

Failure Root
Cause Analysis

Six sigma

RA & MDT
adapted to
Warranty

Customer
Relationship
Management

Warranty Policy
Risk-CostBenefit Analysis

E-Technologies
(E-Warranty)

Life Cycle Cost

Analysis

Step 2: EFFICIENCY

and service economy. A method which can help to

elaborate such plan at the very beginning of the
warranty program can be extracted from management techniques of the maintenance field. Particularly, it will be useful the application of an adapted
Reliability Analysis and Maintenance Design Tool
(RA&MDT), as for instance using FMECA for
generic maintenance plan design.
An initial maintenance plan, applied to the
warranty time horizon, can suppose a good first
approach for the warranty capacity planning, the
spare parts provisioning, the warranty task schedule, skill level of the technicians etc. The planning
and scheduling improvement applied to a warranty
program can of course enhance the effectiveness and
efficiency of program policies. Such improvement
will depend on the time horizon of the analysis.
About costs and failure modeling, there is a
huge range of diverse approaches, analytical and
empirical, related to other fields. In order to carry
out a Warranty Policy Risk-Cost-Benefit Analysis,
such activity will depend of course on the objective
that the own model builder keeps in mind. In any
case (as here with the management of a warranty
program), the problem is influenced by the information available. In addition to this, the complexity of the issue is usually high and considerations
must be taken under certain assumptions in order,
either to simplify the analytical resolution, or to
reduce sometimes the computational needs.

Reliability,
Availability,
Maintenability
and Safety

Step 3: ASSESSMENT

Figure 5. Proposed framework for warranty management.

demonstrate in the first stages of the product, how

requirements expressed in initial technical specifications can be incompatible or even impossible to
accomplish for determined product configurations
(V. Gonzlez et al, 2009d).
To complete this 3rd step about warranty program assessment is important to include a Life
Cycle Cost Analysis, which calculates the cost of
the product for its entire life. The typical analysis
includes costs for planning, research and development, production, operation, warranty and disposal (C. Parra et al, 2009). From the consumers
point of view, the life cycle cost will suppose the
acquisition costs, purchase price, costs of operation
and maintenance, etc. That means, in general, the
total cost of the item ownership. In any case, the
life cycle cost regarding warranty issues, is highly
influenced on the values for reliability and failure
rate, cost of spares, repair times, and component
costs. Normally, a low budget for product engineering leads to high warranty costs in the future.
3.4 Fourth step: Warranty program improvement
As a result of the previous steps in this management process, a continuous improvement of the
warranty program management is possible thanks
to the application of emerging techniques and technologies in areas considered of higher impact. The
implementation of new technologies to warranty
brings with itself the introduction of the concept
E-Warranty. which can be defined as a warranty
program support that includes the resources, services and management necessary to enable proactive
decision. This support not only includes e-technologies, but also activities such as e-monitoring,
e-diagnosis, e-prognosis etc. Together with the
implementation of new technologies for a warranty program, it is crucial to involve the warranty

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technicians with the warranty improvement process, in order to reach a successful goal which supposes higher level of product quality and program
effectiveness. Consequently, higher levels of knowledge, experience and training will be required.
It is clear that one of the most important parts
inside the management of a warranty program is
the relationship with the client. The techniques
that manage these relationships are usually considered part of an ERP system (Enterprise Resource
Planning), and sometimes it is treated as a complementary part. The CRM (Customer Relationship
Management) is used not only to define a strategy
of business centred in the client, but also to include
a group of applications useful to deal with data
related to clients, complaints and, in general, the
commercial activity of a company. A CRM module can be adapted for the warranty management,
which should allow the company:
To identify products and services that clients
require to be attended;
To optimize assistance times and information
channels;
To identify clients groups in order to develop
warranty strategies;
To be aware about the current aftersales necessities of the clients;
To increase sales of the company together with
the clients satisfaction;
Among others.
The customer relationship management includes
operational areas and tasks that deal directly with
the client (front office), and other ones more
analytical where different parts of the company are
closely involved (back office). The main part of
any CRM strategy will be the Data Base, which can
provide very interesting information about complaints, repetitive failures, hidden defects, quantitative and qualitative analysis, statistical results etc.
To lubricate all this machinery, is necessary the
set-up of programs to optimize the organizational
efficiency, in this case focused on the warranty program management. For that purposes it is possible
and interesting to adapt, for instance, concepts from
the Total Productive Maintenance (TPM) philosophy. The TPM tries to achieve a continuous improvement applied in that case to a maintenance practice.
Many organizations are recently implementing a
new management philosophy that can be also very
useful for the warranty management. The Six Sigma
is a methodology which integrates the human factor
with improvement tools, mainly statistical to engage
the complex mechanisms inside a company, and
proposing the following steps:
To select indicators or variables, which are critical for quality.

To take measures of these variables in order to

compile real data of the current situation.
To detect the variation source of those interesting variables and their allowed tolerance.
To implement solutions.
To apply statistical controls that allows the long/
middle term improvement.
The application of the 6-sigma philosophy supposes the necessity of real data and the use of a
huge amount of variables. Therefore, this methodology combined with new e-technologies can bring
very good results in the field of the warranty program management.

4 AUDIT TO THE CASE STUDY

ACCORDING TO THE
CARACHTERISTICS
OF THE PROPOSED FRAMEWORK
In this final part of the paper we test the support
provided by those stages proposed as management framework, on the already described study
scenario. Further researches can be focused on the
observation for instance about what todays companies are doing correctly or not, in order to round
off the development of a completed framework.
4.1 Remarks to the current situation
This brief exercise is helpful to check whether our
organization is considering the nowadays available techniques to manage properly these kinds
of issues or there are still some fields left on the
decision-making scope, which could be targeted
for improvement. For that purpose, we present in
few words some weak points of the case study and
the referred suggestions according to the application of the proposed framework.
On the effectiveness stage checking:
1. Balance score card: In the case study, decisions
are usually taken conforming problems appear.
There is an aftersales strategy at the beginning of
the project and the following changes are related
to short-term reachable objectives. There is a
reactive management behaviour, thus managers act when a problem appears but do not take
an advantage to avoid its appearance. On the
contrary, regarding the proposed framework,
strategical formulation for the warranty program must be translated to middle-term reachable objectives and the development of action
plans. A periodical review of performance and
strategy is basic just to quantify the progress
and taking into account any necessary changes
in the organizations support infrastructure.

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2. Criticality analysis: Customers complaints are

usually prioritized following a temporal scheme
(as a FIFO method) in the case scenario. That is
due to the fact that the concept of inoperance is
not really clear between client and manufacturer.
In addition to this, managers who take decisions
on this area, have to fight normally against business objectives. However, as mentioned in the
framework proposal, a systematical decision
about which assets should have priority related
to the warranty management, can avoid discrepancies with the existing program strategy.
Taking into account the probability of an event,
and the impact that this event would cause, it
can allow aligning aftersales actions with the
business targets.
3. Failure root vauses analysis: In the study scenario, repetitive and systematical failures are
specially treated. However, the concept of systematical failure is not clear and therefore, special interventions on such cases are usually not
fast. As suggested on the management proposal,
the failure root causes analysis should run a protocol of systematical actions which can allow a
soon intervention, readapting the considerations taken initially on the Balance Scorecard.
On the efficiency stage checking:
4. RA&MDT adapted to warranty: The maintenance criteria about capacity planning, the
spare parts provisioning, the warranty task
schedule, skill level of the technicians etc., is
applied during the whole warranty program of
the case scenario. According to the proposed
framework, an initial maintenance plan, applied
to the warranty time horizon, can suppose a
good first approach. Nevertheless, it is crucial
its adaptation to the warranty necessities, in
order to enhance the effectiveness and efficiency
of program policies.
5. Warranty policy Risk-Cost-Benefit analysis:
The study case does not consider any risk-costbenefit analysis, however, a costs provision is
supposed at the beginning of the project, and
during the development of the warranty program there is a follow-up and a readaptation of
the initial budget assigned to warranty assistances. As indicated in the framework proposal,
an integrated model for total warranty costs
depends on the information available. Moreover,
the complexity of the issue is usually high and
considerations must be taken under certain
assumptions in order, either to simplify the analytical resolution, or to reduce sometimes the
computational needs.
On the assessment stage checking:
6. RAMS analysis: As the aftersales support is
offered in the case scenario while the production
line is still open, the product engineering and

manufacturing improves with the data feedback

from the warranty program. However, in this
case study is supposed that every vehicle shows
the same level of reliability. Nevertheless, once
the product is launched, we saw in the proposed
framework that this analysis can help to take
soon measures and to correct or improve the
product, foreseeing also probable claims from the
users due to a low reliability on the first products.
Therefore, this action increases reliability progressively, with the consequent clients satisfaction.
7. Life cycle cost: This analysis is carried out in
the scenario at the beginning of the project,
together with the rest areas of the product life
cycle, being warranty costs simply considered as
a percentage of the complete project budget.
However, the framework considers that life
cycle cost regarding warranty issues is highly
influenced on the values for reliability and failure rate, cost of spares, repair times, and component costs. As commented along the paper,
a low budget for product engineering leads to
high warranty costs in the future. Therefore, a
complete LCC analysis can help to determine
an appropriate budget for the possible warranty
needs in the future.
On the improvement stage checking:
8. E-technologies: High levels of knowledge, experience and training is required in the study
scenario to the warranty technicians, in order
to work with special tools and test equipment
useful to check the status of each vehicle. However, it is not implemented new technologies as
e-monitoring, e-diagnosis, e-prognosis ... etc.,
included in the concept of e-warranty, defined
in the proposed framework. The implementation
of new technologies for a warranty program is
crucial as a support. It includes those resources,
management and services, necessary to enable
proactive decision, in order to reach a successful goal which supposes higher level of product
quality and program effectiveness.
9. Customers relationship management: Communications channels between client and manufacturer, and also among the different departments
of the case company, are widely open to transmit quickly incidences, decisions, orders, etc., in
order to be aware about the current aftersales
necessities of the clients. In addition to this, a
data base can provide information about complaints, repetitive failures and hidden defects.
However, we have observed other viewpoints in
the framework proposal. Not only is important
to identify products to be attended or to open
faster information channels; a high improvement will be also to enable the identification
of clients groups in order to develop warranty
strategies and to optimize assistance times. The

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main part of the strategy is the data base, which

provides also interesting information about
quantitative and qualitative analysis, statistical
results etc.
10. Six-Sigma: There is a team in the case study
(Management Board), not necessary multidisciplinar, which focuses the communications
with the client and among the different departments, distributing orders, and taking decisions.
The proposed methodology requires however a
multidisciplinary full-dedicated team, together
with improvement tools, mainly statistical, in
order to engage the complex mechanisms inside
a company.
4.2 Improvement actions
Once identified those areas to be enhanced, it is
possible to propose some practical actions to
improve the warranty program management and,
in general, its decision-making for our defined
study scenario.
4.2.1 Case study effectiveness
For each department implicated in the warranty
management process, a Balanced Scorecard model
is suggested to avoid discordances between local
objectives and the complete business goal. Objectives, measures, targets and initiatives mainly for
the Aftersales Department, but also for Logistics,
Manufacturing, Quality, Purchasing, and Engineering departments, must be developed under
the supervision of the Management Board, and
periodically reviewed in order to quantify the
middle-term progress and to formulate new strategic goals and action plans.
In accordance with this program strategy, it is
crucial to have clearly defined between client and
manufacturer concepts as systematical failure
or inoperance degree, in order to enable special
interventions when needed. The Criticality and
the Failure Root Cause Analysis must be therefore performed using those data about incidences,
damaged materials, repairs etc., gathered by Aftersales, Quality and Engineering Departments and
saved in the Data Base, having also in mind those
considerations taken initially on the Balance Scorecard. These analyses and the Data Base compiling
must be followed-up and reviewed by the Quality
Department.
4.2.2 Case study efficiency
As soon as the warranty assistances begin to be
applied, the current warranty necessities related
to the actual organizations support infrastructure,
appear much clearer.
With these data, a Reliability Analysis and Maintenance Design Tool, together with a Risk-Cost-

Benefit Analysis (adapted both to warranties) can

be performed, making easier on one hand those
decisions about capacity planning, spare parts provisioning, warranty task schedule, skill level of the
technicians etc., and, on the other hand, the readaptation of the initial budget assigned to warranty
assistances.
These facts are of course alive during the development of the warranty program. That means, the
different departments must follow-up those data
which affect to their scopes and responsibilities,
according to the events evolutions and the boundary conditions for each moments. The Management
Board should them gather all these information
and, together with the Aftersales Department,
periodically update the required resources to cover
properly the actual warranty necessities.
4.2.3 Case study assessment
The warranty Database, fed with those information
coming from Aftersales, Engineering and Manufacturing areas, and kept by the Quality Department,
is a good tool to perform a Reliability, Availability,
Maintainability and Safety analysis, as well as a
Life Cycle Cost study. The results from the RAMS
analysis will be expressed in terms of probability,
taken into consideration the mechanisms and relationships between failure cause and effect.
These results feed back the Engineering and
Manufacturing Department, so they can apply
changes in the design and assembly, improving
consequently the product reliability, and will be
useful for a later phase related to the Six-Sigma
application.
The reliability values and the failure rates
influence highly the cost of spares, the repair
times, etc. This information must be taken into
account, on one hand by the Management Board
in order to determine an appropriate budget for
the possible warranty needs in the future, on
the other hand by the Aftersales Department
in order to attend soon those claims related to
important or costly failures. By these actions,
the Aftersales Department should also identify
those preventive actions which can help to avoid
or decrease future customer complaints, started
by similar causes.
4.2.4 Case study improvement
The huge and diverse amount of data requires of
course an automatic processing and a systematic
treatment. The use of a Database and other computing tools to save and store all these information,
is therefore essential. The help of the IT Department
to make easier the data processing and the information flow can be very useful. In addition to this, the
use of new E-technologies has been also proposed
along this paper. These new e-tools can be for

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Figure 6. Summary chart with the involvement degree of each department in the different phases.

instance (and when possible) the condition monitoring of each vehicle in order to follow-up in real time
their behaviour, checking by this way (for example) if
systematic failures have been eliminated and solved.
The above mentioned Warranty Database, together
with a Customer Relationship Management system,
helps the Management Board to (among others)
identify customers groups or, in the case of a fleet
of vehicles, to determine different vehicles behaviours when they are located in different destinations,
in order to plan a properly warranty schedule, and
to analyse with the Aftersales Department, possible
reasons and causes to localized failures.
Finally, The Management Board has been here
defined as a full-time dedicated team to coordinate
and deal with all those warranty issues. Nevertheless, according to the Six Sigma methodology,
this team will be much more effective if included
among its members are engineers, technicians and
managers from each implicated department. By
this way, the Management Board can have not only
a complete view of the warranty process, but also
to know the casuistry of each involved area, and
how decisions can affect them.
As an example, Figure6 tries to summarize how
much the different department can be involved in
the described phases of the proposed framework.
In any case, this involvement degree will depend
of course on the company policy for its warranty
program management.
5 Conclusions
Along this paper, we have shown that a warranty
management framework must help to define
new, clearer policies and procedures for claims

processing. Basically, it has been expressed that a

global reference framework shall involve:
Warranty process reengineering.
Warranty management outsourcing.
Data analysis.
Supplier analysis, recovery and collaboration.
Repair management.
Service parts planning and inventory management implementation.
Logic warranty claim validation.
With the help of a case study, this paper summarizes a business process inside a specific framework: the warranty management. The analysis
observes how information related to warranty and
maintenance, gathered during the lifetime of the
project, can be profitably used to take decisions
reducing unnecessary expenses and improving the
quality, the service and, essentially, the image of
the company in front of the client. The data compilation enables to weight those parameters needed
to choose properly among alternatives. Such decisions are expressed in the workflow as gateways.
Currently, the use of computing tools can be helpful not only to make automatically choices, but also
to model and simulate business processes in order
to detect for example their weak points.
Nowadays, e-technologies are being applied in
many and different fields and will be, consequently,
key factors to reach high levels of quality, reliability,
effectiveness and, of course, confidence before the
client. As the business world is more and more competitive, only those new management philosophies
can bring a difference. Therefore, the purpose here
has been to adapt and to apply well-known techniques (developed for other areas) to a field which
was not yet in the focus of most of the executives.

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The present paper has summarized the framework (the essential supporting structure) needed
to manage a warranty program, suggesting methods to improve the program management and its
decision making. Consequently, this paper tries to
provide the reader with an up-to-date review and
citations of significant methods, techniques and
technologies, to enable an organization the development of various warranty-related functions, allowing them to face the typical complexities in todays
manufacturing and service environments. Other
suggested references related to this topic are (V.
Gonzlez et al, 2011), (V. Gonzlez & A. Crespo,
2010), (V. Gonzlez et al, 2010b and c) and (Legnani
et Al, 2010). Further researches can try to develop
the impact of e-technologies in order to show the
possible added value of e-monitoring, e-diagnosis,
e-prognosis on the warranty costs and effectiveness.

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