Quality Warranty Cost Optimization Study Of CON Autonotive Co.,Ltd.

As one of the most globalized industries,the mission of the Automotive industry is to provide safe,convenient and green transportation for their customers.Commercial vehicles,especially heavy-duty trucks,are used as production materials,so their industry prosperity is closely related to economic activities.The Chinese market has become the world’s largest heavy-duty truck market since 2008,with sales accounting for 57%of its peak sales(in Yr.2010),with an average contribution rate at 40%-50%.At present,there are nearly 30 domestic manufacturers engaged in the production of heavy-duty trucks,but the top ten manufacturers account for more than 90%of the market share,the market concentration is relatively high.With the seriously social reactions caused by the exposure of various quality issues,companies are paying more and more attention to quality issues.At the same time,companies are much more sensitive to the losses caused by quality issues(that is,the cost of failure quality).From various literature studies,there are many studies that provide a variety of options for optimizing quality cost,but most of them are more theoretical and have limited guiding significance for the implementation of enterprises.Based on the inferior position of suppliers in China’s heavy-duty truck industry,this paper takes CON automotive Co.,Ltd.as the object.Through the research and analysis of CON automotive Co.,Ltd.failure(loss)quality cost data,detected the key factors that constitute its quality warranty cost,that external failure costs accounted for more than 98.5%of all failure costs,while non-product liability claims(failures caused by no trouble found and failure caused by electrical over-stress)accounted for 94%of all external failure costs.Due to the status of the supply chain,all claims costs caused by "non-product liability" are paid by the CON automotive Co.,Ltd,such losses mean loss of net profit to the company;therefore,it is extremely urgent to improve the status quo.Based on this,the main research content of this paper is to work out the feasible optimization solutions for how to reduce the quality warranty cost under the industry market situation and the status quo of the enterprise.Analyzing the quality warranty cost data of CON Automotive Co.,Ltd.,the cost structure and the improvement orientation is determined as follows:1).Pay attention to the improvement of the top 3 primary customers’ quality warranty costs,which takes more than 80%of total warranty cost;2).Warranty costs caused by non-product liability claims,including no trouble found issue and failure reproduced-EOS.According to the analysis conclusion of the quality warranty cost data,combined with the analysis of the industry market situation and the enterprise status,we propose a win-win optimization plan for the enterprise and the customer,including:1)Much more robust design for ESD protection;2)cross-organization process optimization to improve OEM’s warranty management of repair shop;a preliminary analysis of the implementation and resources of the plan is carried out.Via the implementation of the optimization plan,the improvement of the warranty cost data was tracked and comparatively analyzed.At the same time,the root cause of the field return parts was analyzed and compared,which proves the optimization plan is effective and significant.Due to the verification time of the optimization solutions proposed in this paper is short,and the data analysis is limited,the follow-up still needs to be continuously verified and improved in practice.Hope that the optimization scheme proposed in this paper can be used for reference by other suppliers in the same industry and conditions.