Warranty - Reliability - Accelerated Testing

[tgurunat]

Warranty cost around the world is growing. According to Bearing Point " ...Estimates of Global spend on warranty claims run between $45- 50 Billion. In the United states, automotive manufacturers and suppliers spent $13 Billion on warranty claims in 2006, according to Warranty Week...."
Warranty is a good measure for management matrix as it goes directly to Gross Margin. According to Warranty Week top 50 US companies have Warranty cost expressed in percentage of revenue, varies from .3% at Johnson controls, .6% at Delphi and Tyco International to 6.2% at Microsoft, 8.6% at Palm, 13% at Lexmark International . Does any of you have information about reliability program at Johnson Controls, Delphi Corporation and Tyco International? What do they do diffirent from others? Do they practice Physics of Failure and Accelerated testing in their product design process. I know Delphi uses Reliasoft Software extensively. How do we help corporations like Lexmark, Palm Inc, and Microsoft realize the benefit of Reliability programs, DFSS program, Shainin techniques, etc
Please note Stock analyst watch Gross margin closely, the company which has higher Gross Margins, in their products sell for higher stock price. Since Warranty cost flows directly to Gross Margin, we have a way to communicte to senior management the power of Design For Reliability process to reduce warranty cost and improve Gross Margin.

[Oleg_I]

The causes of growing of the warranty cost around the world are known.
I have a question about the name of this thread - "Warranty - Reliability - Accelerated Testing".
How the warranty cost (development cost and manufacture cost too) depend on accelerated testing parameters directly for case of the unique complex products and/or high cost and large duration of testing (something like the automobile as a whole or aircraft gas turbine engine)?
It is difficult to estimate the intermediate link (Reliability) in this case.
Do somebody know the suitable tools for these goals?
Thanks.

[csasun]

Hi!

It is a nice piece of statistics on warranty cost. It is surprising to note that Microsoft is having warranty cost as high as 6.2% and Lexmark is even higher at 13% - I wish this is only an aberration for the recent past.

Atleast in automobile example, it is generally opined that <1% of turnover is fundamental and <0.5% is considered worldclass.

Coming to the point of how warranty, reliability and Life testing are related, the following points may be considered:
1. Reliability is a function of failure rate (or occurence) over time.
2. Failure occurence can be easily converted in terms of 'money' and
hence 'reliability' is `money'
3. Warranty is a norm based on time, and hence it is related to Reliability
4. Life testing generates 'failure data' in lab that can be correlated to
field. Therefore, this data can be utilised to generate Reliability
function.

Trust it is easy to see the link.
Sasun
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[Oleg_I]

Hi Sasun,

Thank you for your reply.
Yes, of course, this link is clear, but the direction of this calculation is not that I want.
The top-down strategy is used usually: setting of the maximum of the warranty cost -> calculating of the required reliability -> design the test for this reliability demonstration (by something like the Weibull++ DRT utility) (all for specific CL).
I am interested in the tool for the bottom-up strategy: set the testing parameters -> estimating of the ensured warranty cost (for specific CL).
It is useful for a choice of the optimal accelerated testing parameters for complex products.
Oleg