The initialisation, implementation and controlling of a quality initiative for a reduction in warranty costs

Development of all management and controlling processes within the framework of a quality initiative for a leading premium automotive manufacturer.


The effects of insufficient product reliability can be clearly identified in annual statements of profit and loss accounts (P&L) within the automotive industry. These days, continuously rising warranty and goodwill costs are the first and tangible motivator for the initialisation of projects initiated for quality and reliability optimisation. A major factor for the success of such organisation initiatives is the simultaneous and balanced implementation of product and process measures. In this regard, the core challenges posed by the reduction of warranty costs is the strategic objective of creating the political and financial leeway required for optimisation projects such as these. It is therefore imperative and also possible to submit proof of profitability via business cases to facilitate decisions for the implementation of quality measures.

The specific task

  • To identify warranty cost-reducing measures
  • To establish management and controlling processes (programme and environment)
  • To initialise and economically evaluate (cost/benefit) optimisation measures KBC-Lösungsansatz

KBC Solution approach

Apart from analysing and identifying quality measures on the basis of systematic and interdepartmental weakness maps, we were also able to support our client with our many years of experience in the initialisation and controlling of large optimisation initiatives. The major success factors during the first step were the contextual definition and alignment of the projects, as well as the development of a calculation system for quantifying the monetary benefit of quality enabler measures on the basis of detailed warranty data. Together with our client, we were also able to professionalise the decision-making processes within the scope of quality organisation operated by Controlling in many companies. The accelerated implementation of measures in combination with monetary statements regarding benefit, costs and transparent target achievement could only be realised with the installation of a decision-making committee at top management level and the inclusion of all functional departments.

Realisation of potential

The initialisation and consistent implementation of the client’s quality measures achieved a significant reduction in warranty and good-will costs (~50%) since 2004. We have been acting as our client’s right hand for years, helping him to expand on this success by consistently tightening the reliability targets. The processes, methods and tools conceptualised by KBC in management and controlling have become the OEM benchmark for the implementation of measures.