Technical article
A 40% reduction in the number of vehicles recalled is possible!
Consequences of product recalls
Munich – Recalls by automakers are a recurring topic in the news. It is estimated that between 3 and 4 million vehicles will be recalled in Germany alone in 2019. In addition to the technical complexity of the recall, the number of vehicles affected is the decisive factor in assessing the financial risk. There is widespread uncertainty among both OEMs and suppliers regarding the potential volume of vehicles affected in the event of a recall. Ensuring traceability can help mitigate the impact of recalls. OEMs and suppliers implement the requirements differently—as a result, the number of vehicles subject to recall varies significantly.
Quantifying Potential Recall Volumes in Practice
The reasons for high recall volumes lie, on the one hand, in the increasing number of identical parts and, on the other hand, in the respective production control processes. KBC has developed and successfully piloted an approach to assess and reduce potential recall volumes:
In cases where a large number of vehicles are affected by defective components, several key drivers can be identified in the production process. These include large batch sizes, grouping/sorting processes, and the resulting violation of the first-in, first-out (FIFO) principle, as well as the mixing of units used and documented in the production process. In practice, these three drivers are identified for each individual production step of a component. This allows the potentially affected quantities to be quantified and evaluated.
Identification of measures to reduce the potential volume of recalls
For each production step and driver, levers for optimization are then identified. The top measures include:
- Consistent adherence to the FIFO principle, as well as a system-level lock in the accounting system.
- Consistent separation of incoming goods batches all the way through to assembly (no “mixing”) for the function-critical component.
- Reducing batch sizes in our own production process (e.g., from shift to KLT).
- Increasing the level of detail in documentation (e.g., introducing dynamic label printing).
Implementing these measures can preventively reduce the potential volume of recalls by an average of 40%. This approach significantly reduces the financial risk in the event of a recall.
