Technical article
How companies can proactively avoid product recalls!
Munich – Recalls by automakers are not limited to low-cost, high-volume models; on the contrary, in 2018, nearly 30 percent of all recalls were attributed to German premium manufacturers (Audi, BMW, Mercedes-Benz, Porsche, and VW). What is interesting here is that the causes of recalls usually lie in the poor quality of the products. This not only leads to rising warranty costs for companies—it also occasionally results in new regulatory requirements. While automakers have the expertise to efficiently resolve the problem through technical solutions, they often lack approaches for proactively preventing recalls.
Preventive measures
To reduce long-term costs, reputational damage, and fines from regulatory authorities—and thereby prevent harm to one’s own company—existing field data on past recalls across the entire industry can be analyzed and used for preventive purposes. In this context, KBC has developed an early-warning radar that analyzes publicly available information on recalls in comparison with competitors and assesses the likelihood of such events occurring. The radar makes it possible to learn from competitors’ mistakes at an early stage. This allows potential problems with one’s own products to be identified and resolved before they occur.
Using the KBC Early Warning Radar
To implement the early warning radar, KBC has developed a process for the systematic analysis and use of field data on product recalls, which can be customized to meet the specific needs of each company. This process consists of two key steps.
1.) In the first step, data is collected and processed from national and international sources, such as the ADAC for Germany. Due to the extensive nature of the datasets, recall issues are clustered and consolidated based on failure patterns. In preparation for the second step, the data can be enriched with additional information, such as design, suppliers, or manufacturing technologies. This facilitates the subsequent assessment of the issues by technical experts and makes the evaluation of potential risk more precise.
2. In the second step, the identified issues are assigned to internal experts. Since the entire value chain is responsible for quality, the experts tasked with evaluating the issues are selected from across departments—including development, procurement, and production. These experts examine products and processes for weaknesses similar to those that have occurred among competitors, thereby identifying the risks to their own company. Subsequently, concrete action items are defined based on this analysis, and standard processes are embedded within the organization.
By using an early-warning system, companies can learn from recalls and quality issues experienced by other manufacturers. Armed with this knowledge, they can take preventive measures to avoid having to issue recalls themselves.
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