Expertise

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Project Example

Sustainable reduction of warranty and goodwill costs

In order to be able to reliably and fully take into account warranty and goodwill costs in business planning, manufacturers use logics that allow the mapping of the current  and expected warranty and goodwill costs (actual or planned) in relation to future target values. Appropriate quality measures reduce the warranty and goodwill costs and ultimately minimise the delta between the actual or planned value and the target value. The aim is to gradually reduce the warranty and goodwill costs so that the warranty and goodwill target values foreseen in the  long-term business planning are achieved.

Background

After finding inconsistencies in the warranty and goodwill planning, which were reflected in deviations in the planned and target values for warranty and goodwill, action was needed at an automobile manufacturer. The analysis and plausibility checking of the planned and target values for warranty and goodwill therefore represented an important challenge, along with the systematic identification and implementation of sustainable measures for the medium and long-term reduction of warranty and goodwill costs.

The basis for a successful and sustainable warranty and goodwill reduction is consistent transparency around all warranty and goodwill costs in the company as well as valid planned and target values for warranty and goodwill per vehicle.  Appropriate quality measures had to be identified and prioritised in order to close the delta between the actual or planned value and the target value. The consistent initialisation and control of measures ensured their sustainable implementation and the achievement of the overall target.

  • Customer’s high requirements and quality standards.
  • Substantial and partly non-transparent warranty and goodwill costs.
  • Implausible planned and target values for warranty and goodwill – targets were not being achieved.
  • The focus was on the long-term elimination of chronic quality problems.
  • Lack of systematics to identify sustainable quality measures.
  • Need for support in the initialisation, conception and sustainable implementation of a quality initiative.

Specific assignment

  • Plausibility checking of planned provisions for warranty and goodwill costs per  vehicle over the life cycle (planned and target values for warranty and goodwill).
  • Analysis of existing warranty and goodwill data to create transparency around current warranty and goodwill costs.
  • Identification of the need for action and optimisation potentials within the framework of a quality assessment (“Q-Scan”).
  • Systematic derivation of quality measures for short, medium and long-term warranty and goodwill reduction.
  • Detailed description and business evaluation of the quality measures (“business case”) as the basis for the implementation decision.
  • Accompaniment of the quality measures during the implementation phase.
  • Support for programme initialisation and control for the sustainable attainment of the benefit of the measures.

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KBC approach

On the basis of a proven analysis system for the validation of the planned and target values for warranty and goodwill, we carried out a detailed examination of the planned provisions for warranty and goodwill costs per vehicle over the life cycle in order to identify abnormalities. After holding plausibility checking meetings, a monetary assessment of the delta between plan and target followed.

That was followed by the implementation of our proven quality assessment (“Q-Scan”) as well as the derivation of systematic quality measures (process and qualification measures) for the medium and long-term reduction of warranty and goodwill costs. To this end, we conducted interviews with the responsible stakeholders as well as carrying out selected data analyses in order to firm up the derived proposals for measures in a needs-oriented manner. Finally, we drew up a proposal for measures including scheduling and monetary business assessment  (“business case”). In addition to the initialisation of the decisive measures, we also supported our customer in the timely and sustainable implementation.

Benedikt Budde
Partner

Achieved Effect

For our customer, we were able to set up plausible planned and target values at vehicle level as well as to establish consistent transparency around the need for action with regard to the planned and target values for warranty and goodwill. In order to reduce warranty and goodwill costs in the long term, we were able on the basis of our proven quality assessment to derive and prioritise sound quality measures and to accompany them in the decision-making process. With our  processes and methods for the initialisation and accompaniment of measures, which have already been tried and tested in numerous initiatives, we were also able to successfully support this customer in ensuring the sustainable success of the project.