Putting a major dent in warranty costs with real- time data analytics

Putting a major dent in
warranty costs with realtime data analytics
Consulting
Automotive
March 2014
A global auto manufacturer tapped into vehicle level data to
collect, combine and analyze information, resulting in
bolstered brand reputation, improved quality and millions in
reduced warranty costs.
Company’s challenge
A leading global automotive manufacturer realized that its warranty costs were out of
control because several of the business functions across the organization, including
finance, sales and marketing, quality, and engineering, were unable to share data and
make timely tactical and strategic business decisions related to emerging warranty and
quality issues. The main operational obstacle was that they lacked real-time consolidated
data and the reporting and analytics tools needed to drive insights, reduce costs and
improve quality.
Manual business processes existed within multiple siloed business areas, and analysts
were spending the majority of their time gathering data and generating reports rather
than analyzing information. There was no place where all of the granular, vehicle-level
information came together to create a master set of data and a “single version of the
truth.”
While vehicles were constantly collecting potentially valuable real-time data about their
performance and faults via their on-board computers, like many of their competitors, the
company had not devised a way to collect it. When sample data was collected, the
company still could not combine it with existing warranty data or mine it to determine
root causes of problems. Addressing potential problems pre-emptively could save
significant amounts of money and bolster the brand’s reputation for quality at the same
time. Other companies in the industry were beginning to see the strategic value of data
analytics and it was time to take action.
PwC’s Advisory solution
The Vice President of Quality realized the opportunity to enhance the brand, improve
quality and save cost by capturing vehicle-level data for analysis, decision making and
action. Achieving the goal would require changes to existing information management
systems to incorporate leading-edge techniques into the quality and warranty
management processes.
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Working with the company’s information technology, quality, engineering, sales,
manufacturing and other teams, PwC leveraged its experience in the global automotive
industry to assist the company in defining and implementing the solution. As part of the
effort, our teams met with key stakeholders to understand and confirm the data they had,
help identify the data that would be needed going forward, and assist in devising ways to
change how they communicated with vehicles to pull in additional data. This complex
process of shared discovery evolved through prototypes and proofs of concept all the way
through to production and deployment of the base application.
Through this work, the company was able to build solutions across multiple functional
units by acquiring granular data from both internal and external sources, creating a
common data model, defining and implementing common business rules, and providing
a global reporting and analysis platform to satisfy reporting requirements specifically
defined to address user needs.
The complex process of pulling, cleansing, and formatting data from multiple legacy
systems took months, but it was work that had to be done. Helping develop a sweeping
global reporting and analytical data repository and business intelligence (BI) platform
leveraged our capabilities in the U.S., China, and India. The solution incorporated
various data management and BI technologies and was designed to work seamlessly in
the context of existing processes within this large and complex organization spanning
multiple markets.
The resulting quality analysis system, which now has users in the Americas, Asia Pacific,
Europe and the Middle East, consolidates vehicle build, sales, warranty, and diagnostic
data from multiple applications, with daily updates, to provide immediate analysis of
emerging issues. It collects raw diagnostic data from dealership garages and
GPS/telematics-equipped vehicles, processes that data into a usable format, and provides
detailed analytical reports in near-real time.
Impact on company’s business
PwC helped the company take the initiative from strategy through execution, designing,
developing, testing, deploying, and maintaining multiple data repository and Business
Intelligence applications. For the first time, the company enjoys near real-time visibility
to data at a VIN level. From inception, the solution has consistently reduced warranty
costs by over five percent per year, a significant savings in real dollar terms.
By applying our deep business knowledge in the automotive industry and the warranty
space within it, we were able to present the company with a technology solution designed
to address specific business issues-- a solution that has had a positive effect on the bottom
line since day one. Within six months of launching the new warranty system, the system
had paid for itself through the early identification of emerging issues and the provision of
detailed root-cause analyses. This savings, applied across many hundreds of thousands of
vehicles, helps the company put a major dent in warranty costs as well as improve quality
and customer satisfaction.
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For more information, please visit
www.pwc.com/us/consulting
Or contact
Wayne Relyea
Managing Director
(732) 618-6017
[email protected]
Amit Gupta
Director
(248) 703-8912
[email protected]
Thomas Lasek
Manager
(248) 686-6233
[email protected]
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