A Case Study in Product Development and Systems Engineering: Using Product Warranty Data as a Measure of Process Effectiveness

A Case Study in Product Development and Systems Engineering: Using Product Warranty Data as a Measure of Process Effectiveness

A firm's product development and manufacturing functions consider product warranty, modification and liability costs as "outputs" from their internal practices and processes. This information is viewed in a segmented fashion (product by product or plant by plant). Corporate accounting reports the aggregate results in the annual report. But there is little evidence that the data are analyzed for association of trends in this data linked to the firm's investment in research and development engineering, cost of goods sold, dealer incentives or net sales. The literature on new product development (NPD), systems engineering and program management metrics contains no references to using a firm's product warranty data for NPD process capability. However, customers provide a "direct" measure of a firm's process execution in quantitative terms based upon customer claims filed during the product's warranty period. This study used data from a large, global manufacturing firm through two five-year periods of consecutive NPD deployment and implementation to investigate the trends in warranty data. Product warranty data can be used by leaders to learn and improve the application of the process.