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A Reliability Engineer's Use of Warranty Cost Information
A Reliability Engineer's Use of Warranty Cost Information
A Reliability Engineer's Use of Warranty Cost Information
Track 2, Session 5
PRESENTATION SLIDES
2004 Symposium Proceedings International Applied Reliability Symposium June 16 - 18, 2004: San Diego, California USA http://www.ARSymposium.org
Copyright 2004 ARS, All Rights Reserved.
Introduction
Many (most, all?) products have a warranty Examples of how to use this information in your reliability engineering work
Electric Light
Good enough for our transatlantic friends, but unworthy of the attention of practical or scientific men.
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Agenda
Introduction Warranty Management Warranty and Total Product Cost Components Pockets of Competences
Overview
Warranty as a percentage of revenue. Warranty as a cost per unit. Who owns warranty? How much warranty expense is right? What is the right investment to reduce warranty?
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Warranty Week
www.warrantyweek.com
Computers
There is no reason for any individual to have a computer in their home.
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The Telephone
"That's an amazing invention, but who would ever want to use one of them?"
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When?
Warranty period
Focus on period of financial risk to company Actual Warranty as scorecard
Or, given a failure rate, determine warranty. Warranty = Failure Rate * Cost/unit * #units
Fred Schenkelberg, Hewlett - Packard Track 2 Session 5 Slide Number: 12
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1 1 + =
Fred Schenkelberg, Hewlett - Packard Track 2 Session 5 Slide Number: 15
R(t ) = e
( t / )
Fan A reliability at 100 hours is 0.95 Fan B reliability at 100 hours is 0.974
Fred Schenkelberg, Hewlett - Packard Track 2 Session 5 Slide Number: 16
Television
"People will soon get tired of staring at a plywood box every night."
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= 0.987
#Failed = (1-0.987) 1000units = 13.25 Cost of Repairs = 250*13 = $3250 Total Cost = $3250+0.10*1000 = $3350
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= 0.98
= 0.99
#Failed = (1-0.98) 1000units = 20 Cost of Repairs = 250*20 = $5000 Total Cost = $5000+0.05*1000 = $5050
#Failed = (1-0.99) 1000units = 10 Cost of Repairs = 250*10 = $2500 Total Cost = $2500+0.50*1000 = $3000
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Aviation
"The popular mind often pictures gigantic flying machines speeding across the Atlantic and carrying innumerable passengers...it seems safe to say that such ideas are wholly visionary."
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Component Challenges
Cost driving manufacturing to low labor cost areas of the world Pb-free causing redesign/reformulation Outsourced design and manufacturing facilities gaining commodity component selection Other than yield - whos watching Quality, Reliability and Warranty?
Component Challenges
P50 formula error example Cracked ceramic capacitors
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Component Challenges
Trust and verify solution Build strong, technically verifiable, language into purchase contracts Check construction and formulation on periodic basis
Nuclear Energy
"Nuclear powered vacuum cleaners will probably be a reality within 10 years."
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Pockets of Competences
Lesson learned from outsourcing of PCA manufacturing (Singapore story) Lessons learned from various capacitor issues Lessons learned from HP-Canon Laser Printer partnership
Pockets of Competences
Add (or keep) technical depth in areas of risk Create business processes that keep this expertise effective in preventing field issues Provide deep technical knowledge behind traditional procurement activities
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Medicine
"The abdomen, the chest, and the brain will be forever shut from the intrusion of the wise and humane surgeon"
Summary
Measure and track warranty Do the math Keep deep technical capabilities to supplement and reinforce partnerships
Sir John Erichsen leading British surgeon, 1837
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http://quanterion.com/ReliabilityQues/V3N3.html
Handbook of Reliability Engineering and Management, 2nd Ed by Ireson, Coombs and Moss.
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