IMPLEMENTATION PLAN

• Team build-up
• Initiation of problem-solving
• Pareto Analysis
• Brainstorming
• Find the failure cost of one occurrence
• Finding total failure cost
• Propose prevention plan
• Prevention Plan
• Set team goal for reducing the impact
• Calculate the return on investment
• Management presentation
Table 1: No of recalls in Hyundai in the last 2
years (Hyundai Recalls in Canada | Auto123,
2024).
Sr. No. Recall Date Units Affected Issue type Category
1 3/8/2023 404543 Brakes SUV
2 10/27/2022 86599 Brakes Light truck & Van, SUV
3 3/17/2023 24676 Visual System SUV
4 3/15/2024 19443 Powertrain SUV
5 7/27/2023 11134 Powertrain SUV
6 8/18/2023 6014 Powertrain Car
7 10/31/2022 4787 Seats and Restraints SUV
8 12/16/2022 3705 Electrical SUV
9 3/17/2023 1897 Electrical Light truck & Van, SUV
10 12/16/2022 1350 Electrical SUV
11 2/1/2024 160 Powertrain SUV

12 1/23/2023 54 Fuel supply SUV

PARETO ANALYSIS
BRAINSTORMING
Table 2: CoQ worksheet for one unit affected in recall.

Average hours Hourly rate Cost of Material cost External Total failure
Sr. No. Tasks
per task ($/Hr) element ($) ($) failure ($) ($)

Customer service (provide

1 0.15 22 3.3 N/A 3.3 3.3
notification for recall)

Transfer information to the quality

2 0.1 40 4 N/A 4 4
assurance team

3 Investigation of problem

Checking of the broken fluid

3.1 0.1 30 3 N/A 3 3
reservoir

3.2 Checking the brake lines of a car 0.1 30 3 N/A 3 3

3.3 Checking the brake Caliper 0.1 30 3 N/A 3 3

3.4 Cost of new brake fluid reservoir N/A N/A N/A 75 75 75

4 Fixing the Issue 3 80 240 N/A 240 240

5 Contact customers with fix and replacement part

Logistics (transportation and

5.1 5 60 300 N/A 300 300
Labour Costs)
Assuming 1
5.2 Providing rental cars 100/day 100 N/A 300 100
day
Total 731.3
Table 3: Proposed prevention cost
Cost
Sr. No. Root cause Analysis The proposed task to eliminate Hours Rates
Total
needed ($/Hr.)
($/Hr.)
1 Lack of training 90 40 3600
Train and certify operator

Not calibration of sensor that can detect

2 Calibration recommendation to 4 120 480
level of brake fluid
customers
Inadequate Suppliers
120 40 4800
Hose assembly from Supplier A
3 Find ISO 9001:2015 Certified
120 40 4800
Fluid Reservoir from Supplier B Suppliers

120 40 4800
Hose clampers from Supplier C

Prepare Standard operating

4 Lack of Maintenance procedure 135 85 11475
procedure (SOP) of installing brake
fluid system

5 Improper Material handling 24 40 960

Ensure proper packaging of raw
materials before delivery
6 Poor design of brake fluid system NA NA NA
None
Total
30915
Table 4: Return on investment and payback period worksheet

Return on investment and payback period worksheet

Failure reduction analysis $0
Internal Failure costs $0
External Failure costs $295,842,295.90
Other hidden failure costs $5,000
Total failure costs $295,847,295.90

Annual achievable failure cost reduction (Goal is to reduce

$88,754,788.77
by 30%)
Prevention dollars required to meet failure reduction $30,915

Benefit/cost (ROI) = Achievable failure reduction / $88754788 / $30915

Prevention dollars = $2870.92

$ 30915/ $ 88754788.77
Payback time = Prevention investment/ Achievable saving = 0.000348 years
= 0.127 days (3 hrs)
IMPLEMENTATION TIMELINE
For the give prevention plan, the estimated time limit is given as below:
•Team build-up: 45 Hours

•Initiation of problem-solving: 30 Hours

•Find the failure cost of one occurrence: 35 Hours

•Finding total failure cost: 5 Hours

•Propose prevention plan: 20 Hours

•Set team goals for reducing the impact: 10 Hours

•Calculate the return on investment: 3 Hours

•Management presentation: 2 Hours

•The total time requirement for the proposed plan is 150 Hours (6.25 days).
CONCLUSION

• In this report, a Cost of Quality implementation plan has been proposed to the management of
Hyundai. Hyundai Canada had to deal with a major recall due to a leakage of brake oil, which led
Hyundai to an external failure with a significant amount of cost. It is true that Hyundai is a giant
and reputed automobile company across the globe. However, without clear Quality cost planning,
Hyundai also has to deal with major external failures like the recall of Hyundai, explained in this
report, which cost a lot of money for the company.

• To reduce the impact of the recall, the proper Cost of Quality implementation plan has been
proposed to the management of Hyundai. With this plan, Hyundai can get a humongous return on
investment by focusing on prevention rather than managing failure. This plan depicts the return on
Investment (ROI) at last, which can benefit the company if they implement the mentioned
prevention efforts in their organization.