Presentation at the 2006 Warranty Chain Management conference

2. “Warranty in Terms
a Designer Can Use”
Fred Schenkelberg
Senior Reliability Consultant
Ops A La Carte, LLC

3. Session Objectives
• Describe a method that enables design
teams to fully consider warranty during
the design decision process

4. World of a Product Designer
• The datasheet has maybe one line related
to warranty and/or reliability
• It’s not the top priority
• It’s not the only requirement
• It’s often in terms that do not make sense or
relate to anything the designer understands
• Depending on the product:
• Time to Market
• Bill of Materials Cost
• Performance

5. Design Metrics
• Common metrics
• MTBF
• Design life of 5 years
• 3 year warranty period
• “As good as or better than last product”
• Better Metrics
• Reliability targets during warranty period
• Warranty budget or cost targets

6. World of Product Warranty
• Money
• Insurance
• Revenue
• Expense
• Speed of Resolution
• Customer Service
• Customer Retention
• Data collection (opportunity exists)

7. Common Metrics
• Common Metrics
• Warranty as %Revenue
• Warranty expense per month or quarter
• Warranty Return Rate
• Better Metrics
• Warranty Expense by product line
• Warranty Expense by category
• Return and call data beyond warranty period

8. The Disconnect
ReliaSoft Weibull++ 7 - www.ReliaSoft.com
Probability - Weibull
99.000
Probability-Weibull
90.000
All Data
Weibull-2P
RRX SRM MED FM
50.000
F=38387/S=271642
Data Points
All U.S. Manufacturers
Probability Line
Warranty Claims & Accruals
10.000
in % of Sales & $mil per Quarter
5.000 1Q 2003 to 3Q 2005
Unreliability, F(t)
1.000
0.500
0.100
0.050
0.010
0.005
Fred Schenkelberg
Fred Schenkelberg Consulting
1/29/2006
0.001 12:33:52 PM
0.100 1.000 10.000 100.000
Time, (t)
β 3 4 4 η 2 .1 9 , ρ 0 9 9
= .3 4 , = 0 7 0 = .9 3
β
R (t ) = exp(−λt )

9. Case Study - Situation
• Mix of test & measurement products
• High volume inexpensive handheld units
• Low volume expensive desk top units
• Warranty Return Rate reported at division
level.
• WRR is the number of warranty returns
over the number of units in warranty on a
month by month basis.

10. Case Study – the change
• Determine the time-to-failure data by
product (or family)
• Implement improved in-house and third
party failure analysis
• Attack ‘no fault found’ category
• Restate warranty cost in warranty dollars
per unit shipped

11. Case Study – the results
ReliaSoft's Weibull++ 6.0 - www.Weibull.com
Probability - Weibull
99.00
Weibull
90.00 Analog
W3 RR3 - SRM MED
F=76 / S=911
50.00 Digital
W3 RR3 - SRM MED
F=57 / S=930
Front Panel
10.00 W2 RRX - SRM MED
Unreliability, F(t)
F=24 / S=963
Power Supply
5.00
W2 RRX - SRM MED
F=15 / S=972
1.00
0.50
0.10
0.05
Fred Schenkelberg
Fred Schenkelberg Consulting
0.01 2/2/2006 13:45
0.01 0.10 1.00 10.00 100.00
Time, (t)
β = .7 9 , η = 3 .5 4 , γ = .9 0 , ρ 0 9 7
1 0 4 4 1 7 5 6 4 1 3 5 0 = .9 7
β = .9 9 , η = 1 .7 6 , γ = .5 0 , ρ 0 8 8
2 0 5 6 2 4 9 3 1 2 3 3 0 = .9 4
β = .8 4 , η = 9 .5 2 , ρ 0 8 6
3 1 2 4 3 2 0 7 1 = .9 0
β = .0 1 , η = 2 87 6 , ρ 0 3 9
4 1 9 6 4 1 9 . 1 2 = .9 7

12. Case Study – the benefits
• Differences in product families are visible
• Goals, targets and results product related
• High priority improvement opportunities
• Future projects have detailed time to
failure data for initial reliability modeling
• Warranty in same units as Bill of Material

13. Key Points
• Enable design team to make trade off
decisions
• Provide product and subsystem specific
information