IBM aims to help U.S. carmakers cut warranty costs


SAN FRANCISCO, Aug. 29 (Reuters) - IBM is set to give details Tuesday about plans to sell sophisticated search technologies allowing automakers to cut warranty expenses, which cost the car industry about $14 billion annually.

Automakers could cut warranty claims 5 percent by using such technologies, which go beyond the "keyword" searches used by consumer Web companies and which mine a variety of information sources such as repair records and Web logs, or blogs, IBM said.

Such searches could reduce the 260 days it typically takes for a report of a mechanical problem to reach the engineer who designed the faulty part, said Linda Ban, global automotive leader at IBM's institute for business value in Southfield, Michigan.

"For every day you can take off that number, that could result in that much fewer problems that are reported because you've been able to enact a fix that much sooner," Ban said in an interview.

International Business Machines Corp. of Armonk, New York said earlier this month it planned to give other software developers its powerful search technology called Unstructured Information Management Architecture (UIMA). The search framework, which is also part of the technology being sold to auto makers, is the result of more than four years of development by IBM Research.

IBM declined to forecast revenue from the project.

"Ultimately, IBM would like to sell this product and the consulting services that go with it," said Martin Piszczalski, an analyst with Gartner, a consulting firm. "That's a good position to be in, in that it touches a lot of data and applications" that may also come from IBM.

The technology allows auto makers to find defects by assembling a dictionary of different terms used to define the same problem, said Larry Lieberman, automotive industry manager for IBM Research. Car buyers on a Web log might describe a problem in various ways, for example, he said.

"Sometimes those kinds of things can actually tell you that there may be something bad happening that you don't see in the warranty claims," Lieberman said in an interview.

The technology, IBM Quality Insight for Automotive, was used on a pilot basis by International Truck and Engine Corp., the operating company of Navistar International Corp. of Warrenville, Illinois.

"The way you cut costs is by identifying emerging issues sooner than you would through the tools that you have available today," said Terry Stewart, who's in charge of warranty management at International Truck.



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