DAIMLERCHRYSLER SAVING MILLIONS IN WARRANTY COSTS

DaimlerChrysler Corp.'s $32 million Quality Engineering Center, which opened in January, already has saved the company $54 million in repair costs.

The 128,000-sq.-ft. facility pulls together 143 employees from five different departments dedicated to reducing problems in finished vehicles and, thus, warranty claims.

During a normal business day, 65 vehicles are evaluated and repaired. Another 12 root-cause meetings are conducted by employees and roughly 100 visiting supplier representatives. So far they have passed on 16 successful projects to dealers, which led to the savings.

The Parts Return Group analyzes 600-700 parts sent in daily from 160 dealerships across the country, selected by location, climate and volume. They represent about 4% of the corporation's U.S. sales. Dealers send their defective parts by courier to the quality center in Auburn Hills, MI. Failure to send a defective part within 60 days results in the dealer being charged with the warranty claim.

Every part received is entered into a database, then taken apart to identify the problem and find a solution. If it can be addressed at the factory, the fix is passed on with haste, before more vehicles are built with the defect.

A team of as many as 40 engineers gathers every two weeks to review engines with warranty claims.

The Quality Engineering Research Garage is where employees bring their own vehicles for repair. It also services DCC's 18,000 corporate-owned vehicles and pilot vehicles being evaluated prior to production.

Engineers performing an ordinary lube job can detect a failure in the making and confiscate a company-owned car in the pursuit of data.

DCC says it has reduced its number of "trouble not found" warranty cases below the 50% industry average.