Industry executives to work together to focus on reducing industry warranty costs

Neil De Koker, president of the Original Equipment Suppliers Association, OESA, recently called for automotive industry executives to work together to focus on reducing industry warranty costs. In a brief address to attendees of the Management Briefing Seminars, De Koker said that OESA has created a Warranty Management Council, responsible for developing recommendations to reduce warranty costs.

According to Warranty Week, the industry spent $11.5 billion on warranty claims in 2004. OESA proposes that it is the responsibility of both suppliers and car companies to seriously look at warranty and other non-value added costs.

"We heard from speakers today who tell us that the next two years will require significant and extreme action to maintain profitability," De Koker stated. "It is imperative that members of the industry collaborate to reduce warranty costs to keep companies competitive.

"OESA proposes that suppliers work with the car companies and each other, to provide insight into best practices that can reduce warranty costs," De Koker added. "The objective of this OESA group is to share best practices that reduce warranty costs for the benefit of the entire industry."

OESA anticipates releasing a publication that outlines a process the automotive value chain should consider to systematically reduce warranty potential during product development. Through this activity, suppliers exchange experiences working with various OEM warranty systems and collectively increase individual company knowledge.

Formed in August 1998, OESA provides a forum for automotive suppliers by addressing issues of common concern through peer group council; serving as a reliable source of information and analysis; and providing an industry voice, when appropriate, on issues of interest. With nearly 400 members having global automotive sales exceeding $300 billion, OESA represents more than 60 percent of North American automotive supplier sales.

See Also

• Original Equipment Suppliers Association
  Original Equipment Suppliers Association(OESA) Website