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The search for serial-number traceability
OEM requirements for item-level product data one step toward early-warning system for warranty problems
Industry standards are driven by OEM requirements that suppliers must follow concerning B2B communications for anything from advance shipping notices (ASNs) to records that need to be delivered with the products.
 | "To do business with Honda, companies must support serial number traceability—it's that simple."
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Jim Errington, director of sales support, Glovia |
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Last year, Honda first required suppliers of critical vehicle components to use an ASN and certain documentation with unit serial numbers, says Jim Errington, director of sales support at Glovia International, an extended ERP vendor. "It's essentially a new standard to track parts and data such as when the part was shipped," he says.
"To do business with Honda, companies must support serial-number traceability—it's that simple," Errington continues. "That serial number must carry forward so it's tracked as it moves through production, even if it's later built into another assembly or product. Honda gains traceability information that improves quality and accountability for warranty recalls."
Similar requirements from OEMs are meant to shorten what Boston-based AMR Research terms the detection-to-correction metric, based on how much time passes from when a manufacturer is first aware of a quality issue until it corrects that issue. Too often, awareness may be triggered by an early warranty claim, but due to mediocre processes and poor information exchange, latency exists, which postpones corrective action, says Kevin Reale, an automotive director at AMR.
"Most vehicle makers take up to 120 days on average—some as long as 220 days—to recognize and correct a problem, with each day costing up to $1 million in service, labor, parts, and brand impact," explains Reale. "Manufacturers look to early-warning systems to reduce the time it takes to correct a defect by as much as 40 percent. It's a process and technology framework in which integration, analytics, and automation identify or predict defective products through an enterprise view of manufacturing."
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