Monday, January 25, 2021

AI could save automotive manufacturers up to £200m annually in warranty claims

Greater use of advanced analytics, and AI in particular, could produce a saving of between £150m and £200m in reduced warranty claims for car manufacturers, according to Deloitte. The estimated saving is based on a typical market-leading original equipment manufacturer (OEM) with annual revenues of £100bn, incurring between one and two per cent of total annual revenue on warranty costs each year.

Warranty costs are the result of vehicles exhibiting lower-than-expected build quality. These issues tend to be the result of a design or manufacturing process, rather than isolated cases. Using AI to interpret, often handwritten, diagnostics can categorise quality concerns quickly and accurately when vehicles arrive for repair. By reducing the time taken to identify and implement a successful countermeasure, engineering time can also be freed up to focus on more business-critical work.

Equally, individual vehicles generate a continuous stream of data, such as engine performance, back to the factory floor. In turn, this can inspire better decision-making, such as ways to improve operations before they become faults, or create new offerings at the development stage.

Michael Woodward, UK automotive partner at Deloitte, said: “The automotive industry is under increasing pressure from alternatively-fuelled vehicles, disruptive technology, greater competition, and changing consumer demands.

“For OEMs, the challenge to maintain market share, profitability and, ultimately, the competitive advantage is set. Many are already re-examining their business models and investing heavily in technology to improve both efficiency and revenues. However, the potential of advanced analytics is still to be realised to its fullest, yet has the potential to completely transform the automotive industry.”

In addition to quality fixes, advanced analytics could also be used to limit factory downtime during machinery breakdowns, particularly as operations become increasingly complex. By identifying the causes of breakdowns, defects, and other holdups along the production line, outage can be predicted and countermeasures actioned proactively, rather than after the fact. Reducing downtime, unscheduled maintenance times, and improving overall efficiency could result in an output capacity increase of between two and four per cent each year.

Woodward continues: “Whilst the potential rewards in adopting advanced analytics are excellent, investment is no guarantee of success. To deliver a successful project, OEMs should prioritise the business questions and challenges to focus on first, and why. At the same time, OEMs should continue to create an environment where talent can thrive and build their analytics around strategy, people and processes before making investments in data and technology.”

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.






Latest news

Refurbishment specialist appointed to multi-million pound fire and police business hub project

Office fit out and refurbishment specialist Overbury has been appointed to undertake a multi-million pound refurbishment of a new business services hub for Northamptonshire...

New partner promotion for BDO in the Midlands

Accountancy and business advisory firm BDO LLP has promoted 20 new partners across the firm with Jonathan Lanes named Risk Advisory Services (RAS) partner...

boohoo snaps up Debenhams IP for £55m

boohoo, the online fashion retailer, has acquired all of the intellectual property assets (including customer data and related business information and selected contracts) of...

Local leaders urge Boris Johnson to “deliver the whole of HS2 to level-up UK”

Leaders from along HS2's Eastern Leg have written to the Prime Minister, urging him to deliver both the local improvements and national connectivity which...

Multi-million pound orders see engineering firm embark on recruitment drive

Around £4 million of orders were placed in January at GAME Engineering, which specialises in materials handling solutions and security products for use in...

Related news

Plans submitted for Local Centre at new mixed-use development in Nottingham

Detailed plans for the Local Centre at the new mixed-use development at Teal Park in Nottingham have been submitted. Despite the economic problems surrounding the...

Refurbishment specialist appointed to multi-million pound fire and police business hub project

Office fit out and refurbishment specialist Overbury has been appointed to undertake a multi-million pound refurbishment of a new business services hub for Northamptonshire...

New partner promotion for BDO in the Midlands

Accountancy and business advisory firm BDO LLP has promoted 20 new partners across the firm with Jonathan Lanes named Risk Advisory Services (RAS) partner...

boohoo snaps up Debenhams IP for £55m

boohoo, the online fashion retailer, has acquired all of the intellectual property assets (including customer data and related business information and selected contracts) of...

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close