U.S. patent application number 11/490524 was filed with the patent office on 2007-01-25 for method and system for using a component business model to transform warranty claims processing in the automotive industry.
Invention is credited to Linda Barbara Ban, Penny Olson Koppinger, Benjamin Thomas Stanley.
Application Number | 20070022410 11/490524 |
Document ID | / |
Family ID | 37680469 |
Filed Date | 2007-01-25 |
United States Patent
Application |
20070022410 |
Kind Code |
A1 |
Ban; Linda Barbara ; et
al. |
January 25, 2007 |
Method and system for using a component business model to transform
warranty claims processing in the automotive industry
Abstract
A method, system and service for using a component business
model to transform a business process. The invention uses a
component business model of a business to prioritize business
changes affecting key performance indicators for the business
process, defines an information technology architecture to support
the business changes, and specifies a roadmap for implementing the
supporting information technology architecture. In a particular
application of the invention to the automobile manufacturing
business, the business process is the warranty claims process, and
a length of time to process a warranty claim is a key performance
indicator.
Inventors: |
Ban; Linda Barbara;
(Southfield, MI) ; Koppinger; Penny Olson;
(Bloomfield Hills, MI) ; Stanley; Benjamin Thomas;
(Davison, MI) |
Correspondence
Address: |
WHITHAM, CURTIS & CHRISTOFFERSON, P.C.
11491 SUNSET HILLS ROAD, SUITE 340
RESTON
VA
20190
US
|
Family ID: |
37680469 |
Appl. No.: |
11/490524 |
Filed: |
July 21, 2006 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
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60701632 |
Jul 22, 2005 |
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Current U.S.
Class: |
717/136 ;
717/104 |
Current CPC
Class: |
G06Q 10/06393 20130101;
G06Q 10/06315 20130101; G06Q 10/06312 20130101; G06Q 30/0201
20130101; G06Q 10/06 20130101 |
Class at
Publication: |
717/136 ;
717/104 |
International
Class: |
G06F 9/45 20060101
G06F009/45 |
Claims
1. A method for using a component business model to transform a
business process, comprising: using a component business model of a
business to prioritize business changes affecting key performance
indicators for the business process; defining an information
technology architecture to support the business changes; and
specifying a roadmap for implementing the supporting information
technology architecture.
2. The method of claim 1, wherein using a component business model
of a business to prioritize business changes further comprises:
using a component business model to prioritize components of the
business; identifying pain points in the business process; mapping
the business process to the component business model; using the
identified pain points and the mapped component business model to
identify opportunities to improve the business process, the
identified opportunities being opportunities to make business
changes in the components; and prioritizing the identified
opportunities in terms of impact on the key performance indicators
and ease of implementation.
3. The method of claim 2, wherein defining an information
technology architecture to support the business changes further
comprises: defining a baseline solution architecture view; using
the component business model to identify information technology
shortfalls; mapping the pain points to the baseline solution
architecture view; identifying business requirements for
eliminating the pain points; identifying information technology
capabilities required to support elimination of the pain points;
and defining a target solution architecture view using the
identified business requirements and the required supporting
information technology capabilities.
4. The method of claim 2, wherein using a component business model
to prioritize components of the business further comprises:
developing a view of the component business model that indicates
whether a given component is strategic, or is to be operated at
competitive parity, or is to be operated at a basic level; and
developing a view of the component business model that shows an
impact of a given component on the key performance indicators.
5. The method of claim 2, wherein the components are comprised of
activities and the identified opportunities are opportunities to
make business changes in the activities.
6. The method of claim 1, wherein the business process involves
collaboration with dealers and suppliers.
7. The method of claim 1, wherein the business is the automobile
manufacturing business, the business process is the warranty claims
process, and a length of time to process a warranty claim is a key
performance indicator.
8. A system for using a component business model to transform a
business process, comprising: means for using a component business
model of a business to prioritize business changes affecting key
performance indicators for the business process; means for defining
an information technology architecture to support the business
changes; and means for specifying a roadmap for implementing the
supporting information technology architecture.
9. The system of claim 8, wherein means for using a component
business model of a business to prioritize business changes further
comprises: means for using a component business model to prioritize
components of the business; means for identifying pain points in
the business process; means for mapping the business process to the
component business model; means for using the identified pain
points and the mapped component business model to identify
opportunities to improve the business process, the identified
opportunities being opportunities to make business changes in the
components; and means for prioritizing the identified opportunities
in terms of impact on the key performance indicators and ease of
implementation.
10. The system of claim 9, wherein the means for defining an
information technology architecture to support the business changes
further comprises: means for defining a baseline solution
architecture view; means for using the component business model to
identify information technology shortfalls; means for mapping the
pain points to the baseline solution architecture view; means for
identifying business requirements for eliminating the pain points;
means for identifying information technology capabilities required
to support elimination of the pain points; and means for defining a
target solution architecture view using the identified business
requirements and the required supporting information technology
capabilities.
11. The system of claim 9, wherein the means for using a component
business model to prioritize components of the business further
comprises: means for developing a view of the component business
model that indicates whether a given component is strategic, or is
to be operated at competitive parity, or is to be operated at a
basic level; and means for developing a view of the component
business model that shows an impact of a given component on the key
performance indicators.
12. The system of claim 9, wherein the components are comprised of
activities and the identified opportunities are opportunities to
make business changes in the activities.
13. The system of claim 8, wherein the business process involves
collaboration with dealers and suppliers.
14. The system of claim 8, wherein the business is the automobile
manufacturing business, the business process is the warranty claims
process, and a length of time to process a warranty claim is a key
performance indicator.
15. Implementing a service for using a component business model to
transform a business process, comprising the method of: using a
component business model of a business to prioritize business
changes affecting key performance indicators for the business
process; defining an information technology architecture to support
the business changes; and specifying a roadmap for implementing the
supporting information technology architecture.
16. A method implementing a service as in claim 15, wherein using a
component business model of a business to prioritize business
changes further comprises: using a component business model to
prioritize components of the business; identifying pain points in
the business process; mapping the business process to the component
business model; using the identified pain points and the mapped
component business model to identify opportunities to improve the
business process, the identified opportunities being opportunities
to make business changes in the components; and prioritizing the
identified opportunities in terms of impact on the key performance
indicators and ease of implementation.
17. A method implementing a service as in claim 16, wherein
defining an information technology architecture to support the
business changes further comprises: defining a baseline solution
architecture view; using the component business model to identify
information technology shortfalls; mapping the pain points to the
baseline solution architecture view; identifying business
requirements for eliminating the pain points; identifying
information technology capabilities required to support elimination
of the pain points; and defining a target solution architecture
view using the identified business requirements and the required
supporting information technology capabilities.
18. A method implementing a service as in claim 16, wherein using a
component business model to prioritize components of the business
further comprises: developing a view of the component business
model that indicates whether a given component is strategic, or is
to be operated at competitive parity, or is to be operated at a
basic level; and developing a view of the component business model
that shows an impact of a given component on the key performance
indicators.
19. A method implementing a service as in claim 16, wherein the
components are comprised of activities and the identified
opportunities are opportunities to make business changes in the
activities.
20. A computer implemented system for using a component business
model to transform a business process, comprising: first computer
code for using a component business model of a business to
prioritize business changes affecting key performance indicators
for the business process; second computer code for defining an
information technology architecture to support the business
changes; and third computer code for specifying a roadmap for
implementing the supporting information technology architecture.
Description
[0001] This invention claims priority from U.S. Provisional Patent
Application Ser. No. 60/701,632 entitled "Automotive Warranty
Component Business Model (CBM)" and is related to commonly owned
patent application Ser. No. 11/176,371 for "SYSTEM AND METHOD FOR
ALIGNMENT OF AN ENTERPRISE TO A COMPONENT BUSINESS MODEL", both of
which are incorporated by reference herein.
BACKGROUND OF THE INVENTION
[0002] 1. Field of the Invention
[0003] The present invention generally relates to component based
business models and, more particularly, to using a component
business model as a basis for developing a service, system and
method for an improved automotive warranty claims process.
[0004] 2. Background Description
[0005] Across the automotive industry escalating warranty costs are
consuming significant revenue from manufacturers and suppliers
alike. In North America, the automotive industry spends nearly 3%
of its revenue on warranty claims, totaling nearly $8 Billion in
2003. Further, warranty costs per vehicle are rising, in part
because of an increasing percentage of in-vehicle software and
electronics and greater complexity associated with increased
reliance upon systems and modules rather than components.
[0006] Original equipment manufacturers (OEMs) in the automotive
industry have developed point solutions to address certain issues.
New call centers have been set up; systems to track claims have
been implemented; new reports have been developed to identify
problems and issues that have already surfaced. These solutions do
not take into consideration the impact of warranty claims on all
parts of the organization (including product design, development,
build, sales and service). Warranty issues ultimately affect almost
all major parts of the automotive business, and if not monitored,
managed and addressed appropriately, result in significant impact
to the bottom line.
[0007] A primary factor that influences overall warranty costs is
the length of time from initial problem report to root cause
identification to corrective action. Warranty claim resolution
under the prior art typically takes more than 160 days. Because
faster resolution results in fewer claims for a given problem and
lower overall warranty costs, cycle time improvement represents a
major financial opportunity for automotive companies.
[0008] Most automotive companies are painfully aware of these
constraints but continue to struggle with warranty administration
hurdles that constrain information sharing among OEMs and suppliers
and delay problem diagnosis. Automotive companies are often unsure
where to start their transformation effort, which organization is
accountable and which warranty administration changes will have the
most impact on their businesses.
[0009] What is needed is a methodology that enables an automotive
company to take a strategic, enterprise-wide view of their
organization to address warranty challenges.
SUMMARY OF THE INVENTION
[0010] An aspect of the invention is a method for using a component
business model to transform a business process. The method uses a
component business model of a business to prioritize business
changes affecting key performance indicators for the business
process, defines an information technology architecture to support
the business changes, and specifies a roadmap for implementing the
supporting information technology architecture.
[0011] In a further aspect of the method, the step of using a
component business model of a business to prioritize business
changes further comprises using a component business model to
prioritize components of the business, identifying pain points in
the business process, mapping the business process to the component
business model, using the identified pain points and the mapped
component business model to identify opportunities to improve the
business process, the identified opportunities being opportunities
to make business changes in the components, and prioritizing the
identified opportunities in terms of impact on the key performance
indicators and ease of implementation.
[0012] In yet another aspect of the method, the step of defining an
information technology architecture to support the business changes
further comprises defining a baseline solution architecture view,
using the component business model to identify information
technology shortfalls, mapping the pain points to the baseline
solution architecture view, identifying business requirements for
eliminating the pain points, identifying information technology
capabilities required to support elimination of the pain points,
and defining a target solution architecture view using the
identified business requirements and the required supporting
information technology capabilities.
[0013] In another aspect of the method, the step of using a
component business model to prioritize components of the business
further comprises developing a view of the component business model
that indicates whether a given component is strategic, or is to be
operated at competitive parity, or is to be operated at a basic
level, and developing a view of the component business model that
shows an impact of a given component on the key performance
indicators.
[0014] It is also an aspect of the method for the components to be
comprised of activities and for the identified opportunities to be
opportunities to make business changes in the activities. In a
further aspect of the method, the business process involves
collaboration with dealers and suppliers. In another aspect of the
method, the business is the automobile manufacturing business, the
business process is the warranty claims process, and a length of
time to process a warranty claim is a key performance
indicator.
BRIEF DESCRIPTION OF THE DRAWINGS
[0015] The foregoing and other objects, aspects and advantages will
be better understood from the following detailed description of a
preferred embodiment of the invention with reference to the
drawings, in which:
[0016] FIG. 1A is a conceptual graph showing the change in claim
processing time between the current state and a target future state
of warranty claim processing; FIG. 1B provides a block diagram
showing detail for the overall claims processing categories shown
in FIG. 1A.
[0017] FIG. 2A is a flow chart showing the current claims
administration process in the automotive industry; FIG. 2B
highlights the pain points during execution of this process; FIG.
2C highlights key points related to the capabilities of information
technology (IT); FIG. 2D highlights the business capabilities
required to eliminate the pain points.
[0018] FIG. 3 is a diagram showing a component business model (CBM)
map of the automotive manufacturer.
[0019] FIG. 4A is a sequential layout of the claims administration
process steps shown in FIG. 2A arrayed under the components shown
in FIG. 3; FIG. 4B is a mapping of the claims administration
process steps shown in FIG. 4A onto the component business model
shown in FIG. 3.
[0020] FIG. 5A is a schematic linking the automotive CBM map of
FIG. 3 to overlays upon that map showing strategic, financial,
transformational and solution views overlaid upon that map; FIGS.
5B, 5C, 5D and 5E, respectively show the strategic view, the
financial view, the transformational view and the solution view
overlays.
[0021] FIG. 6 is a chart showing a further level of analysis for
two components with respect to the four views shown in FIGS. 5B
through 5D.
[0022] FIG. 7A is a graph of a baseline architecture showing IT
applications and systems particular to warranty issues; FIG. 7B is
a target version of the Solution Architecture View (SAV) shown in
FIG. 7A adapted to reflect prioritized business requirements
identified using the component business model.
[0023] FIG. 8A is a transformation view overlay upon the CBM map of
FIG. 3 showing priorities for IT applications; FIG. 8B shows gaps,
redundancies and overextensions of current IT systems identified
using the component business model.
[0024] FIG. 9 is a chart connecting IT shortfalls with possible
solutions.
[0025] FIG. 10 is a map of CBM priorities overlaid with the
business capabilities identified in FIG. 2D for eliminating the
pain points.
[0026] FIG. 11 is a chart showing a roadmap for transforming the
current state of warranty services to a desired future state in
order to resolve warranty issues.
[0027] FIG. 12 is a chart detailing the solution, technology
evolution and benefits of the roadmap over the short term, mid-term
and long term.
[0028] FIG. 13 is a schematic diagram showing the benefits of
warranty process enhancements to the various participants in the
automotive industry.
[0029] FIG. 14 is a graphical representation of an assessment
metric comparing the current state of data usability for warranty
purposes with an industry benchmark and a future target state of On
Demand computing.
DETAILED DESCRIPTION OF A PREFERRED EMBODIMENT OF THE INVENTION
[0030] Component business modeling (CBM) takes a look at the
business that is different from most conventional perspectives used
for evaluating and improving the business, such as process
analysis. Although process reengineering helps companies analyze
and improve workflow, it focuses only on the workflow dimension of
the business. CBM allows analysis from multiple perspectives, and
the intersection of those views offers improved insights for
decision making. Because CBM groups like activities together
without regard to organizational, geographic or process boundaries,
companies can use CBM analysis to more readily spot redundancy
(similar business activities that are duplicated in other corners
of the company, as well as redundant resources used to support
those activities). CBM also helps clarify a company's focus on
strategic, differentiating capabilities, enabling more
straightforward prioritization of improvement plans.
[0031] It is an object of the present invention to provide a
strategic, enterprise-wide view of the automotive organization to
address warranty challenges.
[0032] A further object of the invention is to reduce the time from
initial warranty problem report to corrective action.
[0033] The invention uses the Component Business Model (CBM)
described in related patent application Ser. No. 11/176,371 for
"SYSTEM AND METHOD FOR ALIGNMENT OF AN ENTERPRISE TO A COMPONENT
BUSINESS MODEL" (hereafter termed "the above referenced foundation
patent application"). CBM provides a logical and comprehensive view
of the enterprise, in terms that cut across commercial enterprises
in general and industries in particular. The component business
model as described in the above referenced foundation patent
application is based upon a logical partitioning of business
activities into non-overlapping managing concepts, each managing
concept being active at the three levels of management
accountability: providing direction to the business, controlling
how the business operates, and executing the operations of the
business. The term "managing concept" is specially defined as
described in the above referenced foundation patent application,
and is not literally a "managing concept" as that phrase would be
understood in the art. For the purpose of the present invention, as
for the related invention, "managing concept" is the term
associated with the following aspects of the partitioning
methodology. First, the methodology is a partitioning methodology.
The idea is to begin with a whole and partition the whole into
necessarily non-overlapping parts. Second, experience has shown
that the partitioning process works best when addressed to an asset
of the business. The asset can be further described by attributes.
Third, the managing concept must include mechanisms for doing
something commercially useful with the asset. For a sensibly
defined managing concept these mechanisms must cover the full range
of management accountability levels (i.e. direct, control and
execute). Managing concepts are further partitioned into
components, which are cohesive groups of activities. The boundaries
of a component usually fall within a single management
accountability level. It is important to emphasize that the
boundaries between managing concepts (and between components within
managing concepts) are logical rather than physical.
[0034] As applied to the automotive industry, CBM analysis can be
used to establish strategic, financial and transformational views
of the business. The strategic view distinguishes which components
offer opportunity for clear competitive differentiation, which are
required for competitive parity, and which are basic necessities.
The financial view highlights which components are associated with
high capital investments, which carry high costs, and which have
both. The transformational view assesses the overall level of
business improvement opportunity present in each business
component.
[0035] The example used to describe the present invention applies
these CBM views and the tools provided by CBM analysis to reduce
the time to process automobile warranty claims. Referring to the
drawings, and more particularly to FIG. 1, there is shown two side
by side bar charts 110 of the major categories of activities
required to process warranty claims. As currently executed, there
are claim settlement activities 112A, a group of activities 114A to
identify the problem and assess the root cause of claims, and a
group of problem resolution activities 116A. Together, from
initiation of a claim to resolution of the underlying problem, the
time to process a claim runs from 160 to 220 days under current
practice.
[0036] By application of the invention, it is possible to reduce
this processing time by 25 to 125 days, as shown by the "Future
State" bar chart with corresponding claim processing activity
categories 112B, 114B and 116B. Substantial reductions are obtained
in the time required for claim settlement activities and problem
identification activities, in particular, thereby shortening
elapsed time to problem resolution. Consequently, by more quickly
resolving underling problems and avoiding a significant percentage
of claims that would otherwise require processing, warranty costs
can be reduced.
[0037] Time can be removed from the process by increasing
collaboration and information sharing across the dealer, OEM and
supplier participants in the process. FIG. 1B provides a more
detailed description of the claims processing categories shown in
the bar charts 110 of FIG. 1A. The customer 181 initiates an
incident report 121 at the onset of the claims settlement process
120 by bringing the vehicle into the dealer 182 for repair. The
dealer 182 services the customer's vehicle 122 and submits a formal
claim 123. The automobile manufacturer (the OEM 183) provides
technical support 124 to the dealer 182 and processes 125 the claim
123 submitted by the dealer. In order to assess the root cause 140
of failure during warranty, the dealer 182 submits the failed part
141 to the OEM 183 for analysis 142, and then to the supplier 184
for analysis 143. Claim settlement 120 is then completed after the
OEM 183 determines a pay out 126 to the dealer for the warranty
service and the supplier 184 reimburses the OEM 183 as required 127
by contractual relationships between the supplier 184 and the OEM
183. In order to resolve the problem 160, the OEM 183 produces a
report 161 consolidating results of the analysis of the failed
part, undertakes a field review 162, and develops early warning
procedures 163 that may be followed by replacement of faulty parts
or other steps to resolve the root cause 164.
[0038] A flow chart 210 for the warranty claim process is shown in
greater detail in FIG. 2A. The customer 181 brings the vehicle in
211 for warranty service or pursuant to a recall. The dealer 182
diagnoses the incident 221, performs the service request 222 and
submits a warranty claim 223. The OEM 183 responds 231 to any
dealer requests for technical support, and receives 232 and
validates 233 the warranty claim. If return of the warranted part
is required 234, the OEM 183 requests the part 234A from the dealer
182, who returns the part 224 for inspection 234B by the OEM 183.
The OEM 183 evaluates the warranty claim for validity 235, and if
the claim is valid determines a payout 236 for the dealer 182, who
receives payment 225. The OEM 182 performs a field engineering
review 237 and provides the results of that review to the supplier
184. The OEM 183 stores data regarding the payout 236 and the field
engineering review 237 in a data warehouse 238, and the data in the
data warehouse 238 is used to trigger early warning signals 238A,
provide historical analysis 238B, issue monthly reports 238C to
suppliers, generate government compliance reports 238D, and provide
the factual basis for establishing contract terms 245 with the
supplier 184. The supplier 184 receives 241 the OEM field
engineering review data, historical data and monthly reports, and
in turn submits its own compliance reports 246 to the government.
The supplier investigates problem parts 242, reimburses 243 the OEM
183 as required by the contract terms, and corrects problem parts
244. The National Highway Transportation Safety Administration
(NHTSA) 185 receives 251 compliance reports submitted by the OEM
183 and the supplier 184.
[0039] The flowchart shown in FIG. 2A details each step in the
process from when a vehicle is brought in for repair, to if/when a
regulatory agency is notified of an issue or problem. The flowchart
includes each step in the process. However, each step may not be
performed by every organization. For example, some manufacturers
provide detail on warranty claims real time to their suppliers,
others do not. Again, this example was put together based on
knowledge of automotive processes and procedures, together with
careful analysis and validation with subject matter experts. An
output of this analysis was an identification of points in this
process that were sources of pain and process delay for OEMs and
suppliers, as shown in FIG. 2B. For the purposes of this
application the term "pain points" will be used to describe these
points, but in applications of the invention to other processes in
other businesses "pain points" refers to sources of adverse affects
upon identified key performance indicators for the process. In the
example addressed in this application, the time to process warranty
claims is a key performance indicator, and therefore "process
delay" is a measure adverse to this key performance indicator.
[0040] As shown in FIG. 2B, incomplete data was captured from
dealers 260 at the time warranty claims were received. Often,
narrative information and vehicle configuration information was not
included. Field engineering review was hampered 261 by lack of
advanced tools and adequate information for the assessment of root
causes. There was not sufficient data integration to promote timely
and effective assessment of root causes. Consequently, technical
support could not be provided to dealers 262 in a timely manner,
and monthly reports to suppliers 263 provided little actionable
information. The suppliers had limited access to OEM information
264, and where data was provided there was a lengthy cycle time
between the incident and the receipt of data. There is a direct
cost to the supplier to access multiple OEM warranty systems.
Suppliers lack tools and data 265 to diagnose root causes, and
there is a slow cycle time to respond to root causes. From the
supplier's point of view, warranty debits from the OEM 266 are
perceived as inaccurate, resulting in painful negotiations 267 to
attribute accountability to suppliers. Further, few OEMs utilize
early warning signals 268, and early warning procedures were not
integrated to the suppliers. Suppliers lack access to data 269 to
comply with TREAD reporting requirements.
[0041] In order to leverage component business model (CBM) tools to
relieve these pain points, it is important to relate the warranty
process to a CBM map of the business. The handling of warranty
claims may be understood from a variety of viewpoints using CBM,
and in particular by use of the CBM map as shown in FIG. 3. The CBM
map 300 is an industry map applicable to vehicle manufacturers
(OEMs 183), and lays out the individual building block components
of an automobile OEM in a matrix that defines the relative
management levels 320 and business competencies 310 (i.e. the broad
functional specializations) of the business. The business
competencies 310 applicable to the automobile manufacturing
industry are business administration 311, financial management 312,
products and processes 313, production 314, supply chain 315,
marketing and sales 316, and service and after sales 317.
[0042] The components within each of these competencies are grouped
into operational management levels 320 reflecting the scope and
intent of activity and decision making applicable to the
components. These levels are summarized as direct 321 components
(i.e. components that serve to define policy, plans, goals,
organization and budgets, and assess overall performance of the
business), control 322 components (i.e. components involved with
allocating tasks and resources, authorizing execution, applying
policy, interpreting goals, and overseeing and troubleshooting
performance), and execute 323 components (i.e. components for
administering, maintaining and operating the business).
[0043] A business component (e.g. customer relationship management
330) is the basic building block of an organization. It is a
cohesive group of business activities supported by appropriate
processes, applications, infrastructure and metrics, all of which
define the contribution of the component to the performance of the
business. Components are non-overlapping partitions of business
activity, that is, components must have boundaries for their
separate cohesive groups of business activities that are
simultaneously coincident with respect to a) functional purpose, b)
organizational role and authority, c) skill levels required, and d)
operational and technical needs.
[0044] Each component operates by calling and offering business
services. The specialization and expertise of a component is
encapsulated as far as possible. A component works under a
"managing concept" (as that term is defined in the above referenced
foundation patent application), which is responsible for each
instance of the component over the lifetime of the instance. Each
business competency 310 in the industry map 300 is formed from a
managing concept or from a combination of managing concepts. Often,
and preferably, within a competency 310 a component (e.g. 330)
defines a boundary with respect to other components that enables
the component to be outsourced with little or no disruption of the
business.
[0045] The warranty claims administration process affects a subset
of components, cutting across business competencies 310 and
management levels 320. These components are shown on the CBM map
300 in FIG. 3 and are also shown as column headers in FIG. 4A. The
representation in FIG. 4A shows the warranty claim processes 410
(items 1 through 14) as a series of linked process steps which
touch components of the CBM map 300, as shown by the indicators
(e.g. 420) beneath a column header and to the right of the
indicated process step. The components touched by each process step
410 are also shown by the numbered indicators overlaid upon the CBM
map as shown in FIG. 4B.
[0046] In the initial process step, a customer reports an incident
or responds to a recall notice 1, thereby invoking the customer
relationship management component 330. A dealer then diagnoses 2
the incident, which is an activity supported by the vehicle service
component 331. Technical support is provided 3 to the dealer by the
OEM and perhaps also the supplier, again implicating the component
330 that manages the customer relationship. Following diagnosis 2,
the dealer submits the warranty claim 4, another activity handled
by the vehicle service component 331.
[0047] The warranty management component 332 is used for OEM
validation of the claim 5, analysis of the claim 7, and
determination 8 of the pay out due the dealer. If the OEM
identifies a need 5 to evaluate a failed part, dealer return of the
part 6 is handled by the vehicle service component 331. Payment 9
of the claim is an activity of the accounting and general ledger
component 334. Then the OEM generates 10 reports and early
warnings, which includes coordination with the supplier, an
activity of the supplier management component 333, as well as a
number of additional activities handled by certain other
components, namely, the legal and regulatory component 344, the
relationship monitoring component 345, and the parts management
component 347.
[0048] Supplier investigation 11 of part problems is supported by
an activity of the warranty management component 332. Supplier
reimbursement 12 of the OEM, in accordance with contract terms or a
negotiated settlement, is handled by the accounting and general
ledger component 334. The supplier also generates reports 13, and
handling these reports is an activity of the legal and regulatory
component 344. Finally, supplier and OEM histories generated by the
warranty process are used 14 by other areas of the business,
invoking a number of other components, namely, business performance
342, financial planning and forecasting 346, quality management 348
(in both the production 314 and service and after sales 317
competencies), and a group of design components 343 in the
product/process competency 313.
[0049] Having thus used the automobile manufacturing industry CBM
map to identify the components affected by warranty claims
processing, the next phase in using CBM tools to relieve the pain
points identified in FIG. 2B is to use the auto industry CBM map
510 to generate views of the business that highlight components
that most affect the value of the business, as outlined in FIG. 5A.
In general, these views are "heat maps" as described in the above
referenced foundation patent application, but in the present
invention they are combined and adapted for use in improving
warranty claims processing.
[0050] Strategic view 520 focuses on core competencies, identifying
components that provide strategic value to the automobile
manufacturing business, components that perform activities that
differentiate the business from competitors, as well as components
that can provide better value to the business through partnering
arrangements. A detailed map of strategic view 520 is provided in
FIG. 5B. Components that provide strategic value, whose performance
can differentiate the business from competitors, such as post
vehicle sale strategy component 525, are shown with a "Strategic"
key. A second group of components, such as quality management 530
(shown with a "Competitive Parity" key), are components whose
performance must be at industry standard levels, maintaining
competitive parity with others in the automobile manufacturing
business. A third group of components, such as parts management 535
(shown with a "Basic" key), provide basic functionality for the
business and can be operated as cost effectively as possible, at
minimum acceptable levels of performance.
[0051] Financial view 540 is tailored to identify high cost and
time impacts of the components, because cost and time are key
performance indicators for the warranty process. More broadly,
however, other key performance indicators may be appropriate,
depending on the business process being transformed.
[0052] The financial view 540 is used to focus attention on
priority value drivers and capabilities, and indicate the financial
consequences of removing redundancies. A detailed map of financial
view 540 is provided in FIG. 5C. Components that have a high
capital investment, such as maintenance management 545, are shown
with a "High Capital" key and dashed border. A second group of
components, such as customer relationship management 550 (shown
with a "High Cost" key), are components having a high operating
cost. A third group of components, such as end-of-life vehicle
component 555 (shown with a "High Capital +High Cost" key and
dashed border), are characterized by both high capital investment
and high operating cost.
[0053] Transformational view 560 identifies those components that
provide the best opportunities for improvement and process changes.
CBM may be used to understand the linkage to components to create a
prioritized portfolio of transformation initiatives. A detailed map
of transformational view 560 is provided in FIG. 5D. Components
that are an immediate priority for improving the warranty process,
such as quality management 565, are shown with an "immediate
priority" key and dashed border. A second group of components, such
as parts management 570 (shown with a "medium priority" key), are
components whose impact on improving the warranty process is
significant but less than for immediate priority components and
which therefore have a medium priority. The remaining components,
such as the post vehicle sale strategy component 575, are those
having no impact and therefore no priority for transformation, and
are shown with a "no action" key.
[0054] Solution view 580 shows which proposed solutions, in light
of the strategic, financial and transformational views, have the
highest impact on reducing the key performance indicator of time
required to resolve a claim. This view may be used to understand
the impact of proposed solutions on each component, and evaluate
the ease or difficulty of solution implementation. The strategic,
financial and transformation views provide the business decision
maker with a depth of perspective that enables the business to
select for action those solutions that best align with the overall
goals of the business within the constraints of available time and
resources. A detailed map of solution view 580 is provided in FIG.
5E. Exemplar components that are selected for action as likely to
have the most direct impact on reducing warranty claim processing
time within the business framework of available constraints, such
as quality management 585, are shown with a "direct impact" key and
dashed border. A second group of components, such as parts
management 590 (shown with a "partial impact" key and a dotted
border), are components having a partial or indirect impact on
reducing warranty claim processing time. The remaining components,
such as post vehicle sale strategy, have no impact on a solution
that is consistent with the overall goals of the business within
available constraints, and are indicated by a "no impact" key.
[0055] FIGS. 5B through 5D provide detail as to which components
are impacted if you take a strategic, financial, or
transformational of the warranty problem. These views provide
evaluation criteria for determining the priority of components in
the solution view shown in FIG. 5E. These priority components
identified in the solution view are then analyzed in increasing
detail to identify opportunities to reduce the high cost of
warranty, as shown in FIG. 6. FIG. 6 shows how two exemplar
components 610, warranty management 332 and quality management 348,
are broken down into activity levels 620. Each of these component
activity levels is then analyzed according to the same criteria
applied to components in the strategic 630, financial 640,
transformational 650 and solution 660 views, respectively, as shown
in FIGS. 5B through 5E.
[0056] Consider, for example, the warranty management component
332. As will be recalled from FIGS. 5B through 5E, the strategic
view 520 shows this component being operated at a basic level in
terms of the strategic focus of the automobile manufacturing
business. That is, excellent performance of this component would
not differentiate the business from competitors, nor was this
component strategic enough to require operation at a level of
parity with that of competitors. A minimum level of resources and
attention would be strategically adequate for this component. As
shown in FIG. 6, a further analysis of activity levels within this
component under the strategic view 520 confirms this conclusion for
each activity level within the warranty management component 332.
With respect to the cost criteria used for evaluation in the
financial view 540, the high cost of the warranty management
component 332 is traceable to two of the four activity levels:
monitoring and tracking warranty and repairs 623; and managing
claims 624. These same two activity levels are also responsible for
the immediate priority evaluation given to this component in the
transformational view 560, and for the direct impact evaluation
given to this component in the solution view 580. But at this more
detailed level of analysis, warranty communication, in the form of
the activity of notification/recall 622, has only a partial impact
on solution to the problem of reducing warranty claim processing
time, and communication of the initial warranty transaction 621 has
no impact at all.
[0057] A similar detailed analysis of activity levels is shown in
FIG. 6 for quality management component 348. Applying the criteria
of the strategic view 520, at shown in FIG. 5B, this component must
be operated at competitive parity in relation to business
competitors in automobile manufacturing, an evaluation 630 which
applies as shown in FIG. 6 to all activity levels 620 within this
component except regulatory compliance 629. With respect to the
cost criteria used for evaluation in the financial view 640, the
high cost of the quality management component 348 as shown in FIG.
5C is traceable to three activity levels: identifying quality
issues 625; monitoring and diagnosing parts 626; and analyzing
early warning data 627. However, all five activity levels are
evaluated as having immediate priority in the transformational view
650. And the "direct impact" evaluation of the quality management
component 348 in the solution view 580, as shown in FIG. 5E,
applies three activity levels: identifying quality issues 625;
analyzing early warning data 627; and providing feedback to the
enterprise 628. The monitoring and diagnosing parts 616 has only a
partial impact on reducing warranty claims processing time and
regulatory compliance 629 has no impact at all.
[0058] Thus, from these two examples of how warranty issues can be
decomposed, evaluated, ranked and prioritized, it will be seen that
the more detailed analysis of activity levels within a component,
according to the criteria used in the various CBM views, more
particularly identifies areas for further action. It should be
noted that those activity levels identified in the solution view
660 as having a direct impact on reduction of the time required to
resolve a claim include those having relatively low evaluations in
the strategic view 520 and the financial view 540.
[0059] The utility of the CBM analysis may be further understood by
reference to FIGS. 7A and 7B. FIG. 7A defines a baseline solution
architecture view (SAV) considering corporate IT standards and
dependencies applicable to warranty issues. The information
technology architecture of the business has been overlaid with
applications and systems particular to warranty issues. The
architecture shown provides a business services interface 710
(including warranty claims management service 712) for user 705.
This is supported by application services 715, which is further
comprised of user access services 720, user interaction services
725, business process choreography services 730, business function
services 735, common services 740, and information management
services 745. The business 750 is further supported by
infrastructure services 765 (which is further comprised of utility
business services 770, service level automation and orchestration
775, and resource virtualization services 780) and connects to user
application services 715 via integration services 755.
[0060] The baseline SAV reflects the current state of IT, with an
indication of elements to be improved in the short term (see "short
term" key 785), the mid term (see "mid term" key 786) and the long
term (see "long term" key 787). As shown in FIG. 7A, the baseline
SAV indicates that the elements to be improved in the short term
include a number of elements within application services 715
(connectivity 721, collaboration services 726, analytics
application 736, develop custom applications 737, reporting 741,
information access 746, and information integration 747), a number
of infrastructure services (security services 776, availability
services 778, server 781, and storage 782), and adaptors/connectors
764 on the enterprise service bus 760.
[0061] Similarly, elements targeted for improvement in the mid term
include a supplier OEM warranty portal 727 and business
rules/workflow 731 within application services 715, network
clustering 783 within resource virtualization services 780,
business performance management 756 within integration services
755, and a number of elements on enterprise service bus 760 (web
services 761, application connectivity services 762, and events
763. In the long term, choreography 732 is targeted for
improvement, together with metering services 771 and license
management 772 within utility business services 770, workload
services 777 within service level automation and orchestration 775,
and Grid/OGSA (Open Grid Services Architecture) 784, a resource
virtualization service 780.
[0062] Having established a baseline SAV, the next step is to use a
map of CBM priorities for transformation as a tool to understand
the information systems requirements of the company. An exemplar
CBM transformational view 800 is shown in FIG. 8A. Those components
assigned an immediate priority (see the "immediate priority" key)
are indicated with a dashed line border. These include the
following components: the organization & process policies,
legal & regulatory, and IT systems & operations components,
within the business administration managing concept 821; the
quality management component within the production managing concept
824; the supplier management, and procurement components, within
the supply chain managing concept 825; the relationship monitoring,
and customer relationship management components, within the
marketing and sales managing concept 826; and the warranty
management, quality management, and vehicle service components
within the service and aftersales managing concept 827. Those
components given a medium priority (see the "medium priority" key)
are indicated with a dotted line border. These include the
following components: the business performance component within the
business administration managing concept 821; the financial
planning and forecasting, risk management and internal audit, and
accounting and general ledger components, within the financial
management managing concept 822; the mechanical design, in-vehicle
system design, process design and tool design & build
components, within the product/process managing concept; the dealer
management and order management components, within the marketing
& sales managing concept 826; and the parts management
component, within the service & aftersales managing concept
827.
[0063] The map of CBM priorities 800 is then used identify gaps,
redundancies and over-extensions of current information systems. A
conceptual representation of this understanding is shown in FIG.
8B, with an exemplar gap 810, redundancy 811 and over-extension
812. Those skilled in the art, and having reference to the above
referenced foundation patent application, will recognize that IT
shortfalls become evident when a company's particular information
systems are overlaid upon a CBM map of the components serviced by
these systems. The information systems overlay is not shown.
[0064] FIG. 9 summarizes the impact 920 of IT shortfalls 910, and
their solutions 930. Possible solutions are identified and
implemented to align IT applications to a target business component
model of the enterprise. When IT systems are overlaid upon a CBM
map, gaps 940 will readily appear, i.e. activities that are not
sufficiently supported by IT, or where there is no responsive
end-to-end integration. This assessment points to an IT solution
that integrates related activities or implements a new application
to service high priority components. An overlay of IT systems will
also identify misalignments 950, where there is a mismatch between
the cost and complexity of supporting IT systems and the value
provided to the business by the supported components. This
assessment points to an IT solution that scales the IT system
appropriately. Redundancies 960 will also become evident with an
overlay of IT systems, where there are multiple systems having
similar functionality, providing inconsistent support of activities
and workflows. This assessment points to an IT solution that
selects the best application and then migrates the application to
cover the redundant applications, which are then shut-down. A
further shortfall uncovered by an overlay of IT systems is an
over-extension 970, that is, where an application designed for one
purpose is adapted and extended to serve other purposes across
other components, but at high cost with increased complexity and
unclear responsibilities, and with conflicts in managing the
application and inflexibility in scaling the application. This
assessment points to an IT solution that breaks the application up
so that different components have their own appropriately tailored
and responsive application.
[0065] The next step is to review the process and key pain points
related to IT capabilities, as may be shown with reference to FIG.
2C. One issue is primarily an OEM issue: time consuming negotiation
with the supplier to attribute accountability because of disputed
debits to suppliers. This adversely affects reimbursement to the
OEM 270. Several additional issues are primarily supplier issues.
The supplier receives OEM data 271, but the supplier has limited
access to the data (OEM reports), and where the data is provided
there is a lengthy cycle time from the incident to receipt of the
data. Further, there is a direct cost to the supplier for access to
multiple OEM warranty systems. An additional supplier issue is with
respect to submission of government compliance reports 272:
suppliers lack access to data to comply with TREAD reporting
requirements.
[0066] However, most issues that are pain points for the industry
and delay the warranty claims process are shared by the OEM and
supplier. Dealer contacts with the OEM for technical support 273
suffer because root cause findings are not captured and updating
for the dealer and technical support and education does not proceed
quickly. Warranty claims received by the OEM 274 reflect incomplete
data capture from the dealer (e.g. lack of dealer narrative and
vehicle configuration information). At field engineering review
275, timeliness and effectiveness of root cause assessment is
hindered by lack of data integration and lack of advanced tools for
the assessment of root causes. Few OEMs utilize early warning
signals 276, and early warning procedures are not integrated to the
supplier. The monthly reports issued by the OEM 277 provide
suppliers with little actionable information. The suppliers lack
tools and data to diagnose root causes when they investigate
problem parts 278, and this contributes to a slow cycle time to
respond with root cause identifications. Finally, there is a
perception by suppliers that OEM warranty debits are inaccurate,
which slows OEM reimbursement 270.
[0067] The next step is to map to the SAV the warranty process pain
points identified with reference to FIGS. 2B, 2C and 2D. These pain
points show that there are limited access channels for key
participants, and therefore that user access services 720 must be
improved. There is a lack of business orchestration processes, a
deficiency of business process choreography services 730.
Application functions are being duplicated, suggesting an
improvement is needed in business function services 735. There is a
need for common analytics functions, which requires expansion of
common services 740. There are inconsistent data capture
mechanisms, which is a responsibility of information management
services 745. There are limited integration standards, which should
be provided by integration services 755. Also, there are no
cohesive sense and respond services, indicating a need for
improvement in service level automation and orchestration 775.
[0068] The next step is to identify the business capabilities
required to eliminate the pain points. These capabilities may be
understood by turning again to the warranty claim process diagram,
and in particular to FIG. 2D. First, an on demand technology
infrastructure is required to support field engineering review 280,
so that the warranty system captures broad claim data, including a
dealer narrative, and so that there is shared access to data with
suppliers to diagnose root causes. Comprehensive incident data,
including dealer narrative, must be captured at the point of dealer
contact of the OEM for technical support 281. A further aspect of
on demand technology infrastructure that is required is greater
access to claim data for suppliers 282.
[0069] Second, improved on demand analytics and reporting is needed
to support triggering of early warning signals 283. There should be
early warning triggers reflecting the complexity of components that
are interconnected in less than optimal ways to components under
warranty, with integration to suppliers and rapid reporting to
suppliers. Further, advanced diagnostic tools (e.g. text mining)
should be applied to the warranty claim information. Suppliers must
receive the requisite data to comply with government reporting
requirements 274. And suppliers must have on demand use of
supporting analytical tools for investigation of problem parts
285.
[0070] Third, improved on demand collaboration is needed to provide
Level 2 support for dealer diagnostics, with feedback from warranty
diagnostics, when the dealer contacts the OEM for technical support
281. Data required to track accountability and debit suppliers
appropriately must be captured in order to better support
reimbursement of the OEM 286. In addition, there must be feedback
systems to extend monthly supplier reports 287 to integrate field
engineering and root cause findings back to dealer support
components.
[0071] The next step is to overlay these identified business
capabilities on a CBM map of priorities for transformation, as
shown in FIG. 10, which for illustrative purposes uses the
transformational view of FIG. 8A as the foundation for the overlay.
FIG. 10 shows a conceptual summary of such an overlay, indicating
that the identified business capabilities affect certain components
on the CBM map. To simplify the display, the identified business
capabilities are grouped into clusters, cluster 1010, cluster 1020,
and cluster 1030. One or more of the capabilities in each cluster
affect the components indicated. However, those skilled in the art,
and having reference to the above referenced foundation patent
application, will recognize that a practical overlay will highlight
those aspects of the affected components that must be transformed
in order to enable the identified business capabilities. The
details of such an overlay are not shown.
[0072] The next step is to define a "to-be" or target version of
the solution architecture view using the prioritized business
requirements from the CBM model and the required IT capabilities
overlaid thereon. This will now be described with reference to FIG.
7B, where on demand technology infrastructure elements are applied
to application services (connectivity 722, collaboration 728, and
information access 748) and resource virtualization services for
applications (metering services 771, virtual machines 785,
clustering 786 and partitioning 787). Similarly, on demand
analytics and reporting elements are applied to application
services (choreography 733 and business rules 734), for the
enabling of integration services (use of SOA and web services 761,
application connectivity services 762, and adapters/connectors
764), and infrastructure services (problem management 774 and
workload services 777). On demand collaboration elements are
applied to application services (custom applications 735, to
include consolidation and development of analytic applications for
root cause corrective actions) and infrastructure services
(configuration services 779 and availability services 778). In
addition, common services are enhanced by leveraging diagnostic
enablement tools, such as text mining, and business performance
management 756 is enhanced to enable autonomic capabilities for
sense and respond services.
[0073] The next step is to develop roadmaps for the transformations
identified in connection with the foregoing, as shown in FIG. 11.
For each of the areas covered by the SAV.(business services 1010,
application services 1020, integration services 1030 and
infrastructure services 1040), an assessed current state and
desired future state fall along a gradation from discrete services
1050 to partial integration 1060 to enterprise integration 1070 to
partner collaboration 1080 and to dynamic partner collaboration
1090. The roadmaps document the assessed current state, the desired
future state and the required capabilities and initiatives to
transform the assessed current state so as to achieve the desired
future state.
[0074] The results over time of following a roadmap are shown, by
way of illustration, in FIG. 12. In the short term, through
integration of disparate data, the solution significantly reduces
processing and transaction cycle time throughout the enterprise,
thereby speeding claim resolution. The technology provides
collaborative applications to integrate data into a common
repository to avoid duplication, and also provides normalization of
data for consistent data interpretation. In the medium term the
solution provides expanded inter-enterprise collaborative
capabilities with and through increased warranty data sharing,
including detailed claim data, component interfaces and part
interoperability. Technology in the medium term leverages portal
capabilities for OEM/Supplier data sharing, establishes a workflow
engine with event triggers, and optimizes the use of text mining
tools. In the long term the solution provides full integration of
business rules between OEM, supplier and dealer to orchestrate
business events in an on demand environment. Technology in the long
term provides service oriented integration of infrastructure, data
management and analytical capabilities. Technology also provides a
grid or utility service for a variable infrastructure model.
[0075] Similarly, the benefits of the solution grow progressively.
In the short term there will be a compression of time to process
claims, resulting in fewer incidents for a given problem. In the
mid term, warranty reserves will be contained as a percentage of
revenue, accuracy of claim data will be improved to facilitate cost
recovery with suppliers, and there will be a reduced parts
inventory associated with fewer claims. In the long term module and
system integration will improve quality management, as compared to
analysis of warranty performance on a component by component basis.
There will be improved customer satisfaction and brand impact.
Further, investment in warranty application management solutions
will become a variable rather than a fixed cost.
[0076] Enhancements to warranty claims administration technologies
will spread benefits to all participants, as shown in the table of
FIG. 13. This chart is an illustrative example of how solutions
generated by the invention can be implemented within specific
timeframes, their benefits and the technology evolution involved.
For warranty claims administration, improved management takes the
form of better collaboration (providing diagnostic support at the
time the incident is incurred, providing a mechanism for early
warning to industry participants, and providing business rules for
the assignment of accountability and appropriate cost recovery.
Analytics and reporting also improve, with a defined analytic
process and advanced support tools for OEMs and suppliers to drive
root cause assessment and corrective action. Improvements are also
seen in infrastructure and data capture through creation of a
services oriented architecture with web services and open access
for OEMs and suppliers to capture and share warranty claim
data.
[0077] For OEMs, these improvements provide improved dealer support
at time of initial inquiry about an incident, capture of
comprehensive data, and expanded analysis of root cause drivers
with early warning signals both internally and to the supply
community. To an increasing extent, response to claims will be to
replace parts rather than overhaul systems containing the parts.
The dealer network benefits from a greater emphasis on reporting
and feedback to drive quality, more repairs on the first pass, and
capture of the observations of service technicians. Suppliers also
benefit from access to near real-time claim data, analytical tools
to assess root causes, a collaborative environment to reconcile
payments, and increased compliance with government reporting
requirements.
[0078] FIG. 14 shows a graphical representation for measuring the
impact of the invention on six evaluation axes: metrics (i.e. how
well is warranty performance measured) 1410, risk (i.e. how
effectively warranty risks are distributed with strategic partners)
1420, partnerships (i.e. the extent to which best in class
capabilities are accessed and efficiencies leveraged through
connections with partners) 1430, data usability (i.e. the extent to
which the process for conversion of enterprise and partner data to
useful information is automated and immediate) 1440, strategic
(i.e. the percentage of time and cost spent on strategic activities
versus reporting and transaction processing) 1450, and adaptiveness
(i.e. the extent to which the warranty process and structure is
adaptive to changing business needs ) 1460. If these evaluation
criteria are measured on a scale from 1 to 5, connecting the dots
forms a hexagon. FIG. 14 shows three such hexagons, one for an
"as-is" condition of a business 1401, one for an industry benchmark
1402, and one for an on demand business following implementation of
the invention.
[0079] While the invention has been described in terms of a single
preferred embodiment, those skilled in the art will recognize that
the invention can be practiced with modification within the spirit
and scope of the appended claims.
* * * * *