TRAVERSE CITY, MICH. — Suppliers beware: Chrysler Corp. wants to take you out of your comfort zone.
When it comes to product warranty issues, the Auburn Hills, Mich., automaker would like its supply community to take a more active role. In the past year, Chrysler has launched a new warranty management program to light a fire under its key parts providers, or what Chrysler calls its Extended Enterprise network.
For far too long, suppliers have waited for automakers to find them when problems occurred, said Gary Andrews, Chrysler's director of supplier development and technical assistance.
Andrews spoke Aug. 4 at the University of Michigan Management Briefing Seminars in Traverse City.
``The supply base was uninvolved in warranty issues,'' Andrews said. ``On significant issues, we could approach an engineer on an activity. But suppliers offered limited assistance.''
No longer is that the case at Chrysler. To drive down warranty costs, the carmaker has hot-wired a fairly dormant program. Suppliers — including a large number of plastic-parts producers — now will be asked to take more responsibility to assess damage and find a long-term fix when a warranty issue arises, Andrews said.
Chrysler's first move was to put its warranty reports online. Dealers now share warranty and expense data through an online database that also can fold in customer remarks.
With the possibility of a looming problem, Chrysler then samples parts from the field and even analyzes customer-satisfaction survey data from J.D. Power and Associates, Andrews said.
Then starts the move to involve suppliers. Chrysler has begun rolling out a plan asking suppliers to interpret the data and recommend repairs.
Together, Chrysler and its suppliers will answer questions about how a part is installed and repaired, how the part relates to other vehicle components and what customer expectations are for the part.
After that period of scrutiny comes the hammer blow. Chrysler will reward those suppliers that help the company keep a lid on warranty costs by coming up with solid solutions, Andrews said. That reward can translate into future projects, he added.
And if smaller, Tier 2 parts suppliers think they are immune, they should think again. Part of a large supplier's reward program comes from its ability to manage quality from its pool of parts providers.
``We don't just want a Tier 1 supplier to solve a problem,'' Andrews said. ``We want them to take a system focus. To establish the root cause, a Tier 1 must talk to his suppliers.''
The end game of the process is for both Chrysler and suppliers to learn from their mistakes and avoid them in the future, Andrews said. Those lessons learned from high warranty costs can be folded into new designs and processes, he said.
The new procedure is designed to excise blame for a warranty problem. That long has been a sticking point aggravating relations between supplier and carmaker, said one conference attendee in Traverse City.
``Pointing fingers gets you nowhere,'' said an executive with a parts-supply company.
Andrews said that, on the average, blame could be spread equally among carmaker, dealer service shop and supplier.
``We will focus more on customer recovery than on who is to blame for a warranty problem,'' Andrews said. ``The customer benefits, and all parties are held harmless. But for that system to work, suppliers must be more responsible to manage warranty costs.''
Consider that a warning.