Carryover Parts and New Product Reliability

By studying a unique data set from a motor vehicle manufacturer, we find that carryover parts, common parts used in successive generations of multi-generational products, are a major source of quality problems, contrary to conventional wisdom. Moreover, the failure rate of carryover parts grows from one generation to the next, a phenomenon known as the carryover spike. Motivated by these results and the need to understand the quality dynamics of multi-generational products, we empirically analyze the field problem-solving process and the new product introduction spike. We attempt to answer the following questions: what factors influence the time required to solve problems? Furthermore, what factors influence the cancellation probability of problem-solving projects? In addition to these questions related to the field problem-solving process, we seek to understand the factors that influence the new product introduction spike. We also investigate various ways to offset the failures of carryover parts. Using a novel simulation model, we test different policies that aim for better prioritization and analysis of carryover problems. Simulation results show that product reliability can be improved drastically using these policies. Our results indicate that managers should expect to witness higher warranty costs related to carryover parts on new products, due to trends in the industry. Thesis Supervisor: Nelson P. Repenning Title: Associate Professor of Management