Award-Winning Case Study: Delphi
Entry: Best Project Achievement in Business Enabling Processes Enterprise Warranty Risk Reduction Process
Strategic Objectives and Scope
Delphi is a Fortune 500 company that supplies automotive components to the global Automotive and Truck Original Equipment Manufacturer (OEM) markets. Delphi Powertrain (PT) is the largest of five Divisions within Delphi, headquartered in Luxembourg, Europe. Delphi PT’s 2007 sales revenue was $5.7B split between three Product Business Units (PBU’s). Like all automotive suppliers, PT is facing increasing pressure from the vehicle OEM community to improve product quality and assume a larger share of the warranty risk associated with their products. This is an issue all industries face, but as Chart #1 illustrates, the automotive industry currently makes up the majority (54%) of the $70B spent annually. Supplier risk factors include: • Vehicle OEM’s aggressively pushing down warranty cost to the supply chain • Vehicle OEM’s offering extended warranties as a sales strategy. Most OEM contracts require supplier support of these extensions with no re-pricing opportunity • Recent Government consumer protection legislation has increased the risk of product campaigns, recalls, and consumer warranty events • Vehicle/ System integration complexity is stressing the supplier’s test and validation capabilities
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