ACKNOWLEDGEMENTS

I would like to thank everyone who contributed to the realization of this master thesis.
First of all, a big thanks to Annika Lorenz, my co-promotor, for all the efforts she made to give me
feedback and guidance throughout the writing and analysis process. Her feedback helped me to
gain focus, to be more critical and was undoubtedly essential to the finalized version of this master
thesis.
Also a big thanks to Nadine Roijakkers, my promotor, for reviewing my thesis and giving feedback
about the lay-out, structure and content of this thesis.
Furthermore, I would also like to express my gratitude to all interviewees for the time they made
available to help me out with my interview questions. Thanks for the enthusiasm, analytical
elaborations and the reviewing of the interviews.
I would like to give a big thanks to my parents for giving me the opportunity to write this work and
supporting me in hard times.
At last but at least, I would like to thank my girlfriend and friends for the moral support. They
helped me to relax and reviewed some parts of this thesis to help me out with content and
grammar mistakes.

ABSTRACT
Product recalls are a hot topic today. This is due to the high complexity in the composition and
assembly of products which increases the total number of conducted product recalls. Many
products contain hazardous materials which may endanger customers. As safety and quality
testing becomes more and more stricter, manufacturers and suppliers need to comply with all kind
of standards and demands, especially in high risk industries. This thesis discusses how
automotive suppliers deal with product recalls and how product recall campaigns influence their
learning processes during the product recall process. Automotive recalls are chosen because only
few research is devoted to this topic. Furthermore, this thesis tries to give an ideal image of how
automotive suppliers should conduct a product recall in order to reduce reputation damage and
increase learning outcomes. As a result, this thesis wishes to contribute to the works of
Haunschild & Rhee (2006) and Wix & Mone (2007). 10 interviews have been conducted in
automotive supplying companies and car distribution centers. All interviews were conducted in
Belgium. A cross-case analysis has been used to visualize and compare the findings. Results show
that product recalls are mainly considered as negative events in an automotive supplying
company resulting into huge financial setbacks. Most automotive firms see product recalls as a
necessity to avoid further escalation of the problem. Still, they are aware of the learning benefits

of product recalls which enables them to save costs and earn trust from customers. As for the
product recall procedure, engineers pay a lot of attention to prevention and proactivity. Prevention
results into containment actions, like clearing out the stock and scrapping the defected parts.
Proactivity on the other hand results into the taking of corrective measures to solve potential
product defects. Results also show that automotive suppliers are very fond of lean problem solving
processes, like the 8D process model, the fishbone analysis model, the PDCA scheme of Deming
and PPAP. Root cause identification is often done by the construction of FMEA schedules and fault
tree analyses. All those problem solving methods lead to preventive and corrective actions
resulting into a lessons learned schedule that can be applied in practice for similar future cases.
Beyond this, proactivity implies that a speedy reaction is needed to inform customers about the
dangers of the product defect. In that way, the firm can reduce its legal fee costs and enhance its
trustworthiness. Experimentation may have a positive impact on organizational learning when
there is only few information available about the product defect. A managerial implication would
be that OEMs and automotive suppliers should work closely together with garage dealers and
customers. This must be done because engineers need the knowledge of everyone who is involved
in the manufacturing and distribution process to fix product defects. The results of this research
are reflected in a Belgian automotive context. Besides this, the results are generally applicable in
all countries where manufacturing, assembling and distribution centers of each interviewed firm
are situated. More research needs to be done in the field of product recall procedures in order to
compare automotive product recall procedures with non-automotive product recall procedures.
Finally, the factor of product recall experience needs to be examined to determine whether
reputation intactness is more present in automotive companies that experienced multiple product
recalls or in automotive companies that only conducted one product recall so far.

TABLE OF CONTENTS

1. Introduction 1
2. Literature study

Chapter
Chapter
Chapter
Chapter

I: Product failures, defects and recalls

II: Product recall procedures 5
III: Learning
9
IV: Learning from product failures
13

3. Methodology 17

3.1Research design 17
3.2Research setting 19
3.3 Interviewee selection 21
3.4 Data collection 23
3.5 Data analysis 25
4. Empirical study
4.1 Empirical study discussion
4.2 Results 27
5. Discussion

27

37

5.1 Summary of the findings

37
5.2 Interpretation of the results
41
5.3 Linkage with the Research Questions
6. Conclusion

27

45

47

6.1 Conceptual models

51
6.1.1 Conceptual model I
51
6.1.2 Conceptual model II
51
6.2 Assumptions, limitations and delimitations of the empirical study
6.3 Managerial implications
53
6.4 Recommendations for further research 55
7. References

55

53

8. Appendices
8.1
8.2
8.3
8.4
8.5

59

Appendix
Appendix
Appendix
Appendix
Appendix

A Interview guideline
59
B Interview quotations
63
C Data analysis code matrix
165
D - Code Relations Browser of all codes VS product failures/defects 213
E Code Matrix Browser
215

1. Introduction
Big established brands like Ford, Toyota, McDonalds, Burger King, Sony and Dell have one thing in
common: at a certain point they all had to deal with product recalls. Sticking accelerator pedals,
exploding fuel tanks, toxic paint, overheated batteries and inflammable toys are examples of
hazardous product defects that resulted into serious accidents. Still, firms are not always tended to
conduct product recalls immediately after safety incidents. It could be that they think that the costs of
conducting product recalls are far too high: it would never compensate the effect of the avoidance of
similar future incidents. Especially the long-term effects of the indirect costs, like reputation damage
and market share loss, scare firms off to conduct product recalls (Korkofingas & Ang, 2011). The
major increase of product recalls since the year 2007 caused an increase in consumerism and
internet-based product reviews (Korkofingas & Ang, 2011). The new trend of classifying and ranking
products towards quality and safety made the consumers more skeptical about the products they
purchased (Korkofingas & Ang, 2011). A study of Korkofingas & Ang (2011) argues that high equity
brands experience a higher negative impact for product recalls than weaker non-established brands.
Adverse media publicity ratifies this negative impact (Wix & Mone, 2007). Still, there is only little
research about which decision criteria firms use to conduct efficient product recalls and how they could
benefit firm performance and learning capabilities. Some studies, like the ones of Farhana &
Bimenyimana (2015) and Korkofingas & Ang (2011) argue that the increasing complexity in
composition and design can be attributed to an increase in the total amount of product recalls.
Therefore research needs to be done about how firms decide which product failures and defects are
eligible for conducting product recalls.
It is remarkable that some industries are more prone to product recalls than others. The food,
pharmaceutical and automotive industries manufacture products that are considered to be riskier in
terms of offering hazardous products. Automotive suppliers manufacture products that need to be
correctly integrated and if there is a malfunction in one of these components, it may cause the car to
crash (Kumar & Schmitz, 2011). Think of the product recalls of Mazda, Toyota and Ford. These
products were recalled due to an hazardous composition or design. Another example of a large scaled
product recall is the one of the Ford Motor company who had to recall 9.6 million vehicles due to
malfunctions in the cruise control switching system (Chao, Iravani, & Savaskan, 2009). This thesis will
specifically focus on product recalls in automotive firms. It is interesting to investigate the impact of
product recalls in automotive companies because they manufacture complex high-risk products that
can endanger the health of its customer when technical failure occurs. A lot of things can go wrong in
a car: brake failure, tire blow-outs, gas- and fuel tank explosions, etc. These failures are considered as
critical and engineers should not neglect them while designing a new car type. One of the most wellknown examples of product recalls in the automotive industry is airbag failure that is caused by the
Japanese car supplier Takata. At least 6 deaths and 100 injuries can be attributed to suddenly
exploding Takata airbags. As a result, several big car manufacturers, like Toyota, Mazda, Ford and
BMW were forced to recall their cars (Hankel, 2015). Therefore avoiding technical failures can save
lives and reduce the number of accidents on the road.
Firms should have certain procedures in place to deal with product recalls in an efficient way.
The importance of an efficient product recall policy needs to be clarified: reacting quickly and with the
right decisions and tools. Even firms who never experienced product recalls before should have a

procedure ready to deal with product recalls swiftly (Wix & Mone, 2007). Conducting a product recall
efficiently requires the traceability of your products throughout the supply chain (Kumar & Schmitz,
2011). By using traceability tools, firms are able to build long-term relationships with customers and
partners. Nowadays, many firms use real-time data and Radio Frequency Identification (RFID) 1
technologies to track the history of their products and materials. Also, speed is a key determinant to
avoid escalation and reassuring your customer audience firms often indicate this as reacting
proactively (Kumar & Schmitz, 2011). In this thesis, I investigate which tools and procedures
automotive quality managers use to deal with product recalls. Failure Modes Effect Analyses (FMEA)
and Root Cause Analyses (RCA) are often used in practice to decide which products need to be
recalled and how this should happen (Kumar & Schmitz, 2011). Afterwards, lessons learned schedules
are composed to work on continuous improvements and avoid recurrence of the product defect.
In summary, this thesis investigates the product recall policies of automotive firms and their
learning outcomes. How can automotive firms increase their learning capabilities before, during and
after a product recall? By conducting 10 interviews of R&D and quality representatives of automotive
firms, I tried to gain a better insight in what a product recall is, when firms decide to conduct a
product recall, how the procedures look like and how firms are able to learn from it. Nonetheless,
there is definitely a lack of research concerning the topic of product recalls in the automotive industry,
especially in a Belgian automotive industry context. The domain of product recall procedures and
learning from failures in the automotive industry is rather underexplored, whereas there is an
extensive amount of literature surrounding successful product launches in the automotive industry.
Therefore this thesis wishes to contribute on the articles of Haunschild & Rhee (2006) and Wix & Mone
(2007) in order to complete the missing gaps and to analyze whether their results are also
reconcilable in a Belgian context. The value for this thesis in practice is to support and advice
automotive firms which steps can be taken to avoid future product failures and recalls and to clarify
what needs to be done in the case of a product recall. Furthermore, this thesis hopes to be useful for
academic practitioners in the framework of organizational learning, innovation, product failures and
product recalls. Literature states that organizational learning enhances the financial performance of
automotive companies (Argote & Miron-Spektor, 2011) and reduces the number of (fatal) accidents
(Haynes, Pine, & Fitch, 1982) in the case of a product recall. Findings of the interviews will be
summarized and conceptualized in 2 models that can be found further on in this thesis.

1 RFID: traceability tool that identifies and tracks tags by the use of electromagnetic
waves and that is designed to track the history of a certain product can be seen as a
substitute for QR codes and traditional barcodes FMEA: schedule that is used to
summarize all potential problems and corrective actions when developing or testing the
product
RCA: analysis that is made to determine the main cause of a problem or technical failure

2. Literature study

Product failures, defects and recalls

Within the product development process, product failure relates to an unforeseen product defect
resulting in customer complaints and dissatisfaction (Chan, Ip, & Zhang, 2012). Not all product
failures influence firm learning: less severe product defects are more likely to reoccur because they
are quickly overlooked and because reparation has become more like a routine. These defects are
easy to fix and in many cases, customers wont be even aware of the problem when using the
product. In the latter case, it implies a hidden product defect. An example of such a hidden
product defect could be a snapped cable in the electric circuit of the car. A more noticeable hidden
product defect could be a leakage in the fuel tank: the driver will notice or be alerted that gasoline
is dripping out of his fuel tank. Product recalls on the other hand can be viewed as a manifestation
of the firms failure to provide a safe product to the market (Kalaignanam, Kushwaha, & Eilert,
2013). Product recalls are characterized by containment actions (Kalaignanam, Kushwaha, & Eilert,
2013) and are considered to be more severe than product defects that are not rated as critical
and thus do not endanger customers health.
Literature surrounding product failures, recalls and incidents is rather scarce. A logical
explanation for this is that firms dont talk about their bad sides because it can harm their
reputation and customer reliability; they rather want to share their success stories (Haunschild &
Rhee, 2006). Therefore, talking about automotive product recalls and failures is a very sensitive
topic. Automotive firms create a climate of secrecy and intimacy when discussing product recalls
and failures which makes it hard to get a complete picture of how the product recall and failure
procedures look like. Mainly the research of Haunschild & Rhee (2006) and Wix & Mone (2007)
helps us to get a better understanding of how automotive firms deal with product recalls and the
related reputation damage.
Rupp argues that we can make a distinction between voluntary and forced product recalls,
also referred to as organizational and governmental product recalls. Almost all recalls in practice
are voluntary, except for some peculiar cases where companies experience an escalation of
commitment (Rupp, 2004). Escalation of commitment arises when organizational decision
makers maintain commitment to losing courses of action, even in the face of quite negative news
(Sleesman, Conlon, McNamara, & Miles, 2012). Voluntary product recalls are more likely to enforce
learning benefits because they lead to defensive responses from external mandates. Companies
with voluntary product recalls have the ability to learn from defects that could follow after solving
that particular defect. Unlike the approach of automotive companies who refuse to conduct product
recalls: they seem to react to external mandates just as required or necessary by the external
environment without taking learning benefits into account (Haunschild & Rhee, 2004).
All product recalls that occur in the automotive industry are due to safety defects. Rupp
(2004) explains that safety defects, like airbag failures, are also more costly to fix than other
defects, like heaters, defrosters and air-conditioning failures. When the organization or customers
face a defect, a decision will be taken whether to recall or not. Technicians will investigate whether

the nature of the defect is severe enough to conduct a product recall. If the defect doesnt meet
mandatory safety standards, is hazardous and perceived as a risk for the customers health, a
recall will be conducted (Rupp, 2004). Examples of safety defects are airbag failures, failures in the
braking system, the formation of corrosion in the suspension of cars, faulty designed mechanical
parts (like roller bearings), motor failing, failure in the electrical circuit and board computer
problems. Rupp (2004) also implies that the initial recall of a car model is more costly than a car
model that faced multiple recalls. While being in the designing stage, developers are often working
in an unknown area. As a result, developing a new car type is very risky in terms of adopted
technologies, customer attraction and functionality (Rupp, 2004). An initial product recall is thus
more likely to cost more because a lot can go wrong just after launching the product. Besides,
there are a lot of improvements to be made. Therefore, a lot of testing and market research needs
to be done and a proper prototype needs to be developed before launching the product to avoid
product failure.
How well a safety defect is defined, determines the degree in which the firm has to perform
or self-regulate. If the safety defect is narrowly defined, only few vehicles will be seen as unsafe
and the following safety measures by the company are limited (Tobin, 1982). As a result, the
probability on detection of later product related failures is lower than by firms whos safety defects
are defined broadly. Car manufacturers who are determined that a defect exists and are more
willing to conduct a recall, have the ability to behave more flexible (Tobin, 1982).
Nonetheless, Chen, Ganesan & Liu (2009) recommend to act proactively once a safety
defect is discovered by customers, dealers or the organization itself. Companies can choose to treat
customer complaints proactively or reactively. If the firm uses a proactive strategy towards
customer complaints, they will frequently consider withdrawing their products from the market
right after the customers identified the defect while companies with passive strategies try to fix the
defects of their product more discretely often without recalling products. Research suggests that
proactive strategies have a negative impact on the value of the firm, because institutional investors
think that the product-harm crisis is sufficiently severe to withdraw their products to reduce any
additional financial losses. A product-harm crisis is related to any safety defect that endangers
the physical or mental health of customers which can lead to severe injuries or even deaths. Less
reputable firms are more likely to use proactive recall strategies (Chen, Ganesan, & Liu, 2009).
Another study of Kalaignanam, Kushwaha & Eilert (2013) suggests that if the magnitude of
the recall increases, the probability of future injuries and recalls decreases. There is also a positive
relationship between the amount of the recall and the product reliability. This relationship is
stronger if the company has higher shared product assets and weaker for brands with higher prior
quality. So the challenge for an automotive company is to fix their product reliability by recalling all
products related to a defect after the identification of the defect. Nonetheless, sometimes it is hard
to make a distinction whether an injury or death is attributed to a human mistake or a vehicle
defect. Consequently, firms should understand the risk of the harmful products towards society and
defend the decision to recalling products (Wix & Mone, 2007).

Product recall procedures

Wix & Mone (2007) suggest that there are 5 steps that lead to a successful product recall: selecting
the most appropriate communication tools, making the recall easy for the customers, getting the
notification right the first time, respecting and complying global jurisdictions and monitoring the
progress of the recall. The following product recall procedure can be constructed after the
occurrence of a safety defect by combining research of Wix & Mone (2007) and Smith, Thomas &
Quelch (1996):

Safety violation caused by a

product defect resulting in (fatal)
accidents

Define which products are affected

with the product defect

Before the

Announce

the

product

recall

Conduct the product recall,

identify the cause of the defect
and quickly provide full and honest
information to the customer

During the
Construct a containment action
and stop the production

Set up procedures of learned

experiences in the past to make
adjustments and fix the defect

Provide a solution and

After compensation
the product
to the customer

Monitor customer satisfaction

reassure customers and
stakeholders

and

Managers should build long-term relationships with customers and dealers and deal effectively and
quickly with everything that jeopardize these relationships (Smith, Thomas, & Quelch, 1996). As a
result, procedures have to be constructed to encourage a fast and clear approach in the case of
threatening product recalls. Saturn for instance, was able to design a successful product recall
policy: every customer that was in possession of a Saturn car with a defect was contacted
personally that the car had to be brought back to the car dealer. The time between defect
identification and fixing was extremely fast. Saturn used an advertising campaign of this product
recall to create new opportunities and to share their success stories. After a product recall, it is
important to monitor customer satisfaction and reassure stakeholders (Smith, Thomas, & Quelch,
1996). Following Smith, Thomas & Quelch (1996) a senior recall manager should be appointed
together with a response team of technical engineers, business managers, retailers and
distributors. Their job is to deal with product recalls on a daily basis. The group has to be diverse to
encourage complementarities. Those are collaborations with the aim to achieve a win-win situation
by sharing knowledge, resources and capabilities (Kapoor & Furr, 2015). As for the nature of
product recalls, they are subdivided into full product recalls, selective recalls, a repair or retrofit
offer, an optional recall or a change in the production and distribution of the product. Also a
compensation has to be foreseen for dissatisfied customers who somehow missed the
announcement of the product recall (Smith, Thomas, & Quelch, 1996).
Companies who announce a product recall should also convince customers to bring their
product back to a retailer, dealer or distributor. Therefore it is important to communicate as much
information as possible to the customer (Smith, Thomas, & Quelch, 1996). Organizational learning
takes place when firms manage to learn from past product failures and improve the product
recalling process (Wix & Mone, 2007). The means within firms achieve economic growth and
ensure firm survival lies in their ability to innovate (Kiziloglu, 2015). In todays society,
organizations need to adapt to the changing environment, observe successes and failures in the
past, identify and correct past mistakes, anticipate and deal with threats, apply incremental or
radical innovation and have the advantage in competition (Kiziloglu, 2015). So in order to change
and apply innovation effectively, organizations have to be able to learn from their previous
experiences (Kiziloglu, 2015).
Firms who conducted voluntary product recalls in the past are tended to perform better in
the case of future product failure (Wix & Mone, 2007). So many firms only think about the
downsides of product recalls: it affects customer reliability and harms the reputation of a firm
through bad media attention. Moreover, if the firm doesnt initiate its product recall efficiently it can
lead to reduced profits and damage to the products brand. How firms deal with product recalls
differ from firm to firm. Many automotive firms choose to replace, refurbish or retrofitting the
harmful product. It is generally assumed that safety of the customer should be priority number one
while developing a new car. If a product contains a defect, it needs to be redeveloped immediately
after the product recall. Afterwards, manufacturers should check if the product meets all regulatory
requirements. If all regulatory needs are met, avoiding product liability becomes paramount.
Eventually, manufacturers wish to bring all collateral damage towards reputation and goodwill to a
minimum. Informing customers about the risks of the product and introducing corrective measures

for the affected customers are the most important steps to conduct an efficient recall. In the case
of a threatening recall, agreements and protocols should be made to conduct product recalls
swiftly. Hereby lessons from previous product recalls should be taken into account. Finally, it is a
must to know the composition and properties of products and where they are distributed. This
enhances the speed and efficiency of the product recall (Wix & Mone, 2007). Direct product recall
costs include injury compensation by end users of the product, emotional compensation for
relatives of a deceased end user, production of replacement parts, reparation of the defect,
markups charged by intermediaries in the supply chain, sending costs of letters and e-mails to
warn the customers and suppliers of the product defect and legal fees (Hill & McGonigle, 2004).
Nowadays, companies outsource a lot of manufacturing and designing activities to partners
and suppliers. Especially automotive manufacturers involve their suppliers in the product
development process and encourage2them to report early stage product defects and eliminating
quality problems. For accountability reasons, the newer trend is to compose contracts for quality
cost sharing when facing product recalls. Of course, clear and consistent agreements have to be
made to experience mutual beneficial effects (Chao, Iravani, & Savaskan, 2009).

To

ensure an efficient information flow throughout the supply chain, firms have to use certain
communication and software tools. Especially in the case of customer or supplier complaints, it is
vital to have tools in place that can track and identify product defects rapidly. A very familiar
procedure for handling customer and supplier complaints is called the 8D 4-procedure or 8D-report.
This is a standardized procedure installed by the German Association of the Automotive Industry
(VDA) used to identify problems, product defects and complaints and their preventive and
corrective action plans. Within this procedure, a team will be appointed to deal with the product
defect. They are responsible for the containment actions of the defected products that needs to be
done within the 24 hours (Behrens, Wilde, & Hoffmann, 2007).

24 8D procedure: standardized procedure consisting out of 8 disciplines to solve a

problem effectively and is frequently used in the automotive industry to fix
product defects
7

Learning
Learning is the process of creating new insights based upon earlier experiences and applying those
insights into conceptualizations, plans and actions (Khanna, Guler, & Nerkar, 2016). Also, learning
relates to any process that is initiated to cause a certain improvement in the way of thinking or
knowledge development (Argyris & Schn, 1996). Furthermore, there are several definitions of
Organizational Learning, but in general it reflects the effort of creating organizational knowledge
and theorizing the methods so that this knowledge can be managed in practice (Kiziloglu, 2015).
Organizational learning is a change in the organization based upon experience (Lorenz, 2014). In
fact, research concerning organizational learning doesnt directly measure changes in behaviors or
cognitions, instead it investigates whether experience systematically changes organizational
processes, routines or outcomes (Lorenz, 2014). Organizations primarily learn by finding a solution
after getting feedback from the environment. Both the internal environment (the organization) as
the external environment (suppliers, customers) are resources for valuable feedback. A study of
Khanna, Guler & Nerkar (2016) suggests that failures should be reported internally instead of
externally. As for automotive manufacturers, aftermarket customers may not be confronted with
manufacturing defects: these should already be identified and fixed within the supply chain.
Learning can also result in new innovative solutions and improvements. To learn effectively from
product failures, it is important to keep the following in mind (Khanna, Guler, & Nerkar, 2016):

C
,
d
I
e
r
t
k
u
o
c
n
y
f
v
m
w
lV
a
h
iff
s
p
b
g
A
ffi

The way to effective

learning

Both the Resource-Based View (RBV) as the Knowledge-Based View (KBV) mention that some firms
outperform competitors because of effective knowledge acquisition which is the main source of
obtaining a sustainable competitive advantage. Still, firms not only focus on acquiring and
developing new knowledge, they also leverage existing knowledge by applying this knowledge
inside the organizations processes. The KBV states that best practices and continuous improvement
thinking needs to be integrated in the organization (Yu, Chen, & Nguyen, 2014). Within the New
Product Development Process (NPD), firms accumulate experience to make product failure and
defect identification processes easier and problem-solving processes more effective. Learning from

failures encourages decision making and implementation and the creation of unrelated, new
knowledge. It also helps to extend already existing knowledge: as the product becomes more
complex and sophisticated, firms have to take into account the learning outcomes from product
defects made in the past to build up their product to a more complete version. Besides, a lack of
experience makes it harder to identify failures and mistakes. So learning from failures makes the
firm more flexible and resistant to harmful crises: a quick recovery is guaranteed when firms are
able to do so (Yu, Chen, & Nguyen, 2014).
Very important in the process of product improvement is the performance of the R&D team,
as well as the firms commercialization skills. Both technology as market knowledge needs to be in
place to ensure the success of the relaunch of a product (Yu, Chen, & Nguyen, 2014). While
searching for improvements, managers and engineers mostly have to learn from failures in a
rational, critical way. Still, to understand the customer needs and to integrate those needs in the
product, managers and engineers have to rely on intuition and gut-feeling. This is referred to as
visceral learning. Important aspects to learn viscerally are empathy and intuition: implement
specialties in the product that ensure some sort of psychological satisfaction for the customer
(Roberts & Palmer, 2012). As for commercialization, a clear market segmentation needs to be done
based upon the several new applications of the product. Different prices needs to be charged to
different customer segments when the improved product is radically different from the original one.
So R&D engineers also need to be aware of the marketing aspect besides the technical
performance of the product (Yu, Chen, & Nguyen, 2014).
In an innovational point of view, learning can happen through experimentation and
exploring new opportunities. When there is no historical data available about a certain products
performance and properties, reliable forecasts need to be made (Khanna, Guler, & Nerkar, 2016).
In order to do so, firms have to integrate certain rules that encourage the trial-and-error way of
thinking. Technology ventures should make reliable and calculated predictions out of previously
determined wild guesses in order to reduce the gap between the predictions that were made and
the realized outcome. Speed, rigor and discipline needs to be present in the organizations working
methods in order to achieve these means (Govindarajan & Trimble, 2005). So learning by
experimentation is actually the only way to successfully launch entirely new technologies in
products or services because there is a lack of documentation and research concerning these
technologies (Khanna, Guler, & Nerkar, 2016). As a result, learning by experimentation can never
be separated from uncertainty and risk. Barriers to learn are little time to plan due to impulsive
decisions from strategic decision makers, rusty and inflexible routines and working methods,
ambiguous data gathering, a failure intolerant organization culture and irrelevant business
performance measurements (Govindarajan & Trimble, 2005).
The negative connotation of organizational failure prevents managers and engineers to
openly discuss the topic. In other words, there are certain organizational and psychological barriers
present that hinder external help. Still, this could be useful to identify the problem more rapidly
and correctly. Nonetheless, this is not the only reason preventing firms to learn effectively and
report failures and mistakes. In many cases there is just insufficient information about the root
causes of the failure or problem or there is a lack of consensus of agreeing that the cause can be
attributed to what the responsible engineer says. Besides, it is common that people formulate the
root causes of the failure in a way that benefits them. Learning from failures may also lead to

significant failure cost reductions, future failures, process improvements and reliability increases
(Khanna, Guler, & Nerkar, 2016). Failure broadens peoples mindset compared to successes. People
are often tended to follow the trajectory of their successes without exploring new valuable
opportunities that could enrich the firms knowledge. Learning by experimentation helps firms to
replace existing routines, working methods by new accurate ones. The same goes for knowledge
(Khanna, Guler, & Nerkar, 2016).
If there is sufficient research done about the properties of the product, new innovative
ideas can arise through deduction what might help engineers in developing a prototype. Small
failures do not necessarily endanger firms survival: both top level as lower level organizational
projects can result in small or big failures. Small failures may not be ignored, even if they are more
or less unnoticeable. Quick feedback is necessary to learn faster and make adjustments to avoid
further escalation. Therefore timing is an important issue when examining failure. Delayed
feedback may also mix up peoples perceptions of actions and outcomes. Khanna, Guler & Nerkar
(2016) suggest that firms should have internal tools in place to identify product failures rapidly.
Also, they argue that an increase in small failures causes a decrease in the volume (amount) of
patent technologies and an increase in the quality of the technologies enclosed into the products or
services.
More in detail, literature makes a distinction between 2 types of learning methods that are
used within the organization learning framework: experiential and vicarious learning. Experiential
learning, also called first-hand experience learning, is the process that takes place while reflecting
own experiences. Vicarious learning takes place when organizations observe the behaviors and
experiences from other organizations and are able to imitate or transform their knowledge
(Hlavacek, Maxwell, & Williams Jr., 2009). This implies that a distinction can be made between
internal learning and external learning. Experiential learning can be seen as a form of internal
learning, while vicarious learning is a form of external learning. A paper of Hlvacek, Maxwell &
Williams Jr. (2009) states that product failures are an opportunity to learn internally as well as
externally: an engineer will encounter hundreds of problems before he finally designs and develops
a successful product. Often, engineers who encounter failure try to think out of the box and thus
avoid tunnel vision. Knowledge sharing, learning and sharing information are crucial processes in
technical organizations, like automotive manufacturers, where information quickly becomes
outdated. Following Hlavacek, Maxwell & Williams Jr. (2009), strong CEO leadership is mandatory
to create a learning culture from reviewing mistakes. The ability to learn faster than competitors is
in fact the only sustainable competitive advantage (Hlavacek, Maxwell, & Williams Jr., 2009). In the
short run, firms are tended to learn more from other companys failure than their own product
failure experiences (Lorenz, 2014).

10

Learning from product failures in the automotive industry

The ability and motivation to learn from product failures depends on the magnitude of the product
recall. An effective large scaled product recall leads to a reduced number of accidents and future
product recalls in comparison with small scaled product recalls. In the case of small scaled product
recalls, firms may be tempted to dismiss the case by neglecting the severity of conducting the
product recall. Large scaled product recalls serve as catalysts to firm learning. To enhance this firm
learning, quality controls are needed to identify possible product defects. Therefore several tests
and measurements need to be taken, especially after the development of a prototype
(Kalaignanam, Kushwaha, & Eilert, 2013). So the scale and the severity of the defected products
are 2 decision criteria for firms to decide whether a product recall is preferable or not.
Still, if an examination is made about articles of how firms overcome product failure,
literature states that firms need to learn from previous incidents (Drupsteen & Guldenmund,
2014). Incidents are unwanted and unexpected events within the organization leading to safety
defects and near misses. They are likely to occur when firms arent capable learning from previous
incidents (Drupsteen & Guldenmund, 2014). Possible explanations why they keep recurring are due
to the underreporting of incidents, inability to identify latent conditions, tendency to seek a
scapegoat or political and organizational decision processes. Follow-up steps and monitoring are
often neglected after decisions concerning incidents (Drupsteen & Guldenmund, 2014). As a
consequence, LFI - Learning From Incidents - needs to be done to improve safety levels and avoid
future defects (Drupsteen & Guldenmund, 2014).
To apply internal, external and organizational learning as a whole on product development
processes, managers have to keep in mind that product failures and recalls are very common in the
automotive industry, particularly due to the more sophisticated technologies that can be found into
the options of cars nowadays. Hoffer, Pruitt and Reilly (1994) conclude that newer car models are
recalled more than older car models. The explanation for this is simple: sophisticated technology
makes the car more vulnerable to defects. Board computer problems, like a false tire replacement
message, are the most frequent technology problems in the automotive industry. So technological
defects can violate the safety of the passengers as well. An example of a technological defect that
is not endangering the safety of the customer is the failure of seat heating. This phenomenon is
more related to luxury and is not considered to be hazardous (Hoffer, Pruitt, & Reilly, 1994).
Furthermore, firms have to keep
experimenting and learning from their failures in order to understand and make sense of the
internal and external environment. This enables the firm to reduce uncertainty in its decision
making. If organizational learning is present, the firm is capable of making better, reliable
predictions towards the future. So failures have to be considered as tests, though challenges where
creativity and idea generation is needed in order to find an appropriate solution or improvement.
Performance indicators will be adjusted as the learning process from failures continues
(Govindarajan & Trimble, 2005).

As for car design,

organizational learning is unmissable to understand customers needs. It was actually the emergent
change in consumer perceptions that caused a focus on design for automotive companies (Farhana
& Bimenyimana, 2015). The aesthetic appearance of the car is one way to satisfy consumer needs
and is valued high as technologies in car designs evolved (Farhana & Bimenyimana, 2015).

11

Innovation leads to the leveraging of firms to craft new businesses and to stimulate strategic
change after rapid external changes. Also, design-driven technology is crucial to satisfy the
customer changing needs. Cars have evolved from the boxy designs from the seventies to the
prismatic, edgy shapes most cars have today (Farhana & Bimenyimana, 2015). The importance of a
personality fit with the customer seems to be almost even important as the quality and
performance of the car. The Fiat Panda for example is a car that is preferred by many customers
due to its meaningful approach rather than its functionality or stylish features. Hence, Fiat Panda
can be considered as a product with a long lifecycle: a product that still manages to satisfy the
need of the customers (Farhana & Bimenyimana, 2015). To cut costs, reduce the complexity of
electronic and assembly parts and to satisfy its customers, automotive manufacturers pay a lot of
attention to integrate modular designs inside their cars. Making the jobs of the dealers and OEM
easier creates better relationships between the dealers and the manufacturers. This is referred to
as the plug and play principle. By using modular designs, like engines or electrical circuits, products
can be used for multiple car types..

As the efficiency of distribution

systems becomes higher and as regulations and ISO-norms become more strict and sophisticated,
the frequency, costs and the global reach of product recalls will continue to increase dramatically.
The large number of product recalls and lawsuits in the automotive industry demonstrates how
undetected quality problems and related production delays can lead to huge profit losses and
reputation damage. ISO-certification concerning safety, quality and sustainability serve as
indicators for customer and supplier reliability. Nonetheless, quality is the 2 nd most important factor
that influences consumers purchasing decisions after product price (Chao, Iravani, & Savaskan,
2009). Current ISO-norms are focused on a safe usage of the tools and materials and on regular
quality inspections performed by quality engineers (Wix & Mone, 2007). After a product recall,
firms usually have to spend a lot of money to comply with the quality or safety standards (Eagle,
Rose, Kitchen, & Hawkins, 2005).

So the internal learning

process of an organization is rooted in their organization culture: the firm-specific values and
working methods and the history of the company shapes collective behavior (Gaile, 2013). As a
result, changing behavior in these deep rooted foundations of the organization is not so easy.
Managers suffer from decision biases (Govindarajan & Trimble, 2005). These biases are rooted in
the values and assumptions of the organization and determine for example whether the
organization is risk tolerant or risk averse, open or closed or whether it expects an on-hands or
patient approach by its employees (Govindarajan & Trimble, 2005).

12

Following everything I cited, the following Research Questions will be tested:

Research Questions:
1) How do automotive companies deal with product failure and recalls?
2) Which measures do automotive companies take in order to avoid future product recalls?
Central Research Question:
How do automotive companies increase their learning capabilities in the case of a threatening
product recall?

13

14

3. Methodology
3.1.

Research design

10 case studies are analyzed using the methodology design provided by Yin (2015). A cross-case
analysis was conducted to observe which measures firms take when they are confronted with product
recalls. Relationships will be sought between product failures, product recalls, learning and innovation.
The interview is chosen as qualitative research method because the topic of product failure learning
moves away from everyday phenomena and because this is one of the most reliable solutions to get
high quality answers. It is therefore important to use interviews in order to gather rich, empirical data
about the episodic and infrequent topic that is discussed in this thesis (Eisenhardt & Graebner, 2007).
The interviewees were contacted by e-mail or phone and the interviews took place in the offices and
meeting rooms of the companies. All of the interviews were conducted face-to-face. According to Yin
(2015), the interview has to contain a certain amount of integrity: the interviewer has to design a
truthful image of the interview and has to indicate whether there are any uncertainties. He may not
elaborate his own thoughts in the interview. As a result, the interviewer tried to give an honest,
transparent view of the experiences of the interviewees by e-mailing the interviewees the transcribed
versions. By doing this, they still have the opportunity to read and correct the interview for certain
misunderstandings and spelling mistakes. Evenlike, they may filter sensitive topics. In this way, the
interviewer also builds trust relationships with his interviewees (Yin, 2015).
To reduce the probability of biases, like impression management and retrospective sense
making, the interviewer has chosen to make use of a recording device in order to quote every single
word of the interviewee in a quotation table. The interviewer tried to reduce the barrier of privacy by
constructing general introduction questions with the aim to ease the interviewee. These questions are
very broad and concern the history of the company, why they like to work for the company and what
their current duties and responsibilities are. Usually, people are proud to introduce themselves which
makes the interviewee opener (McCracken, 1988). Another barrier that the interviewer tried to reduce
is the one of time scarcity: he let the interviewees pick the dates and hours and told them in front how
much time was needed to conduct the interview. As a result, the interviewer didnt experience
difficulties with time constraints. Also, highly knowledgeable managers are interviewed whom are all
related to the topic somehow. Certain managers have to deal with product recalls on a weekly basis.
The topic is thus very actual and recent to them. 10 interviews have been conducted because this
amount reduces generalization of the findings in comparison with fewer interviews. Beyond these subquestions, I also constructed a few additional questions on the moment of the interview. These
additional questions are answered in the quoted interview section.

15

16

3.2.

Research setting

The research setting of this thesis is defined as the Belgian automotive industry. The products of the
Belgian automotive industry are very diverse: transmissions, engines, tires, roller bearings, axle
stands, braking systems, exhaust systems, fuel tanks, window shields and so on. As for original car
manufacturers, there are only 3 main plants in Belgium: Volvo Cars Ghent, General Motors Antwerp
and Audi Brussels. I also contacted these 3 car manufacturers but the responses were negative
because their research centers are located abroad. In this thesis, representatives of automotive firms
that supplied OEM customers are questioned: those are the car manufacturers and garage dealers
who assemble the car components. It is interesting to observe product designs and developments and
product recall and failure policies in automotive firms because automotive firms are especially prone to
product recalls. Cars form a complex set of components that are assembled together: the likelihood
that one of these assembled components contains a defect that may lead to incidents is high.
Furthermore, product defects can result in serious safety hazards for the aftermarket customers, like
tire blow-outs, airbag failures, unpredictable seat movements, braking failures, accelerator pedal
blockages and so on. Therefore product recalls are conducted as a result of safety violations.
Aftermarket customers are protected by safety, quality and environmental laws, including ISO norms.
The safety of manufacturing employees and OEMs has been improved by certain laws as well: working
with dangerous materials (like chrome 6, lead, zinc and so on) has been restricted in order to respect
the wellbeing of employees, dealers and aftermarket customers. Besides regulations and restrictions,
aftermarket customers enjoy warranty claims in the case if they face a manufacturing defect in their
car. Also, the automotive industry is characterized by long development times and high uncertainties
concerning design and safety testing.

With

this background in mind, the design and development of cars need to fulfil certain expectations: those
of the customers and those of the regulatory institutions. Otherwise the product has the risk to turn
out to be a product failure. Severe product failures lead to product recalls. Toyota for example, was
known for their superb quality cars until their reputation collapsed in 2009 as a result of unintended
acceleration problems. The accelerator pedal contained a defect that made the car accelerate even
faster while performing the same pressure on the pedal (Harrison, 2015). Also, Toyota and Mazda had
to conduct a product recall for defected airbags that suddenly exploded in the face of the passenger.
Besides the successful product recall due to the unintended acceleration problems, Toyota car
manufacturers have a constant focus on improving quality, performance and improvement and were
the pioneers in the lean production system. This concept includes the production of high quality cars
with a minimum wastage of resources. Toyota became a benchmark for many other car
manufacturers. Besides the quality and performance, Toyota takes into account changing consumer
behavior: during the nineties more and more customers started to value self-expression and status as
crucial decision factors in the purchase of a car (Farhana & Bimenyimana, 2015). The lean production
system of Toyota can be seen as a perfect example of a vicarious learning process for many other
firms, even outside the automotive industry.

17

18

3.3.

Interviewee selection

As for the selection of the interviewees, I have chosen 10 interviewees who could tell me more about
the subject of product recalls and more specifically about the questions I composed. All the
interviewees have a background in quality and operational engineering, R&D, economics or IT. All of
the interviews took place in offices or meeting rooms of the automotive supplier company in question.
The interviews have been recorded in the Dutch language, except for interview 7 (the one of
Caterpillar) which was recorded in English. In some interviews, the interviewee has called other
persons who could help him out with the questions that were posed. In interview 3 Diederik Vanden
Eynde arranged me a meeting with Dennis de Jong, senior business analyst, who works with quality
and material engineering systems. The same goes for interview 4: Koen Ceyssens gathered 2 other
people, Stijn Moons and Thomas Weigert to help me with my questions. Stijn is occupied with service
development, while Thomas handles quality aspects and recall campaigns. As for interview 7, Jo
Torrekens arranged a meeting together with Vincent Vanhauw, purchasing supervisor of Caterpillar EU,
to tell me more about supplier quality and certifications.
Furthermore, I have contacted many other automotive firms by phone and by e-mail. I also visited 2
garage dealers. Volvo Cars Ghent, Audi Brussels and General Motors Antwerp have been contacted,
however the responses were negative. Other firms that are contacted without having any success are:
Carglass Hasselt, Auto 5 Maasmechelen and Hasselt, Van Osch BMW garage, Driessen Ford garage,
Ford Lommel Proving Ground, Ford Aachen Gmbh Research Center, Wealer Car Dealer Maastricht and
SML Genk. The topic of product failures and product recalls is a very delicate one to discuss. The car
dealers were very hesitating and directed you most of the times to the car manufacturers themselves
in Germany, Sweden or the Netherlands.
List of interviewees
Intervie
wee
1
2
3
4
5

Name
Patrik
Habets
Barend
Braaksm
a
Diederik
Vanden
Eynde
Koen
Ceyssen
s
John
Heeren

Luc
Huygen

Jo
Torreken
s
Geert
Van
Hove
Christop
he
Weerts
Pol Put

8
9
10

Company
SKF
Punch
Powertrain

Function
Senior Business
Controller
Global Quality
Director

Communicat
ion
Face-to-Face

Duration
2h:11min

Face-to-Face

49min

Scania

Quality Engineer and

Q-Team Leader

Face-to-Face

2h:05min

Facil

Service Development
Engineer

Face-to-Face

1h:16min

Tenneco Inc

R&D Manager
European Services
and Materials
Engineering
Quality Manager
Benelux

Face-to-Face

1h:05min

Face-to-Face

1h:14min

EAME Quality
Manager

Face-to-Face

1h:17min

Mazda

Senior Manager Parts

Supply & Logistics

Face-to-Face

25min

BMW

Corporate
Communications
Manager
Quality engineer /

Face-to-face

39min

Face-to-face

44min

Kautex
Textron
GmbH
Caterpillar

SAS

19

Automotive
Ghent

manager & Head of

Quality

20

21

3.4.

Data collection

I have chosen to semi-structure the interviews: in this way the answers of the respondents will be
more flexible and focused on the relevant topics. A semi-structured interview encourages idea
generation and gives the interviewee the opportunity to discuss certain topics in-depth. The principles
of Grant McCrackens book The long interview (1988) are applied when constructing the interview
guideline and the interviewing process. An open-ended questionnaire is applied to maximize the value
of the time spend with the respondent (McCracken, 1988). In-depth questions are posed to highlight
relevant questions. In the findings section, a comparison is made between some answers of the
interviewees. The differences and similarities between interviewees will be elaborated. 10 qualified
managers, of whom are all active in the automotive industry, gave the essential input for this study.
Through primary data, the empirical study tries to give a clear and representative image of
what factors managers really consider unmissable in the learning process of their organizations. All
interviews were taken in Belgian subsidiaries of automotive companies. The interviewer has composed
a questionnaire of 38 interview questions concerning the topic of organizational learning in the
automotive industry. The questions are ranked topic-wise. Topics include internal, external,
innovational, vicarious, product failure and product recall learning.
Interviewees were not influenced by the interviewer: in that way the interviewer hoped to
enable as much knowledge as possible from the interviewee (McCracken, 1988). Therefore the
interviewer sometimes jumped in with specific questions. The interview questionnaire or guideline
has the purpose to gather information to answer 2 research questions the interviewer had composed
below after a thorough literature study. All interviews took place in a business environment. Most of
the managers who are interviewed have a technical background: they have a certain experience and
expertise in the domain of quality control, business analytics or Research & Development in an
organization. To reduce the probability of age biases, the interviewer tried to pick younger as well as
older managers. Women are not represented in the interview list because only few women serve
managerial R&D functions. The interviews have been recorded and transcribed and are compared with
each other. In the interviewing process, the interviewer took notes for potential questions that fill in
relevant and necessary information that was missing in the interview guideline. Later on, the interview
guideline has been edited by these remarks. The duration of the interviews was approximately one
hour. The interview guideline can be found in the attachments of this thesis (Appendix A).
Intervi
ew
1

Company
SKF

Products

Revenues
Roller bearings

75 000 000 euros

Employees
390 (Tongeren)

Punch Powertrain

Transmissions

158 359 063 euros

Scania

5 946 871 653 euros

Facil

Trucks, busses & Marine and

industry engines
Bolts, nuts, screws

Tenneco Inc

Shock absorbers

258 798 526 euros

Kautex Textron GmbH

Fuel tanks

88 753 526 euros

Caterpillar

Heavy machinery & mining vehicles

112 362 996 euros

Mazda

Cars

3 582 468 euros

1062 (SintTruiden)
200
(Tessenderlo)
713
(Grimbergen)
240 (Willebroek)

BMW

Cars

1 524 591 669 euros

260 (Bornem)

10

SAS Automotive Ghent

Dashboards & Cockpits

374 226 601 euros

22

400 000 000 euros

328 (Sint-Truiden)
650
(Opglabbeek)
400 (Genk)

199 (Ghent)

23

3.5.

Data analysis

A software program, MAXQDA 12, is used to analyze the qualitative interview data to generate
summaries and output tables. Afterwards, I drew a formal conclusion out of the summarized findings.
All interviewees were contacted by e-mail or phone and the interview themselves took place in
meeting rooms. Face to face conversations were held to explore the world of product failure, product
recalls and organizational learning. As for the results, I have chosen to cluster quotations of
interviewees topic-wise. In that case comparisons can be made about certain statements. After the
comparison of the findings, a summary will be given based upon elements that keep recurring in every
interview. The following classification of codes is used:

All codes have been subdivided into these (sub)categories. Afterwards, I filtered the answer until only
the relevant quotations of product failures and product recalls is visible. First of all, I wanted to
compare the interviewees responses of what they understand by product failures. Afterwards, I asked
how they solve product failures and which procedures they use to recall their products swiftly. I
continued asking in-depth detailed questions about these procedures, like which products need to be
scrapped and which were considered to be the ones that could be repaired. Because ISO norms and
regulations take a dominant role when discussing product recalls, I decided to ask some questions
surrounding Belgian law, quality norms, counterfeit products and safety issues as well. Which

24

measures firms take to track the history of their components and materials is also examined. This is
very important in the process of identifying product defects. Furthermore, I wanted to discuss which
different types of product defects we can distinguish. What are examples of product defects caused by
the customer, OEM, supplier or 3rd parties? As for product recalls, I was extremely interested in the
firms experience with it, the consequences the interviewees link to it, the reasons of why firms
conduct product recalls, the specific procedures themselves and the learning outcomes that are
associated with a swiftly conducted product recall. At last but at least, I tried to give a better overview
of what product recalls really entail by illustrating cases of conducted product recalls in the past. Both
the problem is described as the improvement or solution to the problem. In this way, I wanted to
illustrate how engineers think and what needs to be done to encourage improvement thinking.
A summary of every interview apart is mentioned in the empirical findings section. MAXQDA
12 excel output tables have been collected and a summary of all interviews is given in the discussion
section. The code relations browsers and code matrix browser can be found in Appendix D and
Appendix E.

25

4.

Empirical study

4.1.

Empirical study discussion

All the relevant segments of the interviews have been coded and an analysis is made about certain
relevant issues of what the interviewees said. Similarities and contradictions are opposed to each
other. The interview quotation tables can be found in Appendix B. While discussing the results, I
used the MAXQDA 12 output tables to make clear and grounded arguments to answer my Research
Questions.
4.2.

Results

a. Product failure definition

As I compared the quotations of the interviewees when they are told to give a definition of what
product failure is, most of them replied that product failure refers to a lack of functionality of the
product in normal conditions. It can be that the product contains a defect, like corrosion or wrongly
drilled holes, but it doesnt necessarily have to be a defect. In the automotive context, product
defects endanger the customer. This is not always the case for product failures. A wrong design of
the product in question can also be a case of product failure.
Interview 2: In my opinion, a product failure concerns every defect that endangers the
functionality of a product in normal conditions.
Interview 3: In my eyes, product failure refers to defects in the product that hinders the customer
to efficiently use the product in normal conditions. Otherwise, we speak of deviations. Deviations
include measurement mistakes, design errors, wrongly drilled holes and so on. If the design says
that an axle stand can carry 6 tons, while it cant even hold 4 tons in practice, I refer to it as
product failure.
Interview 4: Product failure occurs when a product doesnt meet the functional requirements of
the customer. It can be that the product is not designed as it is illustrated in the technical
drawings. A product failure doesnt necessarily contain defects. If the nut doesnt fit in the rear
axle of the car, this could be a product failure. The wire of the nut, doesnt have to be broken. You
can still inform the customer that the product isnt correctly designed. Still, he may be given the
choice to use it anyway. Of course, if the product defect is critical, there is no way that the product
may fall in the hands of the customer.
Interview 5: If the product doesnt meet customer requirements and demands, you can speak of
product failure. They send it back from the field to us. A shock absorber that doesnt work properly
causes the car to drive rougher. In that case, you feel every bump in the road what isnt a
pleasant experience. Another product failure could be that corrosion caused a damper to drip oil
from the car. These are product failures that are noticed by the customer. They are observable.
Another example is annoying noise caused by one of our shock absorbers. The OEM will notice
product defects as well of course, but these are less severe.
Interview 7: You can view the term product failure from different angles / perspectives. Product
failure relates to any product that doesnt comply with the specifications as being drawn or
calculated in CAD models, technical drawings or calculating measures. Sometimes you are aware of
the product failure, sometimes you are not aware of it. If you just throw it into your inventory or
network while you know that a product defect is present, the customer will complain by usage of it.
In that case, it becomes a product failure. It is relevant that we communicate to our suppliers that
they never ship defected products. Thats again the proactive approach we use. We try to stop it
before it reaches our warehouses. The right practices need to be put in place to avoid the flow of
defected products. Of course, some product defects are more critical than others: you can have a
bit of rust on the components edges or a scratch on the sides. This is not a critical product defect:
it will not stop the machine from working. Or in other words, there is no product failure.

26

Interview 9: All problems that are somehow connected to the product. This problem can find its
roots in our production processes or the production processes of our suppliers.
Interview 10: Everything that Volvo sends back to us and consists out of low quality. Another
interpretation I can give to product failure is every product that doesnt fit within the original
design of the product. We dont have the time to make adjustments to every incoming product
here on the line. I think of drilling holes, screwing bolts and applying tiny nuts.
b. Product defect / failure / recall procedure
As for product defect, failure and recall procedures, quality inspections mainly work by certain
lean or structured operational processes, like the PDCA cycle of Deming, the 8D procedure, the
fishbone analysis and the construction of FMEA schedules. Automotive suppliers make use of
quality systems who support product defect detection and solution. Garage dealers can connect
their laptops with the board computer of the car and can send an error notification to the dealer.
Afterwards, he can check what this notification means and how to solve the defect by looking on
the automotive supplier or manufacturers website. Furthermore, automotive recall procedures are
characterized by preventive and corrective actions. Preventive actions include containment actions,
like clearing out the stock or stopping the production, while corrective actions are focused on
finding a solution for the defect. The latter can happen through reparation, replacement,
refurbishment or an additional compensation (in case that no suitable solution can be found in a
short timeframe). Most of the interviewees talk about being proactive by taking your own
responsibility and searching for a solution immediately after you discovered the product defect.
Besides that, most of the companies who were interviewed, work together with suppliers and
customers while encountering product defects: this could reduce a tremendous amount of time and
opens new doors for learning opportunities. Consequently, you need the knowledge of others to
look for interdependencies once you encountered the product defect. Products with defects are
scrapped, except when rework can be performed on the products. In most cases, recalled cars will
be reworked and thus repaired. All this is done to reduce the total amount of product recalls and
the PPM rate.
Interview 2: We admit the mistakes we made and go for a proactive approach: we talk to our
customers about the problem. By doing that, you build special trust relationships with your
customers and this enhances customer reliability because you came to the OEM with the problem
before he could identify it. Therefore reputation damage of the OEM is limited as well. The problem
is sneaking around somewhere out there. Therefore you have to take responsibility. This is also in
the advantage of the OEM. Media and press dont say that the transmissions of Punch Powertrain
have failed. No, they will write it down as: Mercedes has failed or BMW is conducting a product
recall. This is independent to the supplier who sold him that product. To summarize: you have to
build a strong trust relationship with your customers.
Interview 2: Every product failure leads to a Root Cause Analysis and like I mentioned before RCA
always leads to corrective and preventive actions. There are several examples of making
improvements in our products. We do this on a daily basis.
Interview 2: Our approach works as follows: if you face a defect in your car, related to one of our
transmission systems, you will go to a (garage) dealer. Suppose: youre Chinese, you bought a car
and in 2-3 years you face a defect, you will go to a dealer. The dealer will say: I will have a look at
it. Just like a doctor, he will perform a diagnose in that case. The current meaning of a car
diagnose is that the dealer will connect the car to his laptop and the car will signal what is broken
or where the defect is localized. He will give a technical notification like transmission is broke. In

27

this notification a defect code is included. The dealer has the opportunity to check our website of
what he must do if he encounters that particular defect code. So he logs in on our website: he will
search the defect code and follow the instructions that are provided there. In 80% of the cases, he
can fix the defect using this information. Whether by using spare parts (replacing the defected
parts), putting other software in the board computer of the car or in worst case scenario, replacing
the whole transmission gear boxes. Still, it can be the case that the dealer cant fix the defect. In
that case, he contacts one of our service teams in China. One member of this service team will
visit the dealer and he will try to solve the problem together with the dealer. This is how our
service after sales looks like.
Interview 2: Most of our products will be repaired. However, if something goes wrong in the
beginning of the manufacturing process, the output of the machine in question will be reduced to
scrap. In a transmission I can perform rework: I am not going to throw away 1000 euros, no, the
product will be reworked if the manufacturing process is sufficiently progressed. Spare parts can be
foreseen in that case. We dont use the cradle2cradle principle because our waste, is really waste:
you cant use it as inputs in another process. We also do remanufacturing: suppose that a
transmission part fails to work and it comes back to us. We will make service transmissions in that
case for the aftermarket. Suppose you have a car of 7-8 years and your guarantee period has
exceeded. In that case you can buy a reconditioned transmission from us at a reduced price: this
reconditioned transmission is made out of materials that are used before. This is what we call
remanufacturing.
Interview 3: VOR (Vehicle Of Road) needs to be solved. We have an international helpdesk, which
is located in Sweden. People who are really stuck in the repairing procedure call our helpdesk and
ask for help. If the helpdesk is confronted with a frequent customer complaint, like the failing of
radiators, we will be contacted to check our spare parts stock. This is a daily phenomenon.
Interview 4: For every customer Facil has a settlement within the 2 kilometers. In these
settlements, there are representative of logistics, quality and engineering. In the automotive
industry, we make use of the 8D process I dont know if you ever heard of this process before. If
there is a customer complaint, severe or non-severe, we have to follow 8 steps to solve the
problem. It begins with the identification of the problem. What caused the defect? or Why is this
customer complaining?. Afterwards, the problem will be put in quarantine. If you notice that
certain bolts are breaking while integrating them on the rear axles, we have to provide a new
good batch of these bolts within the 24 hours. This process includes a Root Cause Analysis. This is
good arranged within the automotive industry. The guys who are concerned with customer
complaints have to be entrepreneurial: they dont wait till the problem escalates before they start
to find a solution.
Interview 5: We make use of a 8D procedure where the problem is solved in 8 steps. One of
these steps includes the avoidance of problem recurrence. Corrective and preventive action plans
are designed to achieve that goal.
Interview 5: The 8D procedure is a tool to solve problems structurally. First of all, you have to
identify the problem. A Root Cause Analysis (RCA) is something that is used to determine the
cause of the problem: which component caused product defect or failure? Are the other
components affected as well or is the problem situated solely in one component? When and where
does it occur? In which cases doesnt the product defect occur? Beyond the 8D procedure, you also
have other tools to solve problems, like the fishbone analysis. In the fishbone analysis, you search
for causes of the problem. Can it be attributed to the operator or the machine? Can it be
attributed to the environment, design or process?. Afterwards you narrow the causes of the
problem: what can go wrong with the machine? Most of the times, finding a solution for the
problem is an urgent case. It can be that you have to conduct a temporary containment action. For
instance, we are going to sort components in our factory or in the depots of our customers. We are
going to sweep certain product types. The containment actions are very costly. Therefore that
companies want to keep this period as short as possible. You have to identify your problem very
accurately to identify the right cause. You have to test the product again and do different
measurements. Consequently, you need a corrective action plan: how can you solve the entire
problem without causing another defect? After a corrective action plan, you have a preventive
action plan: how can we avoid the recurrence of the problem?. If everything is solved, you
congratulate the team for solving the issue.

28

Interview 5: All products that contain a product defect that is identified before its sold, will be
contaminated. You also have certain components that can be reduced to scrap. For instance, we
make use of steel plates where technicians need to stamp a few circles. What is left of the steel
plate after the technician is finished, is residual waste that can be reduced to scrap. We take the
amount of scrap in consideration when we make calculations. We buy pipes from 6 meters. The
shock absorber measures 303 millimeters in the longitude so it would be an enormous coincidence
if we dont have scrap from the pipes we purchase. You always have scrap. In the case of a
product defect, you have unforeseen scrap. In peculiar case, we make use of rework. The extent in
which rework is possible depends on what went wrong in the production process. If a rod is sawed
10 millimeter too long, we can fix that. If a rod is sawed 10 millimeters too short, it will be reduced
to scrap.
Interview 6: If there is a big problem present within Kautex, we have a specialized team
(including me) ready to respond: they have to warn our team members, managers and directors.
Suppose that we cant deliver a certain product batch due to product defects: the quality manager
has to warn the plant manager and the headquarters. They are called together. Afterwards
someone in Bonn will take the lead and coordinate the steps that need to be taken towards the
customer. A short term solution will be proposed to him. A videoconference will follow to monitor
the effect of the solution on the customers satisfaction. We put this in a lessons learned schedule.
As for product failures we follow the 8D procedure. At first, every representative is called.
Consequently, a containment action is prepared. Then a corrective action plan is formulated to
provide a short term solution for the customer. After the corrective action plan, a preventive action
plan follows to take up lessons learned and provide a long term solution. The resident engineers
will help the aftermarket customer to implement the solution that is proposed. A quality engineer is
expected to behave flexible. It is important that the customer is supported and understood in the
problem solving process. The supplier quality engineer is responsible for identifying quality defects
of supplier materials.
Interview 6: The PDCA cycle of Deming is used to work on continuous improvements: we follow
the steps of plan, do, check and act to realize improvements which forms the base of a new
planning, doing, checking and acting process.
Interview 7: If it fails the quality control, we start a process with the suppliers to come at a
disposition or an agreement at what needs to be done with the part or component. It can either be
that we work together with the engineering group of Caterpillar and the supplier to see if there is a
possibility of deviating from the original technical drawing. Still, it could be that the specifications
of the components are not right or that our supplier gave us the wrong components with different
part numbers.
Interview 10: As for quality control, we make use of the 8D (eight Discipline) approach. We focus
both on prevention coming from a FMEA schedule and correction. If a problem on the line occurs,
we try to find the root cause through a Failure Method and Effect Analysis and try to narrow it
down and to localize interdependencies as well. Afterwards, a corrective action plan will be
formulated to find a proper solution for the problem. Volvo is especially concerned with finding a
proper solution for the problem: it is not sufficient to go the operator who made the mistake and
tell him that he may not do the same mistake again in the future. No, the mistake needs to be
solved and the defect needs to be fixed as well. Those are the requirements of Volvo Cars Ghent.
You need to answer 2 questions: Why did the defect or mistake happen? and How does it come
that no one detected the mistake or defect earlier on in the process?. Determining the root cause
needs to be done independently of the problem. We dont experience a lot of difficulties with
product defects coming from our suppliers, but still it happens. Actually, our assembly line has
never stopped rolling. Sad but true, but a main concern of the company is to keep the production
or assembly line rolling: never quit production or assembly. As for containment actions, defected
products need to be sorted from the assembly line and stock. This is done by an external company.
They will be instructed which parts are defected, which supplier is responsible and how to perform
checks to determine that the quality of other products is still unaffected.
Interview 10: In the case of a product defect or recall, we organize a meeting (pulse meetings).
We involve both Volvo as our suppliers into these meetings. Afterwards, we will check what the
problem is. How can this problem be solved? Can it be fixed by a first maintenance action or are
there multiple maintenance actions necessary? Suppose that there is a safety critical defect
present inside a Volvo car: the connection of the airbag has come loose. In that case, you will

29

immediately get a notice or warning to visit your garage dealer on the dashboard of the car. You
cannot afford people driving cars with defected airbags.

c. Regulations and standards

As for regulations and standards, automotive suppliers have to comply with certain safety, quality
and environmental related ISO norms. Following the interviewees, every automotive supplier is
expected to comply with the ISO norms. As a result some big automotive manufacturers have
specific demands that need to be fulfilled in order to be their supplier. Those demands are there
because they want to ensure high quality and to maintain their reputation. Also, the use of
hazardous and poisonous chemical materials in the automotive industry is reduced by law.
Interview 3: We deliver Scania trucks worldwide. We are ISO 9001 and ISO 14001 certified. We
expect that all our suppliers are certified with this. Of course, in some countries, like China and
Pakistan, this legislation doesnt exist. In this case, you have to do a bit more research of your
suppliers over there. Belgian law is very strict: there are several law surrounding airbags and seat
belt technologies because they are applied by using pyrotechnics. We also try to comply with the
laws and legislations of other countries. A perfect example of this is that 1/3rd of our stock is
devoted to left driving countries (Great-Britain, Australia, Thailand). This includes right steering
wheel cabins, special measured cables, the mirrors and so on. There are components that are the
same for every country.
Interview 5: Emission norms cause a focus for engineers to develop new lightweight materials. A
reduce in weight of the car causes the car to use less fuel than when original materials are used.
We are occupied with a project that concerns the development of shock absorbers that can create
electrical energy on their own. If a shock absorber absorbs energy, it stores heat. If we could
transform this heat into electricity by using an electric convertor, we could use this electricity for
other applications. Towards environmental issues, I think of the avoidance of dangerous materials
in the composition of the components, like Chrome 6 and lead. Materials that are hazardous and
poisonous may only be used in certain amounts and circumstances in the automotive industry. A
zinc coating is used for protection against corrosion. In the past, there were components that
contained such a zinc coating before technicians weld them. The fumes that come out of the
burned zinc are very toxic. This is not allowed any more. Also, lead was used in the rods of the
shock absorber. Only very little amounts of lead are used now in the rods. Those materials can be
dangerous for aftermarket customers as well as technicians and the OEM customer. When the
product reaches the end of its life cycle, it needs to be recycled. If zinc, cadmium and lead are
dumped beneath the earth, the whole environment will have medical complaints.
Interviewee 6: Concerning safety, we get audits from our sister-companies. 3 days a month they
will sweep the plant for conducting a safety inspection. The measurements they make concerns
ergonomy, incidents and accidents happened in the organization, the identification of labels
concerning safety and the safe use of tools. Like I mentioned before, Kautex organizes workshops.
As for ISO TS, we are TUF certified. Every 3 years, you need to be recertified. In a follow-up audit,
there will be evaluated how production processes improve within the 3 years. This is very intense:
the inspectors will ask you questions concerning the machine specifications, the working methods
and the quality checks. Beyond that, we also have the audits of our customer. There are yearly
visits of our 4 customers. Begin June, Renault will visit our plant for an audit. Today, Volvo was
here. Regularly they also pay us a visit for other issues.
Interview 10: Apart from ISO norms, Volvo has specific demands as well.

d. Product defect classification

There are many sorts of product defects. Product defects can be caused by OEMs, customers,
suppliers or low cost imitator companies. As for customer, he or she can misuse a car or a
component of a car by using it where it is not designed for. Still, OEMs and automotive firms have
to prove that no blame can be appointed to them because their car failed. Furthermore, automotive
products need to be reliable to be sold to automotive producers and are characterized to have a

30

highly complex manufacturing process. Therefore, defects due to counterfeit products are rather
rare because the counterfeit market is very small in size for most automotive products. Still, Scania
and SKF mentioned that they have to deal with counterfeit products while SAS Automotive Ghent
and Punch Powertrain say that they dont. So it is very product dependent. Product defects can also
come from suppliers: therefore stock checks and traceability tools need to be in place. Every
supplier needs to be recertified after a certain amount of time.
Interview 9: If an accident did occur which cannot be attributed to the inability of the driver, this
will be reported to us and we have to come up with a clear problem identification and solution.
Thorough research is done to find out the root cause of the technical defect. For example, it
happened once that a cleaning lady accidentally pushed a button in one of our BMWs which caused
the soft top roof to close resulting in the suffocation of the cleaning lady. This was an unfortunate
accident which we cannot be blamed for.
e. Product defect traceability
As for traceability tools, most of the interviewed companies, made use of RFID technologies to get
a track of the components history. It is a cost saving tool that replaces the older traditional tracking
methods, like QR laser scanning codes. Traceability is vital to check where the defect sneaked into
the product.
Interview 7: As for traceability, serial numbers may be attached to supplier parts. I think of
certain crucial parts, like engine components or full engine systems. For the small components, like
nuts and bolts, you dont need these traceability tools. Depending on the type of products, a
different type of traceability will be used to track the components history.
Interview 8: To reduce the amount of packaging waste, we make use of steel cages who travel
from factory to factory. These steel cages also have the RFID systems in place. The RFID is used
for tracking. We also have small blue boxes for the smaller parts in our warehouse: they also are
provided with RFID codes. Of course, these steel cage are unpractical to use in case if you only
have to distribute 1 unit of a small item. If this is the case, we use other distribution tools. In
summary, packaging is subjected to a continuous learning process for making improvements.
Interview 9: Every component in the car can be monitored by computer software. You can see
how many kilometers the car has driven, tire pressure, brake performance, quality of the oil filter,
etc. For every car that has been distributed we have an integrated SIM card. By using this SIM
card, we can send information to the board computer. For instance, if a car broke down, the
concession holder or garage dealer knows the root cause of the problem. He doesnt even have to
be at the location to localize the defect. The sensors and chips have send the information to the
SIM card which transfers the info back to the garage dealer. It the defect isnt fixable, a tow
trucking service will be send.
f.

Product recall experience

Not every interviewed company did have experiences with product recalls: Facil and Kautex Textron
Tessenderlo didnt have to deal with product recalls yet. The ones who had, describe the process of
product recalls as financially negative events, but with a lot of learning opportunities. Most of the
interviewed firms realized that avoiding product recalls is not always better than initiating them. A
fast, determined, proactive and problem solving approach is needed in order to start learning from
product defects and their improvements. In a company that wants to avoid product recalls by any
means necessary, escalation of the problem would arise. The companies who claimed that they
never had to conduct product recalls before, still have product recalls procedures in place in case

31

they are forced to initiate one in the future. There is a climate of secrecy surrounding product
recalls, many firms choose to keep it in the company and involve as less people as possible to
avoid reputation damage. If this is the best way to initiate a product recall is another story. Still,
companies who have more experience with initiating product recalls, will have learning benefits in
terms of product recall cost savings.
Interview 2: I have experienced 2 product recalls during my career. Yes Its something you
absolutely you want to avoid. The last product recall was initiated in 2011. Since 2011, we are free
of product recalls. As for product failures, we do have these in the field. Still, this is on an
acceptable level. Customers are aware that transmissions fail to work sometimes.
Interview 3: We deal with product recalls on a weekly basis. It can be small scale or large scale.
The last product recall we encountered included seats that were delivered by our suppliers. Those
seats were very sensitive for bumps and shocks: a pin would break inside the seat mechanism that
caused the seat to go down while driving. This surprised the customer. We immediately get rid of
the seats of that brand and sent quality reports to the supplier in question so that he is aware of
the problem. Before this supplier can talk with the dealer, he needs to make sure that there are no
defected seats among the spare parts, because we only have that seats to put in a truck.
Interview 9: Yesterday, we had a product recall concerning a ISO-fix support tool for steel plates.
We discovered the defect ourselves and let the dealers know that there was a defect present in the
steel plate supporting tools. We have send a letter to all our customers to invite them to bring their
car to their nearest BMW concession holder to repair the defect. The defect itself was active in the
BMW X3 and X4 series. Obviously, this process doesnt bring any costs for the customer: we pay
for all the costs involved in this product recall process.
Interview 10: We never had product recalls that had to do with safety violations, so our product
recalls never made the press. As for Volvo Cars Ghent, this has been the case multiple times. I
think of the big Takata airbag recall during 2010-2011.
g. Reasons product recall
The reason of why a product recall is initiated, has always to do with a safety violation: products
that contain defects that can cause severe injuries or even death to the driver. Highly complex
products, like board computer hardware connections in dashboards and transmission boxes, have a
higher probability of failing. Because transmission failure would also result in car failing, the
product defect becomes critical in terms of safety. A product recall needs to be undertaken for
this. The reason why those highly complex products fail, could be rooted in their design, their
assembling with other components or in the damaging of the product throughout the distribution
process. Other frequently recalled products are poisonous and hazardous chemical substances used
in the components of the car. If it harms or distracts the customer in a way that an accident is
more likely to happen than in normal conditions, a product recall will be undertaken for these
products as well. Interviewee 9 contradicts this by saying that most product recalls are conducted
on smaller and less dangerous components, just because of anticipation reasons: suppose that
something bad could happen with this product. Besides, people are tended to do a quick quality
check on these types of products which increases the probability of defects and failures. It doesnt
have to be the customer that complains: it can also be a technician working for the OEM.
Interview 5: I think of the avoidance of dangerous materials in the composition of the
components, like Chrome 6 and lead. Materials that are hazardous and poisonous may only be
used in certain amounts and circumstances in the automotive industry. A zinc coating is used for
protection against corrosion. In the past, there were components that contained such a zinc

32

coating before technicians weld them. The fumes that come out of the burned zinc are very toxic.
This is not allowed any more. Also, lead was used in the rods of the shock absorber. Only very little
amounts of lead are used now in the rods. Those materials can be dangerous for aftermarket
customers as well as technicians and the OEM customer. When the product reaches the end of its
life cycle, it needs to be recycled. If zinc, cadmium and lead are dumped beneath the earth, the
whole environment will have medical complaints.
Interview 7: If the product failure is critical in terms of safety, a product recall would be the right
choice for sure. Escalation of this problem needs to be avoided. If you dont conduct an efficient
recall, people might get hurt or even die due to accidents that can be attributed to that particular
defect.
Interview 8: The airbag product recall started after a fatal incident in the US which resulted in an
enormous recall of Mazda and Toyota cars. The airbag suddenly exploded in the face of the driver
which caused him to hit a tree and die shortly after the incident.
Interview 9: Actually, you have a lot of product recall campaigns for small and less dangerous
components. This has to do with being cautious: suppose that something bad could happen when
this components fails or breaks. We have to anticipate: try to localize the defects before our
customers do. We have had problems with the airbags. Still, this was the responsibility of our
supplier, Takata. On the other hand, we still have some responsibility towards the customer when
a product of our suppliers threatens to fail. We have to initiate the product recall: the cars need to
be recalled in the first place, not the airbags. Therefore, it is also our reputation that is at stake
when our suppliers provide hazardous or low quality materials.
h. Consequences product recall
As already mentioned before, most interviewees are not keen on product recalls. They are more a
necessity. Interviewees mostly link reputation damage, bad financial results and juridical trouble to
product recalls. They think of the product recall costs, compensation costs and scrapping and
rework costs. Moreover, firms also have less customers because a failure story has more impact on
the buying audience than a success story. So you also lose customers on the long run with
dropping sales as a consequence. The learning benefits that can arise from a product recall are
however not totally ignored by the interviewees. They say that every recall is an opportunity to
make improvements, to make yourself better in what you do. To achieve learning results, lessons
of the past need to be taken into account as well. It requires proactive thinking and
experimentation.
Interview 1: At first, reputation damage would be the most devastating effect. As a result, this
leads to dissatisfaction to customers and to the loss of market share. Product recalls lead to the
dissatisfaction of other customers due the bad name that has been given to the company in that
case. Obviously, when you lose market share, you lose customers and thus your turnover and
profits will be lower. Product recalls can also have a positive effect: I think of the learning effect for
the organization, but of course the negative effect is more present. Also, we try to react rapidly
while facing a product recall: emails will be sent to our customers to give them full, complete and
honest information about the reason of the product recall. Technical engineers will identify the
products while visiting customers. He or she will analyze if other products of the same product
types are affected and if the defect is severe enough, thus endangers the safety of our customers.
If yes, a product recall will be conducted. In the case of a product recall, you also need to
compensate your customers and this is very costly.
Interview 2: It has a certain positive impact if we conduct these product recalls following our eight
step procedure. We admit the mistakes we made and go for a proactive approach: we talk to our
customers about the problem. By doing that, you build special trust relationships with your
customers and this enhances customer reliability because you came to the OEM with the problem
before he could identify it. Therefore reputation damage of the OEM is limited as well. The problem
is sneaking around somewhere out there. Therefore you have to take responsibility. This is also in
the advantage of the OEM. Media and press dont say that the transmissions of Punch Powertrain
have failed. No, they will write it down as: Mercedes has failed or BMW is conducting a product

33

recall. This is independent to the supplier who sold him that product. To summarize: you have to
build a strong trust relationship with your customers.
Interview 3: For everyone this is negative. The only positive thing of a product recall is: if we
identify the defect on time, we can prevent worse. It is good for companies to conduct product
recalls when facing a critical product failure, but try to do it without them. Of course, if you have to
go to the garage dealer 4 times a month, it gets on your nerves. Even if it doesnt cost you
nothing: it wastes your time, you start cursing. After a product recall, we take lessons into account
to prevent future similar incidents. Accept your mistakes and try to work on it. If you switch
braking systems with a different pressure, you can have big troubles. As already mentioned, we
make a distinction between S,M and C-defects.
Interview 4: If there is a problem in the field which eventually leads to a product recall, it will
have a negative impact on the customer. Besides, a product recall is very costly, numbers can go
up to 100 000 euros and more. The most important negative impact for us is the loss of
reputation. The speed of reacting and coming with a corrective action plan are the biggest
determinants of conducting successful product recalls.
Interview 5: In my point of view, a product recall has a negative impact on the reputation of the
company. Reputation damage towards customers is unavoidable when conducting a product recall.
If you deliver defected products to your customers and proceed production without taking actions
to containment or improvement, the customers will consider to stop buying from you. You need to
make a new design: this costs money. It concerns short term damage: quality control that is not
functioning well. But you also have long term damage: reassuring your customers. We try to learn
out of product recalls, but I would not say that a product recall is a positive event. It is far from a
positive event. We try to compose a lessons learned schedule to avoid similar problems in the
future. Processes and working methods should be improved after putting this schedule in practice.
Interview 6: You can learn from it and you can prevent worse. Preventing collateral damage is
paramount. But like I mentioned before, Kautex never experienced product recalls. Still, I think
that there are daily product recalls in the automotive industry, however they are not published in
newspapers: they are rather kept secret. This to reduce reputation damage and costly court
sanctions. For some product recalls, I even think that it is better that we never heard of them.
Interview 7: It always starts with a negative impact. On the long run, you will learn from it
however. We try to put processes in place to prevent future product recalls and critical product
failures. A product recall is a risk that blows you out of business. You can recover from losing
customer reliability, but it takes a lot of time. And probably money as well. As for the engine
product recall, our managers had to deal with a lot of pressure: the longer it takes to deal with
product recalls, how higher the probability will be that the problem escalates.
Interview 8: First of all, you have reputation damage. This is unavoidable. Imagine that you face
a product recall everyday: it will get on the nerves of your customers. He will waste his time and
will be dissatisfied. The Takata airbag recall was the biggest product recall I ever experienced.
Interview 9: First of all, you suffer reputation damage. Consequently, it is a very costly process.
Especially for large scaled product recalls. You contribute to make a better product: you are
encouraged to make improvements. Besides this, it is a must do. You cant go around it. You may
not let the problem go to the escalation phase. The safety and health of our customers is our first
priority. We will never take risks to let people drive cars where product defects are likely to occur.
Other values of BMW are sustainability and mobility. Also, we try to outperform in driving
experience: a BMW has to be a car that is fun to drive with. People should enjoy the driving
experience of a BMW car.
Interview 10: First of all, a product recall results in a financial setback for SAS Automotive. We
dont suffer a lot of reputation damage, because customers mostly link Volvo cars to the defect,
not the dashboards or cockpits. Therefore that Volvo has so many testing facilities and testing
tools. Volvo cannot say to the customer that a supplier can be blamed for the product defect: they
have to turn up for the costs that are made as well. Besides, product recalls resulting from safety
violations are very costly: you have to compensate the customer and pay fees for the juridical
arrests. Reputation damage of Volvo eventually leads to a drop in sales which also leads to a drop
in sales for us. So a product recall is both disadvantageous for Volvo as for us.

34

i.

Learning benefits product recall

Almost all interviewees agree that a product recall campaign entails more learning benefits for the
company than not conducting a product recall in the case of a product defect or failure. Only
interviewee 3 claims that they threat product recalls the same as normal relative safe and
innocent product defects and failures. Improvement thinking needs to be encouraged within the
firm. This requires creativity and experimentation, especially when there is few knowledge about
the products properties. Besides this, lessons learned schedules need to be clear in order to be
successfully applied in practice. Interviewee 6 mentions that there is more pressure to learn when
the product recall size is large and when the product recall has been published in the press: in that
case you need to restore your reputation. Interviewee 8 claims that you need an open and failure
tolerant culture to encourage learning and improvement thinking. Working together with
customers, suppliers and other partner is therefore vital to gather knowledge for new
improvements and solutions.

Interview 3: In Scania, product failures and product recalls are threated similar. I think they both
have the same impact on learning. The biggest impact for the customer is a product failure
followed by a product recall. The customer has to bring his truck to the garage dealer. A product
recall is just a consequence of severe product failures. You have to help the customers by giving
them better and higher quality materials and products. This enhances our learning process. TIs
come from technical personnel. Product recall campaigns are conducted by higher management
personnel.
Interview 5: A product recall increases the probability that all the lessons learned are applied in
practice. The improvements that are made have a higher impact on the learning behavior of
engineers and designers. In my opinion, you can learn more from product recalls, however they
are not very common. There are only few cases were a product recall is plausible.
Interview 6: I think that product failure followed by a product recall has a higher impact on
learning if the product failure is large scaled, severe and if lives are at stake. If the product defect
is small scaled, individual replacement will take place for the aftermarket customers and a
redelivery will take place for the OEM. Also, safety violations are hard to hide: product recalls of
products that are not endangering the customers health will be conducted more discretely without
press reports I think. If there is a defect located in a heat shield, the garage dealer may purchase
the component separately. In most cases, the garage dealer will order an entire fuel tank if the
heat shield turns out to be defected. In the past, they disassembled every component separately to
identify the root cause and replace the defected component. In practice, this is not done any more.
If a bumper is broken nowadays, the lights will be replaced as well. In the field, we have only had
warranty claims. If the pump of the supplier doesnt work properly, the costs of the product failure
will be directed to him.
Interview 8: Well, I think that preventive measures are the most important thing to do when
facing product failures, defects and recalls. You should contaminate the products from the market
and prevent additional accidents and injuries. Besides this, you should act proactively to find a
solution and formulate a corrective action plan. This can happen by following the steps of Plan, Do,
Check and Act, but there are also other tools that can help automotive engineers to fix product
defects and provide replacement or spare parts. As a firm, you absolutely have to avoid an
organization culture of secrecy and denial: denying that you made mistakes and giving someone
else the blame for your mistakes. Even if your supplier did something wrong, you have to take
responsibility yourselves and react proactively to seek for a suitable solution together with your
supplier.
Interview 10: It is not the case that, because you are a supplier that only has a small contribution
to the ultimate Volvo car, you cannot learn from your mistakes and others failures or successes.

35

Mistakes and failures are discussed very openly. As for success stories, think of the lean
manufacturing system of Toyota. However the last years Toyota also suffered reputation damage
despite the big Takata airbag recall. I think that everyone can learn from each other, both in
weaknesses as strengths. Sometimes you need to think out of the box, especially for failures. In
that case you have to shift your current way of thinking. So you need to reflect your own thoughts
of what went wrong and how you can adjust those thoughts to make superior quality products.
5.

Discussion

5.1.

Summary of the findings

Product
Product
Recall / Failure Recall
Procedure
Consequences

Problem
resulting in a
product recall

Improvements made after

Product
Recalls / Failures

Learning Benefits
Product Recalls

Reputation loss
Market share
loss
SKF

Lower profits
due to higher
cost and fines

Higher pressure
to learn

Punch
Powertrain

8D analysis

Taking

Software that

Using better direct

responsibility

wasnt

materials

enhances trust

correctly

relationships

integrated

Using lightweight

with the

materials

React proactively
Involve suppliers and

Positive impact

automatic

on learning

transmission

New integrated software

system

modules to reduce the

customers
Dont let the problem
reach escalation

probability of transmission
Preventing
8D analysis
Scania

PPAP
FMEA

Suddenly

escalation of the adjusting

failure
Replacement of a pin in

Lessons learned

the truck cabins seats

schedule is applied in

problem is the

truck seats

the production and

only positive

causing the

engineering

impact

driver to sit

departments

lower than
desired

36

Reputation loss

All data of previous

Lower profits

product failures is
recorded

Facil

8D analysis

Quick reaction
towards customer
complaints

Jaw bumpers

A better calculation and

Reduction PPM-rate
Engineers learn to

that werent

protection of the rods of

prevent similar future

enough

the shock absorbers

mistakes

protected

prevented spring

against water

explosion that could result

Fishbone

and salt

in a tire-blowout

analysis

resulting in

Reputation loss

8D analysis
Tenneco
Inc.

the damaging
of the rods

8D analysis

Positive impact

Fuel tank

Use of cameras to monitor

by preventing

systems with

product defects, like

escalation of the

leakages due

drilled holes and poorly

problem

to wrongly

assembled clips

Kautex

drilled holes
PDCA analysis

and poorly
assembled
clips
Loss of

Engine

Using fire-resistant

Choosing better

reputation

explosions

materials to prevent

suppliers

when

injuries by engine

Negative impact

intensively

explosion

ST

using the

8D analysis
Caterpillar

PPAP

truck carrying
PDCA analysis

Positive impact

tons of weight

LT

37

8D analysis
Mazda

Loss of

GPS wiring

Prewiring principle which

Poka Yoke: making it

reputation

system was

made the GPS convenient

easier for your

too complex

to install and integrate in

customers by

for the dealer

the car due to a modular

reducing the

system: the garage dealer

probability of failing

can make no mistakes

of the integration,

concerning the plugging

assembling and

process

installation of certain

Customer
dissatisfaction

PDCA analysis

components

BMW

Loss of

TAKATA

Improvement in the

reputation

airbag failure: pyrotechnic controlled

about a more

suddenly

profitable solution

Negative

exploding

financial impact

airbags

sensors of the airbag

Proactively think

Experimentation is

PDCA analysis

desired when there is

Lessons learned,

a lot of uncertainty

preventive and

about the product

precautious

defect resulting in the

measures

product recall

Drop in sales

Assembled

Antenna was equipped

Lean manufacturing:

antenna on

with a sort of tape which

every process in the

made it cold resistant and

company needs to be

thus solved the problem

structured and

Financial setback the cockpit

fell off when
Juridical trouble

exposed to

monitored

(extreme)
SAS

8D analysis

Automotive
Ghent

FMEA

Worst Case

cold

Discussing failures

Scenario: loss of

temperatures

and mistakes openly

the only

with Volvo Cars

customer they

Ghent and other 1st

have: Volvo Cars

tier suppliers of Volvo

Ghent

Cars Ghent
Collaboration with
other suppliers of
Volvo Cars Ghent for
valuable feedback

38

5.2.

Interpretation of the results

a. Product recall procedures

The results imply that automotive firms mainly make use of the 8D problem solving process when
encountered with product recalls. Other tools that are applied by a minority are the fishbone analysis
and FMEA schedules to search for root causes of the defect and to determine corrective actions. PPAP
is used to ensure quality standards of every component after the manufacturing and before the
assembly process. Besides this, firms enhance their product improvement capabilities by applying the
PDCA-cycle of Deming. I will discuss each of these methods briefly below:
-

8D process: procedure consisting out of 8 disciplines and that is used for problem solving,
especially in the automotive and aerospace industry. Product failures and defects are

examined and adjusted stepwise (Behrens, Wilde, & Hoffmann, 2007).

Fishbone analysis: diagram that is constructed to identify product defects and failures in
an orderly manner. The diagram has the shape of a fishbone. The fishbone diagram
analysis is a quality tool that helps the analyst or engineer to search for the root causes of
the defect. The most important causes leading to the defect are mentioned in the extent of
the fishbones. It thus allows the analyst to prioritize problems and search for valuable
solutions and corrective actions to improve the defect or failure as a whole (Buglione &

Abran, 2006).
PPAP: Production Part Approval Process. This manual includes that automotive suppliers
are responsible for the design of their automotive parts. Quality checks will be performed
from the OEM whether the production parts are ready for assembly. The purpose of the
PPAP manual is to ensure and monitor product quality by checking whether all customer
engineering design record and specification requirements are fully understood by the
supplier. The automotive supplier should comply with these requirements while producing

at a certain given production rate (Munro, 2002).

FMEA: Failure Mode and Effects Analysis. Bottom up analysis wherein the engineer
inductively assesses failures to components linked with the initial failure. In that case he
gets an overview of why the whole system or product is failing. These effects are often
evaluated following the criteria of Severity (S), Occurrence (O) and Detectability (D).
Afterwards the measures of these criteria are combined to estimate the overall failure risk.
All this data is gathered in a table where every Effect is explained of every Failure Mode.
The engineer then knows where he needs to make adjustments and improvements and
which effects those improvements and adjustments have on the whole system or product

(Chen C.-C. , 2013).

PDCA cycle of Deming: Plan-Do-Check-Act schedule that allows analysts to introduce
improvements to their manufacturing, assembly, distribution and IT processes. Each step
of the cycle contains certain indicators concerning operational measures (like the PPM-rate
and work floor accident rate). In which extent these indicators are achieved is determined
by their colors green, orange or red. This is what is referred to as the traffic light system.

The PDCA procedure is mainly a tool used for quality controls (Bushell, 1992).
b. Consequences of product recalls

39

Most of the interviewed firms just want to avoid the negative impact of product recalls on their future
financial results and the loss of reputation they experience towards their customers. They more or less
take learning benefits into account resulting from successfully initiated product recalls. Indirect
product recall costs are referred to have the most devastating impact on the firms financial
performance on the long run. High indirect product recall costs result into a drop in the sales due to
reputation damage and customer dissatisfaction. Other often linked consequences of product recalls
are financial setbacks on the short run due to high direct product recall costs: costs of sending out emails, scrapping and rework costs, compensation costs and fines. Firms are extremely adverse
towards safety violations and fines that are related to these violations. Therefore the multiple testing
of materials and the measuring and recalculating of the design features. If a customer died despite a
safety violation caused by the OEM or automotive supplier, the OEM is forced to pay an emotional
compensation to the family above the normal material compensation. The interviewees that did
mention that product recalls are beneficial to achieve new and high learning outcomes, claim that
those learning outcomes increase when the product recall is initiated earlier. Engineers who experience
a lot of pressure to learn, also initiate a product recall faster. Lessons learned schedules include new
improved working methods, improved operational processes including manufacturing and assembling
and new efficient IT systems who speed up the data gathering and searching processes.
c.

Defects leading to product recalls

Product recalls are conducted when cars are perceived as unsafe and thus can result in serious
accidents. Nonetheless, most of the product recalls conducted in the interviewed firms concerned
products that were defected by wrong handling in the manufacturing/assembly process or
measurement and designing mistakes. Components that are perceived as initially unharmful and not
dangerous can also be recalled due to anticipation reasons. An example would be the false assembly
of a nut. If the nut loses grip and hits a tire, it can cause a tire blowout resulting in a crash. Another
example would be that an antenna falls of the cockpit of a car.
More complex products have a higher probability of failure because every single
component needs to be successfully integrated, installed or assembled. Therefore there are plenty of
product recalls for electronical issues, software upgrades and wiring systems. Those are the most
frequent reasons why customers have to bring their car in by the OEM.
Highly explosive or dangerous chemical products, like airbags, engines, fuel tanks and
lubrication products also have a higher probability to be recalled due to their high risk of endangering
the customers health if something goes wrong. For this reason, dangerous components have to
comply with more strict regulations surrounding quality and traceability. Regulatory institutions also
require cars to be equipped with all kind of safety tools. Examples are fire extinguishers in case of fire
or safety vests and triangles in case of vehicle breakdowns. Products having a higher probability of
failure and perceived as more dangerous are subjected to a stricter quality control than bulk products
that are perceived as less dangerous.

d. Improvements made after product recalls

40

One of the main objectives of automotive suppliers is the use of qualitative materials in their
production processes. Therefore they pick ISO-certified suppliers to purchase their materials.
Preferably they choose cheap suppliers, but this is very firm specific. Volvo Cars Ghent has more a
focus on price over quality. Scania on the other hand rather chooses quality over price. Anyways,
choosing another supplier can result in working with better (direct) materials which also will be
reflected in the finished product.
Furthermore, the trend is that the automotive industry has a focus on using lightweight,
stronger and safer materials. Making the car lighter in weight enables engineers to work with fuel
efficiency and they have the ability to gain more aerodynamic power which will make the car faster. In
addition to steel and aluminum, carbon and other plastic products are far more used. While being in a
crash, carbon will protect the driver and passengers more than steel or aluminum will.
Since engineers implement a lot of electronics in a car, the integral electric circuit of a car
becomes more and more complex. Both hardware as software modules are evolving. This requires
customers to bring their car in for maintenance and garage dealers to do software updates. Many
Japanese engineers work with the principle of Poka Yoke. This means that automotive suppliers make
it easier for the garage dealers and OEMs to create a modular design for the electric plugins. Mistakes
cant be made anymore because every plugin only fits in one plug. This is a major improvement,
though this process always needs to be adjusted as more cables and wires are integrated into a car.
Problem solving procedures like mentioned above also lead to improved products. This can
be an adaptation of the design because of a better calculation resulting into better fitting rods, steel
plates or other components. It can also result into special checks, controls and tests. John Heeren
talked about vibration tests that lead to a better sound of the engine and the exhaust system in Ford
cars. He was responsible for these vibration tests in the past. The instability of the Scania truck seats
was another example that was solved by recalculations and testing.
The focus of automotive suppliers on safety requires engineers to know a lot about the
pyrotechnics within an airbag and working with fire resistant materials to reduce the probability of
explosions in engines and fuel tanks. Those parts are equipped with special safety mechanisms. As for
the manufacturing process, quality checks can be performed by personnel as well as cameras.
Cameras are way more efficient to identify defects, but arent so flexible because they act according
the programming codes: they cant identify all product defects. Testing needs to be done in order to
make improvements.

e. Learning benefits product recalls

41

Product recalls learn firms to behave proactively and to engage people to search for solutions and
improvements. Getting everyone involved is a must to gather new knowledge and to extend firm
specific or tacit knowledge. Most of the interviewed automotive suppliers are open to share their
knowledge and work closely together with their customers and suppliers. Product recall experiences
also learn firms to conduct product recalls faster and more efficiently. Therefore all previous
experienced product failures and recalls should be documented to avoid similar made mistakes in the
future. Experience also enables firms to choose better suppliers and identify more profitable
customers. Another benefit that arises from a firms experience is the ability to successfully implement
lean and structured problem solving procedures. Consequently, it is hard to tell what the benefits of
product recalls are when firms never really experienced them.
Lessons learned schedules should be constructed after product recall campaigns have been
initiated. They have the aim to implement improvements on the work floor. Both the engineering as
manufacturing department should take these lessons into account and behave accordingly.
Not every product failure is worth a product recall. If the product defect isnt noticeable for
the customer, it isnt worth the effort. Still, admitting that you did make mistakes increases the firms
trustworthiness and credibility. It is even better for firms if they immediately search for help and are
trying to find a solution for the problem. Avoiding escalation of the problem is a major concern of the
firm at that point.
When there is a lack of data about the product defect, experimentation is the only method
to come up with new creative solutions. Out of the box thinking can be very useful: new untouched
areas can be explored which enable firms to be innovative. A trial-and-error approach can be
frustrating for the practitioners, it still can lead to extraordinary results. Applying cold resistant tape
on the Volvo antennas was an improvement that resulted out of experimentation methods.

5.3.

Linkage with the Research Questions

42

a) How do automotive companies deal with product failure and recalls?

Automotive firms mainly use structured systems to deal with problem solving issues concerning
product defects and product recall campaigns. Corrective and preventive actions are both included in
8D procedures, fishbone analyses, PDCA routines and PPAP quality checks. Being proactive and asking
help from your suppliers, customers and other involved stakeholders is necessary to successfully
identify the root cause of the defect and implement those corrective and preventive actions. Product
failure correction and product recall campaigns should be initiated very fast after the product
identification: it may not reach escalation. Automotive suppliers should immediately undertake actions
to determine which product types are affected and the scale of the product recall. Furthermore,
automotive suppliers have to let their customers and suppliers know that there is a defect present in
their product. E-mails will be send to the garage dealers and concessionaires who will contact their
customers to bring their car in for maintenance. The process of contacting your customers should also
be initiated very fast to avoid any collateral damage and customer dissatisfaction.
b) Which measures do automotive companies take in order to avoid future product recalls?
Automotive suppliers try to avoid product recalls by manufacturing and assembling high quality
products. In the automotive industry, suppliers and OEMs need to comply with a lot of regulations and
ISO norms concerning safety, quality and environment. Every component needs to be thoroughly
tested on hardness, elasticity, cold and heat resistance and material fatigue. If a certain component
fails the quality control, it will be reduced to scrap in most of the cases. Still, if a defected product
passes the quality control, OEMs may complain and send the product batches back. In this case, a
solution have to be sought together with the OEM. This will occur in a pulse meeting: a meeting
wherein engineers have to come up with a temporary solution in a short timeframe, like within 24
hours. Furthermore, OEMs require automotive suppliers to be ISO certified and they mostly also have
specific demands they have to comply with. In summary, the strict regulations, the multiple testing of
components and the proactive problem solving procedures that are initiated when the manufacturing
department or the OEM discovers a product defect, help automotive suppliers to avoid product recalls.
c) How do automotive companies increase their learning capabilities in the case of a threatening
product recall?
A failure tolerant culture is needed to encourage experimentation and testing. If operational personnel
dont have the space to make mistakes, they will also not learn from them. Also, you have to involve
as much people as possible in the case of a threatening product recall. Most companies that were
interviewed have rather a policy of secrecy surrounding product recalls: the information is kept in the
firms. Still, it is better to publically initiate the product recall and admit that you made some mistakes,
because it increases your reliability as a firm. Most of the firms are embarrassed to admit their
mistakes and are even worse of when they are forced to conduct a product recall with a far larger
scale later on. So dont let it reach escalation. Experimentation methods are desirable when there is
only few information available about the products properties and failure interdependencies. A risk
analysis helps you to give a better estimate of when the product is going to fail and when defects are
likely to occur. Afterwards it is important to organize meetings in order to compose lessons learned

43

schedules and integrate those in the operational IT systems. In that case, operational personnel is
aware of the product defect and its adjustment process. All lessons learned of the past should be
taken into account to build upon new improvements. The PDCA cycle of Deming enhances this
improvement thinking. Improvement thinking can find its roots in experience, experimentation,
lifestyle, sustainability and other creative sources.

44

6.

Conclusion

The aim of this thesis is to investigate how firms can increase their learning capabilities in the case of
a threatening product recall. By answering this question, a distinction can be made of how firms are
able to increase their chances for a successful product recall, before, during and after this process is
initiated.
Before a product recall
Before conducting a product recall, engineers should perform a thorough analysis of what went wrong.
Finding the root cause and determining which types of products that are defected in the production,
stock and aftermarket need to be done first. This can happen through structured problem solving
procedures, like the 8D procedure or fishbone analysis. Another frequently used process to determine
product defects happens through the construction of FMEA schedules. A FMEA schedule has the aim to
determine root causes of the defect and prioritize them. Often these product defects are composed
into a Fault Tree Analysis starting from the top and leading to the roots of the tree. Many problems
concerning safety engineering are analyzed by constructing those fault trees.
Besides, one of the most critical success factors to conduct product recalls, is the former
experience of the firm with product recalls. Firms need some expertise of what practices and
procedures work the best. Consequently, firms would be able to determine the range and types of
products that faster and with less costs when initiating a product recall.
Cooperation with customers, suppliers and distribution partners are crucial to gather as much
information from the defected products as possible. Once the responsible firm has identified the root
cause, everyone involved in the distribution, manufacturing and assembly chain will be contacted by
e-mail. Automotive suppliers include as much information as possible in those e-mails: which type of
products are affected, the range, date of when the defect is identified, all suppliers that were involved,
properties of the product, age of the products after being in use and the name of the customers who
bought a car containing those components. Also, how earlier the product recall is conducted, how
higher the learning outcome will be.

45

During a product recall

a. 8D procedure
The most common tool for dealing with product recalls is referred to as the 8D or 8 Discipline
process. The 8D process is actually a problem solving tool that consists out of 9 different disciplines
or stages. 8D problem solving processes are used to solve both product failures and product
recalls. It is an analytical and methodological tool to fix product defects and prevent recurrence.
Another similar analytical tool that is used is a Fishbone Analysis. Within a Fishbone Analysis, the
Root cause will be narrowed until the observer is focusing on the core-component that is causing
the defect. In a Fishbone Diagram, the Root Cause will be sought systematically. Is the engine
failure due to a defect in the raw materials or did the assembly went wrong? Is there a deviation in
the design due to a mistake in lab calculations? Suppose that the cause of the engine failure can
be attributed to the wrong assembly by employees. In that case, the firm has to ask themselves
which operational department is responsible for it. Is the oil filter wrongly assembled? Or did the
cylinder head cover break due to a loose screw? Afterwards, it is easier to formulate corrective
action plans and identify defected products in the market. Because almost all interviewees talked
about applying an 8D procedure approach, I will explain this procedure step by step.

46

D0:
Define
and
describe
the
problem

(6
)

D5:
Implement
and validate
permanent
corrective
actions

(1
)

D6: Prevent
recurrence

(7
)

(5
)
D4: Identify
and verify
permanent
corrective
actions

D1:
Establish
team

D7: Record
cut off date
and cut off
number

(4
)

(2
)
D2:
Implement
immediate
containmen
t action

D3: Analyze
and define
Root Cause

(8
)

D8:
Recognize
team

(3
)
(1)Define and describe the problem by answering the following questions:
WHAT is the problem?
WHEN is the problem found?
WHERE is the problem found?
WHO found the problem?
HOW (in which test, scenario) is the problem found?
HOW repeatable is the problem?
What is the REQUIREMENT?
How big is the GAP between the actual situation and the requirement?
(2)Establish a team:
Make sure that there is a sufficient amount of diversity among the team members
Appoint the persons involved and define their roles
Appoint a team leader
(3)Implement an immediate containment action:
Define which products are affected with the defect
Verify when this containment action has to take place
Define who is responsible for the success or failure of the containment action
Make sure that every defected product can be traced and thus recalled
Monitor the effectiveness of the containment action and adjust where needed
(4)Perform a Root Cause Analysis (RCA):
Construct a Fault Tree Analysis and Hazard Analysis

47

(5)Identify
-

Measure, calculate and evaluate the Failure Tree

Motivate why the measurements and tests were necessary to detect the Root Cause
Summarize the test results
and verify permanent corrective actions:
Define the corrective actions that are needed
Define who is responsible for those actions
Filter the corrective actions (resources available, amount of risk)

(6)Implement and validate permanent corrective actions:

Implement the filtered actions
Define who validated the corrective actions and when they will be executed
Monitor the effectiveness of the action that has been taken
(7)Prevent recurrence:
Define who is responsible for the preventive action plan and determine the date of
-

execution
Monitor the effectiveness of the preventive action plan

(8)Determine cut-off date, cut-off number and add remarks about the success of the corrective and
preventive action plans
b. PDCA cycle of Deming
It is important to have certain mechanisms in place to prevent severe product failures that could
lead to product recalls. One of these mechanisms that is used by Kautex Textron and Caterpillar is
the Deming cycle. In the case of a product failure firms should work on continuous improvements
by applying the steps of plan, do, check and act. The Deming cycle can be understood as followed:
Analyze
Improve

Working methods
Objectives
Risks
Resources needed

Act

Plan

Chec
k

Results
Objectives
Controlled risk

Do

Put into practise

Activities
Processes
Functions

Many authors in the quality management, like Johnson (2002) and Goetsch & Davis (2010),
analyzed how firms should make use of the PDCA or Deming Cycle. They agree that a planning
process is necessary before handling the problems. Of course, this planning process occurs after
gathering as much information as possible about the systems or process malfunctions and defects.

48

The planning process states which resources are required, what the objectives are, the working
methods that may lead to more efficient behaviour and a risk analysis of the success rate of the
new working methods. Afterwards, the actual implementation of the new working methods into
the firms operational processes takes place. The 3rd step has to do with the monitoring of the
progress made after putting those new working methods into practise. Finally, improvements and
adjustments are made accordingly to some checks that deviate with the planning design from step
1. This whole process is repeated again to create superior products with only very few and
preferably unnoticeable product defects.

After a product recall

After a product recall, lessons learned schedules are composed coming from the firm specific applied
product recall procedures. These lessons learned schedules have the aim to prevent similar product
defect cases in the future. All lessons learned from the past are taken into account and embedded into
a structured operational system in order to help the engineers to identify potential product failures and
defects. Monitoring the product recalls efficiency is necessary to make adjustments where needed.
Also, automotive firms learn more from large scaled product recalls because other product defects can
be noticed which results in the improvement of these defects as well.
6.1.

Conceptual models

6.1.1. Conceptual model I

Before PR

During

PR

After

PR

Corrective
RC
Product
defect

Monitoring

8D

FA
FME

Preventive

6.1.2. Conceptual model II

Internally
identified critical
product defect

PDC

Failure tolerant
49

Customer & supplier

Product

Firm recall
policy

Proactivity &
commitment

PPA

Experien

Accident on the road

coming from product
defect
5
FA: Fishbone Analysis

50

Learni
ng
benefi

6.2.

Assumptions, limitations and delimitations of the empirical study

The interviews have been conducted in automotive supplying companies situated in Belgium:
automotive suppliers, logistics and distribution partners are interviewed. The findings of the interviews
are not applicable for automotive industries in the rest of the world. Also, 7 interviews are conducted
with only one respondent speaking as a spokesman for the automotive supplying company in
question. This means that it is hard to measure if that particular person gives a representative answer
for the company. As already said before, the interviewees may be tended to take into account their
personal experiences rather than their firms experiences. This could give some biases in the answers.
We find more generalizable answers in the interviews of Scania Parts Logistics Opglabbeek, Facil and
Caterpillar because the other speakers complement their answers to the answers of the other
interviewees. Besides this, Facil and Kautex Textron lack the experience of conducting product recalls:
they do have procedures in place, but they never tested it in practice. Therefore it is hard to tell
whether these procedures really are as effective as the interviewees claims. Consequently, it could be
that the interviewee is withholding information. Maybe this is due that he doesnt want to share failure
stories of his company as failures can harm the reputation of the firm. The withholding of information
can be intentionally or non-intentionally. At last but at least, employees are legally bound with certain
secrecy and confidentiality policy rules. They simply may not give all kind of information concerning
the companys highly advanced processes, failures and firm specific working methods. Especially for
the topic of this thesis, interviewees are less prone to share every product recall or defect they
encountered and telling what overall impact it had on their firms performance and reliability.
6.3.

Managerial implications

In practice, operational managers and engineers should involve customers, suppliers and other
stakeholders into the product defect identification and solving process. Being proactive and searching
a solution for the problem together is necessary because a firm at his own doesnt have all the kind of
information of the manufacturing, assembly and distribution processes of the product. Therefore
meetings should be organized in a considerable short time after a critical product defect has been
discovered. People who attend these pulse meeting should have a diversified background: technical
engineering personnel active in all kinds of domains (electronics, material composition, testing, )
have to attend such meetings in order to come up with creative solutions. Complementarity among
the members is thus needed to find an optimal solution. Besides this, the automotive industry is
characterized as a highly complex industry with a lot of suppliers and assembly partners. Lean and
structured processes and procedures must be in place to get rid of certain problems as fast, cheap and
efficiently as possible. Those procedures are based upon best practices resulting out of failures made
in the past. The 8D procedure is considered to be the most efficient approach to deal with product
recalls: almost all automotive suppliers that were interviewed uses this procedure in practice and they
find out that they really work according the firms responsiveness to product defects and recalls and
the firms avoidance of reputation damage. In case of a product recall, managers should both conduct
preventive as corrective actions. First of all, you need to prevent harmful products going out of the
firm and endangering your customers. This process also includes to recall all kind of products of types
that were sold to customers. Corrective actions need to be taken afterwards, those include searching
for technical improvements inside the products material composition or design. If less is known about

51

the root cause and fixing method of the product defect, an experimental trial-and-error approach is
needed to come up with a suitable solution.

52

6.4.

Recommendations for further research

It is hard to say in which extent automotive recalls differ from non-automotive recalls. All those
different product recalls and their procedures should be analyzed and compared thoroughly.
Furthermore, it is hard to test whether automotive supplying firms that only faced one product recall
before, reaches a lower level of reputation intactness than automotive supplying firms that faced
multiple product recalls during their lifespan. Longitudinal research needs to be done to examine those
developments over time.
7.

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8.

Appendices

8.1.

Appendix A Interview guideline

8.1.1. Introduction
Hello, my name is Rob Thys, Master student in Applied Economics and Sciences at the University of
Hasselt. First of all, I would like to thank you for taking the time to participate in this interview. For
my Master Thesis, I have chosen to investigate organizational learning behavior in
automotive firms. Therefore, Im looking forward to establish insights with you about how your
company applies organizational learning and deals with product failure and product recalls.
8.1.2. Aim of the Master Thesis and the research questions
Automotive companies sometimes need to deal with product recalls. These are due to several
factors (safety, quality defects; meeting sustainable requirements). The purpose of my Master
Thesis is to investigate the sources of these factors and the related actions the company
takes in order to reduce the probability of product recalls in the future. Also, I would like to know
more about the learning capabilities of automotive firms. How do they react to a precedent
product failure? And which measures did they take to learn from these events?
8.1.3. Interview process
The interview will last approximately 1 hour. The research questions are divided into different
categories. The research questions are open questions within a narrow topic, but with a broad
answering domain. The questions are designed in such a way that the interviewee can openly
discuss his / her knowledge about the topic. Further on, some questions will be more
hypothetically from nature: It is not guaranteed that certain events are to be found in every
company. The interview itself will be semi-structured. The goal of this method is to avoid
incomplete information, to be able to react to spontaneous comments or questions, to overthink
topic relevant questions and to gain in-depth information on the issues that are emphasized by the
interviewee.
8.1.4. Confidentiality, privacy and anonymity
Consequently, I would like to inform you that the data of this interview is collected confidentially
and can be published in a paper under an anonymous form. Beyond that, the interview will be

57

recorded, transcribed and temporarily saved for scientific purposes. The research results will
be provided to you after finalizing them. With your participation you consent with these conditions.
Do you have any questions before we start the interview?

8.1.5. General information

Name:

Working for the company since:

Function:

Turnover/sales:

Operational / strategic management:

Employees:

Company name:

Headquarters:

Most important product:

Date interview:

Main suppliers:

Location interview:

8.1.6. Interview
1) Introduction
1
2
3

To start, can you give a short introduction of who you are and your role within the firm?
What are your duties and responsibilities?
Could you explain and tell me a bit more about your company? What kind of company is it?

How is it organized? (small/large scale/(in)formal/bureaucratic)

What most attracted you to your present work? How did you become involved in your current

work?
Can you give me a brief description of how your company applies innovation?
2) Vicarious, internal and external learning

Does your company use any internally occurring problems as a source of inspiration for

improving products/processes?
How do you find out about any incidents (of other companies) concerning organizational and

product failure (media, press, etc.?)

Do you try to learn from others successes, failures or both? Could you please give me an
example?
3) Learning from product failure

9 What do you understand as a product failure?

10 Which steps does your company take once product failure is discovered?
11 How do you ensure safety standards for the customer? What is the role of quality management
in your company?
12 What is your/your companys experience with product failure?
13 How does your company deal with product failure? Do you follow an internal protocol?
14 How do product failure incidents influence future products/processes?

58

4) Learning from product recalls

15 Which are the most frequent reasons for product recalls encountered in the past?
16 According to your opinion, how do/should automotive companies deal with product recalls?
17 How does your company deal with product recalls? Can you describe a process of the different
steps that need to be taken in case of a recall?
18 What is the role of regulations / standards in product recalls?
19 What are the consequences of product recalls (ranking by importance viewed by interviewee)?
Which problems could arise?
5) Conclusion/ Final questions
20 Have product failures been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
21 Have product recalls been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
22 Which has the higher impact on learning: product failure or a product failure followed by a
recall?

59

8.2.

Appendix B - Interview quotations

General information
Name: Patrik Habets

Working for the company since: 2002

Function: Senior Business Controller

Turnover/sales: 75 000 000 euros

Operational / strategic management: Strategic

Employees: 320 + 70 agencies (Tongeren)

Company name: SKF

Headquarters: Gothenburg, Sweden

Most important product / service: Roller bearings,

Date interview: 02/26/16

Transport & logistics

Main supplier(s) to the SKF Group: steel suppliers

Location interview: Tongeren, Belgium

Interview 1
1

Introduction

Rob: To start, can you give a short introduction of your company?

Patrik: Yes, of course! SKF is a multinational and market leader in the manufacturing of roller
bearings. Not so long ago, SKF has extended its product line towards drive shafts, drive belts,
lubrication products and mechatronics: this is the process of bringing electronics into the
mechanics. More in detail, mechatronics is used to conduct certain measurements concerning
product standards and quality. These measurements can be applied by using sensors or chips. To
make an illustration: while the roller bearing is spinning inside the car or machine, the sensor will
register how fast it spins, how much millimeter lubrication is present, etc. This sensor will send this
information towards a computer. This computer will give signals to the operator if something goes
wrong within the 3 days. In that case, the roller bearing will be replaced preventively. This is one
of the services that is provided which gives the company a competitive advantage.
Rob: What are the several applications of roller bearings?
Patrik: The roller bearing is used in every machine wherein certain spinning or rotating
movements are made. This can be your car, bike, shaving machine, hair dryer and so on. In
essence, a roller bearing is used to reduce friction to lengthen the lifespan of the machine in
question. Obviously, the maintenance and monitoring service as described before is not applicable
to hair dryers. The seize of roller bearings can differ as the machine is smaller or bigger. The
biggest roller bearings have a diameter of 5 meters, while the smallest have diameters of 1 to 2
millimeters. It will never be the case that a factory will have to stop its production because a roller
bearing refuses to work.
Rob: Where does your company operate?
Patrik: We have production and sales offices all over the world. Since a few years, SKF has
production facilities in India, China and Russia. Here, in Tongeren, we have the European

60

Distribution Center of SKF. This actually includes distribution of the spare parts and the service
after sales. To clarify: a roller bearing of a new bought Volvo will never come from the distribution
center in Tongeren. Only, if the roller bearing has to be replaced, the spare parts will be brought
from Tongeren to the distributor. This is the big distribution concept of SKF. In other
establishments of SKF, you will notice that storage depots are located near the factories of SKF.
These factories will deliver to the big customers who are situated into the OE (Original Equipment)
market. The Distribution Center in Tongeren however will not deliver to private customers or
garage dealers, instead it only distributes its products to distributor companies like Imes Hasselt.
Rob: What about your suppliers?
Patrik: Our suppliers concerning the roller bearing components are situated in the iron, steel and
metal industry. We try to differentiate ourselves from the competition by bringing qualitative steel
to our customers. Nowadays however, the automotive industry is very competitive and companies
are emphasizing more on price while quality comes second. SKF tries to deliver a good pricequality combination aligned with the customer needs.
Rob: Can you tell me something about your duties and responsibilities please?
Patrik: My function has a financial background and evolved throughout the years. In 2002, I
started as an accountant and focused solely on the bookkeeping aspects. Afterwards, I was
promoted to the function of Financial Manager. This was actually a very broad function and
combined bookkeeping and financial (investment) analyses with a controlling function. My
controlling function now consists in an advising, supporting role towards the management team.
Rob: Ok, can you tell me something about the total number of employees that work here?
Patrik: In total, SKF Tongeren employs 320 employees in fixed wage statutes of which 85 are
clerks (office function). 60 to 70 people are employed using an interim contract. Reasons why
they prefer to work interim: they dont want to work fulltime and thus enjoy a certain flexibility.
The expensive interim pool is interesting for SKF due to its flexibility towards the delivery process
to customers. Belgian law limits fulltime employees. These limitations can be recovered by using
interim contractors.
Rob: How is your company organized (small/large scale/(in)formal/bureaucratic)?
Patrik: SKF has a Swedish organization culture. This has certain implications for the working
methods and visions of the company. Working in a multinational means that the communication
process is more delayed than working in a small seize company. Managers have certain mandates
(budget representation): team approval is required if certain mandates are perceived as too high
or risky. How higher the manager is situated in the organigram of the firm, how higher the
mandates will be. Beyond that, SKF tries to reach a high (free) cash flow and to increase its share
price. One big threat SKF experiences nowadays is the imitation of own products. These products
are labeled as SKF products, look similar, but are qualitative inferior. These products also causes
safety hazards for customers. If SKF is faced with a victim of imitation products, a procedure will
be started to find the distribution origin. In this case the local police will be contacted. These will
perform raids if the culprits distribution centers are located. As for economic growth, SKF can be

61

defined as a mastodont with a more slow economic growth. SKF has conducted a few
restructurations, like the delayering of the organizations several layers were perceived as
inefficient for the organization. By doing this, reporting was made more easier and practical.
Rob: Do you also keep more outdated, obsolete products in stock?
Patrik: Not much, but yes we keep some of our older products in stock in order to jump in on
defects of older types of machines. Also, our products have a limited lifespan due to the formation
of corrosion and the expiration of lubrication. Most of our products will be destroyed if they reach
the age of 2 years or more because their lifespan will be too short to satisfy the customer. A
solution for these defects is the installation of a newer version of the component or the reparation
of the older type of the product, however the older components will not be available in Tongeren.
The time until the component is delivered will normally last a bit longer than in the case of the
installation of a newer component type.
Rob: Can you give me a brief description of how your company applies innovation?
Patrik: In the first place we manufacture roller bearings with the purpose to reduce friction and
warmth generation. We have seen certain waves in the past, like green energy. SKF was an
important supplier for the wind industry. The current wave focusses on products

that involves

preventive detection of defects in order to ensure safety to customers and to respond rapidly to
the deterioration of equipment and machines. This in combination with data collection techniques.
Chips and sensors however are only used in the more expensive roller bearings, you cant find
these in hair dryers for example. So the mechatronics aspect is an innovative concept that is used
by SKF. Also, we apply innovation in logistic services: we not only ensure product quality, but also
good logistics. The 3 successful components that SKF uses to reach innovation in the logistics
sector is the velocity, quality and cheapness of the delivery. Also, SKF pays attention to the weight
of the different products: a roller bearing of a big machine requires another logistic service than
the logistic service of a small sealing valves. Some automotive customers were dissatisfied because
they were left behind with large wooden pallets, while they demanded small boxes. SKF learned
from this experience to differentiate in its logistic services. Consequently, SKF invested in a fully
automatic systems which picks boxes in their depots. The current concept SKF enhances, is
described as followed: the fork lift driver will have a notice of an incoming order on its screen. In
this notice, the location of the packages and spare parts are mentioned. Afterwards, the packages
will be put in boxes, labelled and strapped. Now SKF wants to install robots and cranes that
reduces the fork lift traffic in the depots. These robots and cranes will pick packages through
automatic order picking systems and transport them to the packaging unit. In that way SKF will
increase productivity and enhance velocity. Why is this important? Because the automotive
industry requires quick package deliveries and the rise of e-commerce. SKF made a huge
investment in this new innovation. Of course this implies that a few human interactions will
disappear which leads to a reduction in the probability of human mistakes. The renewal of logistic
processes is thus a perfect example how SKF applies innovation.
Rob: Did your company ever faced product recalls in the past?

62

Patrik: There are some cases in the past that some products needed to be recalled yes, however
these cases are rare and more limited.
Rob: Could you maybe specify which products were involved in product recalls?
Patrik: Im occupied more with the activities of the distribution center, so Im afraid I cannot help
you with this question sorry.
Rob: Do you hire the trucks you use for the distribution center?
Patrik: SKF does not have its own transport network. SKF works with the bigger transport
companies

over

the

world

who

will

pick

up

the

goods

at

the

SKF

warehouses.

In the warehouses SKF uses either purchased or leased fork lifts.

Rob: How does your company learn across teams, departments, hierarchical levels (horizontal,
vertical)?
Patrik: New employees that are hired have a certain knowledge liability in comparison with the
older ones. It is evident that we hire people with a specific knowledge base. SKF requires from new
employees that they at least have finished their secondary school. Employees who are active inside
the depots, can do all tasks related to depot work. A requirement for depot employees is that they
are in the possession of a fork lift drivers license. New employees will be put in a coaching system
(mentor-apprentice). This is a sort relationship that encourages the new employee to learn the
working methods of the organization from more experience colleagues. The problem however is a
decrease in productivity because 2 people are doing the same job now. The learning effect of the
new employee will compensate this decrease in productivity because this pays off in long term.
Rob: How long does this integration process take?
Patrik: The normal duration of this mentor-apprentice relationship is 2 weeks. For some
employees who face more difficulties this timespan will be longer. Of course, if we notice that there
is no progress in the learning process of the employee, the organization is forced to break any
participation with him / her. Benefits of this mentor-apprentice system is that there will be
examined how employees can perform a more extended task package and what career
opportunities are possible.
Rob: Which tools do you use to maintain a clear and fast communication among your employees /
colleagues?
Patrik: This has been always a challenge for us and I think all multinationals face this problem to
some extent. Managers can communicate too much or too less which causes confusion and
distraction among employees.
Rob: In other words, may I presume that how more layers in the organization are present, how
higher the probability will be for communication distortion?

63

Patrik: Yes, indeed. We use e-mailing systems, signs and screens that are situated in the cafeteria
and the lunch room. General information and decisions of the staff will be projected here. The
content of these information can differ from the implementation of new processes to new safety
measurements.
Rob: Does SKF engage itself in certain group activities?
Patrik: Office employees have regular meetings with their superiors. For the warehouse employees
there are some scrum meetings to keep everyone engaged. In those scrum meetings, safety
measurements are mentioned, global and local news about SKF will be informed and so on. In the
depots, safety measures are unmissable because severe accidents are likely to happen when so
many fork lifts are driving in a small room. We also advise employees to inform on incidents of
unsafe behavior (near misses). These employees will also be rewarded.
Rob: How do you motivate your employees / colleagues to share their knowledge (tacit
knowledge)? How do you motivate your employees / colleagues to admit small/large errors they
made?
Patrik: The signs, screens and e-mailing systems I mentioned above are example of these
knowledge sharing tools. The office staff will get an introduction in many of the departments. This
is introduced because interdependency is present amongst every department. Rob: Is the
organization strategy clear to everyone?
Patrik: We receive strategy goals from the mother firm. She will present the companys mission
and vision. This will be communicated downwards throughout the organization. In SKF Tongeren
the strategy can be more specific because we take care of the logistics of the spare parts. We
translate our specific strategy into a company achievement goal plan to our employees. These
achievements are related to certain measurements, for example We want 0 accidents inside the
company. We communicate these measurements towards our employees in the organization. If
the achievement goals are fulfilled, employees will be rewarded: how closer they are to reaching
these measurements, how higher the reward will be. Strategy is thus defined by the Board of
Directors. The strategy achievement goals will be communicated to employees by the use of a
traffic light system. On the screens in the cafeteria they will see whether certain goals are
achieved, green light in this case, or if they have to work or adjust certain goals, orange or red
light in this case. Green light needs to be maintained. Company achievement goals concerns
productivity, quality and employee health.
Rob: Thank you, I think that will be sufficient for this part. Now, I am also interested in certain
issues that are situated outside the organization. A first question I like to discuss is whether your
company engages in any learning activities (e.g. R&D collaboration) with external partners
(universities, suppliers, customers etc.)? If yes, why do you engage in them?
Patrik: We have special investment programs where we deliver certain technical and logistic
innovations to the automotive industry. In order to analyze these investment programs, we
collaborate with the University of Hasselt and PXL. They help us to develop, redesign and

64

automatize certain logistics processes and models. This contributes to the analyzing of the
investments and processes in our depots and thus the making of better investment decisions. This
is also a part of our subsidy file concerning innovation. Consequently, we also have R&D centers
who operate worldwide. The nearest center is located in the Netherlands, in Nieuwegein. Here they
will analyze innovations, new products, new techniques that are used inside the relevant market.
In Belgium you have the SKF Sales office in Evere, here some engineers and technicians work on
the translation of customer requirements and needs to product development. These people talk to
the customers and try to define their needs. As a result, the products they develop are not
standardized products used for mass production, no, these are special unique products. To
summarize: UHasselt and PXL helps us to develop new logistical processes. They have a specific
cell on logistics processes. They help us with the questions we set out for them. Im going to give
one example. I already discussed that we wanted to enable automatized robot cranes in the
depots. Now, we want to adjust human interactions of the fork lift drivers with the automatized
processes of the robot cranes. We try to create a model to adjust these 2 processes: this depends
on the velocity of the processes and the distribution of the products in the depot. Certain products
will be brought to the customer in a sort of combination. It is logical to bring these products
together in the depot and not setting product A in the one end of the depot while it has to be
combined with product B which is located on the other end of the depot. So the speed has to be
adjusted for those 2 processes. This includes picking order systems.
Rob: How does your company take into account potential market threats (price fluctuations,
decrease in demand, )?
Patrik: This is more related to flexibility if I understand the question correctly. Well, I have
already discussed the availability of interim workers inside SKF. In crisis moments, like 2009 and
2012, we saw that orders decline and there is only few work to be done. In this case, we have to
say to certain interim workers that there is no work for them. Of course, this is a statute that they
have chosen themselves. Therefore their statute is more vulnerable to crises. It has ever been the
case that this interim pool has been reduced to 0 which caused that we only worked with fixed
workers. The general company activities have to move on. On the other side, if we see an increase
of the orders, we also increase the interim pool.
Rob: I recalled you mentioned that SKF has troubles concerning the imitation of their products. Is
this seen as a threat?
Patrik: Yes, of course. These criminal manufacturers deliver poor quality products which they
label with the SKF mark. So they actually reduce our market share inside the industry.
Rob: Are there certain measures SKF take to control the imitation of SKF products?
Patrik: We have a special department that is concerned about these issues yes. This department
is located in Gothenburg, Sweden. They collaborate closely with the police forces of the several
countries where SKF settlements are located and act like a sort of detective inside the market.
They collect information about certain suspicious activities and pass these information towards the
local authorities.

65

Rob: Is the imitation of SKF products allowed in certain countries?

Patrik: No, from the moment that a false product is labelled SKF, it is an illegal activity. It is
allowed however to sell the product without any label at all. Channels and logistics of these
products differ from country to country.
Rob: How do you react against actions from your competitors?
Patrik: Nowadays, it is remarkable that the little players have united themselves. In the past,
small competitors didnt have a big influence on the roller bearing market. Now, you only have big
competitors who influence prices, competitors, logistics and so on. They constantly fight SKF with
these factors. We were actually too big to set the same prices as the competition would set them.
This explains the fact that we had a big reorganization and restructuring. Now, the company is
more decentralized and we are still cutting costs. This is also why we lost some of the market
share the last couple of years.
Rob: This question maybe relates to the 3 aspects you mentioned before, no? Velocity, quality
and cheapness?
Patrik: Yes, were now considering that we made products that are too good in quality features.
Therefore the products were more expensive while the customer didnt demand such high quality
products. Therefore we are busy with matching the willingness to pay of the customer with the
needs of the customer in terms of quality features. A question that arises is if we have to use
premium steel for the production of our roller bearings or if the customer is also satisfied when we
use steel of a slightly lower quality which is x% cheaper? I repeat: We focus mainly on the
customer requirements nowadays. To conclude you can say that we used a push strategy in the
past, where we defined price and quality features, whereas now we make use of a pull strategy,
where customers define price and quality features.
Rob: You already briefly mentioned the competitive advantages of your company. Does SKF still
have other unique capabilities and resources that it uses to beat the competition?
Patrik: Well, you can add that we try to adopt customer requirements into our products. So,
creating the right product with a price that is cheaper than the competition. The innovative story
of mechatronics is an example of how we can add a differentiated service after sales to our
customers. We try not to sell our roller bearings like a commodity but like a full package that
consists of installment, delivery and monitoring.
Rob: How does your company adopt new technologies?
Patrik: Besides developing products that are demanded by customers, our innovative cells also
try to predict the future of the products that are developed. What are new revolutionary
developments that can bring us further in the future? Also how can we improve our products,
what are new developments, trends inside the market? As for our logistic services, we sometimes
collaborate with depots of spare parts of other similar logistic companies in the world. Information
is than shared about the installations and processes. We also do a lot of company visits in logistic
and automotive firms. Of course, we are not allowed to do company visits with competitors! We

66

observe the new techniques they use and try to learn how they improve their processes and fork
lift systems. We are also closely connected to our suppliers and other firms who are in possession
of big depots.
Rob:

Which

sources

of

inspiration

does

your

company

use

for

new

products/technologies/processes?
Patrik: Those are the collaborations I have mentioned earlier. We try to identify knowledge
everywhere where we can: suppliers, colleagues, competitors, educational institutes, In that way
we can create an optimal infrastructure of controlling systems, warehouse management systems
and other processes and systems.
Rob: Does your company use any internally occurring problems as a source of inspiration for
improving products/processes?
Patrik: Yes, to give an example, we have had a lot of difficulties with communication. Therefore
communication is always a topic in the management meetings we have. We analyze trust
relationships among employees and managers and try to analyze how we can send information
throughout the layers of the organization. By making communication a subject in management
meetings, we are always thinking of ways to improve knowledge sharing and reachability of the
information. We have developed a communication program that includes how we, as managers,
should communicate to other managers and employees. For instance, if we want to make
something clear, is it sufficient to project this on the screens in the cafeteria? No, a screen is never
the optimal communication tool: you cannot expect that everyone has seen it. We have
constructed a matrix wherein we mention what kind of communication needs to be communicated
and which approach needs to be applied for an efficient information transfer. Communication
screens is one example of this, it has been a clear improvement.
Rob: Are those screens only situated in the cafeteria?
Patrik: No, there are also screens in the depots and in the places where employees have their
breaks. We also use other communication channels like general announcements by operational
managers.
Rob: Ok! And how are you aware of internal problems?
Patrik: We measure certain parameters in the case of a customer complaint. So we analyze who
has done what and when. Also, pulse meetings will be arranged. What is a pulse meeting? Well,
this is a meeting wherein all problems and goals will be discussed. This relates to goals which need
to be achieved in 1 day, 1 week or 1 month. In most cases it relates to a solution that has to be
found within the 24 hours. We have executives of all departments that attend pulse meetings.
There are also pulse meetings where only department related members can participate. In the
pulse meetings, a solution has to be found concerning the relevant problem. If the pulse meeting
doesnt find a satisfying solution, the issue is escalated to the management team. These short
pulse meetings are actually very active and open. This increases the involvement of colleagues to
participate in these meetings. Topics of pulse meetings are: why did the truck leave too late, why

67

is this order not ready yet, Possible causes could be: the shipping documents were not ready
yet, the networking systems failed, Participating in a pulse meeting is short and doesnt cause
much additional workload.
Rob: How do you find out about any incidences (of other companies) concerning organizational
and product failure (media, press, etc.?)
Patrik: In our company we have a lot of technical personnel who are not trained to be sales men.
However, we just use the technical knowledge of these people as a benefit for selling products,
because they support the customer if he wants to know specific technical details. We dont seek
sales men who talk smoothly, but we rely on the technical knowledge of engineers who are
considered to go along well with customers. This gives us knowledge about what the customer
expects from our products. Of course, if there is a production failure, it is difficult for engineers to
fix this problem at the instant. This needs to be investigated in a lab. The engineers are actually
the representatives for SKF.
Rob: Are there some SKF incidences of product failure that were mentioned in the media?
Patrik: There have been incidences in the past yes, but they are very rare. Still, I cannot recall
any specific technical details.
Rob: Do you try to learn from others successes, failures or both? Could you please give me an
example?
Patrik: In the first place, we try to learn from each other in the company. We have Project
Management Offices (PMOs) where we observe projects that take place in and outside our
organization and we consider to replicate these projects from other organizations into our
organization. We are going to do a lot of knowledge sharing with our sister companies and
colleagues as well. Here topics are discussed like organization culture issues, the ageing of
employees and so on. On the one side we do visits to other companies, on the other side we try to
learn internally as I mentioned before.
Rob: What do you understand as a product failure?
Patrik: If SKF products dont perform well in normal conditions, we label it as product failure.
Products arent always used in the right ways. This can lead to product failure. Of course, the
wrong usage of a product is something that SKF cant avoid. If you use your laptop as a hammer,
instead of a computer, it will be broken. Thats obvious. Besides that, if we have a product that has
an expected lifespan of 20 years and which is broken in 2 years, we are confronted with a problem.
We are going to analyze this as a company in solution factories. This is a specific center where we
do product development (outside the standard production). Information of measures and
improvements will be collected and reported to the central solution factory. If the customer
requires a product that is broken, an analysis will be made of what went wrong and a solution will
be proposed to them.
Rob: And how do you react against product failure? What is your / your companys experience
with product failure?

68

Patrik: if a certain batch of products doesnt satisfy customers, a product recall will take place. In
that case we try to develop a new similar product by eliminating the problem that occurred. If we
look at our distribution center in Tongeren, we notice that the majority of mistakes are due to
human mistakes. For example, someone goes to a rack and picks object A while he had to take
object B. Or if someone picks 350 components while 349 are needed. To avoid these mistakes, we
work with weighing instruments. They contain a margin wherein certain deviations in the amounts
are allowed. This is actually a very intensive control mechanism but it enhances quality and
productivity. A KPI in our organization is the number of complaints from our customers.
Rob: How do you ensure safety standards for the customer? And what is the role of quality
management in your company?
Patrik: Im afraid I dont possess the information that is needed to answer this question. We in
Tongeren dont have the technical knowledge of the manufacturing of our roller bearings. We as
logistical partners are only occupied with the transport, logistics and service after sales. In the
daily life, we dont take our products out of the box to check their quality. If we visually see that
something is wrong, if there is a box that has been damaged or if oil drips out of the box, it will not
go to the customer. We will put these boxes aside and the products inside will be reduced to scrap.
As for quality management: we have a special department concerning quality and safety
standards. This department sets up special targets and translates them to the operational
management and depot workers to make improvements, generate ideas and support processes.
This is 2-sided: how can we monitor the product and where can we make improvements.
Complaints of the customers will be considered in the quality department.
Rob: How does your company deal with product failure? Do you follow an internal protocol?
Patrik: I cant answer this question because this is more related to R&D and customer services.
Still, there are certain procedures that SKF follows to conduct a product recall but I cant tell you
more about it sorry.
Rob: No problem! And how do product failure incidents influence future products/processes?
Patrik: All the failures in the communication channels will be collected in the solution factories.
Consequently, the decisions they make will lead to improvements in the certain processes. As for
product development, our specialized R&D centers will try to fix the defects after the identification
of the defect by the engineer. In this process, customer demands will be translated in quality and
sustainability measures. SKF wants to provide a full service to their customers.
Rob: You told me that you have experienced few product recalls in the past. What are the most
frequent reasons why SKF conducts a product recall?
Patrik: I would say quality defects, but I cant go in detail at this one.
Rob: According to your opinion, how do/should automotive companies deal with product recalls?
Patrik: SKF wants to profile themselves as the biggest and the best. We cant say to the
customer: you have bought something, now its up to you. There are clear instructions that the

69

product will be replaced if a certain defect is present. We use a very entrepreneurial, hands-on
approach to help the customer. We cannot allow to let our customers figure out the defects
themselves. Let me clarify: here in Tongeren, we have a specific center where we can handle
retour shipments. This includes product defects, wrong product deliveries and so on. The
customer will be credited in that case. Of course, these cases are not applicable to general
product recalls. These defective products will be subjected to a product quality control to identify
the nature of the defects.
Rob: Ok, now I want to state a more difficult question: Can you describe a process of the different
steps that need to be taken in case of a recall?
Patrik: At first, knowing what is going on, identifying the defects. Furthermore I think it is
important to avoid similar future failures and monitor progress if there are any additional product
defects that take place. However I cant help you out if you want to know the specific product recall
procedure.
Rob: So I can say that the research centers are more paying attention to the quality standards.
But can you tell me what factors define these quality standards?
Patrik: If customers send our products back, our first concern is to investigate the cause of the
product defect. Has it been damaged during transport or did the customer used the product in an
incorrect, inappropriate way?

In the research center, engineers will look to the products

properties and if they are in line with the standard product type. In the case of a general product
recall, the whole organization will search for possible causes of the product defects. A product
recall and a retour shipment is something entirely different. You can compare it with the ecommerce web shops: imagine that you bought shoes from Zalando and return your shoes with
mud on the downside. This will not be accepted by Zalando! If the product has been damaged, the
customer wont be paid back because he caused the damage himself.
Rob: What is the role of regulations / standards in product recalls?
Patrik: I cant tell you about the regulatory standards because I have insufficient information to
answer this question. You should contact R&D managers in Gothenburg or Nieuwegein for this
question.
Rob: What are the consequences of product recalls? Which problems could arise?
Patrik: At first, reputation damage would be the most devastating effect. As a result, this leads to
dissatisfaction to customers and to the loss of market share. Product recalls lead to the
dissatisfaction of other customers due the bad name that has been given to the company in that
case.
Rob: And losing profits as well I assume?
Patrik: Obviously, when you lose market share, you lose customers and thus your turnover and
profits will be lower. Product recalls can also have a positive effect: I think of the learning effect for

70

the organization, but of course the negative effect is more present. Also, we try to react rapidly
while facing a product recall: emails will be sent to our customers to give them full, complete and
honest information about the reason of the product recall. Technical engineers will identify the
products while visiting customers. He or she will analyze if other products of the same product
types are affected and if the defect is severe enough, thus endangers the safety of our customers.
If yes, a product recall will be conducted. In the case of a product recall, you also need to
compensate your customers and this is very costly.
Rob: Ok, thank you. We are approaching the end of this interesting interview. I have 3 more
questions now. First of all: Have product failures been a source of improving any existing
products/process in your company and can you tell me an example and explain what has/was
changed?
Patrik: Yes, we already discussed some of these issues. We try to create systems towards a better
identification of problems and defects. Employees are encouraged to mention their problems
concerning certain issues. The organization culture in SKF is considered to be open and based upon
trust. Potential problems need to be visible to the organization. Therefore we have the organization
culture with those pulse meetings and introducing improvements. We want to give a voice to
employees in the depots and on the work floor to create idea generation. In that case, experienced
employees can share ideas of improving their actions. This can be certain movements that can be
done in an easier, more relaxing and more efficient way. Another method of working can be more
efficient. This kind of ideas and knowledge we want to encourage.
Rob: Have product recalls been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
Patrik: SKF learns about what defects lead to product failure. How has it come so far? Couldnt we
take actions to prevent it? Which improvements can we make?
Rob: Which has the higher impact on learning: product failure or a product failure followed by a
recall?
Patrik: Well, this is a difficult question in the sense that it is very situation specific. If it is indeed a
product failure and it leads to the damage of machines and accidents, we cannot do anything else
than conducting a product recall. Otherwise we will have customer dissatisfaction and huge fines of
the government and regulatory institutions. If we see that a roller bearing is depreciating faster
than is preferable, we will usually go over to individual replacement and not putting it in the press.
Hereby, we apologize to the customer for the inconvenience and offer them a suitable alternative.
This approach is more discrete and less riskier than conducting a general product recall. I think
that the learning process is indeed more significant when you perform a product recall because the
effect on the organization is bigger. The approach of a product recall is more riskier and therefore
there is more pressure to the management team to learn from these failures and experiences. The
learning curve will increase in that case.

71

Rob: What most attracted you to your present work? How did you become involved in your
current work?
Patrik: Well, I finished my studies as an accountant and I graduated in a time where demand was
high and supply was low. I had to collect experience and had to have a broad attitude. I started
working in a banking firm in Brussels where consumer loans were sold. I was part of the
accountancy department. I had the opportunity to climb up very fast because I was ambitious,
enthusiastic and willing to learn more. With these abilities, you can count on some recognition of
your colleagues and superiors. After a couple of years however, I was asking myself if I wanted to
work there all my life. At a certain point, I realized that selling consumer loans is actually living
from the misery of other people. There were a lot of distressing situations where mothers lay there
last coins on the table in order to pay of their debt while holding their crying babies. From an
ethical point of view, I had difficulties to work for this firm. It didnt feel right working for this firm.
After a while, I was contacted by the HR manager of SKF here in Tongeren. At that time, SKF was
searching for an accountant. Since I had relative good results in the year of my graduation, they
picked me as their best candidate. Afterwards, I had a conversation with the HR manager what
went very well. Mentally, I had difficulties leaving my old job behind because I had to start all over
again: it was a tremendous change in my life. I was very interested in accounting and financial
issues so that compensated the latter. Also, my boss back then decided to leave SKF. I was given
the opportunity to take in his place. My interest for this job was high and I could use some
additional challenge. Those were the reasons why I took the job as Financial Manager and
sometime later to Business Analyst & Controller. I was wondering myself that I cant do an analysis
of the productivity of the depot if I didnt have the knowledge about the depot itself and the
working methods of the depot workers. I have obtained a lot of operational knowledge due to this
switch.
Rob: Are you closely connected to suppliers and customers of the firm?
Patrik: Of course, but this is a bit difficult because we work inter-group. Who are our customers?
Those are the SKF selling offices. As for the suppliers, we purchase a lot of direct materials. So
because Im closely connected to the financial reporting of the firm, I will be involved in the
purchase processes of SKF. This includes tendering and making invoices. Im not only collaborating
with suppliers but also my colleagues in SKF are supporting me. Im functioning as a financial
advisor, so therefore I dont have all the technical knowledge about our products. I rather use
analytical tools from investment valuation methods like calculating the Pay-Back period, Annual
and Internal Rate of Return and Net Present Value to evaluate investment and valuation decisions.
My role can be determined as a supporting and advising role. For me it is interesting to combine
the performance results of a firm with the activities of a firm.
Rob: Ok, that was the end of my interview. I thank you for your active responses and for the time
you made available for this interview. You are a very enthusiastic speaker.
Patrik: Youre welcome, for me it was very interesting as well! I wish you a lot of success with
your future career and thesis.

72

General information
Name: Barend Braaksma

Working for the company since: 2009

Function: Global Quality Director

Turnover/sales: 158 359 063 euros

Operational / strategic management: StrategicEmployees: 328 (Sint-Truiden)

Company name: Punch Powertrain

Headquarters: Sint-Truiden

Most important product: Automatic gear boxes

Date interview: 03/10/16

Main suppliers: Metal, electronic suppliers

Location interview: Sint-Truiden

Interview 2

73

Rob: Goodafternoon, Mister Barend! To start, can you give a short introduction of who you are
and your role within the firm? And could you give me a brief description of how your company
applies innovation?
Barend: Hello, my name is Barend Braaksma. Im responsible for the quality issues inside the
company of Punch Powertrain. Im also occupied with after-sales and service. This is probably the
domain where you are interested in after reading your questions. Our products are innovative: in
Punch Powertrain we make continuously variable transmission gear boxes and we offer a service to
implement this product inside the vehicles of the customer. So we are responsible for making
vehicles drivable. The CVT (Continuously Variable Transmission) concept is an automatic concept:
all our gearboxes are automatically powered. In this way, you can switch gear without using a
clutch. So the customer doesnt make use any more of gears: 1,2,3,4,5,6, maybe 7 or 8. No, the
customer is able to choose all gears without using a clutch not depending on motor speed.
Rob: So this is actually the principle of Drive, Park and Reverse?
Barend: Yes, you put the car in drive, you accelerate and the car picks automatically its optimal
gear depending on the acceleration. This is actually the main idea.
Rob: Ok, and do you make use of green energy in your gear boxes?
Barend: The CTV is introduced with the goal to drive efficiently: it tries to search its optimal
operating point with the combustion engine. We also have an hybrid variant based upon our
transmission. This hybrid transmission I think you already know the concept means that the
car can partially drive electric. With our transmission, you can drive full electric till 120 km/h, if
you reach higher speed, the transmission will switch to fuel. Also, you have several variants of
these transmissions: you can drive full electric or you can drive miled as I described in my last
sentence.

In

general we have

the AT (conventional

Automatic

Transmission), the

CTV

(Continuously Variable Transmission) and the DCT (Dual Clutch Transmission). These are the big
concepts of automatic transmissions.
Rob: In which cars are they used?
Barend: We produce our hybrid technologies entirely in Asia. At the moment, we have 23 Chinese
customers probably you dont know any of them. So we focus on the Asian market. A famous
name among our Chinese customers is Geely, also owner of Volvo. We also make a variant of the
hybrid: this is referred to as EV powertrains Electric Vehicles. This includes that you drive full
electric with a battery, so you just have to plug the plug in and youre able to drive.
Rob: This building is the Headquarters of Punch Powertrain?
Barend: Yes, our HQ and production facility is located here in Sint-Truiden. We also have a
development office in the Netherlands, near the Technical University of Eindhoven. And we also
have a production and assembly factory in Nanjing in China. In Malaysia, we have our service
department.

74

Rob: I have seen that you have a consolidated turnover of about 160 million euros, what are the
projections for next year?
Barend: Next year we plan to have a turnover of 500 million or half a billion euros. We thus want
to almost triple the turnover we generated last year. In 2015 we already doubled our turnover in
comparison with 2014.
Rob: What are your duties and responsibilities?
Barend: Im the end responsible of everything that includes quality issues. We have several
subdivisions in our department: we have a subdivision that is performing measurements in a
special climatic test chamber. We have a subdivision that is called the Quality Engineerings Club:
they think of models of how they can measure certain things. We also have a Supplier Quality
Department: they control everything that comes in from suppliers. We also have a subdivision that
is related to Customer Care. This is actually the department that handles service after sales and
customer complaints. So if a car faces a defect, they will try to find out what went wrong and will
try to make the car drivable again. And of course, as a director I have shared responsibility for
what is going on with this company.
Rob: As for service after sales, I know that SKF makes use of mechatronics. This is making use of
sensors and chips to localize a defect in their products which are roller bearings. Do you also use
such kind of technology related to defect identification?
Barend: No, this is not the case in our company. Our approach works as follows: if you face a
defect in your car, related to one of our transmission systems, you will go to a (garage) dealer.
Suppose: youre Chinese, you bought a car and in 2-3 years you face a defect, you will go to a
dealer. The dealer will say: I will have a look at it. Just like a doctor, he will perform a diagnose in
that case. The current meaning of a car diagnose is that the dealer will connect the car to his
laptop and the car will signal what is broken or where the defect is localized. He will give a
technical notification like transmission is broke. In this notification a defect code is included. The
dealer has the opportunity to check our website of what he must do if he encounters that particular
defect code. So he logs in on our website: he will search the defect code and follow the instructions
that are provided there. In 80% of the cases, he can fix the defect using this information. Whether
by using spare parts (replacing the defected parts), putting other software in the board computer
of the car or in worst case scenario, replacing the whole transmission gear boxes. Still, it can be
the case that the dealer cant fix the defect. In that case, he contacts one of our service teams in
China. One member of this service team will visit the dealer and he will try to solve the problem
together with the dealer. This is how our service after sales looks like.
Rob: Ok, thanks. And how do you define your company culture?
Barend: One of our core values is defined as entrepreneurship, applying an on-hands approach.
Take initiatives yourselves and dont wait till you get instructions to work on it. This freedom is
given in our company: what can I do better in this company? Of course, this doesnt mean that you
can do everything you want. There are certain rules you have to keep in mind. Still, employees

75

have a certain freedom in the approach of how they handle problems. A second value that is very
present in our culture is: Speak up and Listen!. If something is going on, keep your eyes and ears
peeled and dare to pose questions if youre stuck with a certain problem. We encourage knowledge
sharing: we expect that employees are interactive and see problems as challenges. Especially, as
we were growing as a company, more and more people were involved with new and good ideas. So
we need entrepreneurship on the one hand and the courage to apply these ideas in practice
Speak up - at the other hand.
Rob: Do you have a certain norm of how much time employees can work on their own ideas and
projects?
Barend: Yes, this is part of what I mentioned before. We try to give employees certain tasks, but
the responsibility of how they handle their tasks lies entirely in their hands. We dont say to our
employees: do this! No, you get a task and how you handle your task is entirely up to you. Try to
give commitment. If you say you can handle a task, you have to realize it in practice. If not, speak
with your superiors. So try to do what you promised to do. Our company culture is thus also
related to honesty. Relationships among managers and employees are based upon trust. I believe
that you can do this task, therefore you get it. Be a partner of your customer because the problem
of the customer is also your problem. This is also related to problems of your colleagues. For
instance, an employee that works on the chain that faces difficulties with following up the
components that are passing by, will have an impact on the other employees working on that
chain. Also, Challenge things and yourself: think out of the box, there is always room for
improvement. These are our core values: entrepreneurship, speak-up and listen, build trustful
relationships with customers and colleagues and challenge things and yourself to make room for
improvement. Beyond this, employees of Punch Powertrain have to work 8 hours a day: they
spend 1/3rd of their weekdays on our work floor. Therefore, it is important that employees are
happy with doing their job. Only, if employees feel good and happy in our company, we can make
synergies and useful idea generations.
Rob: Ok thanks, this already summarizes a bit how your company learns across teams,
departments, hierarchical levels (horizontal, vertical). Is there something you want to add
concerning this issue?
Barend: Yes, we have self-regulating teams. Even the teams on the lowest operational levels are
responsible for the output, for improvements and so on. There is no boss that is making
adjustments. They are the specialists, we however provide them with a framework of what is
allowed and for some issues, how this should be done, but the end responsibility is for the
employees themselves. That is something that we try to stimulate in our company.
Rob: Which tools do you use to maintain a clear and fast communication among your
employees / colleagues?
Barend: Every department has its own goals. Like in this office, you can see that the strategic
goals are pinned upon the wall. You can find them everywhere, even on the operational level. You
can find screens on the left and the right in the production facilities. More important is that we are

76

able to talk with each other and exchange ideas. I think this is the most important communication
tool. Teamwork encourages knowledge sharing, stand-up meetings as well. Of course we have
some other communication tools like e-mailing and collaboration software, like Jira.
Rob: How do you motivate your employees / colleagues to share their knowledge (tacit
knowledge)? How do you motivate your employees / colleagues to admit small/large errors they
made?
Barend: Like I mentioned before, employees have responsibility, make sure that they enjoy their
work and the responsibilities they get. Your knowledge has to be shared and transferred, we also
have certain structural methods to do this. For instance, we are obliged to make up lessons
learned after each project and transfer these lessons to other teams. Especially in product
development departments its very important to keep the lessons learned in mind and to work
further on it.
Rob: Is there a certain meeting where you decide what lessons you have learned?
Barend: No, lessons learned is an obliged activity for every team member involved in the project.
It is a team activity that everyone can share what he or she learned. This information will be
collected into what the team learned as a whole. It is the responsibility for the team leader to
encourage these lessons learned activities and to share the knowledge.
Rob: How do new employees / colleagues adopt existing working methods in the organization? Is
there a process/guideline?
Barend: Yes, we have a very extended procedure for the integration of new employees. We offer
introduction courses for new employees that are hired. If you start in our company, you can decide
which courses you want to follow. In that case you will find a suitable job related to these courses.
Also, some courses are obliged: safety courses, environmental courses. Obviously, if you want to
work in a product development area, you have to study some technical courses. This is part of the
guidance trajects: you are able to know the people you are going to work with, where you have to
be, and so on. In this way, it is easier for the new employee to build a trustful relationship with
his / her colleagues.
Rob: Does your company engage in any learning activities (e.g. R&D collaboration) with external
partners (universities, suppliers, customers etc.)? If yes, why do you engage in them?
Barend: In our direction, we have certain levels of collaborations. We sponsor the Lego League,
this institution is focused on creativity among primary school pupils. They will gather around and
play with Lego blocks to build their own creations. In Group T campus Leuven, we sponsor the
Solar Team. The Solar Team is famous for its yearly race of solar energy driven vehicles in
Australia. In this way, we try to get in touch with technical talent. So we have several connections
with universities, high schools and several specialist groups concerning technology and product
development in Belgium.
Rob: How do these external engagements help you to advance own internal processes/products?

77

Barend: By being there and talking with people. Also, company visits are a source for picking up
new ideas and knowledge. This is stimulated in the industry as well.
Rob: How does your company take into account potential market threats (price fluctuations,
decrease in demand, )?
Barend: Of course, we are prepared to fight these threats. We have certain goals that we try to
achieve by setting certain KPIs. The performances are followed up to give an image of how far our
deviations are in comparison with our KPIs. If we deviate too far, we have the buttons to adjust
our processes. What these buttons are, is dependent to the kind of problem.
Rob: What is the current market share of your company in the transmissions sector?
Barend: I dont have the information to answer this question, but you can look it up on the
internet. I believe it will be mentioned there. It is difficult to define the exact market seize. Also,
the numbers constantly change.
Rob: How do you react against actions from your competitors?
Barend: We try to be the best, the cheapest and the most efficient in the transmissions sector.
Our product is something else than a consumer product. We only deliver our products at OEM
(Original Equipment Manufacturers) The automotive industry. We have no benefits when garage
dealers sell more of their cars. How good his cars are sold, is his responsibility. Besides, he does
make the choice to purchase the transmissions by us or the competitors. At the moment that he
chose a suitable transmission type, youre contracted to buy from that supplier 4 to 5 years. These
contracts are provided because it takes a lot of efforts to validate the transmissions into the car.
You just cant say: today I have an IPhone for my car and tomorrow I will use an Android. This is
not allowed.
Rob: How much patents does Punch Powertrain have?
Barend: Through patents we try to protect our knowhow. I dont know the exact number of
patents we have.
Rob: How would you describe the competitive advantage of your company?
Barend: Euhm, with our transmission we are not bound to a OEM, we operate fully independent.
That is an advantage: we can deliver our products at anyone we want to. Some brands have a
transmission supplier, but that transmission supplier is bounded to deliver all his products to that
brand. He is forced to deliver only to BMW or Mercedes for instance. We are flexible: we are fully in
the Chinese Market.
Rob:

Which

sources

of

inspiration

does

your

company

use

for

new

products/technologies/processes?
Barend: In our company, we have an Advanced Engineering Club: those are the smartest people
you can find. They do nothing else but generating new ideas. They read articles on databases and

78

internet, they talk with universities, they have ideas on their own and keep experimenting. They
have a full technical background and have knowledge about the automotive industry business.
They try to gather the innovative ideas from the market and say: OK, is this matter appropriate
for Punch Powertrain? Lets investigate this in detail. This is all related to transmission
technologies, specifications of drive shafts and roller bearings and so on. Everything that goes into
that direction.
Rob: Is meeting the customer needs the most important issue for Punch Powertrain?
Barend: Yes of course, but sometimes you have to go a bit further: you as supplier must come
with an idea to your customer in order to attract their interest to adopt that new idea in their cars.
We must not wait till the OEM comes knocking on our door and tells us which kind of transmissions
he needs. Of course, we have these conversations of what the OEM needs, but in fact we have to
anticipate them. We have to say to them: Isnt it better if you try our new transmission?. In that
case you have the ability to be innovative. You have to create your own market. Dont wait till
someone tells you what you need to design for him.
Rob: Has your company experienced product failures and product recalls before?
Barend: I have experienced 2 product recalls during my career. Yes Its something you
absolutely you want to avoid. The last product recall was initiated in 2011. Since 2011, we are free
of product recalls. As for product failures, we do have these in the field. Still, this is on an
acceptable level. Customers are aware that transmissions fail to work sometimes.
Rob: The product recall in 2011 you just mentioned, has it been on the news or in the
newspapers?
Barend: No, because we were very actively involved to solve this defect. And this is also a lesson I
learned from the past. Suppose: you know that there is a problem and that a certain type of
transmission is not working probably. You have to have the guts to go to your customer and admit
the errors and mistakes you make. It doesnt matter how painful this will be. This and this is
defected, we are going to solve this together. Still, you have to take responsibility on your own:
you have to avoid that employees are scared of admitting their mistakes. I hope he doesnt come
to me with that problem. This is a boomerang effect: the problems are escalating and eventually
it will come to you the one way or the other. In that case, the problem is not be overseen, you
already suffer reputation damage towards the OEM. It is his task to identify defects and to decide
whether a product recall is suitable. It is better to say: We have done something wrong, but if we
work together on it to find an appropriate solution to fix the defect, the problem will still be
overseen. In our case, we had several cars who were still standing on the parking of the OEM,
those cars were successfully repaired by our people at that time. We have send a response team
who worked 24 hours shifts a day to repair all the defected cars and there was only a limited series
of the car that contained the defected transmission about 300 cars contained the defect. Those
300 clients received a letter and e-mail of the dealer that the car can be repaired when bringing
the car to the dealer. The dealer repaired all the defects of these cars with our help.

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Rob: Has the product type of the transmissions exited the market?
Barend: No, we have solved the problem. It is still the same product we sell today, with some
improvements of course.
Rob: Ok, Lets see What do you understand as a product failure?
Barend: In my opinion, a product failure concerns every defect that endangers the functionality of
a product in normal conditions. You can say: you buy a car and it makes a lot of noise. The OEM
will say: Yes, thats normal, all my cars produce a lot of noise. If you didnt buy a Mercedes or a
BMW, instead you have chosen for a less qualitative brand. The quality is different, but the
customer can have the same expectations as while he bought a Mercedes or BMW. The OEM will
respond that the customer had to buy another car if he wanted less noise. This is also an example
of a customer complaint, you see? The customer expects something where the product is not
designed for. In that case you have a mismatch in acceptation those cases are the most difficult
to solve.
Rob: Ok, thanks. And do you also experience a wrong usage of the product by some customers?
Barend: Well, there are some safety issues integrated in the software. But you can still misuse the
transmissions we sell yes. It is possible. For instance, if I put an heavy trailer behind my small car
and I try to transport my trailer 1000 kilometers far away, your transmission will explode.
Rob: What is the normal life expectancy of such a transmission?
Barend: Our transmissions is expected to go along for 250 000 kilometers, in years this will be
about 10 years suggesting that the customer is driving 25 000 kilometers a year.
Rob: How does your company deal with product failure? Do you follow an internal protocol?
Barend: We have an eight-step plan to handle customer complaints. This is a fixed procedure to
solve customer related problems and product failures. First of all, we are putting the defected
products in quarantine. These include the suspicious product we think are contaminated with this
defect. We will stop the production of these products and stop sending them out of the company
towards our customers. Afterwards, we begin by composing a team: who is going to work on that
kind of problem?. Then, youre going to conduct a root cause analysis. This includes the
identification of the problem and making analysis of interdependencies between the root cause of
the defect and other possible defects that could occur resulting from the root cause of the defect. If
the team finally conducted a RCA, it will analyze whether corrective and preventive actions can be
undertaken. Adjustments and improvements will be made in order to fix the defect partially or
entirely. If the team only finds a solution to fix the defect partially, the product will be tested again
towards safety and quality regulations. If the results show that the improvements made to the
product are sufficient, the product will be put out of the quarantine and it will be sold as all the
other products in our assortment.

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Rob: Ok, I have a question: In SKF they also put their defected product in a sort of quarantine
and reduce them to scrap. As I understand correctly, you dont reduce your products to scrap,
instead you repair them?.
Barend: Actually no, most of our products will be repaired. However, if something goes wrong in
the beginning of the manufacturing process, the output of the machine in question will be reduced
to scrap. In a transmission I can perform rework: I am not going to throw away 1000 euros, no,
the product will be reworked if the manufacturing process is sufficiently progressed. Spare parts
can be foreseen in that case. We dont use the cradle2cradle principle because our waste, is really
waste: you cant use it as inputs in another process. We also do remanufacturing: suppose that a
transmission part fails to work and it comes back to us. We will make service transmissions in that
case for the aftermarket. Suppose you have a car of 7-8 years and your guarantee period has
exceeded. In that case you can buy a reconditioned transmission from us at a reduced price: this
reconditioned transmission is made out of materials that are used before. This is what we call
remanufacturing.
Rob: How does your company deal with product recalls? Can you describe a process of the
different steps that need to be taken in case of a recall?
Barend: This is exactly the same process as I described before. We use a procedure that contains
8 steps to solve problems relating to product failures and product recalls. As for product recalls, I
am the team leader, the champion on the highest level because I work on the global level. I
directly report to our CEO. In that view, I have all power to do what is needed to be done in my
eyes.
Rob: What is the role of regulations / standards in product recalls?
Barend: A car manufacturer has to indicate on a website whether there is a problem with a car
by law he is obliged to report defects and problems. For the rest, I can only think of the ISO-norms
concerning safety and the strict emission norms which became more actual despite the Volkswagen
incident concerning the fraud emission software. I cant think of other regulations, because I dont
sell my cars to the end-market, I sell them to the OEM. It is his responsibility to comply with the
local regulations concerning these issues. I can conduct a recall towards the OEM, but I cant
conduct a product recall towards the end customers.
Rob: What are the consequences of product recalls (ranking by importance viewed by
interviewee)? Which problems could arise? I know you mainly focus on the negative aspects of
product recalls, but is there also a positive effect you can link to conducting product recalls?
Barend: Of course, you are able to learn from product recalls and product failures. It has a certain
positive impact if we conduct these product recalls following our eight step procedure. We admit
the mistakes we made and go for a proactive approach: we talk to our customers about the
problem. By doing that, you build special trust relationships with your customers and this enhances
customer reliability because you came to the OEM with the problem before he could identify it.
Therefore reputation damage of the OEM is limited as well. The problem is sneaking around

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somewhere out there. Therefore you have to take responsibility. This is also in the advantage of
the OEM. Media and press dont say that the transmissions of Punch Powertrain have failed. No,
they will write it down as: Mercedes has failed or BMW is conducting a product recall. This is
independent to the supplier who sold him that product. To summarize: you have to build a strong
trust relationship with your customers.
Rob: How do you build strong trust relationships with your customers?
Barend: By talking with the customer, by helping him, by regularly paying him a visit.
Rob: Ok, now I still have 3 more conclusion questions till we reach the end of our interview. First
of all, have product failures been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
Barend: Every product failure leads to a Root Cause Analysis and like I mentioned before RCA
always leads to corrective and preventive actions. There are several examples of making
improvements in our products. We do this on a daily basis.
Rob: Yes OK, could you give me one example of this?
Barend: Euhm, often we do software updates to prevent customer complaints and we do product
improvements in order to increase efficiency and reduce the probability of transmission failure.
Actually, you can think of improvements in several domains. From using better direct materials,
like better quality steel, to solving software leakages and integrating new software modules to
solve these leakages.
Rob: Have product recalls been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
Barend: If your company faces a product recall, there is always something going wrong. You can
consider a product recall like a more severe product failure with a bigger impact. Product recalls
are implying that you recall every product of that type that has been delivered to the end
customers. Of course, it is important that you know which of these products are really suffering
from defects. So not every product failure leads to a product failure. If you go to the garage dealer
and you say that your car makes a strange noise, the dealer will not conduct a product recall of
that car type, that is obvious. They will repair this defect. A product recall will occur if the safety of
the customer is endangered. For instance, if youre driving your car and while stopping at a red
light, the airbag comes out of the dashboard. This was the case of Toyota in 2010. Afterwards all
the other brands were also investigating their airbag suppliers whether customers experience
unpredictable airbag explosions. Due to these airbag failures, accidents can happen, resulting in
injuries and deaths. This is something else than the strange noise that your car was making.
Rob: So I can say that safety is priority number one in order to avoid product recalls? Also, do
they perform an investigation globally to find the supplier who provided this defected product?

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Barend: Yes, this is what the investigators do. They check the supply chain of the supplier. In the
case of the airbags, it was not only Toyota who used the defected airbags. There were several
other car brands that integrated these airbags in their cars. They investigate whether different
series of the same brand is affected. So, it can be the case that the BMW 5 series also contains the
defected airbags as was the case in the BMW M series.
Rob: Ok, thanks! I have one more question to end with: which has the higher impact on learning:
product failure or a product failure followed by a recall?
Barend: You only conduct a product recall if the impact is so severe that it can harm the
customers health. The procedure we do is exactly the same as in the case of product failures. The
way in which customer complaints are threated and problem solving is applied, is exactly the
same.
Rob: This was the interview. Thanks for your cooperation. I think you were a rich source of
information for my Master Thesis Topic. Besides that, I wish you a lot of success in your future
career!
Barend: Thanks a lot! The same goes for you! Have a nice day.

General information

Name: Diederik Vanden Eynde, Dennis De Jong

Working for the company since: 1995, 2004

Function: Quality Engineer, Business Analist

Turnover/sales: 5 946 871 653,16 euros

Operational / strategic management: Operational

Employees: 650 (Opglabbeek)

Company name: Scania

Headquarters: Sdertlje, Sweden

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Most important product: Trucks, busses, engines

Date interview: 03/11/16

Main supplier(s): SKF

Location interview: Opglabbeek

Interview 3
Rob: Hello Diederik and Dennis! Im very glad that you gentlemen had some time available to help
me out with my interview. To start, can you give a short introduction of who you are and your role
within the firm?
Diederik: Scania is an automotive company that manufactures trucks, busses and industry & marine
engines. We have the aim to be CUBIC or best in class. We want to be the best. We are also the
most expensive in our industry. We try to keep the quality as high as possible. Not only in the
technical aspects of the materials, but also in the service we deliver to our customers. In the past,
you had Scania and Mercedes as high quality brands. Or you chose cheaper brands and thus lower
quality trucks, like Iveco. Nowadays everyone in our industry focuses on reaching high quality
standards, partially due to the more strict ISO-norms. So automotive manufacturers have to comply
with a lot of regulations concerning safety and emission standards. So for automotive manufacturers
there is definitely pressure to comply with these regulations. For instance, they cant afford to deliver
a chassis that bends after driving on a speed bump. Still, you have to make sure that you have some
sort of competitive advantage. If everyone has high quality, you have to differentiate yourself with
other things. Our competitive advantage is the service we offer to our customers. This implies the
speed wherein customers are helped and customer involvement in the problem solving process.
Rob: How do you define your product development process?
Diederik: The Scania Product Development Process can be subdivided into 3 arrows. We begin with
the yellow arrow. The yellow arrow represents pre-development. Who works here? The people who
think of products that they will design next. Those people focus on idea generation and have a
tremendous problem solving capability. Momentarily we have the PRT series. How is this model
evolved? In the beginning we had the Scania 1 series, 2 series, 3 series and 4 series. So after each
model design, the series number has changed as well. Actually there was meant to be a Scania 5
series, but they called it Scania PRT instead. Why did they do this? This was actually a facelift of the 4
series. Now those people are thinking of developing and designing new series or to switch over to the
development of other automotive products. This is also dependent on market research that marketing
experts will conduct in order to check customer needs and complaints. Once the pre-developers are
developing a new series type, they will take into account the results of the market research. Every
relevant customer complaint will be investigated. Also, technical engineers have improved the older
series if 3 deviations or more are identified by the customer. If you see a Scania truck of the older
series driving on the streets, you will know that there are made 1000 improvements in comparison
with the beginning stage of the product series. The green arrow represents continuous introduction.
The people who work here are technical engineers, designers and developers. They are sitting in a
building where 1000 engineers work together. They begin by developing the parts and components
needed to build the trucks and busses. Among them are also purchasers, they have a close connection
towards suppliers. Once the green arrow people say that the trucks are ready to be sold, the red

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arrow people will start to work. The red arrow represents product follow-up. So we are occupied with
a pre-development, development and product follow-up.
Rob: Do you also keep older product types and components in stock or are they removed after a
certain period of time?
Diederik: If certain improvements are made in the product type components, the depot will be
cleared of the older product types. Also, our customers who have older products in their depots will
receive a TI (Technical Information) notice. This notice will be sent to all involved customers in all
languages. We ask to our customers to send back that kind of product. So the product ID will be
sought in the stock. The products will be removed between batch x and batch y and afterwards Scania
will send the new improved component to the customer. The most common reason why older products
are cleared out of our stock is because the life expectancy of the product is too short. There is nothing
so irritating than going to your garage dealer because a component inside your truck failed. It costs a
lot of money, not only for the drivers, but also for us. In that case, we go back to the people of green
arrow they developed these components. Do you need to apply a new weld on a failing bracket or
do you need to purchase new materials? This is what they call Engineering Change Orders (ECO). By
using this, they are going to make adjustments and improvements in the product components.
Scanias policy is that when you make improvements in a product, you have to change the product ID
as well. This solely for the reason of traceability: I can put an old and new product component next to
each other and I bet you cant see the difference between those two. The change in the composition
of the materials isnt always visible to the naked eye. If there are any technical defects, the whole
stock will be cleared. Another cause can be that we found a better supplier. The materials purchased
from the new supplier will receive a new product ID. Were going to sell the older products first and
afterwards the newer products: thats the basic concept. Sometimes it is the case that we have to
wait too long to get the new improved products. We then use the old products we have in stock. Also,
we can have a Delivery Stop (DS): this happens for example when a brake drum is overheated and
fails. The chauffeur is than in danger because he cant brake properly. A DS will result in the
immediate stop of selling the products to customers.
Rob: What are your duties and responsibilities?
Diederik: There are 3 departments of Scania active in the product follow up process, the red arrow.
The Quick Team, the Medium Team and the Heavy Team. Im the Team Leader of the Quick Team,
also referred to as Q-Team. We act in a timeframe of 24 hours, therefore the term Quick. We try to
find a short term solution within the 24 hours when we are faced with a customer complaint. Every
day we have a Q-Team meeting at 10h:00, weekends excluded. This is how we encourage proactive
behavior from our members. If you get an assignment today and I dont see you for 14 days, it can be
that you didnt work on the assignment as expected. Therefore we expect daily reporting of our QTeam members. I lead 6 people: 5 people are sitting here in Opglabbeek and 1 of them lives in Brazil,
South-America. Everyone has its own unique competencies: the one is a specialist in transmissions,
the other one in engine repairing and electronics. We always try to get the right man on the right job.
Of course, now holidays are in sight, we have to perform our tasks with fewer members which
requires more efforts. After the 24 hours short term we have to conduct a Root Cause Analysis (RCA):

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what is the cause of the defect? With this in our minds, we try to find a long term solution. In
summary: ST solution, RCA and LT solution forms the Corrective Action Plan (CAP). Afterwards, we
construct a FMEA (Failure Method Effect Analysis). The term wherein the CAP has to fulfill its
expectations is 10 working days. Does this fail due to a certain false design drawing or measurements
mistakes, we transfer the problem to the Medium Team. The Medium Team has 3 months to find a
solution. It can be that in the case of a fitting where the hole has to be a bit smaller and the axis has
to be broader, that the problem is more complex. Especially in the case that the axis has the same
size as the hole. If the Medium Team needs more time than 3 months to solve the problem due to the
fact that materials need to be tested or changed or if a switch of suppliers is needed, it will be
transferred to the Heavy Team. They have 2 years to find a solution for the problem. For instance,
they solved once a problem with a dashboard. They had to redesign the whole mechanism of the
dashboard, had to find a new supplier and test the dashboard specifications. The product follow-up
processes is composed out of these 3 teams and is also referred to as the Red Arrow process. The
trigger for composing Q-teams was an event in 1997. Back then, there were a lot of warranty
incidences: I think it were 7 to 8 warranty incidences per delivered chassis. This implies that if you
bought a new truck, you would bring it 7 to 8 times to the garage dealer. If your car is broke within
the warranty period, you get a rental car without paying any additional costs. In the truck business
this is not the case, because this is very specific: you have trucks with cranes, with cooling
departments with low loaders. For transport firms, this was very frustrating to hand in because the
chauffeur cant drive its truck at that moment. He cant go to his customers or suppliers. He didnt
earn money that day. Also, the carryings have a higher risk to be unusable, especially when food
products are carried. If they reach the expiration date, they are unusable. Therefore the warranty
incidences needed to be reduced. By the use of market research and with the help of our colleagues
we saw that our competitors used similar systems like red arrow. You see that the warranty incidents
reduced from 1997 to 2002. In 2002, the Q-teams were composed. Our boss always wanted to reduce
those warranty incidences. After the introduction of the Quick Teams the number of warranty
incidences drastically fell. By the introduction of the PRT series in 2005, you see that the warranty
incidences dropped more slowly than before. This due to the new materials and the more
sophisticated technologies that are integrated in the trucks and busses. A new concept is thus always
more vulnerable to product failures. Since 2006, the number of warranty incidences stagnated.
Nowadays we have 1,2 warranty incidences per chassis. Obviously, the target in the future is 0
warranty incidences. As for the product engineering network, every department has its own Quick,
Medium and Heavy Team. These departments include product engineering transmissions, bus chassis,
axles, electronics, cabs, industry and marine engines and so on. We, Scania Parts Logistics, are the
only one who have only a Quick Team available. The reason for this is that we have products of all
types of these departments (transmissions, electronics, axles, industry and marine engines, ). If we
had Medium and Heavy Teams here in Scania Parts Logistics, the developers and designers had to
wait too long until they finally had some work. And of course, these people are very costly. If we have
a problem concerning electronics that cannot be threated within the 24 hours, we contact our Medium
Team colleagues of the product engineering electronics department.
Rob: What most attracted you to your present work? How did you become involved in your current
work?

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Dennis: I began working for Scania in 2004 as customer service employee. What was appealing in
my point of view was that I was connected with the new different markets. I sat in the export team:
at that time we had a new interesting project with Indonesia. We went to Indonesia to identify the
customer needs, in which conditions they used trucks and in what terms the customer needs differ in
comparison with European customers. You learn that counterfeit products is a big problem over there.
Besides that, the roads are in worser condition than the European roads: it is rougher terrain. Most of
the roads arent even asphalted. My current job is business analyst and project manager. Now, Im
more focusing on new technologies. I think it is interesting that you try to find long term solutions in a
strategic point of view. I work with Master Data and develop IT systems. Momentarily, Im project
leader of a project to design a new ERP tool in cooperation with SAP. My area is order management
and return management: everything that is customer related actually. I also am responsible for
developing a new portal where customers can file their complaints. We try to combine ROL and RIDE
to create one portal for order placing and complaint filing.
Rob: Does your company engage in any learning activities (e.g. R&D collaboration) with external
partners (universities, suppliers, customers etc.)? If yes, why do you engage in them?
Diederik: If we go to our product engineering axles department and we notice that a hole is wrongly
drilled, we contact our suppliers that something is wrong. Till 1997, the defected products keep lying
in stock on other places. In this way the defected product were only localized by additional customer
complaints. If we receive a customer complaint now, well undertake immediate action to clear out the
stock. This is an example of cross-functionality among teams. We have 1200 suppliers worldwide. I
have worked closely together with XIOS - former name of PXL high school. Here we performed tests
on rust resistance in a special climatic test chamber. We leave the components there for 5 days and
set the parameter on 60 degrees Celsius and 80% moisture level while performing these tests. These
tests are conducted to simulate the transportation of the components by ship. Therefore it is
important to build strong relationships with your partners and collaborators. As for personal contacts,
I think of the order pickers who come to us when they realize that certain components are very
different than what is labelled on the box. We regularly check our stock for certain product failures or
missing items. VOR (Vehicle Of Road) needs to be solved. We have an international helpdesk, which is
located in Sweden. People who are really stuck in the repairing procedure call our helpdesk and ask
for help. If the helpdesk is confronted with a frequent customer complaint, like the failing of radiators,
we will be contacted to check our spare parts stock. This is a daily phenomenon. If we notice that the
newer types of radiators have a more limited lifespan than the older types which are installed in the
older types of trucks, this problem will be transferred to the M and H people. They will look if the
materials are too weak or too thin. You have to seek a balance between turnover and customers you
can keep.
Rob: Do you also have problems with the imitation of products?
Diederik: Yes, absolutely! We do further analysis to track the sources of these low quality, false
labelled products. We also use failure and deviation reporting systems or like we call it: FRAS. FRAS
also contains statistics about warranty incidences. This is a system developed by Scania. Every
afternoon at half past 1, we have a global Customer Online Meeting () containing all Q-team

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members, product engineers and developers. In these meetings, quality aspects and deviation reports
will be investigated. Every product category (Industrial & Marine Engines, Truck Engines, Cabs,
Electrics, Truck Chassis, Transmissions, Bus Chassis, Axles, Repair & Maintenance and Parts Logistics)
is discussed separately. As for parts logistics, at least 2 specialized engineers will come to the red
room, located in the middle of the production department to check their product for product failure in
the case of a customer complaint. Scania parts logistics CVAB (Commercial Vehicles AktieBlag) in
Opglabbeek is part of the mother company Scania. Scania importers are business units. The business
units gets cases from its dealers. Only relevant customer complaints reported by dealers will be
investigated. So the complaints are filtered and will be sent further to the field quality engineers.
These guys will filter the complaints a second time. The competitive strength of Scania is that the
customer will be informed about the problem and that there is a follow up procedure to ensure his or
her satisfaction.
Dennis: I remember a small shop in Korea where the shop owner sold Scania counterfeit products.
He used a catalogue where several Scania components were mentioned with their corresponding
pirate numbers. The components that are sold cost 1/3 rd of the price we ask in Europe. He also had
delivery men on scooters to deliver the components to the customer. We try to beat this market by
informing the customer why he may not buy this products because it can endanger him. We also try
to stop this by legislations: we work with a specialized team and the local police forces in order to
perform raids in warehouses where we think that Scania counterfeit products are stored. You need to
convince the customer that the products are from poor quality and have a limited lifespan. If you have
a warranty claim, you have to identify whether the defect is caused by the customer or the
manufacturer. It can be that product failure can be related to the assembly of pirate products in
Scania trucks. In China, they also copied the design of our trucks, this can be considered as a big
threat towards our existing models. Once a Scania component is delivered to the customer, the
packing will be sent back. The reason why we do this is to avoid that customers send this package to
someone who distributes pirate counterfeit products. Scania packages have specific characteristics,
therefore that it is dangerous to spread them around.
Rob: Has your company ever faced product recalls?
Diederik: We deal with product recalls on a weekly basis. It can be small scale or large scale. The last
product recall we encountered included seats that were delivered by our suppliers. Those seats were
very sensitive for bumps and shocks: a pin would break inside the seat mechanism that caused the
seat to go down while driving. This surprised the customer. We immediately get rid of the seats of
that brand and sent quality reports to the supplier in question so that he is aware of the problem.
Before this supplier can talk with the dealer, he needs to make sure that there are no defected seats
among the spare parts, because we only have that seats to put in a truck.
Rob: What are the most frequent reasons for conducting product recalls?
Diederik: At first, we conduct Delivery Stops when there are safety defects, injuries among the
chauffeurs and Vehicle Of Road incidences. For product failures, we have the labels S,M and C
(Standard, Medium and Critical). C-defects imply the breaking of certain legislations, like ISO-norms ,

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the endangerment of customers and possible VORs. Examples of C-defects are too high emission
norms, airbag failures and the seat example I illustrated earlier. Another example of a C-defect is the
loss of your mirror: it is stated by Belgian law that every truck makes use of 2 rear mirrors. An
example of a M-defect is brand damage. In the past, we have bought chrome brand plates of Scania
that were put on a grill but were from a very low quality. After going 2 times to the car wash, the
brand name wasnt visible any more. An example of a S-defect is the tenderness of seats after a
certain period of time. Our HQ is located in Sdertlje, Sweden. In Poland, we have the production of
the bus bodies. In Zwolle and Angers and Sao Paulo, we have our truck assembly factory. In
Tucuman, Argentine, we manufacture the more outdated versions of axles and transmissions. These
are not manufactured in Europe anymore. Our boss want 0 deviations, 0 defects and world class
quality.
Rob: Ok thanks a lot for this explanation. I have certain additional questions I would like to ask if you
dont mind. First one is: How do you define your company culture?
Diederik: Our company culture is very open. Im connected with a lot of other firms: I pay them a
visit if they are stuck with a certain problem. There I notice that at some of them, there is still a high
hierarchy present. You have the big boss, the CEO and below him are several middle managers who
take the lead over other managers and people. These firms have a lot of layers. In our organization,
this is not the case. Also, everyone here speaks in an informal way with each other: if you call
someone with his surname or with Mister people will think that you have something against them.
Everyone is called by his front name here. This doesnt mean that you dont have respect towards the
person in question, no, it creates a certain relaxed atmosphere. We report mistakes we made to the
customers: we dont have secrets for our customers and colleagues. Of course, we dont communicate
our financial situation to our customers because this is confidential. But we do inform them about
improvements that are made, why they are made and so on.
Dennis: We also have a learning culture: we are failure tolerant. Early stage detection of the problem
needs to be encouraged. Therefore that our employees are empowered to inform us about the
mistakes they made. Still, they have to take measures to solve the problem. Our motto is: we love
deviations, but dont accept them.
Rob: Which tools do you use to maintain a clear and fast communication among your employees /
colleagues?
Diederik: Well, I just wanted to show you this. This is FRAS, a system designed by Scania: a
database where all defects, solutions and improvements of quality issues is reported. If a problem is
present, I will read this in in FRAS. This FRAS system will be saved in the main server in Sdertlje in
Sweden and a backup is taken in Brazil. I will give you an example of how we work in FRAS. Today we
have 16 cases that were reported in FRAS. I just click on this one. Now, you see that a field quality
engineer send me this case. First of all, well check if we are indeed involved in this case by checking
if we have materials from this suppliers and so on. If this is the case, we put the case status on open
and our timer starts to run: at this moment we have 24 hours to find a short term solution for the
problem. When we have the short term solution, we change the case status to pending. If we need

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other components from other suppliers, Scania first gives these components to the production unit
because otherwise the production would stop for a certain time and we cant afford this. This case is
about a certain truck component, an axle stand, that should be able to carry 6 tons of weight.
However, when we placed an axle of 4 tons onto the component, we saw that it broke. This is
definitely a C-defect. Luckily, none of our employees or OEM customers were hurt. Im assigned as
assignment leader to solve this problem. It is a FQ case. We have PR and FQ cases. PR (Production)
cases are about defects that are identified by the production unit. FQ (Field Quality) cases are about
defects that are identified by aftermarket customers. In problem to be solved, you see a description of
what is going on. In a truck you need to put 2 axle stands in a truck, so they should be able to carry
12 tons. They cant even carry an axle of 8 tons: this is a big problem. These axle stands were
certified as CE. It is possible that they faked their CE testing results. Images and pictures are included
in the cases. For some cases we contaminate the products. In which extent these contaminations take
place is dependent on RANScodes. We have RANScodes from 1 till 8, where 7 and 8 is full
contamination: the product may not go out and nobody may get access to the product, even the
employees. We put these components in a special locked room where no one has access to. By doing
this we prevent that certain employees are tended to deliver the defected components with a
RANScode to the customer after the customer keeps asking for it. They want to satisfy the customer
at all costs. It can be that certain of our products will be reduced to scrap. We work with electronic
quality reporting to our suppliers. If we face a defect, the supplier has to give us a corrective action
plan after a RCA. The suppliers will have to turn up for the costs that are made. It can be that there is
damage to the product or that the floor is broken where the components fell, also there are cost for
blocking the products and transaction costs. Therefore we ask to our supplier if he wants his defected
products back. If no, it will be scrapped by us. When scrapping the product, our supplier will receive
an additional invoice as well for the scrapping process. If he wants it back, we will return the products
by truck. In this case, the supplier will pay the transportation costs. The supplier will investigate
where the defects are located. In many cases the sub-suppliers have delivered components that
contained the defects. The suppliers are responsible for the mistakes they made in their product
development. They will have to investigate whether sub-suppliers can be appointed for this defect.
Dennis: The replacement of certain components can be rooted into 2 causes: we made a switch of
supplier or we made improvements towards the product. A TI will be sent to replace the old
components and articles. We have a lifetime requirement to keep products in our stock for maximum
10 years. We dont have a scrapping policy. We have high storage costs, but we keep older
components in stock. In that way, we can still switch to older components if the new ones are
threatened to fail somehow.
Rob: Do you also see opportunities to explore new markets?
Dennis: Yes, we manufacture engines for marine ships. This is a growing market. Another new
market what we find interesting is the one of biogas installations. Scania is considering using biogas
engines. With new markets you have new areas you can reach, like India and Indonesia.
Rob: Are there also cases of misusages of the customer?

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Diederik: Yes, thats why our Q-team consists out of people with a diverse technical background. If
we see that something is forced by the customer, we will report this. We cannot take responsibility for
these issues. Scania components are very high-tech. Even for the additional tools you pay a lot of
money. Technical engineers work like puzzle solvers: every component has to fit into another one to
create a certain end product. In certain countries, technicians dont know how they should handle
these high-tech materials: they use primitive tools (like hammers) to assemble the materials.
Afterwards, they come to us and complain that our high-tech materials are broken. So these
misusages are a problem that concerns us yes. These materials need to be taken care of with more
accurate tools special developed for this kind of job.
Dennis: I recall that there was such an event in Indonesia where truck drivers used our trucks as
mining vehicles. They brought coal up to a steep hill and were wondered that the truck stopped
working after they have driven 1000 kilometers. We in Belgium have trucks that can carry a towing
weight of 40 tons, while the Indonesian mining truck drivers required 120 tons of towing weight. This
is triple the amount of what they are designed for. Because we had an agreement with our Indonesian
customers, we made the trucks stronger and reached a consensus. The allowable towing weight they
may use for the truck is 105 tons of towing weight.
Diederik: In the EQR (electronic Quality Report) we will ask the supplier to give us a CAP (Corrective
Action Plan). If we dont get this CAP within 10 working days or if the given CAP is not good enough,
we will hand over this case to the POL-guys. POL consists out of people who visit the supplier. They
will help the supplier with the problem: they talk with each other and try to find a solution. Sometimes
POL doesnt have the results they wanted. Than the supplier will be escalated into step 1,2 or 3.
Escalation step 1 is that every week the supplier needs to send test reports. Besides that, the supplier
is not allowed to receive a quality report from us in the first 3 months. If the supplier doesnt follow
these rules, escalation step 2 will commence: the supplier will be invited to our office in Sdertlje. If
the problem isnt solved after this step, he will be in escalation step 3 and we will switch to another
supplier. The latter is a very rare phenomenon in our company. There is no need to be the boo-man!
Interdependency is needed: we need them and they need us.
Rob: How do you motivate your employees / colleagues to admit small/large errors they made?
Dennis: Concerning human mistakes, we make evaluations of the performance of the employees.
Every order picker will be monitored. We know exactly which order reaches the customer. Human
mistakes could be poor packaging and labeling, picking a wrong amount of the components, picking
the wrong components and so on. Our pickers know that they have to perform well: error margins are
monitored. Our employees are proactive in solving their mistakes and improving their working
methods. We have certain IT tools that support mistake admitting behavior, like the voice picking
system. Thanks to these tools we have an error margin of 1 out of 150 000 picking lines. The voice
picking system tells you what kind of product you need to pick and where it is located in the stock.
You also have to say the last 3 digits of the batch type: this is an additional control mechanism to
avoid mistakes. In the system of RIDE, customers will file their complaints. We will figure out whether
our pickers, packagers or truck drivers are responsible for the damaging of the product. We also
perform Q and A checkups: random checks of pallets to ensure product quality. We make a distinction

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between product quality and the quality of logistics. Customer satisfaction is also measured by
external consultancy bureaus like Deloitte and Gartner. They inquire 20 000 aftermarket customers to
gather information about their experiences with Scania. Everything is measured in this survey:
sustainability, performance and comfort. Afterwards they publish a graph to monitor Scanias
progression in comparison with its competitors. It is an independent research.
Rob: What needs to be included into quality reports?
Diederik: Measurements about lengths, weights and strengths. As you can see in this slide, this
component is 2 micrometer too short for fitting inside the hole. It is important to define which
instructions you give to the operational personnel checking the stock. Also, you need to take into
account that there are several measurement mistakes that can happen: a measurement of length in
the stock where it is 15 degree Celsius differs from a length measurement in the truck where it is
maybe 23 degree Celsius. We work with precise measurements in micrometers. In the automotive
industry these precise measurements are very important for our quality control management. You can
say that for a furniture manufacturer a micrometer difference will not have severe consequences for
product defects. We have to make sure that everything is designed following the drawings that are
provided by our engineers. We have all information about the properties of the materials: the
composition, the technical drawings (including length, weight, strength). We have access to all
Production Parts Approval Processes (PIPAP). In FRAS we also have the multi-sphere: what is the
product used for and where is it manufactured? If we receive a corrective action plan, we will conduct
a quality inspection on that component. The following 3 deliveries will be annulated and transferred to
the Q-team. The people in the Q-team will measure these 3 deliveries. If they are all perfect, we mark
the problem as solved. If the next delivery after the corrective action plan is still defected, we send
the POL guys to the suppliers. In 9 out of the 10 cases, the corrective action plan meets our
expectations concerning quality. We have differentiated products, its not like mass production of
standardized items.
Dennis: With our C200 modular system, we collect defect codes of components. So we can identify
the problem with the C200 modular system, with FRAS and with the help of our garage dealer. He has
a laptop that can be connected with the board computer of the car (wireless or plugged). 40 days in
front, we let our dealer know whether the truck needs to get in for maintenance. Of course, we have a
maintenance contract with the dealer in that case he has to pay a monthly fee for this contract. 20
days in front, the garage dealer is informed again. We use C200 modular systems to monitor truck
component fatigue and corrosion specifications.
Rob: How do new employees / colleagues adopt existing working methods in the organization? Is
there a process/guideline?
Diederik: If I hire a new employee for the Q-team, he will closely work with the other members of
the Q-team who give him some guidance. After a year, he is expected to work autonomously. The
most employees here in Scania Parts Logistics are order pickers. Order pickers have learner
apprentice relationships with their employers. Also, there are some courses order pickers can pick up
to learn more about their specialist area. After a week, employers will evaluate the new order pickers

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by a list where all the activities are summarized. On the long term, the whole list will be green. There
are also course books provided by Scania in order to learn firm specific processes, like working with
AROS. If the order picker seems to do his work inefficiently, the HRM team will try to find another
suitable job for him based upon his competencies.
Rob: How does your company take into account potential market threats (price fluctuations, decrease
in demand, ) ?
Diederik: Our motto is: Learn from your mistakes. Dont be jealous because your competitor is doing
better at a certain issue, but try to be as good or even better. We in Scania do market research to
evaluate the strengths of our competitors. When market research shows that broader truck cabins are
selling better than the ones we use, we will try to switch over to broader truck cabins. We define our
competitive advantage as the high quality of our materials and service. Worldwide we are with 450
quality engineers. Our boss says: like deviations, but dont accept them. We learn from deviations
and product failures.
Rob: Could you give me an estimate of the market share of Scania in comparison with its
competitors?
Dennis: Yes, I believe that we have 16,7 % market share in the heavy duty trucks business.
Mercedes has a larger market share because they also take their city distribution trucks, like the Vito,
into account. Scania doesnt have vans and light weight trucks. Therefore that the market share
number is relatively low. We also focus on fuel economy: how can we reduce the amount of fuel in
order to reduce gasoline costs?. You also need to take into account that a truck in the developing
countries maybe costs 1/3rd of a Scania truck over here. In that segment, you have to try to gain
market share as well. We also try to outperform in delivery time of components. If you have a
Chinese market without aftermarket, the truck driver has to wait for days before his defected truck
can be repaired. With the FRAS and RIDE system, defects are filed directly and a local OEM technician
will be sent to repair the defect.
Rob: How does your company adopt new technologies?
Diederik: Well, there are some courses our people can follow. The Q-team will go twice a year to the
Scania academy were new techniques, trends and methods are learned. For example, we are
considering to make a switch to a new project management system, the Epsilon project. We also use
other similar companies, like DAF and MAN, as inspiration sources to compare our products.
Consequently, we have collaborations with specialized institutions. We try to find a good balance
between production and learning.
Rob: How do you find out about the latest technological developments/trends in your industry?
Dennis: Being present on the market, establishing networks and visiting fairs. We are now a
subsidiary of the VW group and synergy partner of MAN. In South-America, there will be Volkswagen
trucks that drive with Scania components. We also work with RFID technologies and smart glasses. I
think of the use of Google glasses. We have done a test for the use of Google glasses in our stocks.
We tested the Google glasses in our stock to check whether employees can find the right components

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faster. We do text inputs: I read a text and I use this text as input. In practice, we have the following
problem. Our stock counts 110 000 articles. A quality inspector needs to judge whether articles are
defected or can pass the quality control. He is the representative whether articles can be sold or not.
Are all components included? Is it the right color? We have maps that contain check lists. We also
implement this information in the smart glasses. You can visually compare products and ask for the
check list. From the 70 000 lines from customer complaints, we put 50% of the products back in
stock. We have a direct connection with Google in the US.
Dennis: A new technology that Scania uses is Industry 4.0: all persons and materials are connected
to each other here. The last years our trucks are equipped with a new modular system named C200:
this is a computer system that can be read from a certain distance. From this system, data is
gathered about corrosion and fatigue of the materials, the amount of kilometers that are driven and
engine performance. Several measurements are conducted to form an analysis of frequent problems.
We investigate whether Italian truck drivers have more problems with their brakes than other
European truck drivers. With this system, we can make a better estimate when maintenance needs to
happen. We inform the drivers that they dont need new brake pads after every 30 000 kilometers.
No, due to the measurements we can make a better estimate. For instance, drivers have to replace
their brake pads at 26 000 kilometers. This is what we call flexible maintenance. Of course, this is not
directly related to product failures or product recalls. Still, it can be useful to identify shorter product
life cycles. This is useful information for researchers, designers and developers to make improvements
to certain products by protecting them, using other materials and so on. Since 2006, we use the FRAS
system to stay connected with every truck that is driving on the European roads.
Rob: Does your company use any internally occurring problems as a source of inspiration for
improving products/processes?
Dennis: As for parts logistics Opglabbeek, we have a culture of continuous improvement and bottomup adjustments. The employee is empowered to make adjustments and report them to the
management teams. He has a big amount of autonomy. In theory, the employee is empowered to
work 10% of his time on continuous improvements. If certain articles are sorted in an inefficient way
or are poorly packaged, employees are free to make improvements. One of the actions we use in
practice is to sort the fragile components as last. In that case, the fragile components will lay above
the less fragile components resulting in a higher probability of product intactness. We also consider
that overseas transport needs other logistics than road transport. For instance, it is not a good idea to
ship a windshield by aircraft. You can put as much labels of fragile on it as you want: your windshield
will shake in the air due to turbulence. We also have ROL: a customer can communicate his / her
complaints through this portal. Complaints of this kind can be related to the labeling of the product.
The product will be send back and the customer will receive the right product. Frequent problems are
analyzed using this tool. A 2 nd system is RIDE: in this portal customers can demand to be paid back.
For instance, the components are damaged or incomplete. A specialist will come to the stock to
analyze the products to frequent problems. Is there something wrong with the packaging of the
product?
Rob: What sources do you use as inspiration?

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Diederik: We have the Scania Production System, what is actually copied from Toyota. Of course,
there is a mutual agreement to use this system. We try to make customized products for the
customer to fulfill all his expectations. We dont produce what we want, we produce what the
customer wants. Project teams have conversations with their customers.
Rob: How do you find out about any incidences (of other companies) concerning organizational and
product failure (media, press, etc.?)
Diederik: We know this by the use of our FRAS system. Our customer will receive product failure
reports by TIs. In the past, it was sent by the post. Nowadays, it is sent by mails in all languages.
Our customers are the OEM customers, so dealers and distributors. Garage dealers should check daily
if there are new TIs. So if certain measurements deviate from the original technical drawing, a TI will
be sent.
Rob: Do you try to learn from others successes, failures or both? Could you please give me an
example?
Dennis: Yes, we do. If we look at our partners MAN and Volkswagen, we try to create synergies. I
think of the gear boxes that are from high quality: they are also used by Volkswagen. We also share
knowledge with MAN and Volkswagen: it is important to build trust relationships with external
partners.
Rob: Where are these measurements conducted?
Diederik: If you send components to the lab, special conditioned chambers are used to conduct
measurements. In our production unit we use hand materials and tools. Usually, the deviations we
face are visible to the naked eye. However if we work on micrometer components, we send it to the
lab. In that case you have to fill in a form and send it to the lab in Sdertlje. They have special 3D
and laser measure banks. Afterwards, you get a deviation report. We, in the Q-team, also conduct
deviation reports because it can happen that the product that is send to the lab is switched in the
meantime. In that case, the deviation is hard to identify. Therefore we put a DNA label on the
components.
Dennis: 10% of our employees work for the R&D department. Inside the test center of Sdertlje, we
have a demo of an engine that is spinning 24 hours a day. We also have a truck on a vibrating plate
what simulates how strong our trucks are if they encounter rough terrain. As for transmissions, there
is a robot that constantly changes gear. These simulations are based upon lifetime experiences.
Rob: What do you understand as a product failure?
Diederik: In my eyes, product failure refers to defects in the product that hinders the customer to
efficiently use the product in normal conditions. Otherwise, we speak of deviations. Deviations include
measurement mistakes, design errors, wrongly drilled holes and so on. If the design says that an axle
stand can carry 6 tons, while it cant even hold 4 tons in practice, I refer to it as product failure.

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Rob: How does your company deal with product recalls? Can you describe a process of the different
steps that need to be taken in case of a recall?
Diederik: A product recall should succeed a quality report. There must already been a discussion with
the supplier otherwise there would be no product recall. After the supplier admitted that there is a
deviation, we check where the products have been sent to in our supply chain. We also send a TI to
the dealers and distributors where the batch number and product ID of the defected product is
included. Everything that relates to safety has to be identified by a certain batch number. In the case
of a product recall a certain product type between batch x and batch y has to be sent back by the
dealer to Scania. A product recall campaign is that trucks need to be recalled. A TI only identifies
deviations. An example of a product recall campaign is that oil pipes are located too short by the
exhaust systems which leads that oil is dripping from the exhaust pipes. These pipelines have to be
removed elsewhere in the truck.
Dennis: I also recall that our air filters, which are assembled in the truck behind the grill, were
constantly constipated in the mining areas of Indonesia due to the big amounts of dust that came into
the filters. The current production of the air filters was stopped in Europe and engineers were making
improvements to filter the dust inside the air filters. Also, the trucks used for mining were brought
back to the dealer to implement the new improvement. At that time, 200 trucks were affected by the
defected air filter. This has been a FRAS-case in the past. Still, repeated FRAS-cases were the root
cause is already identified in the past, will not be send to Sweden: the Q-team from the facility in
question will immediately come with the short term solution.
Rob: Do you think that product recalls only have a negative impact?
Diederik: For everyone this is negative. The only positive thing of a product recall is: if we identify
the defect on time, we can prevent worse. It is good for companies to conduct product recalls when
facing a critical product failure, but try to do it without them. Of course, if you have to go to the
garage dealer 4 times a month, it gets on your nerves. Even if it doesnt cost you nothing: it wastes
your time, you start cursing. After a product recall, we take lessons into account to prevent future
similar incidences. Accept your mistakes and try to work on it. If you switch braking systems with a
different pressure, you can have big troubles. As already mentioned, we make a distinction between
S,M and C-defects.
Rob: Is there also a customer follow up process you apply after a product recall?
Diederik: Absolutely, we use the lessons learned to improve future products and processes. What
happened, why did it happen, what does the CAP say and what did we learn in general? This is also
included into our FRAS system.
Rob: What is the role of regulations / standards in product recalls?
Diederik: We deliver Scania trucks worldwide. We are ISO 9001 and ISO 14001 certified. We expect
that all our suppliers are certified with this. Of course, in some countries, like China and Pakistan, this
legislation doesnt exist. In this case, you have to do a bit more research of your suppliers over there.
Belgian law is very strict: there are

several law surrounding airbags and seat belt technologies

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because they are applied by using pyrotechnics. We also try to comply with the laws and legislations
of other countries. A perfect example of this is that 1/3 rd of our stock is devoted to left driving
countries (Great-Britain, Australia, Thailand). This includes right steering wheel cabins, special
measured cables, the mirrors and so on. There are components that are the same for every country.
Rob: Ok, I have 3 more questions for you guys till we reach the end of this interview. First of all,
have product failures been a source of improving any existing products/process in your company? Can
you tell me an example and explain what has/was changed?
Diederik: Yes, of course! I think of our Q-teams: we try to find a ST solution for the customer within
the 24 hours. Therefore it is important to improve defected products. An improvement is something
that fails earlier than expected and that can be fixed by using other materials that increases the
lifespan of the product. The adjustment of a deviation is not an improvement.
Rob: Ok, thanks! My final question now: which has the higher impact on learning: product failure or a
product failure followed by a recall?
Diederik: In Scania, product failures and product recalls are threated similar. I think they both have
the same impact on learning. The biggest impact for the customer is a product failure followed by a
product recall. The customer has to bring his truck to the garage dealer. A product recall is just a
consequence of severe product failures. You have to help the customers by giving them better and
higher quality materials and products. This enhances our learning process. TIs come from technical
personnel. Product recall campaigns are conducted by higher management personnel.
Rob: This was the interview, thanks a lot for your cooperation!
Diederik: Thanks! It has been a pleasure!
Dennis: Likewise! Good luck with your thesis!

General information

Name: Koen Ceyssens (Thomas Weigert, Stijn Moons)

Working for the company since: 2014

Function: Service development engineer

Turnover/sales: 400 million euros

Operational / strategic management: Operational

Employees: 400

Company name: Facil

Headquarters: Genk

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Most important product: nuts, bolts, clips and washers

Date interview: 03/23/16

Main supplier(s): Kamax and ARaymond

Location interview: Genk

Interview 4
Rob: Good afternoon Gentlemen! I suggest that we commence the interview. To start, can you give a
short introduction of who you are and your role within the firm?
Stijn: Facil is a service provider within the automotive industry. We deliver services concerning
fastening technologies. In other words, all our products are related to mechanical connections
between materials. Actually, everything that fits inside a small tray. This includes bolts, nut fasteners,
clips and washers. The reason of our existence is situated in the year 2000 when Ford faced
difficulties with its numerous suppliers of these small seized components. Ford has had always
problems with its numerous suppliers, especially logistical and quality problems. Ford had too much
suppliers to negotiate with. I think they had to negotiate with more than hundred suppliers, only for
bolts, nut fasteners, clips and washers at that time. They only wanted to talk with one central partner.
This partner has to take care of everything: engineering, logistics, quality and purchasing. There are 2
firms, Kamax and ARaymond. They wanted to fuse together which made the joint venture of Facil. So
what do we do exactly? We purchase products, which concerns all the small fastening materials used
in cars, we put them in stock and sell them to the Ford factory in Genk. We provide a full service for
them. So if we face a certain defect in the field or the production line, we will try to solve this defect
immediately. In that way, Ford Genk doesnt have to negotiate with all the separate manufacturers
who are our suppliers. Because this concept was so innovative and thus world changing, Facil was
able to grow fast. Ford in Valencia became one of our customers, Volvo Cars in Ghent as well. BMW
and Renault and Volvo trucks also came knocking on our door later on. The concept was interesting
for the OEMs, because they are concerned with specific issues, like the design, the look and the
suspension of cars. We have no manufacturing unit. Still, supply chain is very hot topic for us. In
Europe, we have around 180 suppliers. In the US, we have about 400 suppliers and in Asia we have
30 suppliers.
Rob: Could you tell me who your main suppliers are?
Stijn: Because we only purchase finished goods, our suppliers are mainly the manufacturing units.
Our main supplier is Kamax. This is also our mother-company. Kamax produces bolts from M6 to M18.
And ARaymond is also a main supplier of us. ARaymond produces metal clips.
Rob: Could you tell me a bit more about the structure of your company? How is Facil organized?
(small/large scale/(in)formal/bureaucratic)
Stijn: Our company structure is very clear. At the top, you can find our CEO. He gives directions and
tasks to the management team what needs to happen. Beneath you have 3 operational departments:
EU, North-America and Mexico, and Asia. In the meanwhile we have had an acquisition in NorthAmerica 5 years back. In the US concern we do exactly the same as here in EU: we also provide a full
service towards our customers. With Volvo trucks, we have also established a new company in Asia.

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In Belgium, we have 9 branches or warehouses: Genk, Gent, In the warehouses, products are
stored, a quality control will be conducted and afterwards the products will be delivered to the
customer. Besides that, we also have a corporate department that consists out of the sub
departments of Finance, HR, Supply Chain, Quality Engineering, Business Development and Sales,
Marketing, Advanced Service Development, ICT and Purchase.
Rob: And your Headquarters are located here in Genk?
Stijn: Indeed, about 50 employees are employed here.
Rob: Do you only deliver to the OEM market or do you also deliver components to particulars?
Stijn: All our customers are situated in the OEM market. So we deliver components for cars and
trucks to the OEM market.
Rob: What are your duties and responsibilities?
Stijn: The 2 people sitting on this table are occupied with Advanced Service Development. This is a
unit within the corporate department. This unit is only 2 years old. The full service concept is not now
any more. There are a few competitors on the market who are copying this concept and try to do
exactly the same as what we do. Beyond that, there are low barriers to entry: it isnt so difficult what
we do. Nowadays, it is more of a price war. Our competitors try to lower prices in the disadvantage of
us. This implies that our contracts with customers like Ford and Volvo Trucks contain many disputes
about price and discounts. Its all about money.
Rob: I recall that Volvo Cars Ghent was recently in the news where they announce to break certain
contracts with suppliers. Is this also a consequence of such a price war?
Stijn: Yes, obviously. Car manufacturers are not afraid to break contracts when your prices raise due
to a certain event. Besides that, everyone can compose an axle: this is not rocket science. The same
goes for the assembly of seats. In many cases, the cheapest supplier gets a contract while the others
have to seek other contractors. It was a challenge for us to think about a certain differentiation
strategy to offer an additional service to our customers. We have to make sure that we create added
value for the customer. We work with brainstorm sessions, internally and externally. We discuss what
is bothering customers and suppliers. We try to think out of the box and answer the question: How
could we help that particular customer?. Should we give him something additional, a compensation in
the case of product defects? This is the main focus of the 6,7 projects we are occupied with.
Rob: Do you also keep spare parts in stock?
Koen: No, we have a special spare parts market, but those products arent kept here. This is a very
small market. It isnt the core business. Less than 1% of our turnover comes from spare parts.
Rob: Can you give me a brief description of how your company applies innovation?
Koen: The brainstorm sessions we regularly keep are an example of how our company applies
innovations.

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Stijn: Yes, indeed. These sessions can be formal, but also informal. It can happen that youre in a
meeting room with 3 to 4 people to discuss interesting ideas. For instance, we try to find logistic
problems for the packages and trays we use. In our warehouses, we work with 10 000 minuscule
items that are collected in a small seized tray. Therefore it makes a difference if you use 10 trays or
500 trays for these items in a logistical point of view. We try to find a plausible solution for putting as
many items in those trays as possible. By the use of a CAD-model, a 3D-model, we try to figure out
how much items can be laid in a 30 to 30 to 20 cm tray. Also, most efficient ways to place these items
are sought as well. This could have a positive impact on the correctness and the velocity of the
logistics and transportation of the products. These are ideas which come more out an informal,
unofficial brainstorm. On the other hand, we have formal brainstorms. 1,5 years ago we have done
such a formal brainstorm in a very big group.
Koen: I think it were 20 people who participated in this brainstorm. It was a very diverse mixed
group which consisted out of women and men throughout several departments and internal and
external people. There was an external moderator. Out of these formal brainstorms, new ideas exists
like Source To Hand. I will explain you the bulk story. The components we purchase all go into special
trays. These trays are heading directly to the line where the technician of the car manufacturer picks
out the items and implements it in the car. Our suppliers begin in a mass production process where
everything is manufactured in big quantities. At the end of their production process, they put the
finished goods into small boxes and trays. We put the goods in other blue trays and deliver them to
the customer. The question that arises was: How do we get rid of all the superfluous trays and
packages? All the cardboard we use for the boxes and the empties of the trays cost money. There are
a lot of solutions that came into our minds while analyzing this problem.
Stijn: Brainstorming can be a process that enhances natural idea generation. Still, it can be a
structured, formal process. We use a combination of these two. It is our job to stimulate idea
generation among our employees. Also, these ideas need to be elaborated. We use these ideas in
practice to see if they have the wished outcomes. Can we use big boxes and bags to put more
products in? Is it efficiently to use boxes of 600 to 700 kilograms in a logistical point of view? Very
important is the interaction among people: speaking with each other to work out each others ideas.
We try to stay in touch with our own operations, with our salesmen, our customers, our suppliers and
external people. We try to help customers out with certain problems they face. We try to analyze their
needs. We are more occupied with the processes. Customer complaints is more situated on a product
level, this is the field of Thomas. If a bolt or nut fastener breaks, it becomes the responsibility of our
quality director. We are more occupied with the operational and logistical processes. We ask ourselves
if it is efficient to provide one big tray where all components fit in instead of providing 50 small trays
containing these components. As for logistics, we want to help the customer directly in his or her
production process.
Rob: Is there a certain norm where employees can work on projects they created on their own?
Stijn: That is absent here. Actually, we do what we want. We try to elaborate the input of the
information flows. We also make use of benchmarking. One person came to us with idea of: Cant we
provide airtight small bags for the aftermarket instead of the trays that are used now? Because the

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components we use have a limited lifespan due to corrosion and coating effects. Therefore these bags
could be more useful, especially when the components are packed in vacuum. We get a lot of ideas
from internal and external people and throughout departments. We also work with gates: ideas come
in, we filter them and we decide whether the idea can be put in practice. We decide which ideas are
worth of putting time in. Let us elaborate these ideas. We also have to weigh whether the goal of the
idea can be achieved because we have time and capacity constraints. We only work with 2 people to
put these ideas into practice. In the following gate we have to make out whether we have to put
money in the idea. Shall we make a prototype? A prototype in our business quickly costs 10 000
euros. In order to put money in this idea, we perform risk analysis and try to predict expected
outcomes. The last gate is the actual elaboration of the idea.
Rob: How do you define your company culture?
Thomas: We have an open company culture: everyone can give its say and is free to share his or her
ideas. Our working method is defined as lean or structured. You have to communicate fast because
this is a requirement of the customer. In the case of a customer complaint, we have to come with a
corrective action plan within the 24 hours. Communicating and reacting fast is something that is
important for the automotive industry in general I think. We have the advantage that we dont have
production. Therefore the reaction speed of your suppliers influences the profits of our firm. We dont
always break contracts with suppliers because they increase their prices or because they delivered
lower quality products. You need your suppliers: they are crucial. Also, for the customers, your
suppliers are of major importance. We have a company culture based upon cooperation and problem
solving. We search solutions for problems that customers face. Helping the customer is our first
priority.
Rob: And which tools do you use to maintain a clear and fast communication among your
employees / colleagues?
Thomas: We have an open office structure, so everyone is aware of the problems of the other
departments as well. On the operational level and customer complaint level, employees talk to each
other mainly in an informal way. We also have monthly meetings where a representative of each
department is present. For strategical processes, we bring out a special journal that is named Facil for
you. In this journal you can find the status of our current technical and R&D projects. This is also
useful for our employees that they stay updated of what is going on in the company. If something
important needs to be communicated, like a brainstorm session with a customer, we make use of
flashing. Flashing can be considered as an e-mail system. Flashes will be sent to the HR department.
They will communicate it throughout the whole company. We also see that direct communication is
sometimes more important than indirect communication. The young people here in Facil are used to
communicate in discussion fora and e-mailing systems while the older people have a lot of difficulties
to get used to these new technologies. If a customer or supplier faces a problem or defect, it is
advisable to make a phone call because you can transfer a lot more information with phone calls than
e-mails. In short term reacting, direct communication is definitely a must. We also make use of
audiovisual materials to enhance communication among employees.

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Rob: Do you also make use of response teams in the case of product failures and product recalls? I
recall that they used 3 response teams, Quick, Medium and Heavy in Scania. As the term of the
problem solving process becomes longer, the problem will move from Q to M to H. Do you make use
of such teams?
Koen: For every customer Facil has a settlement within the 2 kilometers. In these settlements, there
are representative of logistics, quality and engineering. In the automotive industry, we make use of
the 8D process I dont know if you ever heard of this process before. If there is a customer
complaint, severe or non-severe, we have to follow 8 steps to solve the problem. It begins with the
identification of the problem. What caused the defect? or Why is this customer complaining?.
Afterwards, the problem will be put in quarantine. If you notice that certain bolts are breaking while
integrating them on the rear axles, we have to provide a new good batch of these bolts within the 24
hours. This process includes a Root Cause Analysis. This is good arranged within the automotive
industry. The guys who are concerned with customer complaints have to be entrepreneurial: they
dont wait till the problem escalates before they start to find a solution. In this building we have one
person who has all the KT plans. He has technical drawings and images of the product defect at his
disposition, however he sometimes has to wait 2 weeks till he gets the sample of the defected
products. And of course, because he is the only one threating customer complaints, there are some
communication problems. These are hard to avoid.
Rob: Do you also have a filtering process concerning customer complaints?
Thomas: The first thing we have to look at are the specifications of the product. What is failing
functionally? Could it be that the component is wrongly designed? Or did the customer use it in an
application that is not according to the drawing. A stronger relationship with your stakeholder
influences the flexibility of the solution seeking process in a positive way. In that way you dont have
to change the procedure of the problem solving process. You can give the customer an alternative
solution. The most important thing is that you talk and understand your customer. And of course that
he understands you.
Rob: What are the most frequent reasons you encounter for product defects?
Thomas: The product defects we face are not safety related. Design mistakes are situated in the bulk
production (mass production). Sometimes, deviations and defects can occur in some of the products,
but they are very rare. It is hard to say a number, but about 5 out of 1000 items contain certain
deviations. These deviations can be in the design, the specifications or the properties of the product.
The official automobile norms allow a certain amount of deviations. These norms are ISO quality
related. A bolt without a wire is an example of such a deviation.
Rob: Did you ever experience product recalls?
Thomas: No, we never did. Still, you have field actions where certain components are fixed. If a
product failure is determined in the field, the defected cars will be recalled in the first place.
Afterwards there will be investigated which supplier is responsible for the product defect. It can be

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that we identify the defect before the customer can do this. In that case we will inform the supplier
that he made a mistake in the production and a product recall will be not necessarily.
Stijn: You can make a distinction between a field action and a product recall. In a product recall,
customers will be informed to bring their defected cars to the dealer. Customers will receive e-mails,
letters and phone calls that they need to bring their car in immediately. If the customer refuses this,
he has a high probability to crash with the car. Field actions includes that we have to inform the
dealers that they have to check the car for certain weaknesses when they are brought in for yearly
maintenance. These weaknesses are not defined as Critical safety defects of course.
Thomas: Detection of the product defect has to happen within a reasonable timespan because we
have to provide a solution for the customer within the 24 hours.
Rob: Who is detecting those product defects? Do the dealers detect them or does your production
unit detect most of the product defects.
Thomas: In most of the cases, the operators on the line detect the product defects: they get the
products in their hands. Most of them are visible, however for some doubtable issues, we need to
conduct measures and check if they comply with the original specifications of the product. Facil makes
use of automatic reading processes. Product failures can be detected in about 95% of the cases.
Rob: Do you have a certain procedure in the case of a threatening product recall?
Thomas: In the case of a field action, the customer will come with the problem. He knows the
technical drawings of the cars in a whole. They have an internal structure to detect these problems
and also have a procedure ready for product defects. Subcontractors, whom are technical personnel,
will come with a solution. They will repair the defected cars. We just follow the working instructions
we get from them. Afterwards we will check the different components. The OEM decides which cars
need to be checked and which products are defected.
Rob: How do new employees / colleagues adopt existing working methods in the organization? Is
there a process/guideline?
Stijn: Every employee will get a variety of courses. First of all, you get a basic course what gives you
more insight in the job you have to do and the firm specific working methods. Besides that, you will
be introduced to your colleagues in an informal way. We just launched a new tool, a database where
you can keep track of everything that you have learned. If you want some additional traineeships, you
can request them on that database. This database is digitalized since a few weeks now. On the
department itself, you also learn more from your colleagues: you try to keep up with them. Also,
learning by doing is important for our new employees. A lot of problems related to operational quality
can be solved by using your experience. If we have a customer complaint, we will check whether
there are similar past incidences. Then we will check how we can solve this. Maybe we have to switch
suppliers? The courses themselves last for one hour. If a new employee is hired, he will have an
introduction throughout all the departments. In his own department he will have a more detailed
introduction of course. You need to take into account that employees also have to learn new IT
systems. This usually takes a while before they are used to it, especially for the older employees.

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Getting used to a new IT system usually takes 1 to 2 months. Beyond that, he still needs to learn
what his own department has to do. You need at least 3 months of work experience to give a
reasonable output.
Rob: How does your company learn across teams, departments, hierarchical levels (horizontal,
vertical)?
Thomas: The open office structure we have in Facil enhances the interdepartmental learning. Besides
that, we regularly organize brainstorming sessions like mentioned before. In these brainstorming
sessions, people with different competences are present. We focus on interaction among our
employees. If the department of purchase has a problem, the other departments will have problems
too. It is all interrelated. Besides that, you have the Accountancy department, they dont have much
interaction with the other departments because it is more static. Logistic and operational levels are
interrelated.
Rob: Does your company engage in any learning activities (e.g. R&D collaboration) with external
partners (universities, suppliers, customers etc.)? If yes, why do you engage in them?
Thomas: We have safety courses we participate in together with some external partners. Besides
that, Stijn and Koen are working on a project in corporation with KU Leuven. This includes a design
assignment: students of the 3rd year of robotic engineering needed a project. For them we have made
an assignment. Also, we have tested software of the Fraunhofer institute in Germany. This includes
the CAD-model and 3D drawings of the trays and the optimal amount of components that can fit
inside those trays like mentioned before. This comes from a research center. Also, we have partners
who shares us knowledge about light weight materials and 3D printing (Melotte). We cherish our
external partners and try to make efficient use of their knowledge in the extent they allow us to use
it. We have chemical suppliers who we can contact if we want some more specifications of a product.
Rob: Do you also visit other automotive companies to subtract knowledge?
Thomas: We dont visit competitors. Still, we visit our supplier 2 to 3 times a month. We have 2 to 3
direct competitors.
Rob: How would you describe the competitive advantage of your company?
Thomas: I would define this as the service we offer to our customers and the flexibility in which we
can handle problems. Our suppliers and partners have the production personnel at their side. Because
we only provide a logistic added value towards the customer, we are capable of reacting more flexible
than manufacturing firms. However, if your suppliers cant produce the quantity that is desired, you
have a problem too. Therefore cooperation is unmissable.
Rob: Is there a follow-up process for customers?
Thomas: Within the ISO norms this happens yes. We have weekly meetings with our suppliers to
follow up problems.
Rob: Does your products have fulfill other regulations, like emission norms, ?

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Thomas: No, not that I can think of.

Rob: How does your company take into account potential market threats (price fluctuations, decrease
in demand, ) ? And how do you react against actions from your competitors?
Thomas: In our customer contracts, we have certain formulas. These formulas includes exclusion
agreements and other detailed specifications. For instance, if the steel price increases, we transfer
this price increase towards the customer. We calculate a certain mark-up marge and add this to the
original price. For supplier agreements, we are obliged for a term of 3 months to purchase from that
particular supplier. The greatest boost happening in becoming a threat, is the increase of the steel
price. It is a transparent process however: the customer has knowledge of this price increase if he
checks the stock prices of steel producers on the stock market. In logistics, we try to have a clear and
predictable forecast. Risk management is therefore important. A long term vision has to be applied.
Rob: Do you have problems with the imitation of your products resulting in a lower quality?
Thomas: Well, this is not a big problem for Facil. It happens sometimes in the Eastern countries, like
Taiwan. Due to the strict requirements by customers and by law, imitation products are more absent
in our business. The OEM customer will notice immediately if the product is imitated, is fake and
therefore from lower quality. Those products are rubbish and fall apart most of the times while coating
them. Everything that is considered as raw materials, untouched materials coming from a natural
source, is traceable. There is an obligation to make a documentation of every single component to
make it traceable. As for competitors, the customer can only send its package in one direction. You
cant deliver random packages to customers. Also, the contracts allows us to oppose suppliers if
needed. Some of our customers are more price-driven while others are more solution-driven. We take
into account the preferences of each individual customer. The one may prefer quality above price.
Rob: Which sources of inspiration does your company use for new products/technologies/processes?
Stijn: We have line-walks who are occupied with keeping track of the current trends in the industry.
Facil makes use of benchmarking. Our marketing director is looking for new opportunities, new
markets we can deliver products to. In that way we are not only active in the automotive industry, but
also in other related markets. He does market research where these products could be used and what
the expected turnover should be.
Rob: What do you understand as a product failure?
Thomas: Product failure occurs when a product doesnt meet the functional requirements of the
customer. It can be that the product is not designed as it is illustrated in the technical drawings. A
product failure doesnt necessarily contain defects. If the nut doesnt fit in the rear axle of the car, this
could be a product failure. The wire of the nut, doesnt have to be broken. You can still inform the
customer that the product isnt correctly designed. Still, he may be given the choice to use it anyway.
Of course, if the product defect is critical, there is no way that the product may fall in the hands of the
customer.
Rob: How does your company deal with product failure? Do you follow an internal protocol?

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Thomas: We use the 8D procedure to solve problems. Im not going into detail because we have
discussed this issue before.
Rob: How do product failure incidents influence future products/processes?
Thomas: We keep track of all the product failures we encountered in the past. Is this problem
process driven or supplier driven? Complex statistics are used to get to a certain pareto-equilibrum.
The outcome of these results goes to the department of Sales and Engineering. Afterwards, a
corrective action plan and a lessons learned sheet is composed with the help of those departments.
Rob: What is the role of regulations / standards in product recalls?
Thomas: You have to comply with the local legislations. Other standards like the use of heavy metals
(lead, zinc, ) and soot measurements need to be taken into account as well. All these measurements
need to be documented and approved by the customers. Therefore the traceability of our
components.
Rob: Do you have a special climatic test chamber where you perform measurements?
Thomas: In our laboratories here in Genk we can measure corrosion particles and the hardness of
materials. We also have external labs because some measurement tools are too expensive. We only
perform measurements when there are customer complaints, so we dont use the climatic test
chamber much in comparison with automotive manufacturers who have to perform measurements
daily. Our lab in the US is more extended, we can do more complex measurements there.
Rob: Could you give me an idea of the lifespan of your products?
Thomas: Our products should survive as long as the car is driving, so I guess that they at least hold
for 20 years. We use a certain glue that is attached to the bolts and nuts to enhance the adhesive
process. In this case the bolt

or nut will not shake as much as there was no glue on it which

increases the lifespan of the product. This special glue has a limited lifespan of course.
Rob: Do you also sweep your stock when certain products become outdated or when improvements
are made on certain products?
Thomas: Yes, the stock is inspected weekly. Due to the electronic systems, it is easier to identify
which components are longer in stock and which batches are close to expire. By following up your
forecasts, you can complete your stock when certain components are threatened to expire. Overseas
transport needs other logistics than road transport. There is more salt in the air and it is a more
moisture environment, therefore there needs to be special protection to keep the components intact.
All components we get from our suppliers are registered and come into a database. 3 to 4 samples
are saved in a locker. So if we switch supplier, we still have 3 to 4 samples of the old supplier.
Rob: What are the consequences of product recalls (ranking by importance viewed by interviewee)?
Which problems could arise?

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Thomas: If there is a problem in the field which eventually leads to a product recall, it will have a
negative impact on the customer. Besides, a product recall is very costly, numbers can go up to 100
000 euros and more. The most important negative impact for us is the loss of reputation. The speed
of reacting and coming with a corrective action plan are the biggest determinants of conducting
successful product recalls.
Rob: Do you also have a certain classification of your product defects, like Critical, Medium and
Safe?
Thomas: In general, the product defects we face are never Critical or safety violating. The linkages
between our components and the suspension or chassis of cars or trucks, can be considered as a
Critical product defect however. The bolt or the nut apart is not endangering the customers safety.
Rob: Have product failures been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
Thomas: We are daily operational and we deliver alternative components. We are now busy with a
new project in Ford, we try to share our past experiences concerning product failures with our
colleagues. We help our partners with our technical knowhow in order to make improvements about
the specifications and composition of the materials (strength, weight, length, ).
Koen: The designers of Ford are now working on a brand new car. We are very closely related to
them and help them to identify barriers and product weaknesses. We check whether the bolts, the
nuts and plastic brackets are satisfying the OEM.
Rob: Have product recalls been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
Thomas: Yes, if we have done the 8D analysis, we can figure out what caused the defect by a RCA.
By conducting a RCA we seek for interrelations: Could the defect of this product be attributed to a
component of the product (from a supplier)?. We not only try to solve problems punctually, but also
structurally.
Rob: Which has the higher impact on learning: product failure or a product failure followed by a
recall?
Koen: I would say both of them. We try to localize product defects and fix them within the 24 hours.
A product recall is an event we try to avoid by any means necessary because the negative impact is
too big for us and the customer. As a result, we take corrective measures in order to avoid similar
future incidences. 80% of our customer complaints are single cased errors. About 1 out of a million
components contains an actual product defect. This number is within the allowable PPM (Parts Per
Million). A product defect differs from a deviation. Like I mentioned before, about 5 out of 1000
components contain a certain deviation. This is also an allowable amount within the framework of the
ISO-norms

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Rob: Ok, I thank you for your time! This was the interview. I wish you guys a lot of success with your
projects.
Koen: Thanks a lot! Good luck with your thesis.

General information

Name: John Heeren

Working for the company since: 1998

Function: Manager R&D Services and ME

Turnover/sales: 258 798 526 euros

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Operational / strategic management: Operational

Employees: 1062

Company name: Monroe Tenneco Inc

Headquarters: Lake Forest, Illinois, US

Most important product: Shock absorbers

Date interview: 03/30/16

Main suppliers: Nitrogen, spring suppliers

Location interview: Sint-Truiden

Interview 5
Rob: Goodafternoon Mister Heeren! To start, can you give a short introduction of who you are and
your role within the firm?
John: We manufacture and design shock absorbers for the automotive industry. Our shock absorbers
are implemented in cars, vans and trucks. Most of our customers are situated in the OEM market
worldwide, especially in the US and EU. Our products are also sold in the aftermarket: hobbyists can
buy our products in their nearest auto repair shop, like Auto 5.
Rob: Did your company experience an acquisition in the past? Because I recall that Tenneco Inc. was
called Monroe in the past.
John: Tenneco Inc. consists out of 2 divisions: one division manufactures components for exhaust
systems, while the other division manufactures components for suspensions. We are active in the 2 nd
division. Tenneco Inc is the corporate firm of those 2 divisions. A hundred years ago, the division of
the manufacturing of components of suspensions is founded in the town of Monroe in the state of
Michigan. Since the seventies, we also focused on the manufacturing of exhaust systems. Monroe is
now a famous brand name. The factory here in Sint-Truiden is operational since the sixties when it
was called Monroe Belgium. Monroe Belgium was a subsidiary of Tenneco Inc. Throughout the years
Monroe had different name changes.
Rob: Do you also manufacture other products besides shock absorbers?
John: In the aftermarket, we distribute other products as well. We also deliver full suspension
systems to the OEM. In order to do that we purchase components that are related to our shock
absorbers, like a spring or a rubber mountings, and implement those components on our shock
absorbers. We also develop some of the components we purchase.
Rob: Ok, could you tell me whom you consider as your main suppliers?
John: Our shock absorbers contain oil and nitrogen. We purchase nitrogen from specialized chemical
suppliers. Beyond that, we have a lot of metal and steel related suppliers: there are a lot of pipes and
rods in the shock absorbers we manufacture. We also make use of springs, these components also
come from steel manufacturers. Nowadays, we make more and more use of synthetic fibers and
plastic products.
Rob: Ok, is Arcelor Mittal one of these steel suppliers?

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John: No, we actually purchase little from the steel manufacturer directly because we buy semifinished goods. Tenneco Inc purchases pipes from a pipe supplier and springs from a spring supplier.
Those suppliers may have Arcelor Mittal or ThyssenKrupp Stahl as sub suppliers. Still, we purchase
steel plates from ThyssenKrupp Stahl to manufacture e.g. spring seats. After a stamping process, the
steel plates will be transformed into spring saucers.
Rob: What are your duties and responsibilities?
John: I work within an engineering department, more specifically R&D. Within R&D, Im responsible
for all structural calculations and validations. Beyond that, Im also responsible for material
engineering: the development of new materials, especially with the aim of reducing the weight of our
products. As said before, Im responsible for measurements, calculations and testing. In the past, I
have been responsible for the modular assembly: the integration of the shock absorber in the
suspension of the car. In this kind of job, I had to make CAD-models and technical drawings, but
these are just tools, just like calculations and measurements, to design a product. Im not focused on
one of these tools specifically in the framework of product development. Nowadays, Im more
occupied with the calculations and the validation or testing of the product. We start with a certain
concept on which we perform several measurements. Is it strong enough? Is the product used as it is
designed for? Strength, fatigue, friction and other properties are taken into account. We use different
simulation tools and methods to calculate these properties. If the calculations of the concept are
satisfying, we decide to build a prototype. Afterwards, we test this prototype. Within R&D, designers
can face difficulties with the testability of a certain product. Therefore, we also create new testing
methods. If the testing results are satisfying as well, the product can be released for manufacturing.
Rob: What most attracted you to your present work? How did you become involved in your current
work?
John: Im a long time active in this company now. I graduated in 1996. In that time, I had my first 2
years working experience in Ford Lommel. Afterwards, I went to Tenneco Inc. What really attracts me
to work for automotive companies is that they offered me the chance to develop and design cars and
other similar machines. Im not an auto freak, but Im interested in everything that concerns
sophisticated technologies. In the 2 years I worked at Ford Genk, I have had a good profile to make
the switch to Tenneco in Sint-Truiden. After 18 years, it is still interesting and fascinating to learn new
trends and technologies in the automotive industry and I dont feel the need to work for another
industry.
Rob: Can you give me a brief description of how your company applies innovation?
John: We try to innovate in a structured way. There are certain steps our employees follow. New
ideas of individuals can be generated by visits to other companies and fairs, benchmarking towards
competitors, specific questions from customers. Throughout different channels, questions and ideas
can arise. We try to implement these ideas in our product development process. Thats how we create
knowledge. Beyond that, research is conducted to examine new materials, new techniques and
methods, who cant be translated yet to the product. These researches are done in collaboration with
academic and professional research institutes. By the use of these different channels we decide

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whether we use this knowledge to figure out a new product concept. Afterwards, there will be a
product development process that is composed out of 4 stages. So first of all, a concept is developed:
what is the functionality of the product? In a second stage, prototypes will be developed and tested.
It can happen that there is a specific validation of the product for a customer whos interested. We
refer to this customer as an early adopter. This customer will decide whether he wants this product
for its production. If there are more customers who are interested in the product, there will be a full
validation of the product. This is the third stage of the product development process. In parallel you
also need to develop your production processes, apart from the product design itself. In summary, we
first develop internally, check the functionality of the product and validate the product. If the early
adopters are interested, we perform a full validation.
Rob: How do you define your company culture?
John: Our company culture contains a mix of American and Belgian values. We have an open office
structure as you can see. We want to encourage interaction and idea generation. Throughout the
departments, we want to enable learning. Our employees have to work together with different
departments. You have many departments in our company: sales, engineering, manufacturing,
purchasing, advanced manufacturing engineering and many others. They should collaborate in an
efficient way. We regularly organize brainstorm sessions to figure out new concepts and designs and
to make improvements on the existing ones. Still, we have certain procedures that needs to be
followed in order to work efficiently. We try to find a balance between people coming with new ideas
and the structured development processes. Since a few years, we have fixed procedures we follow in
the case we want to develop a new product. In the past, we used less structured procedures for
product development processes. We have noticed that this was not the best way to work efficiently. It
is good to start in a new framework, but you also need to terminate the project successfully. There
are also restrictions upon people and resources. Therefore you need a to make a good judgmental
estimate of which projects are the best (using real option pricing models, NPVs, IRRs, ).
Rob: Which tools do you use to maintain a clear and fast communication among your employees /
colleagues?
John: One communication tool are project or team meetings, often scheduled on a weekly basis. If
we organize too many meetings, it will be inefficient. We communicate face to face, through phone
and GSM, through e-mailing systems, through web- and videoconferences. There are also some chat
opportunities. We make use of portals and intranet.
Rob: Is every department represented in those meetings or do only department members attend the
meetings?
John: I think that every department scheduled a meeting at least one time in the week. As for our
department, we have a meeting scheduled one or two times in the week. The most meetings we have
are project related and consists out of people who come out of different departments. People who
attend these meetings thus have different competencies. Within a department, you have a team
leader, but also a product owner and a designer. It is possible that those people work for the same
department, however they have different competencies as well. In every meeting, people with

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different competencies are present. Also, we develop products for plants located in Poland and Spain.
In this case, we make use of web- and videoconferences.
Rob: How do you motivate your employees / colleagues to admit small/large errors they made?
John: In the first place, we try to avoid mistakes. If an error or mistake is made, we will notice it
somewhere in the development process most of the times. For instance, a validation that turns out to
be not OK or a component that fails to work how it is designed to work. Exceptionally, the customer
will identify mistakes made by our employees. We try to figure out where the problem is situated. Is
there a defect? What caused the defect? Did our technician forgot to integrate a certain component in
the product? Is the product developed accordingly to the technical drawing or design? Did our
employees purchase lower quality steel from suppliers? Is the package damaged? Is the product
damaged while transporting it? Our first priority is to search for a solution for the problem. Once the
problem is fixed, we try to learn from it in order to avoid similar incidences in the future. In most of
the cases, a mistake cannot be attributed to one individual. You can say that an individual made a
wrong design drawing. Okay, this could be possible, but these drawings should be reviewed,
monitored and recalculated by other people. A calculation can give incorrect results or can be
forgotten. Monitoring people may have forgotten to check certain specifications of the drawing. Early
stage detection of the mistake is crucial: once the customer is faced with the problem, it is already
too late. If the team leaders notice that there are mistakes made in the drawings, the problem is
identified in an early stage. In that case, the problem can be fixed before the product reaches the
customer. It is normal that technical drawings and concepts can contain a mistake, however this
amount should be as small as possible. It is not allowable that problems keep recurring. People who
keep making the same mistakes, will most likely get fired sooner or later. This goes for most
companies I think. Our product development process is built to detect problems in an early stage.
When the problem is detected in a later stage on the production line, it is likely that the problem is
located in precedent phases of the product development process. Our first concern is to avoid similar
future incidences and not pointing the finger at the ones who are responsible for the problem. Most of
the problems are thus detected before they reach the production line. We have certain quality norms
that are stated into KPIs. We try to reach a minimum of PPM (Parts Per Million). Our PPM-rate is
between the 10 and 20. The PPM-rate measures the total amount of defected pieces when producing a
million units of the product. Of course, our production unit encounters more product defects. The
quality control people makes sure that the PPM-rate is reduced to a minimum. If these quality controls
were absent, we would have a PPM-rate of 100 or 200. We also subject supplier materials to quality
controls. PPAP makes sure that a finished good will be validated. Before something gets into
production, you have many quality controls in order to reduce the probability of product defects.
Rob: How do new employees / colleagues adopt existing working methods in the organization? Is
there a process/guideline?
John: Employees receive a standard introduction training. In this training, they will acquaint with the
organization. They will be introduced to their colleagues and department representatives. Obviously,
someone who works on the production line has to get another training than the people who work for
the engineering department. For everyone in the company, there is a certain introduction course

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which we call blue card. On this blue card there are several competencies that the employee in
question needs to achieve. Independent of the job of employee, there are certain basic training
sessions, like product trainings and awareness trainings. External trainings will be organized as well.
Rob: So everyone is aware of the interdependency among the departments?
John: Yes, they should have an idea of how the organization is organized. There is always a guided
tour for new employees we hire. He will shake a lot of hands and gets familiar with the people he is
working with.
Rob: Does your company engage in any learning activities (e.g. R&D collaboration) with external
partners (universities, suppliers, customers etc.)? If yes, why do you engage in them?
John: Yes, we collaborate with suppliers, development partners, research centers (like universities),
logistic and production processes partners.
Rob: How do these external engagements help you to advance own internal processes/products?
John: We learn by realizing, analyzing and discussing projects as a team. We have certain partners
that gives us knowledge when we pay for it. We often start research projects together with these
partners in order to create mutual benefits. You learn out of these projects, the knowledge will be
documented. The aim of a development project is to document everything that you learned. This can
be guidelines or design rules. If you collaborate with a university to realize a development project, the
research results will be saved and documented as well. As a firm, you enlarge your knowhow.
Rob: Okay, so this can be equated with a sort of lessons learned guideline?
John: Not exactly, because lessons learned only focuses on the generation of solutions after mistakes
have been made. This will be documented stepwise. If we encounter several problems when
developing a product, this will be solved. We make use of a 8D procedure where the problem is solved
in 8 steps. One of these steps includes the avoidance of problem recurrence. Corrective and
preventive action plans are designed to achieve that goal.
Rob: In most of my interviews, this 8D procedure comes back when handling problems, product
failures and product recalls. Is this procedure mainly used in the automotive industry or do other
industries use this procedure as well?
John: The 8D procedure is a tool to solve problems structurally. First of all, you have to identify the
problem. A Root Cause Analysis (RCA) is something that is used to determine the cause of the
problem: which component caused product defect or failure? Are the other components affected as
well or is the problem situated solely in one component? When and where does it occur? In which
cases doesnt the product defect occur? Beyond the 8D procedure, you also have other tools to solve
problems, like the fishbone analysis. In the fishbone analysis, you search for causes of the problem.
Can it be attributed to the operator or the machine? Can it be attributed to the environment, design
or process?. Afterwards you narrow the causes of the problem: what can go wrong with the
machine? Most of the times, finding a solution for the problem is an urgent case. It can be that you

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have to conduct a temporary containment action. For instance, we are going to sort components in
our factory or in the depots of our customers. We are going to sweep certain product types. The
containment actions are very costly. Therefore that companies want to keep this period as short as
possible. You have to identify your problem very accurately to identify the right cause. You have to
test the product again and do different measurements. Consequently, you need a corrective action
plan: how can you solve the entire problem without causing another defect? After a corrective action
plan, you have a preventive action plan: how can we avoid the recurrence of the problem?. If
everything is solved, you congratulate the team for solving the issue.
Rob: How does your company take into account potential market threats (price fluctuations, decrease
in demand, )? And how do you react against actions from your competitors?
John: If we offer a new project, we will hear from our customers whether we are too expensive or
not. This is related to what our competitors have to offer. If we are indeed too expensive, we examine
how we can cut costs or we decide that the project is not attractive any more from our point of view.
They have to take the price as it is in that case. We also make use of benchmarking when exploring
new technologies. We also buy products that our competitors produce. We compare them with our
products to see what is better. By analyzing the products of our competitors we try to improve our
products.
Rob: Okay, many automotive firms use the Toyota lean production system in their production
processes. Is this also the case in Tenneco.
John: Yes, we use a variant, called Tenneco manufacturing system. But this is not really new. In the
time that I graduated, the Toyota lean production system was the famous benchmark.
Rob: How would you describe the competitive advantage of your company?
John: We are the biggest shock absorber manufacturer on the market. Together with a German
competitor, we are the market leaders. We are superior in turnover, production volume and
technology. The customer can come to us with a specific demand, we almost always have a technical
solution for him. Im speaking now about the OEM market, not the aftermarket. We are also very
flexible in comparison with our competitors. The engineering center in sint-Truiden is located centrally
in Europe. We can get easily to our French and German customers. We also have good connections
due to the airport in Brussels. Besides that, we often can speak the language of the customer. As for
the aftermarket, we have spare parts for more than 90% of the vehicles on the road today.
Rob: Ok, I just wanted to ask you whether you have a spare parts distribution center. Where is it
located?
John: Indeed, our spare parts distribution center is located in Sint-Truiden as well. This is a very
large European depot facility where all our spare parts are located. We also have certain targets to
cover the market. I dont know the exact numbers, but lets say that we have shock absorber spare
parts of 90% of the cars who drive nowadays on the roads.

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Rob: How does your company adopt new technologies? You already mentioned this a bit, are there
any more things you want to add to this question?
John: We make use of benchmarking and trend watching. We observe new technologies together
with external partners. We go to fairs.
Rob: How do you find out about any incidences (of other companies) concerning organizational and
product failure (media, press, etc.?)
John: Most of the times, we detect our problems and defects before they reach the customers. I hope
that our product failures never reach the press. This is a sign that the impact is very severe for the
safety of customers, for not complying with legislations or by making repeated mistakes. If there is a
defect in our shock absorbers, our customers, like Ford, will give us a sign that there is something
wrong. As for our aftermarket customers, we provide certain warranties for them to prevent customer
dissatisfaction.
Rob: Do you try to learn from others successes, failures or both? I think of the failing of airbags, like
the ones of Toyota in 2009 and 2010. Could you please give me an example?
John: Yes of course, we try to learn from others successes and failures. In the past, we have noticed
that small mistakes can have big negative consequences. I think of safety problems and cost
increases. The things that we learned out of these mistakes is that we have to build more certainty in
our products and do an additional quality control. We regularly update our check list.
Rob: What do you understand as a product failure?
John: If the product doesnt meet customer requirements and demands, you can speak of product
failure. They send it back from the field to us. A shock absorber that doesnt work properly causes the
car to drive rougher. In that case, you feel every bump in the road what isnt a pleasant experience.
Another product failure could be that corrosion caused a damper to drip oil from the car. These are
product failures that are noticed by the customer. They are observable. Another example is annoying
noise caused by one of our shock absorbers. The OEM will notice product defects as well of course, but
these are less severe.
Rob: How do you ensure safety standards for the customer? What is the role of quality management
in your company?
John: Concerning safety, we dont have a lot of norms or standards. Still, the OEM has a lot safety
standards. The car as a whole needs to fulfill certain quality and safety standards. We have to fulfil
certain requirements resulting from these quality and safety standards. We have to fulfill specific
environmental requirements, but our customer is subjected to comply with the strict quality and
safety norms. We work with a tool called FMEA (Failure Methods and Effects Analysis). In this tool, a
product is analyzed as a whole. In the FMEA we make use of a scale from 1 to 10. 1,2,3 are labeled as
Safe defects, not noticeable for the customer. 4,5,6 are labeled as Medium defects, noticeable for
some high demanding customers. 7,8 are defects that are considered to be noticeable for all
customers using the product but arent safety violating. In this case, you need to go to your garage

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dealer to fix the problem. 9,10 are labeled as Critical defects and concern defects that endangers the
safety of the customer using the product. If a defect is labeled as safety critical, you risk getting an
accident if the problem would occur. If a spring which is assembled on the front side of the shock
absorber would break, it can happen that the metal of the spring forms a sharp edge that punctures
the tires of the car resulting in a tire blowout. Most likely, this will be labeled as severity level 10 of
the FMEA scale (Critical). Endangerment of the safety without warning is the most severe product
defects you can have. If the customer experienced a noise before he had the blowout, this could be
labeled as a severity 9. There was a warning noticeable for the customer. Other things are stated by
law. I think of the torque moment of a nut or bolt you have been to Facil I have been told, so I
guess you know more about this than me. For every nut runner, you have a certain speed, torque and
angle that you need to take into account to ensure the car to be assembled steady. As for us, every
shock absorber is traceable.
Rob: Did your company ever conducted a product recall?
John: Yes, we have had some product recalls in the past.
Rob: How does your company deal with product recalls? Can you describe a process of the different
steps that need to be taken in case of a recall?
John: A product recall is a sign that something is severely wrong with your product. Even in that
extent that the product needs to be actively removed from the market. In the case of a product recall,
finding a solution is more urgent than in the case of a usual product failure. We sort out which firm is
responsible for the defect. As a firm, you dont want to turn up for costs that are caused by another
firm. Maybe the supplier was responsible for the product defect? Or maybe the customer was
responsible for the mistake as well? You need a more critical analysis in order to solve a product recall
crisis.
Rob: Can it be the case that the customer misuses your product?
John: Normally, we get specifications of our customers. If the customer sends a notification that one
of our shock absorbers breaks after applying a force of 10 kilo newton on it, we compare it with the
shock absorbers we have in stock. If we notice that our shock absorbers will break if a force of 20 or
30 kilo newton is applied on the components, we give this information to the customer. We will try to
find a solution for this customer, however he has to pay for it. If it was our fault, we pay for it of
course. Another example of the misusage of our products is a technician who used the wrong working
tools to assemble the shock absorber. The customer assembled the shock absorber in wrong way, so
he has to turn up for the damage that was made.
Rob: What is the role of regulations / standards in product recalls, besides the safety standards you
mentioned before?
John: Emission norms cause a focus for engineers to develop new lightweight materials. A reduce in
weight of the car causes the car to use less fuel than when original materials are used. We are
occupied with a project that concerns the development of shock absorbers that can create electrical
energy on their own. If a shock absorber absorbs energy, it stores heat. If we could transform this

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heat into electricity by using an electric convertor, we could use this electricity for other applications.
Towards environmental issues, I think of the avoidance of dangerous materials in the composition of
the components, like Chrome 6 and lead. Materials that are hazardous and poisonous may only be
used in certain amounts and circumstances in the automotive industry. A zinc coating is used for
protection against corrosion. In the past, there were components that contained such a zinc coating
before technicians weld them. The fumes that come out of the burned zinc are very toxic. This is not
allowed any more. Also, lead was used in the rods of the shock absorber. Only very little amounts of
lead are used now in the rods. Those materials can be dangerous for aftermarket customers as well as
technicians and the OEM customer. When the product reaches the end of its life cycle, it needs to be
recycled. If zinc, cadmium and lead are dumped beneath the earth, the whole environment will have
medical complaints.
Rob: Are there some defected products that are reduced to scrap?
John: All products that contain a product defect that is identified before its sold, will be
contaminated. You also have certain components that can be reduced to scrap. For instance, we make
use of steel plates where technicians need to stamp a few circles. What is left of the steel plate after
the technician is finished, is residual waste that can be reduced to scrap. We take the amount of scrap
in consideration when we make calculations. We buy pipes from 6 meters. The shock absorber
measures 303 millimeters in the longitude so it would be an enormous coincidence if we dont have
scrap from the pipes we purchase. You always have scrap. In the case of a product defect, you have
unforeseen scrap. In peculiar case, we make use of rework. The extent in which rework is possible
depends on what went wrong in the production process. If a rod is sawed 10 millimeter too long, we
can fix that. If a rod is sawed 10 millimeters too short, it will be reduced to scrap.
Rob: Do you also use certain outputs as inputs of your production processes? Im talking about
sustainability here.
John: We sell the scrap we have from our production unit to a metal or steel supplier. We have
containers that only contains this metal waste. Most of our waste is sorted, recycled and reused.
Rob: What are the consequences of product recalls (ranking by importance viewed by interviewee)?
Which problems could arise?
John: In my point of view, a product recall has a negative impact on the reputation of the company.
Reputation damage towards customers is unavoidable when conducting a product recall. If you deliver
defected products to your customers and proceed production without taking actions to containment or
improvement, the customers will consider to stop buying from you. You need to make a new design:
this costs money. It concerns short term damage: quality control that is not functioning well. But you
also have long term damage: reassuring your customers. We try to learn out of product recalls, but I
would not say that a product recall is a positive event. It is far from a positive event. We try to
compose a lessons learned schedule to avoid similar problems in the future. Processes and working
methods should be improved after putting this schedule in practice.

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Rob: Have product failures been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
John: Yes, in the past we have had a jaw bumper. This is a bumper that is assembled on the front of
the shock absorber. In certain overseas markets, these bumpers were exposed to moisture, sand and
salt. The bumper complied with local legislations and the specifications were correct and accordingly
to the drawing. Still, we get several customer complaints. Corrosion was formed on the front side of
the bumper: this also caused the rod to be damaged. If the rod is damaged, we get a blockage in the
absorber. Out of this specific event we have learned to protect the bumper from water, sand and salt,
even if the customer doesnt demand it explicitly. We also have learned that we need to make more
accurate measurements and calculations of certain components. We learned to correlate calculations
with tests. The aim of learning in an engineering point of view is to avoid collateral damage and to
make improvements in order to avoid future product failure.
Rob: Have product recalls been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
John: The jaw bumper incident did not result in a product recall. Our OEM has changed the jaw
bumpers of the shock absorbers when they are brought in for maintenance. This was included in the
warranty for the aftermarket customer, so he enjoyed costless replacement. For motorbikes we have
had to conduct a product recall in the past. In the field, there were 2 incidences that happened that
could be attributed to the failure of our shocking absorbers. At that time, we decided to call back all
the shock absorbers of that product type and stop the production of it. This resulted in the
improvement of calculations concerning rods. These calculations made our rods stronger. We made
our acceptance policy stricter.
Rob: Which has the higher impact on learning: product failure or a product failure followed by a
recall?
John: A product recall increases the probability that all the lessons learned are applied in practice.
The improvements that are made have a higher impact on the learning behavior of engineers and
designers. In my opinion, you can learn more from product recalls, however they are not very
common. There are only few cases were a product recall is plausible.
Rob: Ok, thank you! this was the interview. I thank you for the time you made available to help me
out.
John: It has been a pleasure. Good luck with your thesis.

General information

Name: Luc Huygen

Working for the company since: 2015

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Function: Manager Quality Benelux

Turnover/sales: 88 753 526 euros

Operational / strategic management: Operational

Employees: 200

Company name: Kautex Textron Benelux BVBA

Headquarters: Bonn, Germany

Most important product: Fuel tanks

Date interview: 04/06/16

Main suppliers: Facil

Location interview: Tessenderlo

Interview 6
Rob: Good afternoon Mister Huygen! To start, can you give a short introduction of who you are and
your role within the firm?
Luc: Sure, we daily produce between the 6 and 7 thousand gasoline and diesel fuel tanks. We have 4
customers, all situated in the OEM market: Volvo, Ford, Renault and GM. We are tier 1 suppliers for
them. This means that we are responsible for defects in the fuel tank and certain related components.
We are not responsible for defects made by tier 2 suppliers. The most critical part of the fuel tank, the
pump, is sourced by the customer. The OEM purchases these pumps mainly from French and German
suppliers. As for clips, straps, rollover valves, heat shields and plastic products, they give us the
freedom to choose our suppliers ourselves: this a task for our purchase department.
Rob: What are your duties and responsibilities?
Luc: As a quality manager, Im responsible for all the quality systems within the organization. I take
the lead of a department that is concerned with performing measurements, handling customer and
supplier complaints. Also, I coach my team members that consists out of 3 quality engineers and 1
supplier quality engineer. We perform 3D measurements and use scanning tools. During the shift, we
constantly have 3 quality inspectors who walk around in the production unit. They monitor the whole
production process and are responsible for the final quality control. We are ISO TS 16 949 certified.
Reaching this ISO norm is my responsibility. We are also certified with ISO 14 001: this norm has to
do with environmental issues and is the responsibility of one of my colleagues. Im not responsible for
the care system. In many automotive firms, a quality manager is responsible for the entire care
system: this includes safety, environment and quality. In this organization, the care system is
subdivided into these 3 categories. The new trend in the automotive industry is to appoint a care
system manager: this job consists out of safety, environmental and quality issues. I also provide
product quality trainings to my team members, especially the interims.
Rob: Ok, do you have specialized climatic test chambers to perform measurements?
Luc: Yes, we do. Here in Tessenderlo, we have a 3D measurement chamber. Still, every test that
needs more accuracy, will be conducted in the European headquarters in Bonn, Germany. In
Tessenderlo, we perform tests by the use of measurement banks, the 3D measurement chamber and
scanning machines. The scanning of fuel tanks is a new technology in comparison with the traditional
measurement tools. For certain customers, we need to measure a given amount of fuel tanks per
shift, per day, per week or per month

this is stated in the control plan. In this case, 3D

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measurements are performed. If we want quick results, the fuel tanks are scanned. Within 15
minutes, you will get the scanning results.
Rob: What most attracted you to your present work? How did you become involved in your current
work?
Luc: I have done several projects concerning quality issues in the past. Im active for about 30 years
now as a quality engineer and I have 15 years of experience in the automotive industry. Also, I have
worked at many locations: I looked for new challenges overseas. I am always fascinated by the
composition of certain materials and the complexity of how components can be assembled together to
form a finished product. The reason why I work here concerns private reasons. I have done projects
in South-Africa and in Spain. Afterwards, I made the choice to go home again and to work here also
due to my age. I have also been active in the synthetic fiber and plastic products industry. I have
designed interior components of cars in the past. The kind of job I do now is actually something
entirely different: it is a challenge for me.
Rob: Can you give me a brief description of how your company applies innovation?
Luc: Nowadays, they design the cars with lightweight materials to reduce the amount of fuel costs for
the aftermarket customers. Plastic and synthetic materials are lighter than metal, steel and aluminum
materials. One of the type fuel tanks we manufacture here contain a lot of pipes within the fuel tank
interior. This is a new technology. There are 2 main reasons why this innovation is applied by our
company. A first reason is that lightweight pipes cause the fuel tank to reduce the cars weight
because less pipes on the exterior will be assembled. Besides a loss in the car weight, sound will be
silenced in a certain extent: everything that is assembled on the exterior of a fuel tank can rattle.
Since pipes are assembled in the interior of the fuel tank, the aftermarket customer will experience
less noise problems. It can be that your fuel tank hits an external pipe that starts to shake against
the chassis of the car resulting in an irritating sound. Heat shields are assembled beneath fuel tanks
to make sure that fuel doesnt make contact with the axles of the car. It is a sort of protective metal
shield that prevents heat transfer. It is also possible that this heat shield starts to shake when a screw
comes loose. Furthermore, we also look at better and more efficient packaging methods to reduce
waste, to enable packaging speed and to use ergonomic designed packages in favor of our customers.
Still, packaging is not our core-business. We in this plant are a series production manufacturer, all our
technology representatives and R&D people are situated in Bonn. Another new innovation that we
apply, is the manufacturing of a carbon canister. Together with BMW, Kautex Textron is designing a
new sort of carbon canister. A carbon canister is also made out of lighter, synthetic materials and has
the aim to vent the air and purify the gasoline or diesel. We also design hybrid (pressure-fed) fuel
tanks for our Volvo clients.
Rob: How do you define your company culture?
Luc: Kautex Textron is actually a fusion of Kautex, a German firm, and Textron, an American firm.
The company has an American company culture. Safety is priority number one. We have to make sure
that employees work safe and stay satisfied. We also have a sign in the entry area which states the
total amount of days without work place accidents. Today, Kautex Textron has survived 50 days

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without work place accidents. Hopefully, we persist in this number. We are also very quality
conscious: we strive to have 0 customer complaints. Furthermore, we want to avoid product recalls you know the story of Volkswagen already. It is very painful to conduct a product recall. Since the
foundation of this plant 25 years ago, Kautex Tessenderlo has never experienced product recalls
before. Our company culture is open-minded. I think that Kautex offers new employees many growth
opportunities. Last month, I have had 2 trainees in my department: a Chinese boy and a German girl.
They are accomplishing 4 projects during 6 months. Afterwards, they can decide whether they want to
work for the quality, logistics or maintenance department. Most of the trainees take the projects
where they graduated in. A graduate engineering student will probably take an engineering project.
Rob: Which tools do you use to maintain a clear and fast communication among your employees /
colleagues?
Luc: In the morning, we have daily meetings. Afterwards the outcomes of these meetings will be
communicated towards the production unit, the most crucial unit of our facility. We start at 9 oclock,
logistics at 10 oclock. After every fifteen minutes, there will be meetings in the production unit at
each line: there are 7 lines in this facility. At half past 10, we have our communication meeting with
the management people. We have top-down meetings concerning the events from the past 24 hours.
Communication tools we use are e-mailing systems - however we try to avoid e-mailing
communication in some extent - and visual management screens. These screens contain certain
process cards with new improvements that are made. While Kautex technicians and operators face
difficulties, they have the possibility to call a specialized problem solver. We call this ANDON: a
system developed to report manufacturing problems. Through cellphones, the quality inspectors and
team leaders will be informed that there is a certain problem present on one of our 7 lines. We also
make use of web- and videoconferences. Besides that we sometimes communicate through LinkedIn
to stay in touch with external partners, customers and suppliers.
Rob: How do you motivate your employees / colleagues to admit small/large errors they made?
Luc: We have an open culture in Kautex: mistakes should be reported. Typically for the automotive
industry, we identify the root cause of the problem by a Root Cause Analysis (RCA). Why did it
happen? What can we do about it? How can we prevent similar future incidences? The PDCA cycle of
Deming is used to work on continuous improvements: we follow the steps of plan, do, check and act
to realize improvements which forms the base of a new planning, doing, checking and acting process.
Employees will be severely punished if they make mistakes intentionally. Punishments can result in
resignations or wage cuts.
Rob: Are product defects detected mostly in the field or at the production lines?
Luc: The operators and quality inspectors detect most of the product defects that are present. The
team member is responsible for the quality. If someone had his trainee and reaches level 4, he will be
assigned to conduct quality controls of the end production processes. If he denies to let certain fuel
tanks pass the line due to inconformity, he will call the quality representatives. Possible product
defects could be a failing pump or a dented fuel tank. We perform several tests which filters the
defected fuel tanks: we have a water test to expose any leakages that may occur. These leakages are

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tested thoroughly: it is not pleasant for the aftermarket customer to discover a pool of gasoline
beneath your car while parked in your garage. Defected fuel tanks will be extracted out of the
production processes. Last month, we had 16 customer complaints of whom 4 concerned our
responsibilities. For some complaints, we are not responsible. For instance, when the supplier gave us
poor quality materials. We dont manufacture the pumps. Still, we perform tests on the pumps we
purchase: we test floater resistance for instance. It is the responsibility from the supplier to test the
pump on other issues, like pressure tests. The employees of Kautex receive a bonus if no customer
complaints are reported or if there are no accidents in the work place. If a label is poorly placed, if
there is an assembly clip missing or if the assembly clip is assembled on the wrong place, there will be
customer complaints. This is due to the assembly employees who made mistakes in their handlings
and actions.
Rob: How do new employees / colleagues adopt existing working methods in the organization? Is
there a process/guideline?
Luc: There are training levels, consisting out of 4 levels. He or she will also get a basic training and
introduction. They will usually get 4 projects throughout the 6 months. When interims come to our
company, they will be informed about the main things that are present within the automotive
industry: 0 defects, safety regulations and so on. You cant wear jewels and watches and you are
obliged to wear safety uniforms (shoes, vests) while working in the production unit. For some
projects, you have mentor apprentice relationships. A new employee is wearing a red T-shirt: in that
case everyone knows that this person needs more guidance and monitoring. Since January, I work
with a new quality engineer who worked on the line first for 2 weeks. He gets an external educational
training in Bonn. He also gets addition trainings concerning quality measurements and tools. A new
requirement of the ISO TS is to develop a matrix and evaluate the new employee that is hired. When
consulting this matrix, progress will be followed up and adjustment points will be reported. FMEA and
8D processes are less relevant for accounting experts, while operational experts can encounter 8D
problem solving process. This also needs to be taken into account.
Rob: Does your company engage in any learning activities (e.g. R&D collaboration) with external
partners (universities, suppliers, customers etc.)? If yes, why do you engage in them?
Luc: We collaborate with our sister-companies and suppliers. The cleaning of the factory and the
maintenance will be conducted by a supplier. We have had the intention in the past to go to the LUC
for a certain kind of problem, however we have noticed that we could solve it ourselves when
cooperating with our European headquarters in Bonn. So we actually dont cooperate with educational
institutes or specialized R&D institutes.
Rob: Which sources of inspiration does your company use for new products/technologies/processes?
Luc: We try to pick up new knowledge from fairs and competitors. We analyze the products of our
competitors in Bonn. This also goes for the OEM. In Volvo, they also observe the components of
Renault to make a comparison. My trainees have been to fairs, like the auto salon fairs in Brussels
and Hamburg.

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Rob: How does your company take into account potential market threats (price fluctuations, decrease
in demand, ) ?
Luc: Every year, there needs to be a reduction in price concerning our fuel tanks. For instance, if a
fuel tank costs 50 euro today, it is expected to cost 48 euro next year. The automotive industry is
keen on cost cutting. We search for new opportunities to cut costs by automatizing processes.
Outsourcing by suppliers is also an alternative we can take in consideration. We come up with many
creative solutions to cut costs. We also try to reduce the number of tests by reducing the samples. We
have statistical programs that keep track of product defects. Of course, you have to make sure that
product defects have at least the same probability to be identified as in the case that you made the
sample bigger. That is a challenge for us.
Rob: How would you describe the competitive advantage of your company?
Luc: Our competitive advantage is the service we offer to our customers: our delivery time is
extremely fast. We sometimes receive compliments from our customers that we were able to deliver
our products on time anywhere in Europe. We have resident engineers all over Europe: if there is a
customer complaint, they will be the representatives of our company present. The alertness and
speed of reacting to customers is defined as our most important competitive advantages. We monitor
customer satisfaction by asking him whether the product fulfilled his expectations. While facing
complaints, we try to find a solution together with the customer.
Rob: Do you also make use of warehouses?
Luc: No, all our Kautex facilities are production plants. In the past, the assembly of fuel tanks is done
by Volvo and Opel, but this diminishing. Full fuel tanks are made in this plant, except for some
components. We dont manufacture filler pipes for example. As for our sister-companies who are
connected with Volkswagen, they do assemble their filler pipes on the fuel tanks. In a logistical point
of view, we prefer to do the assembly with the filler pipes elsewhere. There are 2 reasons why we do
this. First of all, filler pipes differ across the type of car that is preferred. You need to foresee different
package methods for every different type. Secondly, it is very unpractical to strap and pack a filler
pipe due to the special form. The filler pipes are manufactured by the OEM customers.
Rob: Do you also have a spare parts distribution center?
Luc: We have 2 types of spare parts: fuel tanks and supplier components. As for fuel tanks, we
deliver them to the OEM. The OEM is responsible for stocking the spare parts in their warehouses in
order to help the aftermarket customers when they face leakages or other problems with their fuel
tanks. For instance, Toyota Diest has a warehouse where the spare parts of every component that
needs to be assembled, comes in: we supply them. We have a software tool inside Kautex to ensure
that articles of injection molding machines and bladder machines can be delivered quickly: whoever
needs these articles can use them within the 2 to 3 hours. Some supplier components can be send to
the OEM warehouses as well if the original supplier is unable to make a delivery and if this is asked by
the OEM.
Rob: How does your company adopt new technologies?

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Luc: We collaborate with our machine builders, like SNS Pneumatic, to discuss new technologies.
Also, we work together with the robotic engineering people from KUKA. So the collaborations we have,
mainly come from suppliers. There are intern workshops that are given in Kautex. We try to make
improvements by using lessons learned schedules. We have an important supplier in Spain of whom
we are copying some technologies from. You can call this a form of benchmarking. We try to monitor
their key indicators.
Rob: How do you find out about any incidences (of other companies) concerning organizational and
product failure (media, press, etc.?)
Luc: Customers and suppliers have a portal where they can log in. Luckily, our product failures never
reached the media.
Rob: Do you try to learn from others successes, failures or both? Could you please give me an
example?
Luc: Of course, we try to learn from suppliers and competitors: what problems did they encounter
and how did they solve it? Designing and developing a fuel tank is a safety issue: I was surprised in
which extent Kautex emphasizes the safety aspect. If the thickness of the fuel tank is lower than the
allowable standard, the fuel tank will be put aside and destroyed. Even it concerns a 1 millimeter
deviation, the fuel tank will be thrown away. We cant take the risk to endanger the customers safety
for it. On the other hand, you can say that a fuel tank is not visible to the aftermarket customers. You
may think that it is not so bad if there is a millimeter deviation in the thickness of the materials. We
cant allow this: it is a hidden defect. If the fuel tank is dented, we will not perform rework on it,
instead it will be thrown away as well. What is the problem in the case of a dented fuel tank? Well, the
volume of the fuel tank is lesser than a standard one. Instead of 50 liters, you only can tank 47 liters.
This can result in customer complaints. He will ask himself whether he consumes more fuel due to his
own actions or whether there is a hidden manufacturing defect? I was also surprised by the
complexity of a fuel tank. If a car is catching fire, there will be a RCA. Maybe it could be that one of
the pipes popped off. Or maybe it was due to the flow of gasoline to the engine of the car. Or did the
driver hit something on the road?
Rob: Ok! I think you already answered this question already in your last sentence, but is it possible
that the defect is caused by the aftermarket customers?
Luc: Yes, it could be that he didnt drive safely. We confront the aftermarket customer with pictures
and images if he is not convinced that he caused the defect. I would also like to add that you have 2
kinds of customer complaints. First of all, you have the complaints that come from the OEM: they
cant get the components assembled to the fuel tank due to a certain defect or deviation. Secondly,
you have the problems that occur in the field: an aftermarket customer starts his car and after 20
kilometers, he will be off the road due to a defect. We call these complaints warranty claims. The fuel
tank will be send back to us and we investigate whether there are any manufacturing defects
noticeable. Sometimes, it happens that the dealer didnt assemble the pump correctly. Through
photos that are made before, we say to the OEM that this is the responsibility of our pump supplier. If
it is our responsibility, we reimburse the customer by costless replacement.

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Rob: Do you have response teams in the case of a product failure or product recall?
Luc: The customer complaint service is available 24 hours a day. As a quality manager, you can be
called at any time if there are problems with customers or with the production unit. You also need to
take into account the time differences. For urgent customer complaints, we have representatives who
pay a visit to the customer within the 24 hours. We also work with rework firms who support us. If
fuel tanks are sorted badly in the production facility in Kln, we will call our local representatives to
check the OEMs stock. This is a free service we give to our OEM customers. We have to make sure
that the production in our plant continues. All of our fuel tanks contain chips for the reasons of
traceability. There is an history of fuel tanks available: Which pumps are assembled when? When did
the blowing process start? The clips we use are not traced. The components that could have an
impact on the functionality of a car are being traced.
Rob: What do you understand as a product failure?
Luc: If I have a look at the history here, the most common mistakes are human mistakes: employees
assemble the wrong type of pipes or they use the wrong tools to connect components together. There
could be a label missing, a clip could be assembled in an inappropriate way and so on. As for
functionality, we cant be blamed. Still, there have been some assembly mistakes in the past within
Kautex. As a result, there is now a better monitoring process and there are also some other actions
that discourages failure tolerance. Customers have become high demanding throughout the years.
This is common in the automotive industry.
Rob: Concerning the quality requirements of certain products, I have been to Facil, which is a nut,
clips, washer and bolt distributor. Now, I have heard that they are especially concerned complying
with local legislations and ISO-norms. Why do they have stricter legislations than Kautex?
Luc: Well, I think this is for all automotive firms the same. Of course for a bolt and nut manufacturer
or distributor, you need to respect certain torques. The same goes for us, we have to assemble the
pumps on the fuel tanks with a certain strength defined by torques. If we cant torque the pump as it
is supposed to be, we head to our supplier and tell him the problem.
Rob: How do you ensure safety standards for the customer?
Luc: Concerning safety, we get audits from our sister-companies. 3 days a month they will sweep the
plant for conducting a safety inspection. The measurements they make concerns ergonomy, incidents
and accidents happened in the organization, the identification of labels concerning safety and the safe
use of tools. Like I mentioned before, Kautex organizes workshops. As for ISO TS, we are TUF
certified. Every 3 years, you need to be recertified. In a follow-up audit, there will be evaluated how
production processes improve within the 3 years. This is very intense: the inspectors will ask you
questions concerning the machine specifications, the working methods and the quality checks. Beyond
that, we also have the audits of our customer. There are yearly visits of our 4 customers. Begin June,
Renault will visit our plant for an audit. Today, Volvo was here. Regularly they also pay us a visit for
other issues.
Rob: What is the role of regulations / standards in product recalls beyond safety issues?

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Luc: We have to comply with OAS, the environmental legislation concerning quality. For instance,
soot resistance is measured.
Rob: How does your company deal with product failure? Do you follow an internal protocol?
Luc: If there is a big problem present within Kautex, we have a specialized team (including me)
ready to respond: they have to warn our team members, managers and directors. Suppose that we
cant deliver a certain product batch due to product defects: the quality manager has to warn the
plant manager and the headquarters. They are called together. Afterwards someone in Bonn will take
the lead and coordinate the steps that need to be taken towards the customer. A short term solution
will be proposed to him. A videoconference will follow to monitor the effect of the solution on the
customers satisfaction. We put this in a lessons learned schedule. As for product failures we follow
the 8D procedure. At first, every representative is called. Consequently, a containment action is
prepared. Then a corrective action plan is formulated to provide a short term solution for the
customer. After the corrective action plan, a preventive action plan follows to take up lessons learned
and provide a long term solution. The resident engineers will help the aftermarket customer to
implement the solution that is proposed. A quality engineer is expected to behave flexible. It is
important that the customer is supported and understood in the problem solving process. The supplier
quality engineer is responsible for identifying quality defects of supplier materials. My supplier quality
engineers are now in Switzerland, because we had some problems with the melting of heat shields. In
the case of a supplier product defect, we check his 8D procedure plan, his production processes and
his working methods. You can consider this as a supplier audit.
Rob: Do you make use of RANScodes to filter safety defects.
Luc: No, this is not applied by Kautex Textron.
Rob: Have product failures been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
Luc: We have had a customer complaint in the past that a certain clip was poorly assembled. With
cameras, we now make observations and comparisons between our products. At that time, we have
registered this manually: an operator needed to turf every fuel tank that contained the poorly
assembled clips. The use of cameras in the detection process was a big improvement.
Rob: What are the consequences of product recalls (ranking by importance viewed by interviewee)?
Which problems could arise?
Luc: You learn from every customer complaint. You notice that there are certain vulnerabilities in the
production and manufacturing processes. As quality manager, I have to ask myself how I can improve
the production processes, even if there are no customer complaints. In that case, its a matter of
efficiency. Delivering 0 defects is very difficult: both suppliers and manufacturers can make mistakes.
We try to automatize our processes, but there are still problems that can occur, like a printed RFID
label that isnt readable. The most common human mistakes are labeling errors.
Rob: How do you identify that a product defect is due to its transportation?

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Luc: In the past, it has happened that a shipment came loose while transporting the goods by boat to
Sweden. We were able to provide evidence by photos and images that the defects were caused by
transportation. We confronted the customer with the evidence who also directed the problem to bad
transportation. Other problems can be that fork lift drivers punctures the fuel tanks with their forks.
Rob: In the case of a product recall, do you think that they can be used as a source of improving
existing products/process?
Luc: Yes, you can learn from it and you can prevent worse. Preventing collateral damage is
paramount. But like I mentioned before, Kautex never experienced product recalls. Still, I think that
there are daily product recalls in the automotive industry, however they are not published in
newspapers: they are rather kept secret. This to reduce reputation damage and costly court
sanctions. For some product recalls, I even think that it is better that we never heard of them.
Rob: Which has the higher impact on learning: product failure or a product failure followed by a
recall?
Luc: I think that product failure followed by a product recall has a higher impact on learning if the
product failure is large scaled, severe and if lives are at stake. If the product defect is small scaled,
individual replacement will take place for the aftermarket customers and a redelivery will take place
for the OEM. Also, safety violations are hard to hide: product recalls of products that are not
endangering the customers health will be conducted more discretely without press reports I think. If
there is a defect located in a heat shield, the garage dealer may purchase the component separately.
In most cases, the garage dealer will order an entire fuel tank if the heat shield turns out to be
defected. In the past, they disassembled every component separately to identify the root cause and
replace the defected component. In practice, this is not done any more. If a bumper is broken
nowadays, the lights will be replaced as well. In the field, we have only had warranty claims. If the
pump of the supplier doesnt work properly, the costs of the product failure will be directed to him.
Rob: I have one more question to end with. Are there any counterfeit products of Kautex present in
the market?
Luc: No, our products are too complex to imitate. Let me say that I never heard of Kautex counterfeit
products before. For the automotive industry, this is a diminishing phenomenon I think.
Rob: Ok, this was the interview. I thank you for the time you made available to help me out with my
graduate project.
Luc: Thanks, the pleasure was all mine. Good luck with your thesis!

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General information

Name: Jo Torrekens (, Vincent Vanhauw)

Working for the company since: 1997

Function: EAME Quality Manager

Turnover/sales: 112 362 996 euros

Operational / strategic management: Operational

Employees: 713

Company name: Caterpillar Distribution & Logistics

Headquarters: Peoria, Illinois, US

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Most important product: Machinery & mining vehicles

Date interview: 04/14/16

Main supplier(s): Caterpillar Inc.

Location interview: Grimbergen

Interview 7
Rob: Hello gentlemen! Thanks for participating in this interview. To start, can you give a short
introduction of who you are and your role within the firm?
Jo: Good afternoon! Im the quality manager here in Grimbergen. My division is responsible for the
product quality inside Caterpillar. This implies that we start an inspection process once the materials
are received. These inspections can be methodological or dimensional. Depending on the results we
get after taking certain measurements and tests, the product will pass or fail the quality control. If the
product is conform and thus passes the quality control, it will be put on location. If it fails the quality
control, we start a process with the suppliers to come at a disposition or an agreement at what needs
to be done with the part or component. It can either be that we work together with the engineering
group of Caterpillar and the supplier to see if there is a possibility of deviating from the original
technical drawing. Still, it could be that the specifications of the components are not right or that our
supplier gave us the wrong components with different part numbers. If this is the case, we try to find
a solution to this problem together with our supplier. He can have it reworked here. If this is not
possible, we send it back to the supplier and he will have to do the rework himself. It can also be that
products or components need to be scrapped. Those are the decisions we take. If the problem is
solved, we bring the component back to the location in the warehouse. We apply a reactive approach:
we only perform inspections on materials that we see here on the receipt. It is based upon different
criteria we have in the system so we try to do it smart with historical data that we have about the
components of our suppliers in the system. We also try to perform salvage inspections. Those
inspections are not mentioned on the receipt, but originates from historical data of the inventory or
complaints that we have from dealers or other customers. We also conduct stock checks: we go to the
stock and verify the inventory. As for salvage inspections, the same process is applicable as
mentioned above after taking measurements and tests. We also try to identify who is responsible for a
certain product defect or deviation. If products arent stored, packaged or protected (against corrosion
or soot for instance) as they should be, Caterpillar is responsible towards the customer. For technical
manufacturing product defects, the supplier will be responsible. We as a team work together with
GSND who is responsible for Purchase Finished Suppliers. Those are external Caterpillar suppliers.
There are also Caterpillar production facilities. They manufacture vehicles and machines, but they also
produce parts and components. We do purchase some components of our Caterpillar manufacturing
facilities: in that way we have it in our own control. It can also be the case that the Caterpillar
supplier purchases from another supplier, 2 nd tier (sub-)suppliers. We have around 1200 PF
(Production Facility) suppliers. We also have an engineer working with those suppliers to work
proactively and avoid that they could be impacted with nonconformities. This is measured by the PPM
(Parts Per Million) indicator. Every supplier is expected to have almost the same PPM-rate. For some
product categories, it is harder to reach this standard. As for our company, the headquarters are
situated in Peoria, US. Caterpillar Distribution and Logistics Grimbergen is the 2 nd largest distribution
center of Caterpillar in the world. Our distribution centers distribute components to dealers. Our

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network consists out of dealerships. We dont have direct connections with the aftermarket customers.
Still, we can provide customer packs. We also supply parts to our Caterpillar facilities in Russia, Dubai
and South-Africa. We have these distribution centers over there because of velocity and complexity of
customer reasons. Think of Russia: it takes some time before you can pass customs at the border.
Rob: Okay! And which protection tools do you use to ensure product intactness when transporting
components overseas?
Jo: Well, there is the possibility that the supplier takes care of the protection and packaging of the
parts. In most of the cases however, Caterpillar is concerned with the packaging and protection of
components. This is done by a 3rd party organization within Caterpillar. Our external suppliers are
shipping in through that 3 rd party: we have composed guidelines how certain components need to be
packaged and protected according to the specifications in the system. Thats how we receive our
materials. In a parts distribution center, there is a focus on the long term while in manufacturing
facilities products will almost directly be consumed. Therefore, protection and packaging is a big issue.
As for logistics and transportation, you need to protect your product against water and salt when
shipping components by boat. Those are things where most production facilities are not concerned
with: they only do the prepackaging while their warehouses take care of the protective and customer
friendly packaging methods.
Rob: And who are your main suppliers?
Vincent: We provide the full range of Caterpillar products, so we have filter, hydraulic, fabrication
suppliers (making the bolts and nuts) and many others. We have around 1200 suppliers in total. We
redistribute the components we get through our dealer network. From a supplier point of view, we
have 3 entry points situated all over the world: Morton for the American suppliers, Grimbergen for the
European suppliers and Shanghai for the Asian suppliers. Parts are also redistributed throughout these
distribution centers.
Rob: What are your duties and responsibilities?
Vincent: Im part of GSND (Global Supply Network Division), a supplier network. We have 2 main
responsibilities. A supplier and logistic responsibility. My group, GSND Purchasing, makes sure that
the purchasing orders are placed and that suppliers deliver their components on time and provide us
with the parts complying with our specifications. We have a supportive role towards the suppliers. Im
also concerned with category purchasing. The type of product we buy is subdivided into several
categories: hydraulics, filters, transmissions, metallics and non-metallics. In each of these categories,
it is important to define a regional or global strategy. Global strategies can be applied to filters: they
do not differ much throughout the world. It is harder to define a global strategy for fabrication
components. For instance, Euro 6 engines are used in Europe, while they still use Euro 5 engines in
less developed countries, like Brazil. There are special customized kits developed depending on the
countrys needs and legislations. We try to keep product quality standards as high as possible and
search suppliers that can help us in our product development activities. We try to find best-in-class
suppliers. In order to achieve that goal, they need to be conscious of the latest technologies and
trends. We assist our suppliers when they encounter problems. If you need to solve a problem today,

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you have to react rapidly. Still, you have to make sure that you dont make the same mistake in the
future again. You have find a certain balance between a thorough examination of the problem and
solving the problem quickly.
Rob: Ok, thank you! Do you make use of lightweight materials?
Vincent: Our main focus is to make our products stronger, optimize the weight of the machine and
providing the right service to the customers. You have to be able to work with our machines. We try
to optimize the rotation per hours, consumption and emissions.
Jo: Caterpillar is recently investing in digital technologies and technologies surrounding a better
follow-up process. We provide a unique service to our dealers and aftermarket customers by
monitoring when the machines and vehicles need to come in for maintenance. We have a lot of data
in our machines that are known and where we work with to avoid product failures. In the future, we
want to track the movements of the machines, where it is located and so on. We also try to lower fuel
costs by reducing the weight of our machines and vehicles. You have to make sure that you have
those installations installed to beat your competitors. As we work with the dealer network, we have to
control our inventory levels. Our inventory needs to be as low as possible. In comparison with cars,
our machines and vehicles have a longer lifespan: 20 to 25 years. We still keep inventory of these
machines : you need to carry a certain amount of spare parts and you need to keep the right ones.
Rob: Can you give me a brief description of how your company applies innovation? I think the going
digital example you mentioned before is already a suitable innovative solution.
Jo: Innovation is a hot topic today. I think every firm has to innovate in some way. We have
dedicated business units who work with innovative issues. Customers nowadays expect that you can
buy parts through the internet at any time. Also, there is a better follow-up process due to certain
chips that track product performance. In that case, dealers know when a vehicle or machine needs to
get in for maintenance. Data will be sent from to a central system that alerts the dealers that certain
components are malfunctioning. Several customers were very happy with this concept, especially in
terms of cost reduction: the operator or driver doesnt lose time and the firm doesnt waste money by
shutting down the machine or vehicle.
Rob: How does your company deal with product failure? Do you follow an internal protocol?
Jo: We make use of the Deming theorem cycle in our product improvement processes: Plan, Do,
Check and Act. Within the Deming cycle, we work with several indicators, like the PPM, to work on
continuous improvements. These indicators work with a traffic light system: the indicators that show
red parameters need to be improved immediately, the yellow ones need to be adjusted (but is not
that urgent) and the green ones need to be maintained.
Vincent: The ones that deliver the eventual service for the aftermarket customers are the dealers.
We only assist the dealers by trying to find an optimal solution to product defects and other related
problems.
Rob: How do you define your company culture?

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Jo: We have certain values that are quite important for the company that are communicated topdown. These values are defined as integrity, excellence, team-work and innovation. They live in the
heart of every employee here: business needs to be done accordingly to these values.
Vincent: People development is also something that is present in our company values: sustainability,
attracting the best people from the market and giving them the space and resources to develop
themselves. We have to make sure that our engineers are the best engineers and that they
continuously generate new ideas. We have a big R&D center in the US. We try to follow new market
trends and adopt new technologies, like 3D printing. We look at things how we can improve our
actions. You need to adapt in order to survive. Taking some level of risk is needed to achieve this
goal.
Jo: Big programs we use, are the 6SIGMA systems (the traffic light system, PIPAP and methodology)
and the CPS and TPS systems which are benchmarks of the Toyota lean manufacturing system. For
people on the work floor, the 6SIGMA system can be a bit confusing, because the systems works with
a lot of figures and mathematical data. CPS is more down to earth: involvement of the employees is
important within this system. Sometimes, employees lose sense of their actual contribution in the
organization. As a result, employees need to ask themselves how they contribute to the group level
performance metrics. You have to break this metrics down into pieces to make it understandable to
the operational workforces.
Rob: How do you perform your tests and measurements?
Jo: We make use of 3D measurement techniques and manual measurement techniques. We perform
crack and hardness tests. We also compare the materials with the specifications we have at our
disposition. We trigger a part number for inspection and tell the inspectors which characteristics they
need to measure, methodological and dimensional. Not every part is eligible for methodological
inspection. For some parts, you cant even conduct a meaningful inspection: you maybe lack the tools
or the knowledge to test the parts. With the least effort, we try to identify the product defects and
keeping our network free of nonconformities.
Rob: Which tools do you use to identify product defects and how do you make sure that it are
manufacturing defects and not defects caused by the customer himself?
Jo: We use cameras to check the inside of our materials. We check for debris in the materials: it is
not good if you have debris in your oil system. Sometimes we get an alert and we can measure it. We
also have a system that allows dealers to send back their materials and parts to us. If their inventory
is growing rapidly and if they dont manage to sell some of the parts due to a specific reason, they
have the ability to ask for an approval to return the materials 2 times a year. By this, we avoid that
products will be unused. We also perform visual checks onto the materials and verify whether there
are any bolts screwed or whether a coat of paint is missing. By performing these checks we may
notify signs of usage. We analyze this carefully, make the right assumptions and report it back to the
dealer.
Rob: How do you ensure traceability of your products?

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Vincent: As for traceability, serial numbers may be attached to supplier parts. I think of certain
crucial parts, like engine components or full engine systems. For the small components, like nuts and
bolts, you dont need these traceability tools. Depending on the type of products, a different type of
traceability will be used to track the components history.
Jo: F principles are in place within the supplier network. So before they release their part numbers
into our network, there needs to be an approval on the specifications of what they developed. This is
also related to proactivity.
Rob: Which tools do you use to maintain a clear and fast communication among your employees /
colleagues?
Jo: A very important communication tool is our metric that is attached on the wall in our offices as
you can see. This metric shows you where you are responsible for as an entity, unit, division and
organization. It shows you the targets and standards where you need to work to. Metrics are specific
to the area where you work in. They can be consolidated on a facility or organizational level. As
mentioned earlier, we work with the theorem of Deming. The indicators will be green, yellow or red
depending on the extent in which you reached the targets. We compare this with the previous year
results. Afterwards an action plan will be composed, which is the 3 rd step of the Deming cycle: If you
dont meet your target, what can we do about it?. How are we going to make adjustments and
improvements? This is a very important communication topic. You also have startups with the
operational workforces on the floor. We also communicate safety standards to our warehouse people:
How can we prevent accidents on the work floor? You can train the people, however people need to
strive these goals on the long term. After a while they are maybe tended to behave in a different way
than is stated in the training and practice guidelines. We also have e-mailing systems, in-cloud
communication, intranet practices and so on. Every division has its own intranet portal: customer
service, supplier service, We distribute newspapers concerning topics that everyone in the
organization should know. Communication is a very difficult topic: What do I need to communicate?
When do I need to communicate? Whether a communication tool works good or effectively is very
hard to measure.
Rob: How do you motivate your employees / colleagues to admit small/large errors they made?
Jo: Yes, I think an important tool we use is standard work. This is a document that describes how a
job needs to be done. You can compare it with an ISO norm: you can make it very general and you
will always be right. Standard work is a very specific tool to do a job from A to Z. It is a tool how a
job should be done, so employees may deviate from these steps. In this document, certain guidelines
are mentioned with the aim to avoid mistakes made by people on the work floor. Furthermore, we
dont have all the technologies in the market in our warehouses, like voice picking and smart glasses.
We are currently working on an older type of legacy system, actually an in-house development
system. We are last in row to have those systems changed because we are the heart of the
organization: you have to integrate it piece by piece what costs a lot of time. Still, some of our
facilities work with voice picking systems and we see positive results. Therefore, you have to keep in
mind that older systems may have limitations in comparison with the newer ones. Actually we have a

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process quality claim rate of 3.5 claims per 10 000 parts shipped. That is not that much. Also, a lot of
efforts have been made to reduce the PPM-rate. Still, there is no human that is mistake free: you can
be focused to avoid mistakes the first 2 days, but after a while it becomes a habit. All mistakes that
happen in the warehouses are attributed to human mistakes. We have certain conveyers there and
fork lifts that are operated by the staff. To avoid these mistakes, we provide a lot of trainings as well,
like fork lift driving trainings, operational processes trainings and so on.
Vincent: We also have a culture of learning from your mistakes. Our culture is failure tolerant,
however employees have to learn from their mistakes: they are not allowed to make the same
mistake again in the future. We do this internally as well: if something happens, you sit down with the
team and discusses what went wrong and how we can prevent similar future incidences. So you adapt
your processes and make improvements following the schedules of lessons learned. There are a lot of
analytical tools we use to come to these lessons learned, like an 8D problem solving process.
Jo: Yes, indeed! This is linked to how we verify and identify the problem by a RCA and the corrective
and preventive action plans that are formulated after doing certain additional measurements,
calculations and adjustments. It always comes back to the same: you know your result, you perform a
RCA and afterwards youre going to solve the problem in question, improve it and implement
preventive measures. We follow up this process on a daily, monthly or yearly basis depending on what
indicator is being measured.
Rob: Does your company engage in any learning activities (e.g. R&D collaboration) with external
partners (universities, suppliers, customers etc.)? If yes, why do you engage in them?
Vincent: Well, we do some developments together with our suppliers. Still, we recognize that we are
not experts in every product category, like some complex hydraulic systems. Assisting them, helping
them to find a solution are actually the main activities where my team is occupied with. We have
organized several sessions to enhance brainstorming. We have a big R&D center in the US where we
get a lot of information from concerning designs, technical specifications and so on. Being up to date
with the new technologies is also one of our concerns, however we not always implement those
technologies into our systems. Involvement and engagement of employees is encouraged because
they feel satisfied and are doing their work more effectively in that way. So we also measure
engagement. We evaluate improvement ideas they have: employees on the work floor are very close
connected to the operational systems and therefore it is useful to let them propose their own ideas to
make their job easier. So we basically learn from our suppliers and they learn from us. We have the
CAT university where we provide trainings for our suppliers: it is our interest that our suppliers are
best in class. We offer them some training opportunities: we train them to work with CPS and other
systems.
Rob: Do you also want to reach new markets?
Vincent: Well, we are investigating 3D printing opportunities. We ask ourselves how 3D printing can
contribute in building new machines and developments. This is part of the projects that are launched
and that have high visibility within the management team. We do realize that it is the future to be

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engaged into the digital world and 3D printing technologies. In 10 years from now, we will be far more
developed than we are today.
Jo: We also want to maintain our position as market leader. There are a lot of new entrants from the
Asian market who offer low cost solutions. We need to make the difference.
Rob: How would you describe your competitive advantage?
Jo: From a value chain perspective, there are a couple of advantages we have in comparison with our
competitors: nobody has such a broad network of dealers around the world as we have. Also our
distribution network is very extended. Besides that, our delivery time is very short despite our large
inventories. We are superior in the velocity and speed we deliver the parts to our customers. Also, we
make sure that all the parts that are demanded by customers are available. By doing this, we make
sure that if a machine breaks down, the customer can be helped in a short timeframe. We have had
some quality issues in the past. Nevertheless, the service we provide to our customers results in
added value: aftermarket customers are less worried if their machine or vehicle is broke. We use
innovations in the machines, but it is still hard to beat the competition. There are always competitors
that are using certain technologies earlier than you do. They are referred to as early adopters.
Rob: Do you try to learn from others successes, failures or both? Could you please give me an
example?
Jo: For sure, many organizations benchmark successful technologies of other organizations. As is the
case in Caterpillar. I can think of our CPS system which is a derivate of the older Toyota lean
manufacturing system. You also have Carline studies: a journal where every automotive related study
is put together. In this journal, several metrics are included that gives a brief oversight of how
different companies are performing. By using this journal, we compare the results of our direct and
indirect competitors with our results.
Rob: Ok, thanks. As for product quality, did you ever experience product recalls in the past?
Jo: Yes, we did. We have had some major engine problems in the past. With major engine problems
I mean that some of them literally exploded harming the people operating the machine or vehicle.
This is a very big issue: the engine is one of the most critical parts of your machine or vehicle.
Rob: How do you find out about any incidences (of other companies) concerning organizational and
product failure (media, press, etc.?)
Jo: I am not sure about this. We mainly detected these problems through customer complaints. The
engine product recall caused our company to lose market share. That is something you want to avoid
by any means. Screwing things up is easy, but building up your reputation and confidence to
customers and other stakeholders is very difficult after such an event. If a critical product failure takes
place, it is very important to react immediately. Apart from product recalls, if Caterpillar experiences
an economic downturn, the firm will act immediately to compensate the impact. If needed they are
going to shut down production facilities: Caterpillar avoids to lose money. We have had a situation in
the past where we were forced to shut down certain facilities temporary till the economy boomed

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again. As for the mining industry, we invested into a lot of projects concerning mining vehicles.
However, when the fuel price dropped, it was a disaster for the mining industry. Therefore, you need
to weigh the decisions you take very carefully.
Rob: What do you understand as a product failure?
Jo: You can view the term product failure from different angles / perspectives. Product failure
relates to any product that doesnt comply with the specifications as being drawn or calculated in CAD
models, technical drawings or calculating measures. Sometimes you are aware of the product failure,
sometimes you are not aware of it. If you just throw it into your inventory or network while you know
that a product defect is present, the customer will complain by usage of it. In that case, it becomes a
product failure. It is relevant that we communicate to our suppliers that they never ship defected
products. Thats again the proactive approach we use. We try to stop it before it reaches our
warehouses. The right practices need to be put in place to avoid the flow of defected products. Of
course, some product defects are more critical than others: you can have a bit of rust on the
components edges or a scratch on the sides. This is not a critical product defect: it will not stop the
machine from working. Or in other words, there is no product failure.
Rob: How do you ensure safety standards for the customer?
Jo: We have systems in place to distribute safe parts and components. We encourage our suppliers
to do thorough material testing that includes hardness tests, corrosion tests and strength, resistance
tests.
Vincent: As part of the design of the products, the protection of the operator is paramount. The cabin
wherein he is, has to be safe in case it rolls over. Therefore the cabin has to contain strong
materials. There are a lot of requirements and legislations surrounding the cabin compartment. So we
also differentiate ourselves by delivering safe products.
Jo: Sometimes we perform inspections on the field. We go to mining areas and check whether the
aftermarket customers are satisfied with the machines and vehicles. We also look how resistant the
machine is against fire: how can the fire be stopped in the case of an explosion taking place?
Operators also need to know what they should do in that kind of situations.
Rob: Do you have a certain specific classification of product defects?
Jo: Yes, we do. We immediately see if there is a safety defect taking place. We have a target to have
all the inventory checked. Still, we dont make a distinction between an emergency situation or not
because it goes fast: everybody receives the details on the same day and you have dedicated people
to check and fix the defect on location. This is also applicable to dealers.
Rob: How does your company deal with product recalls? Can you describe a process of the different
steps that need to be taken in case of a recall?
Jo: For recalling parts in our distribution centers, it will always go back to the entry point because
those firms are responsible for the supplier. Everything will be consolidated into the entry point and

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this firm will work closely together with the supplier. A letter or e-mail will be send out to the dealers
that they need to clean their inventory of the defected products. This is what we call a TI (Technical
Information). It can be the case that we scrap all the recalled products.
Vincent: If the supplier is responsible for the product defect, he will be asked to conduct a 8D
analysis. The nonconformity will be investigated. Why did it happen? When did it happen? In what
conditions did it happen? The product recall will trigger rejection and this rejection will be translated
into corrective and preventive action plans brought by the supplier.
Rob: What is the role of regulations / standards in product recalls?
Jo: Regulations have a very big role when conducting product recalls and investigating quality issues.
We face a lot of complexity in complying with legislations and laws throughout several countries. ISO
norms concerning safety and quality are sometimes very vague concepts. ISO-certified companies
dont always outperform in quality and safety because it all depends on how you interpret those ISO
norms.
Vincent: We do require our suppliers to be ISO certified. On top of that, we have our own certification
process. We are validating their processes. ISO is indeed very vague and its just a framework. We
are checking if they have a sort of on-time delivery and development processes in place. We have
different certification levels: bronze, silver, gold and platinum.
Jo: An ISO-certification just tells you that you have an infrastructure in place to do things right and
that you have had audits of it in the past. Though, you need to evaluate your supplier in terms of
what he delivers. By losing a certain certification, it can be that we will switch from supplier. Also, we
cant afford a platinum certified or preferred supplier to deliver low quality materials. It is a very strict
validation process that is validated yearly.
Rob: What are the consequences of product recalls (ranking by importance viewed by interviewee)?
Which problems could arise?
Jo: It always starts with a negative impact. On the long run, you will learn from it however. We try to
put processes in place to prevent future product recalls and critical product failures. A product recall is
a risk that blows you out of business. You can recover from losing customer reliability, but it takes a
lot of time. And probably money as well. As for the engine product recall, our managers had to deal
with a lot of pressure: the longer it takes to deal with product recalls, how higher the probability will
be that the problem escalates. Bankruptcy can be a severe consequence of not reacting quickly and
efficiently to product recalls.
Rob: Are there any counterfeit products of Caterpillar in the market?
Jo: Yes, certainly. It is very hard to tell for some products if they are real or imitations. Even the
brand CAT can be imitated without even seeing any differences. Imitation products contain however
differences in quality.

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Vincent: As for air filters, it is very hard to distinguish fake from real. Only if you dissect the product
or disassemble it, you will notice that the interior part is entirely different. There are some minor
differences in labelling, attached wires and color, however you wont notice it since you dont know
where to look at. A cylinder that is hardened versus a cylinder that is not hardened is not visible to
the naked eye for example. As a global brand, you also need to be aware of these products circulating
into your dealer network. Besides, the imitation parts and components are very cheap. Some of our
customers may not choose for our high quality products, instead they choose for the more cheaper
black market products. Still, we do support those customers to let them realize that they better
purchase high quality materials. We sell investment goods to our customers which are supposed to
operate as many hours as possible (productivity) hence the huge cost of idle time and lost
production.
Jo: As for these types of suppliers, we dont provide them with the technical drawings. We are
working on reverse engineering: we never confront that type of supplier with the technical drawing
itself: we say its good or its not good. They will make some notes, but thats the only service we give
them: we dont give them information about tolerance levels or other specifications. Its a difficult
group to check quality levels.
Rob: Have product recalls been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
Jo: All dealers need to check the inventory to identify defected products. We adapt the processes on
side. If we face product failures or a part on the receipt that is not conform, we will put that part
number on a targeted inspection. This means that we will check the batches of these particular parts
or components multiple times. This moves away from the random product inspection approach. If a
product defect is in your inventory, it is reactive. If a product defect is identified by doing a supplier
inspection, it is proactive: you didnt pollute your own network with it. Building confidence that the
supplier is delivering high quality materials again, takes some time as well.
Rob: I have been to Scania Parts Logistics in Opglabbeek and over there I noticed that they
characterized some highly defected products with RANS-codes. These RANS-codes have a range from
1 to 8 where 8 stands for full contamination of the product due to critical safety hazards. Now, is this
also applicable in the product quality processes of Caterpillar?
Jo: No, I actually never heard from it. We do have a contamination control and Caterpillar
contamination principles. Still, we make a distinction between 2 types of contaminations. You can
have contaminations concerning the parts: it needs to be disclosed from the outside world, but still
other types of the product can be delivered to dealers. Besides this, you can also have certain
contamination actions in the field. Those are more severe, especially when the product is unique and
when there is no substitute for it.
Rob: Ok and now a question to end with. Which has the higher impact on learning: product failure or
a product failure followed by a recall?

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Jo: Well this depends on the severity of the product failure. If the product failure is critical in terms of
safety, a product recall would be the right choice for sure. Escalation of this problem needs to be
avoided. If you dont conduct an efficient recall, people might get hurt or even die due to accidents
that can be attributed to that particular defect.
Rob: Ok, this was the interview. Thanks a lot for helping me out with this interview!
Jo, Vincent: Youre welcome! Good luck with your thesis!

General information

Name: Geert Van Hove

Working for the company since: 2006

Function: Senior Manager Parts Supply & Logistics

Turnover/sales: 3 582 468 euros

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Operational / strategic management: Operational

Employees: 240

Company name: Mazda Motor Logistics Europe

Headquarters: Fuchu, Japan

Most important product: Cars

Date interview: 04/27/16

Main suppliers: Mazda

Location interview: Willebroek, BE

Interview 8
Rob: To start, can you give a short introduction of who you are and your role within the firm?
Geert: We manufactured Mazda cars solely in Japan since a few years ago. Since 2 years we have a
production facility in Mexico. This facility was established because of 2 reasons: our capacity was
insufficient and we only traded with Japanese yens. Mazda has changed its currency trading to US
dollars because this is less risky. In the past, we manufactured 6 to 7 different Mazda types in one
factory. This is exceptional in the automotive industry. If you compare this with Ford where they only
manufacture like 3 model types in one factory, you will notice that this factory demands an enormous
capacity. Therefore that we opened several production facilities around the world. For example, we
have a flexible production facility in Fukushima, South-East Japan. We also have been a member of
the Ford Motor Company in the past. Now, we are independent. In Willebroek, we purchase all the
finished components and cars and distribute them throughout Europe. I deliver to 28 countries. So we
are not a regional distribution center. 25% of our turnover comes from our German customers. We
are known for our customer delivery speed: it only takes 4 to 8 hours to deliver parts our German
customers. To our Swiss and Danish customer, we also try to deliver within the 24 hours. Products are
sorted today while the next morning the goods will be in Copenhagen and Bern. Light weight trucks
are used to transport these particular items. We deliver directly to the car dealers. 70% of the
products we have in stock comes from our production facilities in Japan and Mexico. The other 30%
comes from European suppliers. Especially the service parts, who require less technical engineering,
comes from the European suppliers. Still, there needs to be a special approval to purchase these
service parts from recognized suppliers who are following the Mazda specs (specifications) because of
warranty issues. Components and parts like engines, gear and transmission boxes, body parts and
other technical parts come from the production facilities.
Rob: Do you make use of any automatization processes?
Geert: We do not make use of many automatization processes, no. We have known a tremendous
growth in our operations and financial figures. When we decided to apply the 3D directly to dealer
approach, we had to rearrange the stock. If we decide to begin with e-commerce by setting up a web
shop, our stock needs to be rearranged again. Much more packages need to be made in that case.
Therefore we choose to work with few automatization tools. Our boss never believed in robotic lifts
and cranes in the narrow hallways of the depot. Picking is done manually or with the use of forklifts.
Voice picking is not used in our depot. Still, every part is labelled with a barcode and RFID. RFID is the
most modern tool we have. We also have a train in use in the warehouse: this train is used to
transport multiple packages in a short timeframe. The advantage is that there is more flexibility in the
warehouse. Maybe you could increase the productivity with some additional automatization tools,

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although you are stuck in a new routine when the automatization processes fail to work. This is the
reason why we dont use these systems here in Willebroek. Throughout the years, our focus has
changed to smaller cars. We have a division that is solely occupied with storage bin location: products
are ranked from small too big and accordingly to their product life cycle. It is not practical to work
with robots in this point of view.
Rob: Do you have a lot of packaging waste?
Geert: Unlike as in Europe where shipping pallets are used, Japan provides their cardboard packages
with disposable pallets. To reduce the amount of packaging waste, we make use of steel cages who
travel from factory to factory. These steel cages also have the RFID systems in place. The RFID is
used for tracking. We also have small blue boxes for the smaller parts in our warehouse: they also are
provided with RFID codes. Of course, these steel cage are unpractical to use in case if you only have
to distribute 1 unit of a small item. If this is the case, we use other distribution tools. In summary,
packaging is subjected to a continuous learning process for making improvements.
Rob: Can you give me a brief description of how your company applies innovation?
Geert: There is an upcoming trend of electronics in the automotive industry. Automotive firms pay a
lot of attention to the connectivity of the car: giving the car connection with the internet and mobile
data platforms. Board computers and GPSs are standard if you buy a car nowadays. In the future, no
one will accept that he doesnt get his phone messages on the board computer in his car. You would
be astonished how much electronics, automatization tools and sensors are integrated in the newer car
models. It is unbelievable. Also, self-driving autonomous vehicles are already developed ideas for the
future. This technology is already applied by some car manufacturers. As for strategy, Mazda has puts
its focus on fuel-efficiency: we have invested lightweight materials and in new ecological solutions to
reduce the amount of fuel in the traditional gasoline and diesel tanks. In addition to our competitors,
we dont invest in electric or hybrid car technologies. Therefore we have more room for making
improvements in the fuel efficiency of the traditional fuel tanks. The average efficiency of gasoline
that is combusted is 33%, Mazda is higher than this average. Besides, Mazda cars are also fun to
drive with and have the acceleration. The combustion engine needs to be more efficient and the
explosion inside as well. The fuel tanks and exhaust systems can also be improved to increase fuel
efficiency. There are a lot of applications that are called sky-active. The ratio between the piston and
cylinder needs to be optimal, comparable with a piston-cylinder ratio of a F1 car. All these things
make our car engines about 40% more fuel-efficient than the ones of our competitors. The next
generation of car engines should even go to a fuel-efficiency of 50%. With the Mazda MX 5, we have
won the price of the year for design and fuel efficiency. Quality is another competitive advantage of
Mazda. As for the quality aspect, Mazda is known as a reliable high quality car. Besides this, German
testers conclude that Mazda and Toyota cars have the lowest warranty claims and thus the lowest
total number of garage visits after purchase. Toyota and Mazda both struggle to outperform in their
product recall campaigns and to avoid technical failures. Still, customers do not always buy by using
common sense, emotional aspects are also very important to take into account when designing cars.
As for the TCO (Total Cost of Ownership) and RV (Residual Value), Mazda outperforms thanks to their
designs and sky-active engines. Mazda also entered the lease-market.

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Rob: How do you find out about any incidences (of other companies) concerning organizational and
product failure (media, press, etc.?)
Geert: A lot of technical failures are reported to us by feedback of our dealers. Quality control on the
floor is rather limited: there are some spot-checks and at the end of the picking and packing
procedure everything will be scanned. Dealers have several mechanisms to report failures depending
on the sort of problem. The problem can be related to under- or oversupply of certain parts, sending
the wrong parts or sending damaged parts (transport damage or picking / packing / packaging
damage). If one of these problems occur, the dealers will return the parts to us. We have a
specialized warranty department in Leverkssen that is concerned with these problems. Only visible
failures are reported here in Willebroek, we cant identify hidden defects. We didnt have had any
public recalls that were mentioned in the press due to our successful recall procedures.
Rob: How can you classify the defects and determine whether the OEM or aftermarket customers
arent responsible for causing the defect?
Geert: Well, Japanese firms are very specialized in making clear and complete manuals of how the
car components should be linked and assembled. We do make use of specialized teams to identify the
root causes of technical failures. Mazda also organizes competitions wherein dealers have to assemble
an entire engine in a certain timeframe. These competitions have the role to serve as high quality
indicators of the capacities of the involved dealers. Identified product failures and defects are well
documented inside Mazda. Also, a lot of time is invested to seek for a plausible solution and to avoid
future similar failures.
Rob: What do you understand as a product failure?
Geert: Well, engineers are the people who identify the root causes of product defects and failures
after customer complaints. In many cases, product failures result in product recalls. One the most
well-known examples of product recalls is the one of airbag failure. Toyota luckily knew how to deal
with it swiftly and soon get rid of the defected airbags in their cars and collaborated with the supplier
to make the airbag defect-free. The airbag product recall started after a fatal incident in the US
which resulted in an enormous recall of Mazda and Toyota cars. The airbag suddenly exploded in the
face of the driver which caused him to hit a tree and die shortly after the incident. We tried to solve
the problem together and conducted a product recall on our expenses to avoid collateral damage and
find a solution together with our Takata airbag supplier. First thing we do is track the defected
products to conduct an organized and targeted product recall: everything that is tagged as a Takata
airbag has been recalled back to the dealers and garages. By doing this, we inform our customers by
mail to send back his car and we foresee a compensation for him. For instance, he can make use of a
temporary replacement car. The customer needs to be assured: also a special service can be provided
to let him feel at ease. Dont let your customer pay for the recall: divide the costs made between your
supplier and your company. Almost every brand experiences recalls, but if they occur, a structured or
lean process needs to be in place to deal with it effectively. Our PPM-rate is below the 500 for
outcoming goods. As for incoming goods, our PPM is between the 1000 and 3000 parts. As for pick
and pack efficiency we try do things more accurately and faster. The production unit of our Mazda

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holdings belongs to the world class car manufacturers. Following a CarLine study, world class
distribution and logistics centers have a ppm of about 1000 parts.
Rob: How do you ensure safety standards for the customer? What is the role of quality management
in your company?
Geert: We meet the high-demanding requirements of homologation. We have a very strict policy
concerning homologation. If a car is delivered to the dealer, the dealer will also get information about
what we delivered and how to assemble the parts. Beyond this, safety is a major concern for
Japanese car manufacturers. They make use of all kinds of tools to ensure safety for the aftermarket
customers. I think of automatic breaking when approaching an obstacle, blind spot hologram
technologies and a sound warning alerts when diverging from your lane.
Rob: How does your company deal with product recalls? Can you describe a process of the different
steps that need to be taken in case of a recall?
Geert: When conducting a product recall, we make use of a 8D procedure that consists out of a Root
Cause Analysis (RCA), a containment action, a corrective and preventive action plan and a follow-up
process. Beyond this, we use PDCA in order to make adjustments where needed. Especially for the
PPM-rate, we use statistical models and studies of specialized firms (like the CarLine studies) to
compare our results with competitors and average industry rates.
Rob: Have product failures been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
Geert: Since a few years, the GPS wasnt integrated in the car. The customer had to buy this device
separately and the dealer had to integrate this GPS himself. This is a very complex integration process
as several cables needed to be connected with the board computer. Back then, GPS integration was a
very sensitive case: if the dealer made a mistake, the GPS wouldnt work. To solve this complex
integration process, we made a modular design of all the electronics in the car. We refer to it as prewiring the car. By doing this, we help our dealers proactively: they cant make any more mistakes
connecting the GPS to false wires. They only have to plug in the GPS. Furthermore, they can make
mistakes because the plug only fits when connecting the right cable to it. This is a concept that the
Japanese call poka-yoke (mistake-proofing). You cant make any mistakes concerning the plugging
process. In the past, dealers get the parts they needed but they had to figure out themselves where
every component needs to be assembled or integrated. Every brand has got several examples of
product recalls. If you have a look at this mail I received some time ago. It describes a product recall
campaign concerning a suspension part. Consequently, my colleague is asked to order and purchase
other suspension parts to replace them with the defected parts in the affected vehicles. The technical
service department in Japan is responsible to purchase the right bolts and nuts to fulfill quality
demands. In this case, the ISO-quantity of the replaced bolts and nuts is 956 units this is not much.
Those parts need to be replaced and the suspension parts need to be reintegrated with the new bolts
and nuts. Engineers will compose a manual of how these nuts and bolts need to be integrated. In that
case, the dealers face less difficulties replacing them. Also interesting to know is that our market
share is 1,5% in the total automotive industry for light vehicles. As for economic reasons, it is

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important to build up your reputation by optimizing your operational processes. In comparison with
competitors, like Kia and Toyota, we outperform in parts availability: in 97 out of 100 cases we can
deliver the demanded item or part.
Rob: What are the consequences of product recalls (ranking by importance viewed by interviewee)?
Which problems could arise?
Geert: First of all, you have reputation damage. This is unavoidable. Imagine that you face a product
recall everyday: it will get on the nerves of your customers. He will waste his time and will be
dissatisfied. The Takata airbag recall was the biggest product recall I ever experienced. Our supplier
was responsible for the product defect. Still, the customer isnt interested whether the product defect
can be attributed to a supplier of the original car manufacturer. Therefore we are responsible for
purchasing those defected products and integrate them in our cars. The product recall concerned
1000s of cars. If a product recall needs to be conducted once in a decennia, the customer will most
likely accept this. It all has to do with reliability, reputation and warranty measures.
Rob: Ok thanks. And what is the role of regulations / standards in product recalls?
Geert: A product recall is something that is required to do because society demands it. The
development, quality, safety and homologation measures of cars are determined by certain ISOnorms. Also, we have the Reach regulations: regulations concerning chemical substances in cars. In
general, you dont find a lot of synthetic chemically produced products in a car. Still, they are certain
products that can be considered as chemical. For example gasoline and lubrication products for brake
pads. There is a very strict regulation policy (CLP) to foresee the traceability for these chemical
products. Beyond that, the regulation concerning these products is becoming more and more
complex. Koolit fluid is a substance that needs to be integrated in the air-conditioning unit of a car
and therefore needs to be labelled very accurately. The same goes for paint used for fixing scratches,
recoloring the car, etc. ADR is a French regulation code that includes the traceability and
transportation of dangerous goods. Concerning traceability, the food and pharmaceutical industry
have a far more strict regulation policy concerning traceability. Every pill or food product needs to be
traced from anywhere in the supply chain. This in order to detect the source of the dangerous good
rapidly. Beyond that, they have expiration dates. Therefore, these industries need to be regulated
more strictly: the probability to cause harm towards the customer is higher than in the automotive
industry. For simple replacement parts, like full metal plates or plastic products, we have a less
stricter traceability policy: it is not harmful. We use RFID to tag cars. In that case, we can trace every
car from everywhere. For the car, the V-number is very important. The car as a final good does have
a strong traceability regulation because it is unique, the serial and V-number is unique. We tag very
small RFID labels and we definitely notice the advantages of RFID tagging. In the past we used QR
codes to tag the codes manually. This was actually a time robbing activity. We also provide RFID tags
in the shipping mark. This means that if the package contains multiple products, every single product
will also receive a RFID label. There is also customs regulation. We dont have to pay import fees. We
have passive regulation: we may reduce a certain amount of import taxes because certain parts of
half fabricates from Japan needs to be assembled here in Europe. Shock absorbers are mainly
produced in Europe for example. Think of Tenneco Monroe Inc. We have a parts consolidation center

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due to efficiency measures. Those are no spare parts, but production parts: we purchase production
parts of our factories in Japan and Mexico used to manufacture a car and combine them with the parts
of our suppliers, like the shock absorbers of Tenneco. It is far more interesting to consolidate or bring
all those parts together here.
Rob: Okay. And does your company experience difficulties with the imitation of your products? If yes,
why is this the case?
Geert: We have a specialized team that spies on suspicious activities concerning falsification of
Mazda parts and components. This team is located in our headquarters. They check the labels and the
quality of the goods and try to find out where they come from. They perform controls on the market
and identify the copies. Pirate products are the most dangerous products concerning quality and
safety. You can find counterfeit products everywhere in the world, not only in Asia.
Rob: Which has the higher impact on learning: product failure or a product failure followed by a
recall?
Geert: Well, I think that preventive measures are the most important thing to do when facing
product failures, defects and recalls. You should contaminate the products from the market and
prevent additional accidents and injuries. Besides this, you should act proactively to find a solution
and formulate a corrective action plan. This can happen by following the steps of Plan, Do, Check and
Act, but there are also other tools that can help automotive engineers to fix product defects and
provide replacement or spare parts. As a firm, you absolutely have to avoid an organization culture of
secrecy and denial: denying that you made mistakes and giving someone else the blame for your
mistakes. Even if your supplier did something wrong, you have to take responsibility yourselves and
react proactively to seek for a suitable solution together with your supplier. In the case of a product
defect, most automotive firms will follow and eight Discipline procedure consisting out of a Root Cause
Analysis, preventive and correction action plans, contamination actions and some other steps I cant
recall right now. In summary, working methods inside an organization is based upon prevention and
proactivity. And there is also an interdependency between these two: if you behave proactively, you
also prevent product defects reaching the aftermarket. Imagine: you work here in this logistic
distribution center as an order picker and you picked something wrong. One week later, an item on
the exact same spot is wrongly picked. You have to see a correlation between these two mistakes and
ask the picker how he picked it and why and try to find the root cause of the mistake that is made.
This is what I mean with proactive and preventive actions. You have to work following the pareto
principle to notice these correlations: statistics need to be obtained and observed. Concerning
corrective actions, you always start with the most frequent cases or mistakes: this is located on the
top of the pareto list. Beyond this, it is important that employees learn from their mistakes. We also
include training on how to avoid the most frequent mistakes that are made by our operational
personnel. Learning outcomes are also included in those trainings. These include improvement
processes, efficiency measures and mistake avoidance measures.
Rob: Ok, thanks a lot! That concludes the interview.
Geert: It has been a pleasure talking with you.

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General information

Name: Christophe Weerts

Working for the company since: 1999

Function: Corporate Communications Manager

Turnover/sales: 1 524 591 669 euros

Operational / strategic management: Strategic

Employees: 260

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Company name: BMW Belux

Headquarters: Mnchen, DE

Most important product: Cars

Date interview: 06/24/16

Main suppliers: Tenneco inc., BMW BU

Location interview: Bornem, BE

Interview 9
Rob: Goodmorning Mister Weerts. First of all, can you give a short introduction of who you are and
your role within the firm?
Christophe: BMW Group Belux is occupied with distributing BMW cars throughout Europe. BMW Belux
is founded in 1942. As for myself, Im corporate communications manager of the BMW Distribution
center here in Bornem. Im responsible for personal affairs, public relations and am a spokesman and
representative for the BMW company in Belgium and Luxemburg.
Rob: What most attracted you to your present work? How did you become involved in your current
work?
Christophe: I have worked for an event bureau and have been active in the steel industry for 11
years. I thought it was very attractive to work in the communications world because I was always
fascinated of how people build durable relationships with each other, both in a social as in a business
context. 14 years ago, I had the opportunity to work for the automotive industry which I thought was
more attractive than working for the steel industry. Besides, many of the steel products are also used
in our BMW cars. This area was not unknown for me. Furthermore, Im fond of cars and motorcycles
in general. BMW is a fantastic company to work for: it has a long term vision for perfection. Every
year this vision is adjusted and narrowed to new changing environmental influences. We are market
leaders in the overall car industry.
Rob: Who are your main suppliers?
Christophe: The suppliers of BMW AG in North-America, Germany and England are very country
dependent. We have suppliers for our steel plates, shock absorbers, brakes, etc. As for our customers,
the car dealers, we make use of concession holders in Belgium and Luxemburg.
Rob: Can you give me a brief description of how your company applies innovation?
Christophe: BMW has a R&D center where 10 000 engineers are working on new innovative designs.
3 years ago, BMW launched a new car from the 7 series that can drive full electric with automatic
parking and several other safety and luxury related options. End 2009, we designed a combustion
engine that was powered by liquid hydrogen. We have a focus to work with light-weight materials: we
rather use aluminum, carbon and synthetic fabricates than steel. The BMW i8 is designed to drive full
hybrid as well. This car has a small electric engine on the front axle and a small combustion engine on
the rear-end axle and the car has 330 horsepower (both engines). The BMW i8 has a fuel consumption
of 2,1 litres on 100 kilometers.

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Rob: Does your company use any internally occurring problems as a source of inspiration for
improving products/processes?
Christophe: It is an on-going process. In the south of France and Lapland, BMW cars will be tested on
test banks and specialized test chambers. Cold and heat resistance is tested, overall safety is tested,
emission tests and vibration tests are conducted and there are also some tests for the typical sound of
the car. Consequently, there is a sort of follow-up process to track defects after the car has been sold.
In that way, engineers can monitor frequently returning defects and thus enhance their focus on these
defects. Another benefit of this follow-up process is faster identification and repair of defects and
technical problems resulting in a higher customer satisfaction. Yesterday, we had a product recall
concerning a ISO-fix support tool for steel plates. We discovered the defect ourselves and let the
dealers know that there was a defect present in the steel plate supporting tools. We have send a letter
to all our customers to invite them to bring their car to their nearest BMW concession holder to repair
the defect. The defect itself was active in the BMW X3 and X4 series. Obviously, this process doesnt
bring any costs for the customer: we pay for all the costs involved in this product recall process.
Rob: How did you discover the defect?
Christophe: Our engineers concluded that there was a defect because the supporting material broke
after performing some tests on it. These engineers always test the newer and older car models. Any
deviating results need to be adjusted by using better materials, making improvements, etc. Engineers
also test the lifespan of products: if a roller bearing is worn after 150 000 kilometers, improvements
need to be made to increase this lifespan. This can happen by integrating new components, so
changing its composition, or by creating another design with the same materials. Still, it can be that
the customer notices the defect. In that case the car is brought to the garage dealer and he will report
the problem to us. We have the PUMA system: the garage dealer reports the problem to the BMW HQ
in Munich. If there are multiple cars involved facing the same defect, a product recall procedure will
be initiated.
Rob: How do you find out about any incidences (of other companies) concerning organizational and
product failure (media, press, etc.?)
Christophe: In most of the cases, this comes from first-hand experiences. If an accident did occur
which cannot be attributed to the inability of the driver, this will be reported to us and we have to
come up with a clear problem identification and solution. Thorough research is done to find out the
root cause of the technical defect. For example, it happened once that a cleaning lady accidentally
pushed a button in one of our BMWs which caused the soft top roof to close resulting in the
suffocation of the cleaning lady. This was an unfortunate accident which we cannot be blamed for.
Rob: Do you try to learn from others successes, failures or both? Could you please give me an
example?
Christophe: You always learn from other companies experiences, both failures and successes. Of
course, they also learn from our failures and successes. For instance, when the Mini was relaunched in
2001 our competitors thought it wasnt profitable for the long run: they only thought the model lasted

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for 3 to 4 years. They thought it was a hype. After 10 years, the model became a big success: sales
increased tremendously. As a reaction to this success, competitors also decided to manufacture
similar smaller cars that looked similar to the design of the Mini Cooper. Think of the models of the
Fiat 500 and the Audi A1. At this point in time, we were not the only one in the market manufacturing
smaller cars. Still, we try to deliver something entirely new to the customer. For instance,
manufacturing SUV is no rocket science these days. Still, our BMW X5 was a breakthrough: there
were several options included that customers could use and thus offered added value. Besides,
market research pointed out that only 10% of all the final customers used a SUV for where it was
originally designed for to do: encountering rough terrain. The BMW X5 still kept its sportive look.
Rob: How do you ensure quality control? How do you detect incoming product defects and outcoming
product defects?
Christophe: We have processes in place to ensure quality standards. The testing of all the materials
is priority within the BMW company. We also test these products as an integral part: how does the
car behave after 10 years?. Has the performance of the car decreased significantly or is there a
safety violation or are all the materials still satisfying concerning quality demands?. Afterwards, we
make improvements based upon the findings of the tests and measurements we made.
Rob: What are the most frequent product defects you encounter?
Christophe: This is dependent from model to model. Actually, you have a lot of product recall
campaigns for small and less dangerous components. This has to do with being cautious: suppose that
something bad could happen when this components fails or breaks. We have to anticipate: try to
localize the defects before our customers do. We have had problems with the airbags. Still, this was
the responsibility of our supplier, Takata. On the other hand, we still have some responsibility towards
the customer when a product of our suppliers threatens to fail. We have to initiate the product recall:
the cars need to be recalled in the first place, not the airbags. Therefore, it is also our reputation that
is at stake when our suppliers provide hazardous or low quality materials.
Rob: How do you ensure the traceability of your materials / cars?
Christophe: All products can be traced: even less dangerous materials like steel plates. You can track
the history of the several components: supplier and distributor, which processes were initiated to
assemble or manufacture the component, This is from major importance when conducting product
recalls: we can narrow the product recall range to a particular supplier (eg. Arcelor Mittal) and type
(Steel plate of 1,5 inches thickness).
Rob: How can you make sure that the product defect can be attributed to the transport of the
goods?
Christophe: Everything is inspected before it is used, processed or distributed. Therefore we can
perfectly say whether an outcoming good (car) is damaged by transport.
Rob: What do you understand as a product failure?

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Christophe: All problems that are somehow connected to the product. This problem can find its roots
in our production processes or the production processes of our suppliers. I have to say that we use,
assemble and integrate a lot of products that we didnt designed ourselves: therefore there are many
cases wherein the supplier needs to come with improvements in its products.
Rob: How do you ensure safety standards for the customer? What is the role of quality management
in your company?
Christophe: Besides the ISO qualification norms, we have very specific BMW demands for quality and
safety. Our suppliers need to comply with those standards. Still, we work with the same norms,
otherwise you dont have a measurement tool to compare your findings with. These are international
norms. We test our suppliers to check whether their products can be approved by us. The BMW
specific norms are even more strict than the international applicable regulations. As for our suppliers,
we focus both on quality as on cheapness. Also for us the productivity and quality needs to increase:
therefore we need to lower prices as well to keep our customers satisfied. On the one hand, you need
to protect the customer, but on the other hand, you also have to avoid taking risks. You have to be
sure that it has to be recalled, so you have to delay your decision until that moment that you are
absolutely sure that it is a must do.
Rob: What is your/your companys experience with product failure?
Christophe: A product recall campaign is never a happy event within a company. It has a lot to do
with juridical restrictions and cases. Customers file in a complaint and use juridical power to justify
the harm that they suffered. In the case of an injury or death, the BMW company has to provide
evidence that no blame can be appointed to them.
Rob: How does your company deal with product failures and recalls? Do you follow an internal
protocol?
Christophe: Product recall cases are reported to us by the headquarters in Munich. After thorough
research has been done about the root cause of the defect, the problem will be transferred to the
quality control department. The quality control department will communicate this problem to every
BMW business units. The strategic departments are more concerned with informing the concession
holders about the problem. The concession holders will send a letter to all their customers to bring in
their car for maintenance. Sometimes, we have to send out a press notice. This is not always obliged,
but in some cases, it is more recommended to do so, especially for large scale product recalls.
Rob: If certain components fail and are perceived as a safety violation, do you take measures to
contaminate those hazardous products?
Christophe: Normally not. The problem is always connected to models that have been manufactured
in the past as well. If we identify a product defect, we can fix this immediately at the production line.
Product recall campaigns are also applicable for models that were already manufactured. However, it
is possible that we are forced to shut down the production for a short time. For the time we havent
found a proper and safe component yet the latter event can happen. Of course, shutting down the
production line is very expensive. This happened once in the past. In that case you have a firestorm

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between the attorney of the supplier and the attorney of BMW. Furthermore, recalled products will be
reduced to scrap.
Rob: What are the consequences of product recalls (ranking by importance viewed by interviewee)?
Which problems could arise?
Christophe: First of all, you suffer reputation damage. Consequently, it is a very costly process.
Especially for large scaled product recalls.
Rob: Are there also positive consequences you could link with conducting product recalls?
Christophe: You contribute to make a better product: you are encouraged to make improvements.
Besides this, it is a must do. You cant go around it. You may not let the problem go to the escalation
phase. The safety and health of our customers is our first priority. We will never take risks to let
people drive cars where product defects are likely to occur. Other values of BMW are sustainability
and mobility. Also, we try to outperform in driving experience: a BMW has to be a car that is fun to
drive with. People should enjoy the driving experience of a BMW car.
Rob: Would you rather report dangerous product defects to stakeholders or would you rather try to
report and fix the problem within the company itself?
Christophe: This is dependent on the type of recall you have to conduct. For some product recalls,
you have to report it to the outside world. Every safety defect should be reported to external people,
actually everyone who is somehow involved in the manufacturing, distribution and usage of the
product. For instance, a system upgrade in the board computer doesnt influence the drivers driving
behavior or the safety of the vehicle. This is more a problem related to luxury and comfort. Therefore,
not everyone should be informed about the problem. Again, it is dependent on the type of problem
you encounter.
Rob: Do you work with a sort of modular system or a plug-and-play principle to make it easier for the
technicians to assemble the car?
Christophe: Every component in the car can be monitored by computer software. You can see how
many kilometers the car has driven, tire pressure, brake performance, quality of the oil filter, etc. For
every car that has been distributed we have an integrated SIM card. By using this SIM card, we can
send information to the board computer. For instance, if a car broke down, the concession holder or
garage dealer knows the root cause of the problem. He doesnt even have to be at the location to
localize the defect. The sensors and chips have send the information to the SIM card which transfers
the info back to the garage dealer. It the defect isnt fixable, a tow trucking service will be send.
Rob: OK, thanks! And do you have any idea of how engineers come to these lessons learned
schedules to integrate the improvements that are made?
Christophe: They simply work. All the ideas and improvements of the past are taken into account to
find an equitable solution. We have 10 000 engineers who are only occupied with doing research:
finding new ideas, doing market research, etc. They are the founders of the BMW designs and are

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responsible for the new technologies that are integrated inside the BMW car. Think of new engines,
new seats and new fuel tank systems.
Rob: Concerning those designs: is this rather a market-pull strategy or do they come up with entirely
new technologies where there even is no market yet for?
Christophe: Both. These people are ought to know what will happen in 10 years. These are very
smart people. We are now designing cars for 2020 and 2025. You have to take several factors into
account. Is there still oil in 2025? Are people still allowed to exceed the speed limit of 50 kilometers
per hour? The same goes for the look of the cars. It needs to be appealing to the eye. We have
recently launched a new car on the market: this is already an old car for the designing engineers.
They are currently working for the next generation of cars in new series. Over time, the composition
of material changes, the look changes, etc. The BMW i8 was introduced in 2009 as a concept car of
vision efficient dynamics. People always believed this car wouldnt be launched into the market and
manufactured on a relatively large scale. Still, this was the case in 2014. This is thus both market
driven as industry driven. Among our engineering teams, there are also some sociologists and
psychologists active. They study the lifestyle of the current BMW customers and try to predict how
this lifestyle evolves throughout the future. Afterwards they translate these characteristics into the
look of the car.
Rob: Have product failures been a source of improving any existing products/process in your
company? Can you tell me an example and explain what has/was changed?
Christophe: If you conduct a product recall, you are not going to manufacture the same product as
you did before. You have to make improvements. The Takata airbags case I mentioned earlier is an
example of how our suppliers work on continuous improvements. If we have a problem with some
type of steel plates, we search another one which has a higher quality and is preferably cheaper. If
you have more carbon in the steel plate, you can make the car lighter (= higher quality).
Improvement thinking needs to be encouraged. Also, if engineers succeed to manufacture a product
that doesnt contain any defects at all, they still dont have the right to be satisfied because
improvements can be made at all times.
Rob: OK, thanks! I have one more question to end with now: Do you experience problems with
counterfeit products within your business?
Christophe: Yes, we do. After all, it is the customers choice to use these lower quality and thus
cheaper products. The price they pay is that it is more dangerous than the products we use. Still, we
have a special team ready to investigate false labelling products. They investigate every suspicious
BMW labelled product and BMW related activity.
Rob: OK, this concludes the interview. Thanks a lot for your participation and your enthusiasm
answering the questions!
Christophe: It has been a pleasure speaking with you.

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General information
Name: Pol Put

Working for the company since: 2005

Function: Quality Engineer, Head of Quality Department

Turnover/sales: 374 226 601 euros

Operational / strategic management: Operational

Employees: 199

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Company name: SAS Automotive

Most important product: Dashboards

Headquarters: Karlsruhe, DE
and cockpits

Main suppliers: TLM Solutions

Date interview: 06/27/16

Location interview: Ghent, BE

Interview 10
Rob: Hello Pol! To start, can you give a short introduction of who you are and your role within the
firm?
Pol: SAS Automotive is a company that is specialized in the manufacturing and assembly of
dashboards for automotive manufacturers and OEMs. Here in Ghent, we have only one customer:
Volvo Cars Ghent. SAS Automotive operates globally: we have about 20 to 25 production facilities
worldwide. Those facilities are settled nearby a OEM. SAS Automotive makes use of the JIT delivery
system for the assembly of its dashboards and cockpits. Manufacturing dashboards is no rocket
science: everyone can do it. Still, assembling the right parts together at the same time does require
some skills and expertise. The design of the dashboards is not our concern: this is done by Volvo Cars
Ghent. Nonetheless we still are involved in giving advice of what designs would work the best for
those types of cars. We are free to give our inputs to make adjustments and improvements.
Rob: Do you work with a plug-and-play principle?
Pol: Yes, indeed. Every components need to fit into a modular system. No adjustments need to be
made at the components themselves. This would be too costly in terms of money and time. We get
700 parts from our suppliers to assemble them into the dashboards. The cockpit itself consists out of
80 parts. So in total we have to integrate and assemble about 780 parts. Besides, you cant assemble
the parts differently from how we assemble them.
Rob: Can you give me a brief description of how your company applies innovation?
Pol: SAS automotive works with very lean and structured processes. We have rather labor intensive
processes. 40 workers are active as operational staff on the assembly line. Every day, we assemble
1200 cockpits. If everyone makes a mistake once a month, we exceed our target with the multiple of
4. Every operator has no room to make mistakes. Everything needs to be done right and be checked
afterwards. As for the innovative application themselves, we make use of robots and automatization
systems to localize parts faster and thus more efficiently. We also have computerized systems when
conducting quality checks. Once our dashboards and cockpits go to Volvo, we are responsible for
every defect that will be discovered later on.
Rob: Who are your main suppliers?
Pol: TLM Solutions is one of our main suppliers. They provide us the hardware to assemble and the
software to integrate into our dashboards. The testing and design of dashboards happens internally.
Those tests include the reading of component specifications through specialized software and
connection tests.

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Rob: Does your company use any internally occurring problems as a source of inspiration for
improving products/processes?
Pol: As for quality control, we make use of the 8D (eight Discipline) approach. We focus both on
prevention coming from a FMEA schedule and correction. If a problem on the line occurs, we try to
find the root cause through a Failure Method and Effect Analysis and try to narrow it down and to
localize interdependencies as well. Afterwards, a corrective action plan will be formulated to find a
proper solution for the problem. Volvo is especially concerned with finding a proper solution for the
problem: it is not sufficient to go the operator who made the mistake and tell him that he may not do
the same mistake again in the future. No, the mistake needs to be solved and the defect needs to be
fixed as well. Those are the requirements of Volvo Cars Ghent. You need to answer 2 questions: Why
did the defect or mistake happen? and How does it come that no one detected the mistake or defect
earlier on in the process?. Determining the root cause needs to be done independently of the
problem. We dont experience a lot of difficulties with product defects coming from our suppliers, but
still it happens. Actually, our assembly line has never stopped rolling. Sad but true, but a main
concern of the company is to keep the production or assembly line rolling: never quit production or
assembly. As for containment actions, defected products need to be sorted from the assembly line
and stock. This is done by an external company. They will be instructed which parts are defected,
which supplier is responsible and how to perform checks to determine that the quality of other
products is still unaffected.
Rob: Are there specific demands SAS Automotive suppliers need to comply with apart from the
standard ISO-norms?
Pol: We require our suppliers to comply with the ISO norms, especially ISO 9001 (quality norm).
Apart from ISO, we look at the PPM (Parts Per Million) rate of our suppliers. Other targets within the
firm metrics, like production volume, are taken into account as well. In the automotive industry, firms
expect that you search a solution for every problem and complaint you encounter. Every defect or
problem you encounter needs to be seen as an opportunity to make improvements. Every year, we
strive to work on continuous improvements. Even when you reach your target, you have to work on
improvements: it isnt a good attitude to be satisfied with a ppm of 1, you can still reduce it to 0.
Those tiny differences matter. Every year we try to increase efficiency by 10% to 20% towards our
working methods, material handling and communication flow. We have to test and measure 1
outbound cockpit out of 1000. For measuring this, we make use of 6SIGMA software.
Rob: Ok, thanks! And what are the most frequent product defects you encounter?
Pol: Typically for our company, those are damaged parts coming from our suppliers. Other product
defects are metal plates with falsely drilled holes and software coding and update errors.
Rob: How do you find out about these product defects? Are most of these defects detected internally
or externally?
Pol: Most of the times, we detect problems and defects internally. Still, customer complaints are also
very important when detecting problems and defects. We simply cannot check and test everything.

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We are not occupied with software downloads, so we dont have to check it into our processes. Volvo
Cars Ghent is occupied with all the integrated testing coming from dashboards, cockpits, brakes,
shock absorbers, tires, etc. We do standardized inspections on the line when the finished goods leave
the company. Inbound inspections are not done: we rely on our suppliers that they checked the
quality of their parts and that they report defects. Besides, inbound inspections take a lot of time and
cost a lot of money. If we localized a product defect on the assembly line, we are forced to take
corrective measures. In the first place, we will check our stock to localize parts of the same type and
supplier. Afterwards, incoming loads and shipments will be checked as well.
Rob: Which traceability tools do you have in place to keep track of your parts?
Pol: Safety critical components contain a special code and are strictly monitored. I think of airbags
and handlebars. Those parts are equipped with a mix number: through RFID Volvo cars Ghent can
identify which components and materials are integrated into the parts. We can always send back
defected materials towards our suppliers and gather info about test data through traceability
technologies.
Rob: Ok! And how do you find out about any incidences (of other companies) concerning
organizational and product failure (media, press, etc.?)
Pol: We never had product recalls that had to do with safety violations, so our product recalls never
made the press. As for Volvo Cars Ghent, this has been the case multiple times. I think of the big
Takata airbag recall during 2010-2011.
Rob: Do you try to learn from others successes, failures or both? Could you please give me an
example?
Pol: All the companies here in the Ghent site are 1 st tier suppliers of Volvo Cars Ghent. This group of
suppliers and Volvo come together 2 times a month to discuss operational, logistic and strategic
opportunities and difficulties in a meeting. It is not the case that, because you are a supplier that only
has a small contribution to the ultimate Volvo car, you cannot learn from your mistakes and others
failures or successes. Mistakes and failures are discussed very openly. We have a very good vision
system and operator trainee system: maybe this can be applied in other firms as well. For instance,
we may optimize our warehouse supply chain systems to check which (fork lift) carrier needs to carry
which component. As for success stories, think of the lean manufacturing system of Toyota. However
the last years Toyota also suffered reputation damage despite the big Takata airbag recall. I think that
everyone can learn from each other, both in weaknesses as strengths. Sometimes you need to think
out of the box, especially for failures. In that case you have to shift your current way of thinking. So
you need to reflect your own thoughts of what went wrong and how you can adjust those thoughts to
make superior quality products.
Rob: I currently read in the press that you made efforts to cut costs because Volvo Cars Ghent was
cutting through its suppliers to pick only the cheapest ones. How does your company reduce its costs
in order to remain cheap in price?

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Pol: We mainly try to cut costs by working more efficiently: therefore our improvement targets. Still,
I have to say that we are specialized in mainly one thing here in SAS automotive: assembling
dashboards and cockpits. We are outperforming our competitors in this specific area. The JIT delivery
system helps to increase this efficiency: less storage costs, time balancing, less waste. Furthermore
we apply a lot of automatization processes (procurement to pay, warehouse systems, ) and perform
reorganizations. Other tools of how we try to reduce our costs are reducing our PPM rate by reducing
the number of mistakes and defects made. Volvo Cars Ghent has outsourced cockpit and dashboard
assembly to us. This implies that the OEM is both our biggest customer, but also our biggest
competitor. Again, what we are doing is no rocket science: everyone can do it after gaining some
experience. Volvo Cars Ghent is considering to do a lot of activities in-house now. This is dangerous
for us. They check the annual reports of our company to compare costs, profits and production
volumes.
Rob: What do you understand as a product failure?
Pol: Everything that Volvo sends back to us and consists out of low quality. Another interpretation I
can give to product failure is every product that doesnt fit within the original design of the product.
We dont have the time to make adjustments to every incoming product here on the line. I think of
drilling holes, screwing bolts and applying tiny nuts.
Rob: Can most mistakes be attributed to humans or machines?
Pol: Most of the mistakes can be attributed to humans because of 2 reasons. 1 st reason: we only
have one robot and 199 employees working here. Still, I have to be honest: in the beginning we
experienced difficulties programming the robot. It requires some experience to program it to a certain
level where he almost makes no mistakes. Beyond this, a robot is also inflexible: you cannot tell him
to screw a bolt deeper on this part than the other part, this has to be done manually. This is the 2 nd
reason.
Rob: How does your company deal with product failures and recalls? Do you follow an internal
protocol?
Pol: In the case of a product defect or recall, we organize a meeting (pulse meetings). We involve
both Volvo as our suppliers into these meetings. Afterwards, we will check what the problem is. How
can this problem be solved? Can it be fixed by a first maintenance action or are there multiple
maintenance actions necessary? Suppose that there is a safety critical defect present inside a Volvo
car: the connection of the airbag has come loose. In that case, you will immediately get a notice or
warning to visit your garage dealer on the dashboard of the car. You cannot afford people driving cars
with defected airbags.
Rob: So actually, the dashboard is responsible for all safety related defects?
Pol: Yes and no. Safety warnings are only displayed on the dashboard. The display is our concern,
not the defect itself (if it is a tire or brake failure).
Rob: How do you inform your customers about the defect?

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Pol: We do not inform our customers about the product defects coming from us or our suppliers.
Volvo Cars Ghent will inform them for us. The only actions we do is taking measures to make the car
safe and qualitative again. We have to defend ourselves by giving advice of what is the best way of
repairing the defect. It is Volvo Cars Ghent who has to recall its cars and thus sometimes has to stop
its production in the case of a product recall. Volvo will e-mail its final customers to bring back their
cars to a local garage dealer for maintenance.
Rob: What is the role of regulations / standards in product recalls?
Pol: We have to comply with ISO TS 16 949. This is a stricter ISO norm than ISO 9001 because it
requires higher quality standards and is more customer oriented. If you look at the automotive
industry in general, you will notice that ISO norms is rather a normal thing to comply with: you are
working with a product that can endanger lives when delivering poor quality goods. Once in a year, we
will get an audit in order to check if we really comply with the ISO TS 16 949 norm. For this, we dont
do anything special: we just work like we are used to work. This audit mostly brings along some
remarks to make our processes better. We dont see this as a shameful experience: we see this as an
opportunity to make ourselves better, to make improvements. Another auditor will evaluate later on
whether you have taken into account the feedback that is given. If you comply with their checklist,
you will be certified again. It is almost a must for automotive suppliers to be ISO certified these days.
Apart from ISO norms, Volvo has specific demands as well.
Rob: Do you have a failure tolerant culture. In other words: do operators report all mistakes that are
made?
Pol: Yes and no. If we notice that we have send a defected product to Volvo, we will report this. We
then ask to put that particular car from the line. Still, we dont report proactively which process
failures we encounter here. Only if we have excessive problems, we report this to Volvo and our
suppliers. Volvo Cars Ghent serves as a moderator for us: collaboration with them helps us to localize
and fix defects more quickly. Internal problems, like the designing mistakes, are the responsibility of
our suppliers and the SAS automotive production units.
Rob: What are the consequences of product recalls (ranking by importance viewed by interviewee)?
Which problems could arise?
Pol: First of all, a product recall results in a financial setback for SAS Automotive. We dont suffer a
lot of reputation damage, because customers mostly link Volvo cars to the defect, not the dashboards
or cockpits. Therefore that Volvo has so many testing facilities and testing tools. Volvo cannot say to
the customer that a supplier can be blamed for the product defect: they have to turn up for the costs
that are made as well. Besides, product recalls resulting from safety violations are very costly: you
have to compensate the customer and pay fees for the juridical arrests. Reputation damage of Volvo
eventually leads to a drop in sales which also leads to a drop in sales for us. So a product recall is
both disadvantageous for Volvo as for us. In most of the cases, the cars will not be reduced to scrap:
the product defects arent so big or severe to transform the whole car to scrap. This would be too
expensive. On the other hand, defected components are always scrapped.

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Rob: Is there a case that the final user of a car may misuse the dashboard?
Pol: Well, it can be that the person in question may forget to disable the airbag function on the back
seats in the case that there are child seats in the back. In that case he is responsible for what
happened: there is no failure. Suppose that you have to do maintenance to a car and that you
accidentally damage a certain item, you are kept responsible for the defects resulting from your
actions.
Rob: Have product failures and recalls been a source of improving any existing products/process in
your company? Can you tell me an example and explain what has/was changed?
Pol: As for product failures, every product failure leads to an improvement. For instance, there was a
problem with a particular antenna manufactured from a Japanese firm. At first sight, the antenna
seemed to work properly, but later on customers complained that they suddenly fell off. After hearing
from these complaints, Volvo decided to test these antennas themselves. After performing test in
Sweden, it seemed that they werent cold resistant at all which caused the antennas to fall off. As a
result of finding the root cause of the problem, the antennas are equipped with a new tape which
causes the antenna to stay attached at the assembled parts of the cockpit. As for our IT systems, we
make use of a new developed training schedule of operators which is convenient in use and saves a
lot of paperwork.
Rob: Do you experience trouble with counterfeit products?
Pol: No, we are an assembly industry, not a production industry. Also, we deliver our products to
Volvo: we are the only ones that are allowed to sell dashboards and cockpits to Volvo. In the
aftermarket are also no counterfeit products: those components are highly secured with all kinds of
sensors and electronics. If a component or software upgrade is missing, the dashboard will simply not
work: all parts need to be integrated and be configured as a whole. Together with the sub suppliers,
Volvo established a team to build in those securities to ensure the quality of the product and thus the
safety of the aftermarket customers. To conclude: I dont think that there are much counterfeit
products of cockpits and dashboards in the market. Besides, the aftermarket is not so big after all:
you are not going to imitate and manufacture an airbag. You need to have the knowledge in the first
place and it needs to be considered as safe by your customer audience. As for the aftermarket, you
only need spare parts when you experienced defects. It can be that there is a counterfeit market in
the auto tuning industry. Because we are the only one selling to the OEM, Volvo Cars Ghent will not
let anyone else manufacture its dashboards and cockpits.
Rob: Ok, thanks! This concludes the interview. Thanks a lot for your participation and your
enthusiasm answering the questions!
Pol: It has been a pleasure speaking with you.

159

160

8.3.

Appendix C Data analysis code matrix

Interview 1

Interviewee

Coded segment

Patrik Habets

There are some cases in the past that

some products needed to be recalled yes,
however these cases are rare and more
limited.

Patrik Habets

At first, knowing what is going on,

identifying the defects. Furthermore I think
it is important to avoid similar future
failures and monitor progress if there are
any additional product defects that take
place. However I cant help you out if you
want to know the specific product recall
procedure.
If customers send our products back, our
first concern is to investigate the cause of
the product defect. Has it been damaged
during transport or did the customer used
the product in an incorrect, inappropriate
way? In the research center, engineers will
look to the products properties and if they
are in line with the standard product type.
In the case of a general product recall, the
whole organization will search for possible
causes of the product defects. A product
recall and a retour shipment is something
entirely different.

Patrik Habets

Patrik Habets

Categorie
s
Product
recall
experience

Themes

Product
recall
procedure

Product
recalls

Classificati
on product
defects

Product
failures /
defects

Product
recalls

At first, reputation damage would be the

Consequen Product
most devastating effect. As a result, this
ces product recalls
leads to dissatisfaction to customers and to
recall
the loss of market share. Product recalls
lead to the dissatisfaction of other
customers due the bad name that has been
given to the company in that case.
Obviously, when you lose market share, you
lose customers and thus your turnover and
profits will be lower. Product recalls can also
have a positive effect: I think of the
learning effect for the organization, but of
course the negative effect is more present.
Also, we try to react rapidly while facing a
product recall: emails will be sent to our
customers to give them full, complete and
honest information about the reason of the
product recall. Technical engineers will
identify the products while visiting
customers. He or she will analyze if other
products of the same product types are
affected and if the defect is severe enough,
thus endangers the safety of our customers.
If yes, a product recall will be conducted. In
the case of a product recall, you also need
to compensate your customers and this is
very costly.

161

Patrik Habets

Patrik Habets

Well, this is a difficult question in the sense

that it is very situation specific. If it is
indeed a product failure and it leads to the
damage of machines and accidents, we
cannot do anything else than conducting a
product recall. Otherwise we will have
customer dissatisfaction and huge fines of
the government and regulatory institutions.
If we see that a roller bearing is
depreciating faster than is preferable, we
will usually go over to individual
replacement and not putting it in the press.
Hereby, we apologize to the customer for
the inconvenience and offer them a suitable
alternative. This approach is more discrete
and less riskier than conducting a general
product recall. I think that the learning
process is indeed more significant when you
perform a product recall because the effect
on the organization is bigger. The approach
of a product recall is more riskier and
therefore there is more pressure to the
management team to learn from these
failures and experiences. The learning curve
will increase in that case.
All the failures in the communication
channels will be collected in the solution
factories. Consequently, the decisions they
make will lead to improvements in the
certain processes. As for product
development, our specialized R&D centers
will try to fix the defects after the
identification of the defect by the engineer.
In this process, customer demands will be
translated in quality and sustainability
measures. SKF wants to provide a full
service to their customers.

Learning
benefits
product
recall

Product
recalls

Product
defect /
failure
procedure

Product
defects /
failures

Interview 2

Interviewee

Coded segment

Category

Themes

Barend Braaksma

Our approach works as follows: if you face

a defect in your car, related to one of our
transmission systems, you will go to a
(garage) dealer. Suppose: youre Chinese,
you bought a car and in 2-3 years you face
a defect, you will go to a dealer. The dealer
will say: I will have a look at it. Just like a
doctor, he will perform a diagnose in that
case. The current meaning of a car
diagnose is that the dealer will connect the
car to his laptop and the car will signal
what is broken or where the defect is
localized. He will give a technical
notification like transmission is broke. In
this notification a defect code is included.
The dealer has the opportunity to check
our website of what he must do if he
encounters that particular defect code. So
he logs in on our website: he will search
the defect code and follow the instructions

Product
defect /
failure
procedure

Product
defects /
failures

162

that are provided there. In 80% of the

cases, he can fix the defect using this
information. Whether by using spare parts
(replacing the defected parts), putting
other software in the board computer of
the car or in worst case scenario, replacing
the whole transmission gear boxes. Still, it
can be the case that the dealer cant fix
the defect. In that case, he contacts one of
our service teams in China. One member
of this service team will visit the dealer
and he will try to solve the problem
together with the dealer. This is how our
service after sales looks like.

Barend Braaksma

I have experienced 2 product recalls

during my career. Yes Its something
you absolutely you want to avoid. The last
product recall was initiated in 2011. Since
2011, we are free of product recalls. As for
product failures, we do have these in the
field. Still, this is on an acceptable level.
Customers are aware that transmissions
fail to work sometimes.

Product
recall
experience

Product
recalls

Barend Braaksma

We were very actively involved to solve

Product
this defect. And this is also a lesson I
recall
learned from the past. Suppose: you know experience
that there is a problem and that a certain
type of transmission is not working
probably. You have to have the guts to go
to your customer and admit the errors and
mistakes you make. It doesnt matter how
painful this will be. This and this is
defected, we are going to solve this
together. Still, you have to take
responsibility on your own: you have to
avoid that employees are scared of
admitting their mistakes. I hope he
doesnt come to me with that problem.
This is a boomerang effect: the problems
are escalating and eventually it will come
to you the one way or the other. In that
case, the problem is not be overseen, you
already suffer reputation damage towards
the OEM. It is his task to identify defects
and to decide whether a product recall is
suitable. It is better to say: We have done
something wrong, but if we work together
on it to find an appropriate solution to fix
the defect, the problem will still be
overseen. In our case, we had several cars
who were still standing on the parking of
the OEM, those cars were successfully
repaired by our people at that time. We
have send a response team who worked 24
hours shifts a day to repair all the defected
cars and there was only a limited series of

Product
recalls

163

the car that contained the defected

transmission about 300 cars contained
the defect. Those 300 clients received a
letter and e-mail of the dealer that the car
can be repaired when bringing the car to
the dealer. The dealer repaired all the
defects of these cars with our help.

Barend Braaksma

In my opinion, a product failure concerns

every defect that endangers the
functionality of a product in normal
conditions.

Definition
product
failure

Product
defects /
failures

Barend Braaksma

Well, there are some safety issues

integrated in the software. But you can still
misuse the transmissions we sell yes. It is
possible. For instance, if I put an heavy
trailer behind my small car and I try to
transport my trailer 1000 kilometers far
away, your transmission will explode.
We have an eight-step plan to handle
customer complaints. This is a fixed
procedure to solve customer related
problems and product failures. First of all,
we are putting the defected products in
quarantine. These include the suspicious
product we think are contaminated with
this defect. We will stop the production of
these products and stop sending them out
of the company towards our customers.
Afterwards, we begin by composing a
team: who is going to work on that kind of
problem?. Then, youre going to conduct a
root cause analysis. This includes the
identification of the problem and making
analysis of interdependencies between the
root cause of the defect and other possible
defects that could occur resulting from the
root cause of the defect. If the team finally
conducted a RCA, it will analyze whether
corrective and preventive actions can be
undertaken. Adjustments and
improvements will be made in order to fix
the defect partially or entirely. If the team
only finds a solution to fix the defect
partially, the product will be tested again
towards safety and quality regulations. If
the results show that the improvements
made to the product are sufficient, the
product will be put out of the quarantine
and it will be sold as all the other products
in our assortment.

Product
defects
caused by
OEM's or
aftermarket
customers

Product
defect
classificati
on

Product
recall
procedure

Product
recalls

Barend Braaksma

164

Barend Braaksma

Most of our products will be repaired.

However, if something goes wrong in the
beginning of the manufacturing process,
the output of the machine in question will
be reduced to scrap. In a transmission I
can perform rework: I am not going to
throw away 1000 euros, no, the product
will be reworked if the manufacturing
process is sufficiently progressed. Spare
parts can be foreseen in that case. We
dont use the cradle2cradle principle
because our waste, is really waste: you
cant use it as inputs in another process.
We also do remanufacturing: suppose that
a transmission part fails to work and it
comes back to us. We will make service
transmissions in that case for the
aftermarket. Suppose you have a car of 78 years and your guarantee period has
exceeded. In that case you can buy a
reconditioned transmission from us at a
reduced price: this reconditioned
transmission is made out of materials that
are used before. This is what we call
remanufacturing.

Scrapping / Product
Rework
defects /
policy
failures

Barend Braaksma

A car manufacturer has to indicate on a

website whether there is a problem with a
car by law he is obliged to report defects
and problems.
For the rest, I can only think of the ISOnorms concerning safety and the strict
emission norms which became more actual
despite the Volkswagen incident
concerning the fraud emission software. I
cant think of other regulations, because I
dont sell my cars to the end-market, I sell
them to the OEM. It is his responsibility to
comply with the local regulations
concerning these issues. I can conduct a
recall towards the OEM, but I cant conduct
a product recall towards the end
customers.
It has a certain positive impact if we
conduct these product recalls following our
eight step procedure. We admit the
mistakes we made and go for a proactive
approach: we talk to our customers about
the problem. By doing that, you build
special trust relationships with your
customers and this enhances customer
reliability because you came to the OEM
with the problem before he could identify
it. Therefore reputation damage of the
OEM is limited as well. The problem is
sneaking around somewhere out there.
Therefore you have to take responsibility.
This is also in the advantage of the OEM.
Media and press dont say that the
transmissions of Punch Powertrain have
failed. No, they will write it down as:
Mercedes has failed or BMW is conducting
a product recall. This is independent to the

Regulations Product
and
defects /
standards
failures

Barend Braaksma

Barend Braaksma

165

ISO
standards

Regulation
s and
standards

Consequen Product
ces product recalls
recall

supplier who sold him that product. To

summarize: you have to build a strong
trust relationship with your customers.
Euhm, often we do software updates to
prevent customer complaints and we do
product improvements in order to increase
efficiency and reduce the probability of
transmission failure. Actually, you can
think of improvements in several domains.
From using better direct materials, like
better quality steel, to solving software
leakages and integrating new software
modules to solve these leakages.

Improveme Product
nts made
defects /
after
failures
product
defect /
failure

Interviewee

Coded segment

Category

Themes

Diederik Vanden
Eynde

We can have a Delivery Stop (DS): this

happens for example when a brake drum is
overheated and fails. The chauffeur is than
in danger because he cant brake properly.
A DS will result in the immediate stop of
selling the products to customers.
After the 24 hours short term we have to
conduct a Root Cause Analysis (RCA):
what is the cause of the defect? With this
in our minds, we try to find a long term
solution. In summary: ST solution, RCA
and LT solution forms the Corrective Action
Plan (CAP). The term wherein the CAP has
to fulfill its expectations is 10 working
days. Does this fail due to a certain false
design drawing or measurements
mistakes, we transfer the problem to the
Medium Team. The Medium Team has 3
months to find a solution. It can be that in
the case of a fitting where the hole has to
be a bit smaller and the axis has to be
broader, that the problem is more
complex. Especially in the case that the
axis has the same size as the hole. If the
Medium Team needs more time than 3
months to solve the problem due to the
fact that materials need to be tested or
changed or if a switch of suppliers is
needed, it will be transferred to the Heavy
Team. They have 2 years to find a solution
for the problem.
VOR (Vehicle Of Road) needs to be
solved. We have an international helpdesk,
which is located in Sweden. People who are
really stuck in the repairing procedure call
our helpdesk and ask for help. If the
helpdesk is confronted with a frequent
customer complaint, like the failing of
radiators, we will be contacted to check
our spare parts stock. This is a daily
phenomenon.

Product
recalls

Product
recalls

Product
defect /
failure
procedure

Product
defects /
failures

Product
recall
procedure

Product
recalls

Barend Braaksma

Interview 3

Diederik Vanden
Eynde

Diederik Vanden
Eynde

166

Diederik Vanden
Eynde

Diederik Vanden
Eynde

Diederik Vanden
Eynde

We deal with product recalls on a weekly

basis. It can be small scale or large scale.
The last product recall we encountered
included seats that were delivered by our
suppliers. Those seats were very sensitive
for bumps and shocks: a pin would break
inside the seat mechanism that caused the
seat to go down while driving. This
surprised the customer. We immediately
get rid of the seats of that brand and sent
quality reports to the supplier in question
so that he is aware of the problem. Before
this supplier can talk with the dealer, he
needs to make sure that there are no
defected seats among the spare parts,
because we only have that seats to put in
a truck.
At first, we conduct Delivery Stops when
there are safety defects, injuries among
the chauffeurs and Vehicle Of Road
incidents. For product failures, we have the
labels S,M and C (Standard, Medium and
Critical). C-defects imply the breaking of
certain legislations, like ISO-norms, the
endangerment of customers and possible
VORs. Examples of C-defects are too high
emission norms, airbag failures and the
seat example I illustrated earlier. Another
example of a C-defect is the loss of your
mirror: it is stated by Belgian law that
every truck makes use of 2 rear mirrors.
An example of a M-defect is brand
damage. In the past, we have bought
chrome brand plates of Scania that were
put on a grill but were from a very low
quality. After going 2 times to the car
wash, the brand name wasnt visible any
more. An example of a S-defect is the
tenderness of seats after a certain period
of time. Our HQ is located in Sdertlje,
Sweden. In Poland, we have the
production of the bus bodies. In Zwolle and
Angers and Sao Paulo, we have our truck
assembly factory. In Tucuman, Argentine,
we manufacture the more outdated
versions of axles and transmissions. These
are not manufactured in Europe anymore.
Our boss want 0 deviations, 0 defects and
world class quality.
Images and pictures are included in the
cases. For some cases we contaminate the
products. In which extent these
contaminations take place is dependent on
RANScodes. We have RANScodes from 1
till 8, where 7 and 8 is full contamination:
the product may not go out and nobody
may get access to the product, even the
employees. We put these components in a
special locked room where no one has
access to. By doing this we prevent that
certain employees are tended to deliver
the defected components with a RANScode
to the customer after the customer keeps

167

Product
recall
experience

Product
recalls

Classificati
on pruduct
defects

Product
defects /
failures

8D process

Product
recall
procedure

asking for it. They want to satisfy the

customer at all costs.

Diederik Vanden
Eynde

Dennis de Jong

Diederik Vanden
Eynde

Yes, thats why our Q-team consists out of

people with a diverse technical
background. If we see that something is
forced by the customer, we will report this.
We cannot take responsibility for these
issues. Scania components are very hightech. Even for the additional tools you pay
a lot of money. Technical engineers work
like puzzle solvers: every component has
to fit into another one to create a certain
end product. In certain countries,
technicians dont know how they should
handle these high-tech materials: they use
primitive tools (like hammers) to assemble
the materials. Afterwards, they come to us
and complain that our high-tech materials
are broken. So these misusages are a
problem that concerns us yes. These
materials need to be taken care of with
more accurate tools special developed for
this kind of job.
I recall that there was such an event in
Indonesia where truck drivers used our
trucks as mining vehicles. They brought
coal up to a steep hill and were wondered
that the truck stopped working after they
have driven 1000 kilometers. We in
Belgium have trucks that can carry a
towing weight of 40 tons, while the
Indonesian mining truck drivers required
120 tons of towing weight. This is triple the
amount of what they are designed for.
Because we had an agreement with our
Indonesian customers, we made the trucks
stronger and reached a consensus. The
allowable towing weight they may use for
the truck is 105 tons of towing weight.
In the EQR (electronic Quality Report) we
will ask the supplier to give us a CAP
(Corrective Action Plan). If we dont get
this CAP within 10 working days or if the
given CAP is not good enough, we will
hand over this case to the POL-guys. POL
consists out of people who visit the
supplier. They will help the supplier with
the problem: they talk with each other and
try to find a solution. Sometimes POL
doesnt have the results they wanted. Than
the supplier will be escalated into step 1,2
or 3. Escalation step 1 is that every week
the supplier needs to send test reports.
Besides that, the supplier is not allowed to
receive a quality report from us in the first
3 months. If the supplier doesnt follow
these rules, escalation step 2 will
commence: the supplier will be invited to
our office in Sdertlje. If the problem isnt
solved after this step, he will be in
escalation step 3 and we will switch to
another supplier. The latter is a very rare

168

Product
defects
caused by
OEM's or
aftermarket
customers

Product
defect
classificati
on

Product
defects
caused by
OEM's or
aftermarket
customers

Product
defect
classificati
on

Product
defects
caused by
suppliers

Product
defect
classificati
on

phenomenon in our company. There is no

need to be the boo-man! Interdependency
is needed: we need them and they need
us.

Diederik Vanden
Eynde

Diederik Vanden
Eynde

Dennis de Jong

We have all information about the

properties of the materials: the
composition, the technical drawings
(including length, weight, strength). We
have access to all Production Parts
Approval Processes (PPAP). In FRAS we
also have the multi-sphere: what is the
product used for and where is it
manufactured? If we receive a corrective
action plan, we will conduct a quality
inspection on that component. The
following 3 deliveries will be annulated and
transferred to the Q-team. The people in
the Q-team will measure these 3
deliveries. If they are all perfect, we mark
the problem as solved. If the next delivery
after the corrective action plan is still
defected, we send the POL guys to the
suppliers. In 9 out of the 10 cases, the
corrective action plan meets our
expectations concerning quality. We have
differentiated products, its not like mass
production of standardized items.
In my eyes, product failure refers to
defects in the product that hinders the
customer to efficiently use the product in
normal conditions. Otherwise, we speak of
deviations. Deviations include
measurement mistakes, design errors,
wrongly drilled holes and so on. If the
design says that an axle stand can carry 6
tons, while it cant even hold 4 tons in
practice, I refer to it as product failure.
I also recall that our air filters, which are
assembled in the truck behind the grill,
were constantly constipated in the mining
areas of Indonesia due to the big amounts
of dust that came into the filters. The
current production of the air filters was
stopped in Europe and engineers were
making improvements to filter the dust
inside the air filters. Also, the trucks used
for mining were brought back to the dealer
to implement the new improvement. At
that time, 200 trucks were affected by the
defected air filter. This has been a FRAScase in the past. Still, repeated FRAS-cases
were the root cause is already identified in
the past, will not be send to Sweden: the
Q-team from the facility in question will
immediately come with the short term
solution.

169

Product
recall
procedure

Product
recalls

Definition
product
failure

Product
defects /
failures

Product
recall
experience

Product
recalls

Diederik Vanden
Eynde

Diederik Vanden
Eynde

Diederik Vanden
Eynde

Diederik Vanden
Eynde

For everyone this is negative. The only

positive thing of a product recall is: if we
identify the defect on time, we can prevent
worse. It is good for companies to conduct
product recalls when facing a critical
product failure, but try to do it without
them. Of course, if you have to go to the
garage dealer 4 times a month, it gets on
your nerves. Even if it doesnt cost you
nothing: it wastes your time, you start
cursing. After a product recall, we take
lessons into account to prevent future
similar incidents. Accept your mistakes and
try to work on it. If you switch braking
systems with a different pressure, you can
have big troubles. As already mentioned,
we make a distinction between S,M and Cdefects.
Absolutely, we use the lessons learned to
improve future products and processes.
What happened, why did it happen, what
does the CAP say and what did we learn in
general? This is also included into our
FRAS system.
We deliver Scania trucks worldwide. We
are ISO 9001 and ISO 14001 certified. We
expect that all our suppliers are certified
with this. Of course, in some countries, like
China and Pakistan, this legislation doesnt
exist. In this case, you have to do a bit
more research of your suppliers over
there. Belgian law is very strict: there are
several law surrounding airbags and seat
belt technologies because they are applied
by using pyrotechnics. We also try to
comply with the laws and legislations of
other countries. A perfect example of this
is that 1/3rd of our stock is devoted to left
driving countries (Great-Britain, Australia,
Thailand). This includes right steering
wheel cabins, special measured cables, the
mirrors and so on. There are components
that are the same for every country.
In Scania, product failures and product
recalls are threated similar. I think they
both have the same impact on learning.
The biggest impact for the customer is a
product failure followed by a product recall.
The customer has to bring his truck to the
garage dealer. A product recall is just a
consequence of severe product failures.
You have to help the customers by giving
them better and higher quality materials
and products. This enhances our learning
process. TIs come from technical
personnel. Product recall campaigns are
conducted by higher management
personnel.

170

Consequen Product
ces product recalls
recall

Improveme Product
nts made
defects /
after
failures
product
defects
ISO
standards

Regulation
s and
standards

Learning
benefits
product
recall

Product
recalls

Interview 4

Interviewee

Coded segment

Category

Themes

Thomas Weigert

The product defects we face are not safety

related. Design mistakes are situated in the
bulk production (mass production).
Sometimes, deviations and defects can
occur in some of the products, but they are
very rare. It is hard to say a number, but
about 5 out of 1000 items contain certain
deviations. These deviations can be in the
design, the specifications or the properties
of the product. The official automobile
norms allow a certain amount of deviations.
These norms are ISO quality related. A bolt
without a wire is an example of such a
deviation.
Product failure occurs when a product
doesnt meet the functional requirements of
the customer. It can be that the product is
not designed as it is illustrated in the
technical drawings. A product failure
doesnt necessarily contain defects. If the
nut doesnt fit in the rear axle of the car,
this could be a product failure. The wire of
the nut, doesnt have to be broken. You can
still inform the customer that the product
isnt correctly designed. Still, he may be
given the choice to use it anyway. Of
course, if the product defect is critical,
there is no way that the product may fall in
the hands of the customer.
We keep track of all the product failures
we encountered in the past. Is this problem
process driven or supplier driven? Complex
statistics are used to get to a certain
pareto-equilibrum. The outcome of these
results goes to the department of Sales and
Engineering. Afterwards, a corrective action
plan and a lessons learned sheet is
composed with the help of those
departments.
The first thing we have to look at are the
specifications of the product. What is failing
functionally? Could it be that the
component is wrongly designed? Or did the
customer use it in an application that is not
according to the drawing. A stronger
relationship with your stakeholder
influences the flexibility of the solution
seeking process in a positive way. In that
way you dont have to change the
procedure of the problem solving process.
You can give the customer an alternative
solution. The most important thing is that
you talk and understand your customer.
And of course that he understands you.

Classificatio
n pruduct
defects

Product
defects /
failures

Definition
product
failure

Product
defects /
failures

Improveme
nts made
after
product
defect /
failure

Product
defects /
failures

Product
defect /
failure
procedure

Product
defects /
failures

Thomas Weigert

Thomas Weigert

171

Thomas Weigert

Thomas Weigert

Koen Ceyssens

Koen Ceyssens

You have to comply with the local

legislations. Other standards like the use of
heavy metals (lead, zinc, ) and soot
measurements need to be taken into
account as well. All these measurements
need to be documented and approved by
the customers. Therefore the traceability of
our components.
If there is a problem in the field which
eventually leads to a product recall, it will
have a negative impact on the customer.
Besides, a product recall is very costly,
numbers can go up to 100 000 euros and
more. The most important negative impact
for us is the loss of reputation. The speed
of reacting and coming with a corrective
action plan are the biggest determinants of
conducting successful product recalls.
We try to localize product defects and fix
them within the 24 hours. A product recall
is an event we try to avoid by any means
necessary because the negative impact is
too big for us and the customer. As a
result, we take corrective measures in
order to avoid similar future incidents. 80%
of our customer complaints are single
cased errors. About 1 out of a million
components contains an actual product
defect. This number is within the allowable
PPM (Parts Per Million). A product defect
differs from a deviation. Like I mentioned
before, about 5 out of 1000 components
contain a certain deviation. This is also an
allowable amount within the framework of
the ISO-norms
For every customer Facil has a settlement
within the 2 kilometers. In these
settlements, there are representative of
logistics, quality and engineering. In the
automotive industry, we make use of the
8D process I dont know if you ever heard
of this process before. If there is a
customer complaint, severe or non-severe,
we have to follow 8 steps to solve the
problem. It begins with the identification of
the problem. What caused the defect? or
Why is this customer complaining?.
Afterwards, the problem will be put in
quarantine. If you notice that certain bolts
are breaking while integrating them on the
rear axles, we have to provide a new good
batch of these bolts within the 24 hours.
This process includes a Root Cause
Analysis. This is good arranged within the
automotive industry. The guys who are
concerned with customer complaints have
to be entrepreneurial: they dont wait till
the problem escalates before they start to
find a solution.

172

Product
defect
traceability

Product
defects /
failures

Consequenc Product
es product
recalls
recall

Learning
benefits
product
recall

Product
recalls

Product
recall
procedure

Product
recalls

You can make a distinction between a field

action and a product recall. In a product
recall, customers will be informed to bring
their defected cars to the dealer.
Customers will receive e-mails, letters and
phone calls that they need to bring their
car in immediately. If the customer refuses
this, he has a high probability to crash with
the car. Field actions includes that we have
to inform the dealers that they have to
check the car for certain weaknesses when
they are brought in for yearly maintenance.
These weaknesses are not defined as
Critical safety defects of course.
In the case of a field action, the customer
will come with the problem. He knows the
technical drawings of the cars in a whole.
They have an internal structure to detect
these problems and also have a procedure
ready for product defects. Subcontractors,
whom are technical personnel, will come
with a solution. They will repair the
defected cars. We just follow the working
instructions we get from them. Afterwards
we will check the different components. The
OEM decides which cars need to be checked
and which products are defected.
Detection of the product defect has to
happen within a reasonable timespan
because we have to provide a solution for
the customer within the 24 hours.

Product
recall
procedure

Product
recalls

Product
recall
procedure

Product
recalls

8D process

Product
recall
procedure

Afterwards, the problem will be put in

quarantine. If you notice that certain bolts
are breaking while integrating them on the
rear axles, we have to provide a new good
batch of these bolts within the 24 hours.

8D process

Product
recall
procedure

Interviewee

Coded segment

Category

Themes

John Heeren

If the product doesnt meet customer

requirements and demands, you can speak
of product failure. They send it back from
the field to us. A shock absorber that
doesnt work properly causes the car to
drive rougher. In that case, you feel every
bump in the road what isnt a pleasant
experience. Another product failure could
be that corrosion caused a damper to drip
oil from the car. These are product failures
that are noticed by the customer. They are
observable. Another example is annoying
noise caused by one of our shock

Definition
product
failure

Product
defects /
failures

Stijn Moons

Thomas Weigert

Thomas Weigert

Koen Ceyssens

Interview 5

173

absorbers. The OEM will notice product

defects as well of course, but these are less
severe.

John Heeren

John Heeren

John Heeren

Normally, we get specifications of our

customers. If the customer sends a
notification that one of our shock absorbers
breaks after applying a force of 10 kilo
newton on it, we compare it with the shock
absorbers we have in stock. If we notice
that our shock absorbers will break if a
force of 20 or 30 kilo newton is applied on
the components, we give this information
to the customer. We will try to find a
solution for this customer, however he has
to pay for it. If it was our fault, we pay for
it of course. Another example of the
misusage of our products is a technician
who used the wrong working tools to
assemble the shock absorber. The
customer assembled the shock absorber in
wrong way, so he has to turn up for the
damage that was made.
We make use of a 8D procedure where the
problem is solved in 8 steps. One of these
steps includes the avoidance of problem
recurrence. Corrective and preventive
action plans are designed to achieve that
goal.

Product
defects
caused by
OEM's or
aftermarket
customers

Product
defect
classificati
on

Product
defect /
failure
procedure

Product
defects /
failures

The 8D procedure is a tool to solve

problems structurally. First of all, you have
to identify the problem. A Root Cause
Analysis (RCA) is something that is used to
determine the cause of the problem: which
component caused product defect or
failure? Are the other components affected
as well or is the problem situated solely in
one component? When and where does it
occur? In which cases doesnt the product
defect occur? Beyond the 8D procedure,
you also have other tools to solve
problems, like the fishbone analysis. In the
fishbone analysis, you search for causes of
the problem. Can it be attributed to the
operator or the machine? Can it be
attributed to the environment, design or
process?. Afterwards you narrow the
causes of the problem: what can go wrong
with the machine? Most of the times,
finding a solution for the problem is an
urgent case. It can be that you have to
conduct a temporary containment action.
For instance, we are going to sort
components in our factory or in the depots
of our customers. We are going to sweep
certain product types. The containment
actions are very costly. Therefore that
companies want to keep this period as
short as possible. You have to identify your
problem very accurately to identify the
right cause. You have to test the product
again and do different measurements.

Product
defect /
failure
procedure

Product
defects /
failures

174

Consequently, you need a corrective action

plan: how can you solve the entire problem
without causing another defect? After a
corrective action plan, you have a
preventive action plan: how can we avoid
the recurrence of the problem?. If
everything is solved, you congratulate the
team for solving the issue.

John Heeren

John Heeren

John Heeren

All products that contain a product defect

that is identified before its sold, will be
contaminated. You also have certain
components that can be reduced to scrap.
For instance, we make use of steel plates
where technicians need to stamp a few
circles. What is left of the steel plate after
the technician is finished, is residual waste
that can be reduced to scrap. We take the
amount of scrap in consideration when we
make calculations. We buy pipes from 6
meters. The shock absorber measures 303
millimeters in the longitude so it would be
an enormous coincidence if we dont have
scrap from the pipes we purchase. You
always have scrap. In the case of a product
defect, you have unforeseen scrap. In
peculiar case, we make use of rework. The
extent in which rework is possible depends
on what went wrong in the production
process. If a rod is sawed 10 millimeter too
long, we can fix that. If a rod is sawed 10
millimeters too short, it will be reduced to
scrap.
We sell the scrap we have from our
production unit to a metal or steel supplier.
We have containers that only contains this
metal waste. Most of our waste is sorted,
recycled and reused.
In my point of view, a product recall has a
negative impact on the reputation of the
company. Reputation damage towards
customers is unavoidable when conducting
a product recall. If you deliver defected
products to your customers and proceed
production without taking actions to
containment or improvement, the
customers will consider to stop buying from
you. You need to make a new design: this
costs money. It concerns short term
damage: quality control that is not
functioning well. But you also have long
term damage: reassuring your customers.
We try to learn out of product recalls, but I
would not say that a product recall is a
positive event. It is far from a positive
event. We try to compose a lessons
learned schedule to avoid similar problems
in the future. Processes and working
methods should be improved after putting
this schedule in practice.

175

Scrapping /
Rework
policy

Product
defects /
failures

Scrapping /
Rework
policy

Product
defects /
failures

Consequenc Product
es product
recalls
recall

John Heeren

John Heeren

John Heeren

John Heeren

The jaw bumper incident did not result in a

product recall. Our OEM has changed the
jaw bumpers of the shock absorbers when
they are brought in for maintenance. This
was included in the warranty for the
aftermarket customer, so he enjoyed
costless replacement. For motorbikes we
have had to conduct a product recall in the
past. In the field, there were 2 incidents
that happened that could be attributed to
the failure of our shocking absorbers. At
that time, we decided to call back all the
shock absorbers of that product type and
stop the production of it. This resulted in
the improvement of calculations concerning
rods. These calculations made our rods
stronger. We made our acceptance policy
stricter.
A product recall increases the probability
that all the lessons learned are applied in
practice. The improvements that are made
have a higher impact on the learning
behavior of engineers and designers. In my
opinion, you can learn more from product
recalls, however they are not very
common. There are only few cases were a
product recall is plausible.
Beyond the 8D procedure, you also have
other tools to solve problems, like the
fishbone analysis. In the fishbone analysis,
you search for causes of the problem. Can
it be attributed to the operator or the
machine? Can it be attributed to the
environment, design or process?.
Afterwards you narrow the causes of the
problem: what can go wrong with the
machine? Most of the times, finding a
solution for the problem is an urgent case.
It can be that you have to conduct a
temporary containment action.
Concerning safety, we dont have a lot of
norms or standards. Still, the OEM has a lot
safety standards. The car as a whole needs
to fulfill certain quality and safety
standards. We have to fulfil certain
requirements resulting from these quality
and safety standards. We have to fulfill
specific environmental requirements, but
our customer is subjected to comply with
the strict quality and safety norms.

176

Examples of Product
improveme recalls
nts made
after
product
recall

Learning
benefits
product
recall

Product
recalls

Fishbone
analysis

Product
recall
procedure

Regulations
and
standards

Product
defects /
failures

John Heeren

Emission norms cause a focus for

Regulations
engineers to develop new lightweight
and
materials. A reduce in weight of the car
standards
causes the car to use less fuel than when
original materials are used. We are
occupied with a project that concerns the
development of shock absorbers that can
create electrical energy on their own. If a
shock absorber absorbs energy, it stores
heat. If we could transform this heat into
electricity by using an electric convertor,
we could use this electricity for other
applications. Towards environmental
issues, I think of the avoidance of
dangerous materials in the composition of
the components, like Chrome 6 and lead.
Materials that are hazardous and poisonous
may only be used in certain amounts and
circumstances in the automotive industry.
A zinc coating is used for protection against
corrosion. In the past, there were
components that contained such a zinc
coating before technicians weld them. The
fumes that come out of the burned zinc are
very toxic. This is not allowed any more.
Also, lead was used in the rods of the shock
absorber. Only very little amounts of lead
are used now in the rods. Those materials
can be dangerous for aftermarket
customers as well as technicians and the
OEM customer. When the product reaches
the end of its life cycle, it needs to be
recycled. If zinc, cadmium and lead are
dumped beneath the earth, the whole
environment will have medical complaints.

Product
defects /
failures

Interview 6

Interviewee

Segment

Category

Themes

Luc Huygen

If I have a look at the history here, the

Definition
most common mistakes are human
product
mistakes: employees assemble the wrong
failure
type of pipes or they use the wrong tools to
connect components together. There could
be a label missing, a clip could be
assembled in an inappropriate way and so
on. As for functionality, we cant be
blamed. Still, there have been some
assembly mistakes in the past within
Kautex. As a result, there is now a better
monitoring process and there are also some
other actions that discourages failure
tolerance. Customers have become high
demanding throughout the years. This is
common in the automotive industry.

Product
defects /
failures

177

Luc Huygen

Luc Huygen

Luc Huygen

Luc Huygen

Yes, it could be that he didnt drive safely.

We confront the aftermarket customer with
pictures and images if he is not convinced
that he caused the defect. I would also like
to add that you have 2 kinds of customer
complaints. First of all, you have the
complaints that come from the OEM: they
cant get the components assembled to the
fuel tank due to a certain defect or
deviation. Secondly, you have the problems
that occur in the field: an aftermarket
customer starts his car and after 20
kilometers, he will be off the road due to a
defect. We call these complaints warranty
claims. The fuel tank will be send back to
us and we investigate whether there are
any manufacturing defects noticeable.
Sometimes, it happens that the dealer
didnt assemble the pump correctly.
Through photos that are made before, we
say to the OEM that this is the
responsibility of our pump supplier. If it is
our responsibility, we reimburse the
customer by costless replacement.
We have had a customer complaint in the
past that a certain clip was poorly
assembled. With cameras, we now make
observations and comparisons between our
products. At that time, we have registered
this manually: an operator needed to turf
every fuel tank that contained the poorly
assembled clips. The use of cameras in the
detection process was a big improvement.
If there is a big problem present within
Kautex, we have a specialized team
(including me) ready to respond: they have
to warn our team members, managers and
directors. Suppose that we cant deliver a
certain product batch due to product
defects: the quality manager has to warn
the plant manager and the headquarters.
They are called together. Afterwards
someone in Bonn will take the lead and
coordinate the steps that need to be taken
towards the customer. A short term
solution will be proposed to him. A
videoconference will follow to monitor the
effect of the solution on the customers
satisfaction. We put this in a lessons
learned schedule. As for product failures
we follow the 8D procedure. At first, every
representative is called. Consequently, a
containment action is prepared. Then a
corrective action plan is formulated to
provide a short term solution for the
customer. After the corrective action plan,
a preventive action plan follows to take up
lessons learned and provide a long term
solution. The resident engineers will help
the aftermarket customer to implement the
solution that is proposed. A quality
engineer is expected to behave flexible. It
is important that the customer is supported

178

Product
defects
caused by
OEM's or
aftermarket
customers

Product
defect
classificati
on

Product
defects
caused by
suppliers

Product
defect
classificati
on

Improveme
nts made
after
product
defect /
failure

Product
defects /
failures

Product
defect /
failure
procedure

Product
recalls

and understood in the problem solving

process. The supplier quality engineer is
responsible for identifying quality defects of
supplier materials. My supplier quality
engineers are now in Switzerland, because
we had some problems with the melting of
heat shields. In the case of a supplier
product defect, we check his 8D procedure
plan, his production processes and his
working methods. You can consider this as
a supplier audit.

Luc Huygen

Luc Huygen

Luc Huygen

Luc Huygen

Luc Huygen

You may think that it is not so bad if there

is a millimeter deviation in the thickness of
the materials. We cant allow this: it is a
hidden defect. If the fuel tank is dented, we
will not perform rework on it, instead it will
be thrown away as well.
The PDCA cycle of Deming is used to work
on continuous improvements: we follow the
steps of plan, do, check and act to realize
improvements which forms the base of a
new planning, doing, checking and acting
process.
All of our fuel tanks contain chips for the
reasons of traceability. There is an history
of fuel tanks available: Which pumps are
assembled when? When did the blowing
process start? The clips we use are not
traced. The components that could have an
impact on the functionality of a car are
being traced.
You learn from every customer complaint.
You notice that there are certain
vulnerabilities in the production and
manufacturing processes. As quality
manager, I have to ask myself how I can
improve the production processes, even if
there are no customer complaints. In that
case, its a matter of efficiency. Delivering
0 defects is very difficult: both suppliers
and manufacturers can make mistakes. We
try to automatize our processes, but there
are still problems that can occur, like a
printed RFID label that isnt readable. The
most common human mistakes are labeling
errors.
You can learn from it and you can prevent
worse. Preventing collateral damage is
paramount. But like I mentioned before,
Kautex never experienced product recalls.
Still, I think that there are daily product
recalls in the automotive industry, however
they are not published in newspapers: they
are rather kept secret. This to reduce
reputation damage and costly court
sanctions. For some product recalls, I even
think that it is better that we never heard
of them.

179

Product
defect /
failure
procedure

Product
defects /
failures

Deming
cycle
analysis

Product
defect /
failure
procedure

Product
defect
traceability

Product
defects /
failures

Consequenc Product
es product
recalls
recall

Consequenc Product
es product
recalls
recall

Luc Huygen

Luc Huygen

Luc Huygen

I think that product failure followed by a

product recall has a higher impact on
learning if the product failure is large
scaled, severe and if lives are at stake. If
the product defect is small scaled,
individual replacement will take place for
the aftermarket customers and a redelivery
will take place for the OEM. Also, safety
violations are hard to hide: product recalls
of products that are not endangering the
customers health will be conducted more
discretely without press reports I think. If
there is a defect located in a heat shield,
the garage dealer may purchase the
component separately. In most cases, the
garage dealer will order an entire fuel tank
if the heat shield turns out to be defected.
In the past, they disassembled every
component separately to identify the root
cause and replace the defected component.
In practice, this is not done any more. If a
bumper is broken nowadays, the lights will
be replaced as well. In the field, we have
only had warranty claims. If the pump of
the supplier doesnt work properly, the
costs of the product failure will be directed
to him.
Furthermore, we want to avoid product
recalls - you know the story of Volkswagen
already. It is very painful to conduct a
product recall. Since the foundation of this
plant 25 years ago, Kautex Tessenderlo has
never experienced product recalls before.
The customer complaint service is
available 24 hours a day. As a quality
manager, you can be called at any time if
there are problems with customers or with
the production unit. You also need to take
into account the time differences. For
urgent customer complaints, we have
representatives who pay a visit to the
customer within the 24 hours. We also
work with rework firms who support us. If
fuel tanks are sorted badly in the
production facility in Kln, we will call our
local representatives to check the OEMs
stock. This is a free service we give to our
OEM customers. We have to make sure
that the production in our plant continues.

180

Learning
benefits
product
recall

Product
recalls

Product
recall
experience

Product
recalls

Product
recall
procedure

Product
recalls

Luc Huygen

Luc Huygen

Luc Huygen

If there is a big problem present within

Kautex, we have a specialized team
(including me) ready to respond: they have
to warn our team members, managers and
directors. Suppose that we cant deliver a
certain product batch due to product
defects: the quality manager has to warn
the plant manager and the headquarters.
They are called together. Afterwards
someone in Bonn will take the lead and
coordinate the steps that need to be taken
towards the customer. A short term
solution will be proposed to him. A
videoconference will follow to monitor the
effect of the solution on the customers
satisfaction. We put this in a lessons
learned schedule. As for product failures
we follow the 8D procedure. At first, every
representative is called. Consequently, a
containment action is prepared. Then a
corrective action plan is formulated to
provide a short term solution for the
customer. After the corrective action plan,
a preventive action plan follows to take up
lessons learned and provide a long term
solution. The resident engineers will help
the aftermarket customer to implement the
solution that is proposed. A quality
engineer is expected to behave flexible. It
is important that the customer is supported
and understood in the problem solving
process. The supplier quality engineer is
responsible for identifying quality defects of
supplier materials. My supplier quality
engineers are now in Switzerland, because
we had some problems with the melting of
heat shields. In the case of a supplier
product defect, we check his 8D procedure
plan, his production processes and his
working methods.
We have an open culture in Kautex:
mistakes should be reported. Typically for
the automotive industry, we identify the
root cause of the problem by a Root Cause
Analysis (RCA). Why did it happen? What
can we do about it? How can we prevent
similar future incidents?
We have to comply with OAS, the
environmental legislation concerning
quality. For instance, soot resistance is
measured.

181

Product
recall
procedure

Product
recalls

8D process

Product
recall
procedure

Regulations
and
standards

Product
defects /
failures

Luc Huygen

Luc Huygen

We are ISO TS 16 949 certified. Reaching

this ISO norm is my responsibility. We are
also certified with ISO 14 001: this norm
has to do with environmental issues and is
the responsibility of one of my colleagues.
Im not responsible for the care system. In
many automotive firms, a quality manager
is responsible for the entire care system:
this includes safety, environment and
quality. In this organization, the care
system is subdivided into these 3
categories. The new trend in the
automotive industry is to appoint a care
system manager: this job consists out of
safety, environmental and quality issues. I
also provide product quality trainings to my
team members, especially the interims.
Concerning safety, we get audits from our
sister-companies. 3 days a month they will
sweep the plant for conducting a safety
inspection. The measurements they make
concerns ergonomy, incidents and
accidents happened in the organization, the
identification of labels concerning safety
and the safe use of tools. Like I mentioned
before, Kautex organizes workshops. As for
ISO TS, we are TUF certified. Every 3
years, you need to be recertified. In a
follow-up audit, there will be evaluated how
production processes improve within the 3
years. This is very intense: the inspectors
will ask you questions concerning the
machine specifications, the working
methods and the quality checks. Beyond
that, we also have the audits of our
customer. There are yearly visits of our 4
customers. Begin June, Renault will visit
our plant for an audit. Today, Volvo was
here. Regularly they also pay us a visit for
other issues.

182

ISO
standards

Regulation
s and
standards

ISO
standards

Regulation
s and
standards

Interview 7

Interviewee

Coded segment

Category

Themes

Jo Torrekens

You can view the term product failure

from different angles / perspectives.
Product failure relates to any product that
doesnt comply with the specifications as
being drawn or calculated in CAD models,
technical drawings or calculating measures.
Sometimes you are aware of the product
failure, sometimes you are not aware of it.
If you just throw it into your inventory or
network while you know that a product
defect is present, the customer will
complain by usage of it. In that case, it
becomes a product failure. It is relevant
that we communicate to our suppliers that
they never ship defected products. Thats
again the proactive approach we use. We
try to stop it before it reaches our
warehouses. The right practices need to be
put in place to avoid the flow of defected
products. Of course, some product defects
are more critical than others: you can have
a bit of rust on the components edges or a
scratch on the sides. This is not a critical
product defect: it will not stop the machine
from working. Or in other words, there is
no product failure.
Sometimes we perform inspections on the
field. We go to mining areas and check
whether the aftermarket customers are
satisfied with the machines and vehicles.
We also look how resistant the machine is
against fire: how can the fire be stopped in
the case of an explosion taking place?
Operators also need to know what they
should do in that kind of situations.
If it fails the quality control, we start a
process with the suppliers to come at a
disposition or an agreement at what needs
to be done with the part or component. It
can either be that we work together with
the engineering group of Caterpillar and the
supplier to see if there is a possibility of
deviating from the original technical
drawing. Still, it could be that the
specifications of the components are not
right or that our supplier gave us the wrong
components with different part numbers. If
this is the case, we try to find a solution to
this problem together with our supplier. He
can have it reworked here. If this is not
possible, we send it back to the supplier
and he will have to do the rework himself.
It can also be that products or components
need to be scrapped. Those are the
decisions we take. If the problem is solved,
we bring the component back to the
location in the warehouse. We apply a
reactive approach: we only perform
inspections on materials that we see here

Definition
product
failure

Product
defects /
failures

Product
defects
caused by
OEM's or
aftermarket
customers

Product
defect
classificatio
n

Product
defect /
failure
procedure

Product
defects /
failures

Jo Torrekens

Jo Torrekens

183

on the receipt. It is based upon different

criteria we have in the system so we try to
do it smart with historical data that we
have about the components of our
suppliers in the system. We also try to
perform salvage inspections. Those
inspections are not mentioned on the
receipt, but originates from historical data
of the inventory or complaints that we have
from dealers or other customers.

Jo Torrekens

Jo Torrekens

Jo Torrekens

Vincent Vanhauw

Jo Torrekens

Jo Torrekens

Jo Torrekens

We also have an engineer working with

those suppliers to work proactively and
avoid that they could be impacted with
nonconformities. This is measured by the
PPM (Parts Per Million) indicator.
The PPAP principles are in place within the
supplier network. So before they release
their part numbers into our network, there
needs to be an approval on the
specifications of what they developed. This
is also related to proactivity.
We make use of the Deming theorem cycle
in our product improvement processes:
Plan, Do, Check and Act. Within the Deming
cycle, we work with several indicators, like
the PPM, to work on continuous
improvements. These indicators work with
a traffic light system: the indicators that
show red parameters need to be improved
immediately, the yellow ones need to be
adjusted (but is not that urgent) and the
green ones need to be maintained.
As for traceability, serial numbers may be
attached to supplier parts. I think of certain
crucial parts, like engine components or full
engine systems. For the small components,
like nuts and bolts, you dont need these
traceability tools. Depending on the type of
products, a different type of traceability will
be used to track the components history.
If the product failure is critical in terms of
safety, a product recall would be the right
choice for sure. Escalation of this problem
needs to be avoided. If you dont conduct
an efficient recall, people might get hurt or
even die due to accidents that can be
attributed to that particular defect.
Screwing things up is easy, but building up
your reputation and confidence to
customers and other stakeholders is very
difficult after such an event.
It always starts with a negative impact. On
the long run, you will learn from it
however. We try to put processes in place
to prevent future product recalls and critical
product failures. A product recall is a risk
that blows you out of business. You can
recover from losing customer reliability, but
it takes a lot of time. And probably money
as well. As for the engine product recall,
our managers had to deal with a lot of
pressure: the longer it takes to deal with

184

Product
defect /
failure
procedure

Product
defects /
failures

Product
defect /
failure
procedure

Product
defects /
failures

Deming
cycle
analysis

Product
defect /
failure
procedure

Product
defect
traceability

Product
defects /
failures

Reasons
product
recalls

Product
recalls

Consequenc Product
es product
recalls
recall
Consequenc Product
es product
recalls
recall

product recalls, how higher the probability

will be that the problem escalates.

Jo Torrekens

Jo Torrekens

Jo Torrekens

Vincent Vanhauw

Jo Torrekens

Vincent Vanhauw

Well this depends on the severity of the

product failure. If the product failure is
critical in terms of safety, a product recall
would be the right choice for sure.
Escalation of this problem needs to be
avoided. If you dont conduct an efficient
recall, people might get hurt or even die
due to accidents that can be attributed to
that particular defect.
We have had some major engine problems
in the past. With major engine problems I
mean that some of them literally exploded
harming the people operating the machine
or vehicle. This is a very big issue: the
engine is one of the most critical parts of
your machine or vehicle.
For recalling parts in our distribution
centers, it will always go back to the entry
point because those firms are responsible
for the supplier. Everything will be
consolidated into the entry point and this
firm will work closely together with the
supplier. A letter or e-mail will be send out
to the dealers that they need to clean their
inventory of the defected products. This is
what we call a TI (Technical Information).
It can be the case that we scrap all the
recalled products.
If the supplier is responsible for the
product defect, he will be asked to conduct
a 8D analysis. The nonconformity will be
investigated. Why did it happen? When did
it happen? In what conditions did it
happen? The product recall will trigger
rejection and this rejection will be
translated into corrective and preventive
action plans brought by the supplier.
"We do have a contamination control and
Caterpillar contamination principles. Still,
we make a distinction between 2 types of
contaminations. You can have
contaminations concerning the parts: it
needs to be disclosed from the outside
world, but still other types of the product
can be delivered to dealers. Besides this,
you can also have certain contamination
actions in the field. Those are more severe,
especially when the product is unique and
when there is no substitute for it.
As part of the design of the products, the
protection of the operator is paramount.
The cabin wherein he is, has to be safe in
case it rolls over. Therefore the cabin has
to contain strong materials. There are a
lot of requirements and legislations
surrounding the cabin compartment. So we
also differentiate ourselves by delivering
safe products.

185

Learning
benefits
product
recall

Product
recalls

Product
recall
experience

Product
recalls

Product
recall
procedure

Product
recalls

8D process

Product
recall
procedure

8D process

Product
recall
procedure

Regulations
and
standards

Product
defects /
failures

Regulations play a very big role when

conducting product recalls and investigating
quality issues. We face a lot of complexity
in complying with legislations and laws
throughout several countries.
ISO norms concerning safety and quality
are sometimes very vague concepts. ISOcertified companies dont always
outperform in quality and safety because it
all depends on how you interpret those ISO
norms.
We do require our suppliers to be ISO
certified. On top of that, we have our own
certification process. We are validating
their processes. ISO is indeed very vague
and its just a framework. We are checking
if they have a sort of on-time delivery and
development processes in place. We have
different certification levels: bronze, silver,
gold and platinum.
An ISO-certification just tells you that you
have an infrastructure in place to do things
right and that you have had audits of it in
the past. Though, you need to evaluate
your supplier in terms of what he delivers.
By losing a certain certification, it can be
that we will switch from supplier. Also, we
cant afford a platinum certified or
preferred supplier to deliver low quality
materials. It is a very strict validation
process that is validated yearly.

Regulations
and
standards

Product
defects /
failures

ISO
standards

Regulations
and
standards

ISO
standards

Regulations
and
standards

ISO
standards

Regulations
and
standards

Interviewee

Coded Segment

Category

Themes

Geert Van Hove

Well, engineers are the people who

identify the root causes of product defects
and failures after customer complaints. In
many cases, product failures result in
product recalls.
A lot of technical failures are reported to
us by feedback of our dealers. Quality
control on the floor is rather limited: there
are some spot-checks and at the end of the
picking and packing procedure everything
will be scanned. Dealers have several
mechanisms to report failures depending
on the sort of problem.

Definition
product
failure

Product
defects /
failures

Product
defect /
failure
procedure

Product
defects /
failures

The problem can be related to under- or

oversupply of certain parts, sending the
wrong parts or sending damaged parts
(transport damage or picking / packing /
packaging damage). If one of these
problems occur, the dealers will return the
parts to us. We have a specialized warranty
department in Leverkssen that is
concerned with these problems. Only

Product
defect /
failure
procedure

Product
defects /
failures

Jo Torrekens

Jo Torrekens

Jo Torrekens

Interview 8

Geert Van Hove

Geert Van Hove

186

Geert Van Hove

Geert Van Hove

Geert Van Hove

visible failures are reported here in

Willebroek, we cant identify hidden
defects.
Well, Japanese firms are very specialized
in making clear and complete manuals of
how the car components should be linked
and assembled. We do make use of
specialized teams to identify the root
causes of technical failures. Mazda also
organizes competitions wherein dealers
have to assemble an entire engine in a
certain timeframe. These competitions have
the role to serve as high quality indicators
of the capacities of the involved dealers.
Identified product failures and defects are
well documented inside Mazda. Also, a lot
of time is invested to seek for a plausible
solution and to avoid future similar
failures.
Well, engineers are the people who
identify the root causes of product defects
and failures after customer complaints.
Also, we have the Reach regulations:
regulations concerning chemical substances
in cars. In general, you dont find a lot of
synthetic chemically produced products in a
car. Still, they are certain products that can
be considered as chemical. For example
gasoline and lubrication products for brake
pads. There is a very strict regulation policy
(CLP) to foresee the traceability for these
chemical products. Beyond that, the
regulation concerning these products is
becoming more and more complex. Koolit
fluid is a substance that needs to be
integrated in the air-conditioning unit of a
car and therefore needs to be labelled very
accurately. The same goes for paint used
for fixing scratches, recoloring the car, etc.
ADR is a French regulation code that
includes the traceability and transportation
of dangerous goods. Concerning
traceability, the food and pharmaceutical
industry have a far more strict regulation
policy concerning traceability. Every pill or
food product needs to be traced from
anywhere in the supply chain. This in order
to detect the source of the dangerous good
rapidly. Beyond that, they have expiration
dates. Therefore, these industries need to
be regulated more strictly: the probability
to cause harm towards the customer is
higher than in the automotive industry. For
simple replacement parts, like full metal
plates or plastic products, we have a less
stricter traceability policy: it is not harmful.
We use RFID to tag cars. In that case, we
can trace every car from everywhere. For
the car, the V-number is very important.
The car as a final good does have a strong
traceability regulation because it is unique,
the serial and V-number is unique. We tag
very small RFID labels and we definitely

187

Product
defect /
failure
procedure

Product
defects /
failures

8D process

Product
recall
procedure
Product
defects /
failures

Regulations
and
standards

notice the advantages of RFID tagging. In

the past we used QR codes to tag the codes
manually. This was actually a time robbing
activity. We also provide RFID tags in the
shipping mark. This means that if the
package contains multiple products, every
single product will also receive a RFID
label.

Geert Van Hove

A product recall is something that is

required to do because society demands it.
The development, quality, safety and
homologation measures of cars are
determined by certain ISO-norms.

ISO
standards

Regulations
and
standards

Geert Van Hove

We have a specialized team that spies on

suspicious activities concerning falsification
of Mazda parts and components. This team
is located in our headquarters. They check
the labels and the quality of the goods and
try to find out where they come from. They
perform controls on the market and identify
the copies. Pirate products are the most
dangerous products concerning quality and
safety. You can find counterfeit products
everywhere in the world, not only in Asia.

Defects due
to
counterfeit
products

Classificatio
n product
defects

Geert Van Hove

Picking is done manually or with the use of

forklifts. Voice picking is not used in our
depot. Still, every part is labelled with a
barcode and RFID. RFID is the most
modern tool we have. We also have a train
in use in the warehouse: this train is used
to transport multiple packages in a short
timeframe. The advantage is that there is
more flexibility in the warehouse. Maybe
you could increase the productivity with
some additional automatization tools,
although you are stuck in a new routine
when the automatization processes fail to
work.

Product
defect
traceability

Product
defects /
failures

Geert Van Hove

We work with steel cages who travel from

factory to factory. These steel cages also
have the RFID systems in place. The RFID
is used for tracking. We also have small
blue boxes for the smaller parts in our
warehouse: they also are provided with
RFID codes.

Product
defect
traceability

Product
defects /
failures

Geert Van Hove

Also, we have the Reach regulations:

Product
regulations concerning chemical substances defect
in cars. In general, you dont find a lot of
traceability
synthetic chemically produced products in a
car. Still, they are certain products that can
be considered as chemical. For example
gasoline and lubrication products for brake
pads. There is a very strict regulation policy
(CLP) to foresee the traceability for these
chemical products. Beyond that, the
regulation concerning these products is
becoming more and more complex. Koolit
fluid is a substance that needs to be

Product
defects /
failures

188

integrated in the air-conditioning unit of a

car and therefore needs to be labelled very
accurately. The same goes for paint used
for fixing scratches, recoloring the car, etc.
ADR is a French regulation code that
includes the traceability and transportation
of dangerous goods. Concerning
traceability, the food and pharmaceutical
industry have a far more strict regulation
policy concerning traceability. Every pill or
food product needs to be traced from
anywhere in the supply chain. This in order
to detect the source of the dangerous good
rapidly. Beyond that, they have expiration
dates. Therefore, these industries need to
be regulated more strictly: the probability
to cause harm towards the customer is
higher than in the automotive industry. For
simple replacement parts, like full metal
plates or plastic products, we have a less
stricter traceability policy: it is not harmful.
We use RFID to tag cars. In that case, we
can trace every car from everywhere. For
the car, the V-number is very important.
The car as a final good does have a strong
traceability regulation because it is unique,
the serial and V-number is unique. We tag
very small RFID labels and we definitely
notice the advantages of RFID tagging. In
the past we used QR codes to tag the codes
manually. This was actually a time robbing
activity. We also provide RFID tags in the
shipping mark. This means that if the
package contains multiple products, every
single product will also receive a RFID
label.

Geert Van Hove

Geert Van Hove

Geert Van Hove

Product
recall
experience

Product
recalls

Product
One the most well-known examples of
product recalls is the one of airbag failure.
recall
Toyota luckily knew how to deal with it
experience
swiftly and soon get rid of the defected
airbags in their cars and collaborated with
the supplier to make the airbag defectfree. The airbag product recall started after
a fatal incident in the US which resulted in
an enormous recall of Mazda and Toyota
cars. The airbag suddenly exploded in the
face of the driver which caused him to hit a
tree and die shortly after the incident. We
tried to solve the problem together and
conducted a product recall on our expenses
to avoid collateral damage and find a
solution together with our Takata airbag
supplier.

Product
recalls

Our PPM-rate is below the 500 for

outcoming goods. As for incoming goods,
our PPM is between the 1000 and 3000

Product
recalls

We didnt have had any public recalls that

were mentioned in the press due to our
successful recall procedures.

189

Product
recall
experience

parts. As for pick and pack efficiency we try

do things more accurately and faster. The
production unit of our Mazda holdings
belongs to the world class car
manufacturers. Following a CarLine study,
world class distribution and logistics centers
have a ppm of about 1000 parts.

Geert Van Hove

Our PPM-rate is below the 500 for

Product
outcoming goods. As for incoming goods,
recall
our PPM is between the 1000 and 3000
experience
parts. As for pick and pack efficiency we try
do things more accurately and faster. The
production unit of our Mazda holdings
belongs to the world class car
manufacturers. Following a CarLine study,
world class distribution and logistics centers
have a ppm of about 1000 parts.

Product
recalls

Geert Van Hove

It describes a product recall campaign

Product
concerning a suspension part.
recall
Consequently, my colleague is asked to
experience
order and purchase other suspension parts
to replace them with the defected parts in
the affected vehicles. The technical service
department in Japan is responsible to
purchase the right bolts and nuts to fulfill
quality demands. In this case, the ISOquantity of the replaced bolts and nuts is
956 units this is not much. Those parts
need to be replaced and the suspension
parts need to be reintegrated with the new
bolts and nuts. Engineers will compose a
manual of how these nuts and bolts need to
be integrated. In that case, the dealers face
less difficulties replacing them.

Product
recalls

Geert Van Hove

First thing we do is track the defected

Product
products to conduct an organized and
recall
targeted product recall: everything that is
procedure
tagged as a Takata airbag has been
recalled back to the dealers and garages.
By doing this, we inform our customers by
mail to send back his car and we foresee a
compensation for him. For instance, he can
make use of a temporary replacement car.
The customer needs to be assured: also a
special service can be provided to let him
feel at ease. Dont let your customer pay
for the recall: divide the costs made
between your supplier and your company.
Almost every brand experiences recalls, but
if they occur, a structured or lean process
needs to be in place to deal with it
effectively.

Product
recalls

Geert Van Hove

When conducting a product recall, we

make use of a 8D procedure that consists
out of a Root Cause Analysis (RCA), a
containment action, a corrective and
preventive action plan and a follow-up
process. Beyond this, we use PDCA in order

Product
recall
procedure

Product
recalls

190

to make adjustments where needed.

Especially for the PPM-rate, we use
statistical models and studies of specialized
firms (like the CarLine studies) to compare
our results with competitors and average
industry rates.

Geert Van Hove

Geert Van Hove

Geert Van Hove

The airbag product recall started after a

fatal incident in the US which resulted in an
enormous recall of Mazda and Toyota cars.
The airbag suddenly exploded in the face of
the driver which caused him to hit a tree
and die shortly after the incident.
First of all, you have reputation damage.
This is unavoidable. Imagine that you face
a product recall everyday: it will get on the
nerves of your customers. He will waste his
time and will be dissatisfied. The Takata
airbag recall was the biggest product recall
I ever experienced. Our supplier was
responsible for the product defect. Still, the
customer isnt interested whether the
product defect can be attributed to a
supplier of the original car manufacturer.
Therefore we are responsible for purchasing
those defected products and integrate them
in our cars. The product recall concerned
1000s of cars. If a product recall needs to
be conducted once in a decennia, the
customer will most likely accept this. It all
has to do with reliability, reputation and
warranty measures.
Well, I think that preventive measures are
the most important thing to do when facing
product failures, defects and recalls. You
should contaminate the products from the
market and prevent additional accidents
and injuries. Besides this, you should act
proactively to find a solution and formulate
a corrective action plan. This can happen
by following the steps of Plan, Do, Check
and Act, but there are also other tools that
can help automotive engineers to fix
product defects and provide replacement or
spare parts. As a firm, you absolutely have
to avoid an organization culture of secrecy
and denial: denying that you made
mistakes and giving someone else the
blame for your mistakes. Even if your
supplier did something wrong, you have to
take responsibility yourselves and react
proactively to seek for a suitable solution
together with your supplier. In the case of
a product defect, most automotive firms
will follow and eight Discipline procedure
consisting out of a Root Cause Analysis,
preventive and correction action plans,
contamination actions and some other
steps I cant recall right now. In summary,
working methods inside an organization is
based upon prevention and proactivity. And
there is also an interdependency between
these two: if you behave proactively, you

191

Reasons
product
recall

Product
recalls

Consequenc Product
es product
recalls
recall

Learning
benefits
product
recall

Product
recalls

also prevent product defects reaching the

aftermarket. Imagine: you work here in
this logistic distribution center as an order
picker and you picked something wrong.
One week later, an item on the exact same
spot is wrongly picked. You have to see a
correlation between these two mistakes
and ask the picker how he picked it and
why and try to find the root cause of the
mistake that is made. This is what I mean
with proactive and preventive actions. You
have to work following the pareto principle
to notice these correlations: statistics need
to be obtained and observed. Concerning
corrective actions, you always start with
the most frequent cases or mistakes: this is
located on the top of the pareto list.
Beyond this, it is important that employees
learn from their mistakes. We also include
training on how to avoid the most frequent
mistakes that are made by our operational
personnel. Learning outcomes are also
included in those trainings. These include
improvement processes, efficiency
measures and mistake avoidance
measures.

Geert Van Hove

We meet the high-demanding

requirements of homologation. We have a
very strict policy concerning homologation.
If a car is delivered to the dealer, the
dealer will also get information about what
we delivered and how to assemble the
parts. Beyond this, safety is a major
concern for Japanese car manufacturers.
They make use of all kinds of tools to
ensure safety for the aftermarket
customers. I think of automatic breaking
when approaching an obstacle, blind spot
hologram technologies and a sound
warning alerts when diverging from your
lane.

Improvemen Product
ts made
recalls
after
product
recall

Geert Van Hove

Since a few years, the GPS wasnt

integrated in the car. The customer had to
buy this device separately and the dealer
had to integrate this GPS himself. This is a
very complex integration process as several
cables needed to be connected with the
board computer. Back then, GPS
integration was a very sensitive case: if the
dealer made a mistake, the GPS wouldnt
work. To solve this complex integration
process, we made a modular design of all
the electronics in the car. We refer to it as
pre-wiring the car. By doing this, we help
our dealers proactively: they cant make
any more mistakes connecting the GPS to
false wires. They only have to plug in the
GPS. Furthermore, they can make mistakes
because the plug only fits when connecting
the right cable to it. This is a concept that
the Japanese call poka-yoke (mistake-

Improvemen Product
ts made
recalls
after
product
recall

192

proofing). You cant make any mistakes

concerning the plugging process. In the
past, dealers get the parts they needed but
they had to figure out themselves where
every component needs to be assembled or
integrated.

Interview 9

Interviewee

Coded Segment

Category

Themes

Christophe Weerts

All problems that are somehow connected

to the product. This problem can find its
roots in our production processes or the
production processes of our suppliers.

Definition
product
failure

Product
defects /
failures

Christophe Weerts

It is an on-going process. In the south of

France and Lapland, BMW cars will be
tested on test banks and specialized test
chambers. Cold and heat resistance is
tested, overall safety is tested, emission
tests and vibration tests are conducted and
there are also some tests for the typical
sound of the car. Consequently, there is a
sort of follow-up process to track defects
after the car has been sold. In that way,
engineers can monitor frequently returning
defects and thus enhance their focus on
these defects. Another benefit of this
follow-up process is faster identification
and repair of defects and technical
problems resulting in a higher customer
satisfaction.

Product
defect /
failure
procedure

Product
defects /
failures

Christophe Weerts

Furthermore, recalled products will be

Scrapping
/ Rework
policy
Regulation
s and
standards

Product
defects /
failures
Product
defects /
failures

reduced to scrap.

Christophe Weerts

Besides the ISO qualification norms, we

have very specific BMW demands for
quality and safety. Our suppliers need to
comply with those standards. Still, we work
with the same norms, otherwise you dont
have a measurement tool to compare your
findings with. These are international
norms. We test our suppliers to check
whether their products can be approved by
us. The BMW specific norms are even more
strict than the international applicable
regulations. As for our suppliers, we focus
both on quality as on cheapness. Also for
us the productivity and quality needs to
increase: therefore we need to lower prices
as well to keep our customers satisfied. On
the one hand, you need to protect the

193

Christophe Weerts

Christophe Weerts

customer, but on the other hand, you also

have to avoid taking risks. You have to be
sure that it has to be recalled, so you have
to delay your decision until that moment
that you are absolutely sure that it is a
must do.
If an accident did occur which cannot be
attributed to the inability of the driver, this
will be reported to us and we have to come
up with a clear problem identification and
solution. Thorough research is done to find
out the root cause of the technical defect.
For example, it happened once that a
cleaning lady accidentally pushed a button
in one of our BMWs which caused the soft
top roof to close resulting in the suffocation
of the cleaning lady. This was an
unfortunate accident which we cannot be
blamed for.
I have to say that we use, assemble and
integrate a lot of products that we didnt
designed ourselves: therefore there are
many cases wherein the supplier needs to
come with improvements in its products.

Product
Product
defects
defect
caused by classification
OEMs or
aftermarke
t
customers

Product
defects
caused by
suppliers

Product
defect
classification

Christophe Weerts

After all, it is the customers choice to use

these lower quality and thus cheaper
products. The price they pay is that it is
more dangerous than the products we use.
Still, we have a special team ready to
investigate false labelling products. They
investigate every suspicious BMW labelled
product and BMW related activity.

Defects
Product
due to
defect
counterfeit classification
products

Christophe Weerts

All products can be traced: even less

dangerous materials like steel plates. You
can track the history of the several
components: supplier and distributor,
which processes were initiated to assemble
or manufacture the component, This is
from major importance when conducting
product recalls: we can narrow the product
recall range to a particular supplier (eg.
Arcelor Mittal) and type (Steel plate of 1,5
inches thickness).

Product
Product
defect
defects /
traceability failures

Christophe Weerts

Every component in the car can be

monitored by computer software. You can
see how many kilometers the car has
driven, tire pressure, brake performance,
quality of the oil filter, etc. For every car
that has been distributed we have an
integrated SIM card. By using this SIM
card, we can send information to the board
computer. For instance, if a car broke
down, the concession holder or garage
dealer knows the root cause of the
problem. He doesnt even have to be at the
location to localize the defect. The sensors

Product
Product
defect
defects /
traceability failures

194

and chips have send the information to the

SIM card which transfers the info back to
the garage dealer. It the defect isnt
fixable, a tow trucking service will be
send.

Christophe Weerts

Christophe Weerts

Christophe Weerts

Christophe Weerts

Yesterday, we had a product recall

concerning a ISO-fix support tool for steel
plates. We discovered the defect ourselves
and let the dealers know that there was a
defect present in the steel plate supporting
tools. We have send a letter to all our
customers to invite them to bring their car
to their nearest BMW concession holder to
repair the defect. The defect itself was
active in the BMW X3 and X4 series.
Obviously, this process doesnt bring any
costs for the customer: we pay for all the
costs involved in this product recall
process.
This is dependent from model to model.
Actually, you have a lot of product recall
campaigns for small and less dangerous
components. This has to do with being
cautious: suppose that something bad
could happen when this components fails or
breaks. We have to anticipate: try to
localize the defects before our customers
do. We have had problems with the
airbags. Still, this was the responsibility of
our supplier, Takata. On the other hand, we
still have some responsibility towards the
customer when a product of our suppliers
threatens to fail. We have to initiate the
product recall: the cars need to be recalled
in the first place, not the airbags.
Therefore, it is also our reputation that is at
stake when our suppliers provide hazardous
or low quality materials.

Product
Product
recall
recalls
experience

A product recall campaign is never a

happy event within a company. It has a lot
to do with juridical restrictions and cases.
Customers file in a complaint and use
juridical power to justify the harm that they
suffered. In the case of an injury or death,
the BMW company has to provide evidence
that no blame can be appointed to them.
This is dependent on the type of recall you
have to conduct. For some product recalls,
you have to report it to the outside world.
Every safety defect should be reported to
external people, actually everyone who is
somehow involved in the manufacturing,
distribution and usage of the product. For
instance, a system upgrade in the board
computer doesnt influence the drivers
driving behavior or the safety of the
vehicle. This is more a problem related to
luxury and comfort. Therefore, not
everyone should be informed about the
problem. Again, it is dependent on the type
of problem you encounter.

Product
Product
recall
recalls
experience

195

Product
Product
recall
recalls
experience

Product
Product
recall
recalls
experience

Christophe Weerts

If you conduct a product recall, you are

not going to manufacture the same product
as you did before. You have to make
improvements. The Takata airbags case I
mentioned earlier is an example of how our
suppliers work on continuous
improvements. If we have a problem with
some type of steel plates, we search
another one which has a higher quality and
is preferably cheaper. If you have more
carbon in the steel plate, you can make the
car lighter (= higher quality). Improvement
thinking needs to be encouraged. Also, if
engineers succeed to manufacture a
product that doesnt contain any defects at
all, they still dont have the right to be
satisfied because improvements can be
made at all times.

Christophe Weerts

Our engineers concluded that there was a

Product
defect because the supporting material
recall
broke after performing some tests on it.
procedure
These engineers always test the newer and
older car models. Any deviating results
need to be adjusted by using better
materials, making improvements, etc.
Engineers also test the lifespan of
products: if a roller bearing is worn after
150 000 kilometers, improvements need to
be made to increase this lifespan. This can
happen by integrating new components, so
changing its composition, or by creating
another design with the same materials.
Still, it can be that the customer notices the
defect. In that case the car is brought to
the garage dealer and he will report the
problem to us. We have the PUMA system:
the garage dealer reports the problem to
the BMW HQ in Munich. If there are
multiple cars involved facing the same
defect, a product recall procedure will be
initiated.

Product
recalls

Christophe Weerts

Product recall cases are reported to us by

Product
the headquarters in Munich. After thorough recall
research has been done about the root
procedure
cause of the defect, the problem will be
transferred to the quality control
department. The quality control department
will communicate this problem to every
BMW business units. The strategic
departments are more concerned with
informing the concession holders about the
problem. The concession holders will send a
letter to all their customers to bring in their
car for maintenance. Sometimes, we have
to send out a press notice. This is not
always obliged, but in some cases, it is
more recommended to do so, especially for
large scale product recalls.

Product
recalls

196

Product
Product
recall
recalls
experience

Christophe Weerts

Christophe Weerts

This is dependent on the type of recall you

have to conduct. For some product recalls,
you have to report it to the outside world.
Every safety defect should be reported to
external people, actually everyone who is
somehow involved in the manufacturing,
distribution and usage of the product. For
instance, a system upgrade in the board
computer doesnt influence the drivers
driving behavior or the safety of the
vehicle. This is more a problem related to
luxury and comfort. Therefore, not
everyone should be informed about the
problem. Again, it is dependent on the type
of problem you encounter.
Normally not. The problem is always
connected to models that have been
manufactured in the past as well. If we
identify a product defect, we can fix this
immediately at the production line. Product
recall campaigns are also applicable for
models that were already manufactured.
However, it is possible that we are forced
to shut down the production for a short
time. For the time we havent found a
proper and safe component yet the latter
event can happen. Of course, shutting
down the production line is very expensive.
This happened once in the past. In that
case you have a firestorm between the
attorney of the supplier and the attorney of
BMW.

Product
recall
procedure

Product
recalls

8D process Product recall

procedure

Christophe Weerts

This is dependent from model to model.

Reasons
Actually, you have a lot of product recall
product
campaigns for small and less dangerous
recall
components. This has to do with being
cautious: suppose that something bad
could happen when this components fails or
breaks. We have to anticipate: try to
localize the defects before our customers
do. We have had problems with the
airbags. Still, this was the responsibility of
our supplier, Takata. On the other hand, we
still have some responsibility towards the
customer when a product of our suppliers
threatens to fail. We have to initiate the
product recall: the cars need to be recalled
in the first place, not the airbags.
Therefore, it is also our reputation that is at
stake when our suppliers provide hazardous
or low quality materials.

Product
recalls

Christophe Weerts

Everything is inspected before it is used,

processed or distributed. Therefore we can
perfectly say whether an outcoming good
(car) is damaged by transport.

Product
recalls

197

Reasons
product
recall

Christophe Weerts

First of all, you suffer reputation damage.

Consequently, it is a very costly process.
Especially for large scaled product recalls.

Consequen Product
ces
recalls
product
recall

Christophe Weerts

You contribute to make a better product:

you are encouraged to make
improvements. Besides this, it is a must
do. You cant go around it. You may not let
the problem go to the escalation phase.
The safety and health of our customers is
our first priority. We will never take risks to
let people drive cars where product defects
are likely to occur. Other values of BMW
are sustainability and mobility. Also, we try
to outperform in driving experience: a BMW
has to be a car that is fun to drive with.
People should enjoy the driving experience
of a BMW car.

Consequen Product
ces
recalls
product
recall

Christophe Weerts

They (lessons learned shedules) simply

work. All the ideas and improvements of
the past are taken into account to find an
equitable solution. We have 10 000
engineers who are only occupied with doing
research: finding new ideas, doing market
research, etc. They are the founders of the
BMW designs and are responsible for the
new technologies that are integrated inside
the BMW car. Think of new engines, new
seats and new fuel tank systems.
We have processes in place to ensure
quality standards. The testing of all the
materials is priority within the BMW
company. We also test these products as
an integral part: how does the car behave
after 10 years?. Has the performance of
the car decreased significantly or is there a
safety violation or are all the materials still
satisfying concerning quality demands?.
Afterwards, we make improvements based
upon the findings of the tests and
measurements we made.

Learning
benefits
product
recall

If you conduct a product recall, you are

not going to manufacture the same product
as you did before. You have to make
improvements. The Takata airbags case I
mentioned earlier is an example of how our
suppliers work on continuous
improvements. If we have a problem with
some type of steel plates, we search
another one which has a higher quality and
is preferably cheaper. If you have more
carbon in the steel plate, you can make the
car lighter (= higher quality). Improvement
thinking needs to be encouraged. Also, if
engineers succeed to manufacture a
product that doesnt contain any defects at
all, they still dont have the right to be
satisfied because improvements can be
made at all times.

Improvem
ents made
after
product
recall

Christophe Weerts

Christophe Weerts

198

Product
recalls

Improvem
ents made
after
product
recall

Product
recalls

Interview 10

Interviewee

Coded Segment

Category

Themes

Pol Put

Everything that Volvo sends back to us

and consists out of low quality. Another
interpretation I can give to product failure
is every product that doesnt fit within the
original design of the product. We dont
have the time to make adjustments to
every incoming product here on the line. I
think of drilling holes, screwing bolts and
applying tiny nuts.

Definition
product
failure

Product
defects /
failures

Pol Put

As for quality control, we make use of the

8D (eight Discipline) approach. We focus
both on prevention coming from a FMEA
schedule and correction. If a problem on
the line occurs, we try to find the root
cause through a Failure Method and Effect
Analysis and try to narrow it down and to
localize interdependencies as well.
Afterwards, a corrective action plan will be
formulated to find a proper solution for the
problem. Volvo is especially concerned with
finding a proper solution for the problem: it
is not sufficient to go the operator who
made the mistake and tell him that he may
not do the same mistake again in the
future. No, the mistake needs to be solved
and the defect needs to be fixed as well.
Those are the requirements of Volvo Cars
Ghent. You need to answer 2 questions:
Why did the defect or mistake happen?
and How does it come that no one
detected the mistake or defect earlier on in
the process?. Determining the root cause
needs to be done independently of the
problem. We dont experience a lot of
difficulties with product defects coming
from our suppliers, but still it happens.
Actually, our assembly line has never
stopped rolling. Sad but true, but a main
concern of the company is to keep the
production or assembly line rolling: never
quit production or assembly. As for
containment actions, defected products
need to be sorted from the assembly line
and stock. This is done by an external
company. They will be instructed which
parts are defected, which supplier is
responsible and how to perform checks to
determine that the quality of other
products is still unaffected.

Product
defect /
failure
procedure

Product
defects /
failures

Pol Put

Most of the times, we detect problems and

defects internally. Still, customer
complaints are also very important when
detecting problems and defects. We simply

Product
defect /
failure

Product
defects /
failures

199

cannot check and test everything. We are

not occupied with software downloads, so
we dont have to check it into our
processes. Volvo Cars Ghent is occupied
with all the integrated testing coming from
dashboards, cockpits, brakes, shock
absorbers, tires, etc. We do standardized
inspections on the line when the finished
goods leave the company. Inbound
inspections are not done: we rely on our
suppliers that they checked the quality of
their parts and that they report defects.
Besides, inbound inspections take a lot of
time and cost a lot of money. If we
localized a product defect on the assembly
line, we are forced to take corrective
measures. In the first place, we will check
our stock to localize parts of the same type
and supplier. Afterwards, incoming loads
and shipments will be checked as well.

procedure

Pol Put

In the case of a product defect or recall,

we organize a meeting (pulse meetings).
We involve both Volvo as our suppliers into
these meetings. Afterwards, we will check
what the problem is. How can this problem
be solved? Can it be fixed by a first
maintenance action or are there multiple
maintenance actions necessary? Suppose
that there is a safety critical defect present
inside a Volvo car: the connection of the
airbag has come loose. In that case, you
will immediately get a notice or warning to
visit your garage dealer on the dashboard
of the car. You cannot afford people driving
cars with defected airbags.

Product
defect /
failure
procedure

Pol Put

As for quality control, we make use of the

8D (eight Discipline) approach. We focus
both on prevention coming from a FMEA
schedule and correction. If a problem on
the line occurs, we try to find the root
cause through a Failure Method and Effect
Analysis and try to narrow it down and to
localize interdependencies as well.
Afterwards, a corrective action plan will be
formulated to find a proper solution for the
problem. Volvo is especially concerned with
finding a proper solution for the problem: it
is not sufficient to go the operator who
made the mistake and tell him that he may
not do the same mistake again in the
future. No, the mistake needs to be solved
and the defect needs to be fixed as well.
Those are the requirements of Volvo Cars
Ghent. You need to answer 2 questions:
Why did the defect or mistake happen?
and How does it come that no one
detected the mistake or defect earlier on in
the process?. Determining the root cause
needs to be done independently of the
problem. We dont experience a lot of
difficulties with product defects coming

8D process Product
defect /
failure
procedure

200

Product
defects /
failures

from our suppliers, but still it happens.

Actually, our assembly line has never
stopped rolling. Sad but true, but a main
concern of the company is to keep the
production or assembly line rolling: never
quit production or assembly. As for
containment actions, defected products
need to be sorted from the assembly line
and stock. This is done by an external
company. They will be instructed which
parts are defected, which supplier is
responsible and how to perform checks to
determine that the quality of other
products is still unaffected.

Pol Put

Pol Put

Pol Put

In the automotive industry, firms expect

that you search a solution for every
problem and complaint you encounter.
Every defect or problem you encounter
needs to be seen as an opportunity to
make improvements. Every year, we strive
to work on continuous improvements. Even
when you reach your target, you have to
work on improvements: it isnt a good
attitude to be satisfied with a ppm of 1, you
can still reduce it to 0. Those tiny
differences matter. Every year we try to
increase efficiency by 10% to 20% towards
our working methods, material handling
and communication flow. We have to test
and measure 1 outbound cockpit out of
1000. For measuring this, we make use of
6SIGMA software.
In most of the cases, the cars will not be
reduced to scrap: the product defects
arent so big or severe to transform the
whole car to scrap. This would be too
expensive. On the other hand, defected
components are always scrapped.
Apart from ISO, we look at the PPM (Parts
Per Million) rate of our suppliers. Other
targets within the firm metrics, like
production volume, are taken into account
as well.

Pol Put

Apart from ISO norms, Volvo has specific

demands as well.

Pol Put

We require our suppliers to comply with

the ISO norms, especially ISO 9001
(quality norm).

201

Deming
cycle
analysis

Product
defect /
failure
procedure

Scrapping / Product
rework
defects /
policy
failures

Product
defects
caused by
OEMs or
aftermarke
t
customers
Product
defects
caused by
OEMs or
aftermarke
t
customers
ISO
standards

Product
defects
classificati
on

Product
defect
classificati
on

Regulation
s and
standards

Pol Put

We have to comply with ISO TS 16 949.

ISO
This is a stricter ISO norm than ISO 9001
standards
because it requires higher quality standards
and is more customer oriented. If you look
at the automotive industry in general, you
will notice that ISO norms is rather a
normal thing to comply with: you are
working with a product that can endanger
lives when delivering poor quality goods.
Once in a year, we will get an audit in order
to check if we really comply with the ISO
TS 16 949 norm. For this, we dont do
anything special: we just work like we are
used to work. This audit mostly brings
along some remarks to make our processes
better. We dont see this as a shameful
experience: we see this as an opportunity
to make ourselves better, to make
improvements. Another auditor will
evaluate later on whether you have taken
into account the feedback that is given. If
you comply with their checklist, you will be
certified again. It is almost a must for
automotive suppliers to be ISO certified
these days.

Pol Put

Most of the mistakes can be attributed to

humans because of 2 reasons. 1st reason:
we only have one robot and 199 employees
working here. Still, I have to be honest: in
the beginning we experienced difficulties
programming the robot. It requires some
experience to program it to a certain level
where he almost makes no mistakes.
Beyond this, a robot is also inflexible: you
cannot tell him to screw a bolt deeper on
this part than the other part, this has to be
done manually. This is the 2nd reason.
Most of the times, we detect problems and
defects internally. Still, customer
complaints are also very important when
detecting problems and defects. We simply
cannot check and test everything. We are
not occupied with software downloads, so
we dont have to check it into our
processes. Volvo Cars Ghent is occupied
with all the integrated testing coming from
dashboards, cockpits, brakes, shock
absorbers, tires, etc. We do standardized
inspections on the line when the finished
goods leave the company. Inbound
inspections are not done: we rely on our
suppliers that they checked the quality of
their parts and that they report defects.
Besides, inbound inspections take a lot of
time and cost a lot of money. If we
localized a product defect on the assembly
line, we are forced to take corrective
measures. In the first place, we will check
our stock to localize parts of the same type
and supplier. Afterwards, incoming loads
and shipments will be checked as well.

Pol Put

202

Regulation
s and
standards

Classificati Product
on product defects /
defects
failures

Product
defects
caused by
OEMs or
aftermarke
t
customers

Product
defect
classificati
on

Pol Put

Pol Put

Pol Put

Well, it can be that the person in question

may forget to disable the airbag function on
the back seats in the case that there are
child seats in the back. In that case he is
responsible for what happened: there is no
failure. Suppose that you have to do
maintenance to a car and that you
accidentally damage a certain item, you are
kept responsible for the defects resulting
from your actions.
Most of the times, we detect problems and
defects internally. Still, customer
complaints are also very important when
detecting problems and defects. We simply
cannot check and test everything. We are
not occupied with software downloads, so
we dont have to check it into our
processes. Volvo Cars Ghent is occupied
with all the integrated testing coming from
dashboards, cockpits, brakes, shock
absorbers, tires, etc. We do standardized
inspections on the line when the finished
goods leave the company. Inbound
inspections are not done: we rely on our
suppliers that they checked the quality of
their parts and that they report defects.
Besides, inbound inspections take a lot of
time and cost a lot of money. If we
localized a product defect on the assembly
line, we are forced to take corrective
measures. In the first place, we will check
our stock to localize parts of the same type
and supplier. Afterwards, incoming loads
and shipments will be checked as well.

Product
defects
caused by
OEMs or
aftermarke
t
customers

Product
defect
classificati
on

Product
defects
caused by
suppliers

Product
defect
classificati
on

In the aftermarket are also no counterfeit

products: those components are highly
secured with all kinds of sensors and
electronics. If a component or software
upgrade is missing, the dashboard will
simply not work: all parts need to be
integrated and be configured as a whole.
Together with the sub suppliers, Volvo
established a team to build in those
securities to ensure the quality of the
product and thus the safety of the
aftermarket customers. To conclude: I
dont think that there are much counterfeit
products of cockpits and dashboards in the
market. Besides, the aftermarket is not so
big after all: you are not going to imitate
and manufacture an airbag. You need to
have the knowledge in the first place and it
needs to be considered as safe by your
customer audience. As for the aftermarket,
you only need spare parts when you
experienced defects. It can be that there is
a counterfeit market in the auto tuning
industry. Because we are the only one
selling to the OEM, Volvo Cars Ghent will
not let anyone else manufacture its
dashboards and cockpits.

Defects
due to
counterfeit
products

Product
defect
classificati
on

203

Pol Put

Safety critical components contain a

special code and are strictly monitored. I
think of airbags and handlebars. Those
parts are equipped with a mix number:
through RFID Volvo cars Ghent can identify
which components and materials are
integrated into the parts. We can always
send back defected materials towards our
suppliers and gather info about test data
through traceability technologies.

Product
Product
defect
defects /
traceability failures

Pol Put

We never had product recalls that had to

do with safety violations, so our product
recalls never made the press. As for Volvo
Cars Ghent, this has been the case multiple
times. I think of the big Takata airbag
recall during 2010-2011.
All the companies here in the Ghent site
are 1st tier suppliers of Volvo Cars Ghent.
This group of suppliers and Volvo come
together 2 times a month to discuss
operational, logistic and strategic
opportunities and difficulties in a meeting.
It is not the case that, because you are a
supplier that only has a small contribution
to the ultimate Volvo car, you cannot learn
from your mistakes and others failures or
successes. Mistakes and failures are
discussed very openly. We have a very
good vision system and operator trainee
system: maybe this can be applied in other
firms as well. For instance, we may
optimize our warehouse supply chain
systems to check which (fork lift) carrier
needs to carry which component. As for
success stories, think of the lean
manufacturing system of Toyota. However
the last years Toyota also suffered
reputation damage despite the big Takata
airbag recall. I think that everyone can
learn from each other, both in weaknesses
as strengths. Sometimes you need to think
out of the box, especially for failures. In
that case you have to shift your current
way of thinking. So you need to reflect your
own thoughts of what went wrong and how
you can adjust those thoughts to make
superior quality products.

Product
Product
recall
recalls
experience

If we notice that we have send a defected

product to Volvo, we will report this. We
then ask to put that particular car from the
line. Still, we dont report proactively which
process failures we encounter here. Only if
we have excessive problems, we report this
to Volvo and our suppliers. Volvo Cars
Ghent serves as a moderator for us:
collaboration with them helps us to localize
and fix defects more quickly. Internal
problems, like the designing mistakes, are
the responsibility of our suppliers and the
SAS automotive production units.

Product
Product
recall
recalls
experience

Pol Put

Pol Put

204

Product
Product
recall
recalls
experience

Pol Put

In the case of a product defect or recall,

we organize a meeting (pulse meetings).
We involve both Volvo as our suppliers into
these meetings. Afterwards, we will check
what the problem is. How can this problem
be solved? Can it be fixed by a first
maintenance action or are there multiple
maintenance actions necessary? Suppose
that there is a safety critical defect present
inside a Volvo car: the connection of the
airbag has come loose. In that case, you
will immediately get a notice or warning to
visit your garage dealer on the dashboard
of the car. You cannot afford people driving
cars with defected airbags.

Product
recall
procedure

Product
recalls

Pol Put

We do not inform our customers about the

product defects coming from us or our
suppliers. Volvo Cars Ghent will inform
them for us. The only actions we do is
taking measures to make the car safe and
qualitative again. We have to defend
ourselves by giving advice of what is the
best way of repairing the defect. It is Volvo
Cars Ghent who has to recall its cars and
thus sometimes has to stop its production
in the case of a product recall. Volvo will email its final customers to bring back their
cars to a local garage dealer for
maintenance.

Product
recall
procedure

Product
recalls

Pol Put

As for quality control, we make use of the

8D (eight Discipline) approach. We focus
both on prevention coming from a FMEA
schedule and correction. If a problem on
the line occurs, we try to find the root
cause through a Failure Method and Effect
Analysis and try to narrow it down and to
localize interdependencies as well.
Afterwards, a corrective action plan will be
formulated to find a proper solution for the
problem. Volvo is especially concerned with
finding a proper solution for the problem: it
is not sufficient to go the operator who
made the mistake and tell him that he may
not do the same mistake again in the
future. No, the mistake needs to be solved
and the defect needs to be fixed as well.
Those are the requirements of Volvo Cars
Ghent. You need to answer 2 questions:
Why did the defect or mistake happen?
and How does it come that no one
detected the mistake or defect earlier on in
the process?. Determining the root cause
needs to be done independently of the
problem. We dont experience a lot of
difficulties with product defects coming
from our suppliers, but still it happens.
Actually, our assembly line has never
stopped rolling. Sad but true, but a main
concern of the company is to keep the
production or assembly line rolling: never
quit production or assembly. As for

8D process Product
recall
procedure

205

containment actions, defected products

need to be sorted from the assembly line
and stock. This is done by an external
company. They will be instructed which
parts are defected, which supplier is
responsible and how to perform checks to
determine that the quality of other
products is still unaffected.

Pol Put

First of all, a product recall results in a

financial setback for SAS Automotive. We
dont suffer a lot of reputation damage,
because customers mostly link Volvo cars
to the defect, not the dashboards or
cockpits. Therefore that Volvo has so many
testing facilities and testing tools. Volvo
cannot say to the customer that a supplier
can be blamed for the product defect: they
have to turn up for the costs that are made
as well. Besides, product recalls resulting
from safety violations are very costly: you
have to compensate the customer and pay
fees for the juridical arrests. Reputation
damage of Volvo eventually leads to a drop
in sales which also leads to a drop in sales
for us. So a product recall is both
disadvantageous for Volvo as for us.

Consequen Product
ces
recalls
product
recall

Pol Put

All the companies here in the Ghent site

are 1st tier suppliers of Volvo Cars Ghent.
This group of suppliers and Volvo come
together 2 times a month to discuss
operational, logistic and strategic
opportunities and difficulties in a meeting.
It is not the case that, because you are a
supplier that only has a small contribution
to the ultimate Volvo car, you cannot learn
from your mistakes and others failures or
successes. Mistakes and failures are
discussed very openly. We have a very
good vision system and operator trainee
system: maybe this can be applied in other
firms as well. For instance, we may
optimize our warehouse supply chain
systems to check which (fork lift) carrier
needs to carry which component. As for
success stories, think of the lean
manufacturing system of Toyota. However
the last years Toyota also suffered
reputation damage despite the big Takata
airbag recall. I think that everyone can
learn from each other, both in weaknesses
as strengths. Sometimes you need to think
out of the box, especially for failures. In
that case you have to shift your current
way of thinking. So you need to reflect your
own thoughts of what went wrong and how
you can adjust those thoughts to make
superior quality products.

Learning
benefits
product
recall

206

Product
recalls

Pol Put

As for product failures, every product

failure leads to an improvement. For
instance, there was a problem with a
particular antenna manufactured from a
Japanese firm. At first sight, the antenna
seemed to work properly, but later on
customers complained that they suddenly
fell off. After hearing from these
complaints, Volvo decided to test these
antennas themselves. After performing test
in Sweden, it seemed that they werent
cold resistant at all which caused the
antennas to fall off. As a result of finding
the root cause of the problem, the
antennas are equipped with a new tape
which causes the antenna to stay attached
at the assembled parts of the cockpit. As
for our IT systems, we make use of a new
developed training schedule of operators
which is convenient in use and saves a lot
of paperwork.

207

Improvem
ents made
after
product
recall

Product
recallls

208

209

8.4.

Appendix D Code Relations Browser of all codes VS product failures/defects

210

8.5.

Appendix E Code Matrix Browser

211