IBM works on automotive warranty early-warning system

Automobile repairs and recalls annoy manufacturers as much as they do consumers, adding billions annually to their business costs. IBM Corp. hopes a new bundle of software and services it has developed will help auto manufacturers cut their warranty costs by deploying an analytics-based early warning system. The company is at this week’s AutoTech conference in Detroit to talk about its work over the past 18 months developing the product.

“We’ve estimated that it can take more than 250 days from the time a problem is identified in a dealership to when information about that problem gets back to the supplier, vendor or [manufacturer] that had a hand in designing that part,” said Linda Ban, the global automotive leader of IBM’s Institute for Business Value team. “If you can correct a problem in day 245 rather than day 250, that’s five days more in which that problem is not reported.”

IBM’s staff has been working closely with truck manufacturer International Truck and Engine Corp., a unit of Navistar International Corp., to develop a prototype system for combing through assorted data such as warranty claims, maintenance and repair records, customer service call logs and even external information sources such as Web blogs and enthusiast discussion boards. The goal was to build text analytics software that can detect looming problems more quickly than manufacturers can now, using largely manual methods. IBM’s product incorporates the company’s language parsing tools and its open UIMA (Unstructured Information Management Architecture) standard.

“If you want to do analysis of unstructured textual data, the problem you have to deal with is that English, as people write it and speak it, is truly unstructured,” said Larry Lieberman, IBM Research’s automotive program leader. “This [software] is not just searching for words, it’s getting a semantic understanding of phrases and sentences.”

The early-warning system issue is sufficiently pressing that the Automotive Industry Action Group, the industry’s trade association, recently convened a conference devoted to the subject. A regulatory act passed in the wake of the Ford Explorer/Firestone tire debacle, the Transportation Recall, Enhancement, Accountability and Documentation Act, added new reporting requirements and accelerated early-warning system investment. Each day companies can shrink the “detection-to-correction” window saves them US$1 million on average, AMR Research Inc. estimates.

IBM is packaging its offering under the name IBM Quality Insight Solution for Automotive, but the product is really an amorphous combination of IBM’s information integration applications and services from its automotive industry researchers and consultants. It also incorporates technology from partners including SAS Institute Inc. and ClearForest Corp.

International Truck and Engine let IBM’s researchers loose on its trove of warranty claim information. The test project worked with historical, not current, data. “The idea was to see, could we have found things sooner if we had a better methodology?” said International Truck and Engine Project Manager Terry Stewart.

The company’s conclusion: yes. International Truck and Engine is in discussions with several vendors and may work with another to develop its early-warning system, but the company definitely plans to begin building one.

“I think it’s a very good methodology that’s being developed,” Stewart said. “It will shave time off on issue identification and corrective action.”

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