Faculty of Engineering and Natural Sciences
Impacts of Carryover Parts on New Product Reliability
Gökhan Doğan, Massachusetts Institute of Technology
Conventional wisdom suggests that carryover parts, common parts used in successive generations of multigenerational products, have positive impacts on the reliability and durability of products because “reliability and durability of [carryover] parts have been substantially tested in the market already” (Clark and Fujimoto, 1991). However, this claim has never been tested empirically. In this paper, we make two contributions to the literature. First, by studying data from a motor vehicle manufacturer, we find that carryover parts are a major source of quality problems, contrary to conventional wisdom, as approximately half of the warranty cost is due to carryover parts. Moreover, the failure rate of carryover parts grows from one generation to the next. Second, we study ways to offset the failures of carryover parts. Using a novel simulation model, we test different policies that aim for better prioritization and analysis of carryover problems. Simulation results show that product reliability can be improved drastically using these policies. We highlight organizational and mechanical barriers to the adoption of these policies. Our results also indicate that managers should expect to witness higher warranty costs related to carryover parts on new products due to the trends in the industry.
Gokhan Dogan is a PhD candidate in the System Dynamics Group at the Massachusetts Institute of Technology’s Sloan School of Management. He holds a BS degree in Industrial Engineering from Bogazici University, Turkey. His research is focused on new product development, behavioral operations and system dynamics methodology.
December 24, 2008, 13:40-14:30, FENS G035