AUTHOR: Sachin Kulkarni & Yashvardhan Jhawar
contents
Leveraging Vehicle Telematics in building
Predictive Analytics & EWS within Warranty
Management
Abstract .................................................................................... 2
Current Warranty Scenario .............................................................. 3
Enabling Remote Diagnostics using Telematics ....................................... 4
Diagnostic Trouble Code (DTC) .......................................................... 5
Proposed Solution Architecture ......................................................... 6
Conclusion .................................................................................. 8
Abbreviations and Acronyms............................................................. 9
References ................................................................................. 9
About the Author .........................................................................10
About L&T Infotech ......................................................................11
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 1 of 11
Abstract
While engaging in warranty initiatives of various Original Equipment Manufacturers (OEM),
L&T Infotech has observed that traditional transactional warranty systems perform well when
it comes to analyzing warranty claims data via dealer-connected systems; however fall short
when it comes to predicting failure way ahead of actual warranty claim. This situation poses a
challenge of early detection of failure and potential warranty claims. Hence, such warranty
transactional systems are restrictive in driving Corrective Action Preventive Action (CAPA)
programs and substantially reducing „Occurrence to Awareness‟ cycle time.
Nowadays, all modern vehicles come with “Telematics Systems”. L&T Infotech believes that
Telematics System which constantly monitors the health and performance of vehicle
generates lot of intelligent information in terms of Diagnostic Trouble Codes (DTC) from on
board devices in vehicles in real time basis. If this information is analyzed leveraging NextGen
Big Data and Business Intelligence (BI) solutions and if appropriately combined with
transaction system, it can assist in building Predictive Warranty Analytics solution.
This paper primarily focuses on how to leverage and build analytics using real-time DTC. It
also emphasizes on driving CAPA programs to minimize warranty claims and restrict expensive
vehicle recalls.
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 2 of 11
Current Warranty Scenario
Warranty expense is usually considered as a cost of doing business and liability. The warranty
statistics mentioned below indicates its rising magnitude.

In 2012, all the US-based automotive companies reported over $10 billion in claims paid,
of which about 85% was paid by 46 OEMs and about 15% by their 105 suppliers. (Source:
Warranty Week)

In 2012, the total amount of warranty accruals reported by all US-based warranty
providers stand at $24.7 billion. (Source: Warranty Week)

German OEMs have the highest warranty costs worldwide.
Warranty management is a wide challenge affecting quality, design, and after-sales
departments of any OEM.
Transactional warranty processes are reactive in nature. Warranty data consists of claims
data that is collected during the servicing of claims, under warranty and additional data, such
as production and marketing data. This data helps in determining product reliability and
product quality, and assists in providing feedback to design teams and suppliers for necessary
product refinements or modifications.
L&T Infotech proposes to use Telematics as a mechanism to implement Early Warning Systems
and minimize occurrence-to-awareness cycle time.
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 3 of 11
Enabling Remote Diagnostics using Telematics
Telematics is the wireless connectivity established between vehicles and infrastructure
whether it is machine-to-machine, machine-to-human or direct to the cloud.
Telematics has reached critical mass in many regions around the globe. All major global OEMs
have implemented telematics in their vehicles in some form or the other.
Telematics for safety and security is most prevalent deployment of this technology, but there
is an increase in use of telematics for remote diagnostics as well. With an embedded module,
OEMs have greater control over system failures and can alert drivers much earlier. Recalls can
be quicker and more precise.
The magnitude of increase in usage of telematics globally is based on the following statistics:

By 2025, revenue opportunities from embedded telematics will increase to USD 25.6
billion. (Source: SBD, 2012)

Globally, the percentage of new vehicles sold with embedded telematics will grow from
14% today to 46% by end of 2018.
Through automated monitoring of real-time telematics data and DTC, OEMs can accurately
predict the failure of a component or part, diagnose the problem, and quickly contact the
vehicle owner for service before failure. Thus, remote vehicle diagnostics allows OEMs,
suppliers, and dealers to proactively address vehicle problems before they create operational
issues. Vehicles can thus be maintained in a better way. They will last longer and run more
efficiently. This in turn reduces time and cost of dealers and customers, thereby preventing
costly recalls.
“
Remote diagnostic technologies provide the ability to deliver on-board
vehicle-related performance and quality data to a central monitoring
application for the purpose of improving parts performance and reliability
insights for engineering and product development. Remote diagnostics can
also improve customer relationship management by automating repair and
service
scheduling.
------------------------------------------------------------------------------------------------------ Gartner
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 4 of 11
Diagnostic Trouble Code (DTC)
DTC is a 5-digit fault code which is generated from vehicles in case of any issues in vehicle
operation or part failure. The below diagram depicts description of each digit in the DTC.
Figure 1: Diagnostic Trouble Code Interpretation
For example, DTC C1412 would refer to the chassis system. The fault is manufacturer-specific
– related to auxiliary emission control – and is the 12th fault of this category.
Using DTC, the system can monitor fuel economy, interior and exterior temperature, air
intake, oil, cooling, fuel system, battery, alternator, load, transmission, transfer case,
differential, traction control, brakes, hydraulics, tires, emissions systems, and trailers. L&T
Infotech proposes to utilize vehicle DTC to predict vehicle malfunctions and allow technicians
to take action before they actually occur. The first digit of a typical DTC provides the
flexibility to design custom fault codes. Manufacturers can add them to monitor behavior of
parts which are newly introduced into the production.
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 5 of 11
Proposed Solution Architecture
L&T Infotech proposes the below architecture to build an early warning system for predictive
warranty analysis.
Figure 2: Proposed Solution Architecture
Vehicles are fitted with Telematics devices which continuously transmit diagnostic data
including DTC. The information gets transmitted to a Telematics Data Center via satellite or
utilizing consumer cell phone internet. All diagnostic trouble codes are collected from various
vehicles in the central database of Telematics data center. A thorough statistical analysis of
the diagnostics fault code helps to identify trends/patterns and develop a pragmatic insight
to zero-in on the problem areas of the vehicle. This extracted information helps in answering
questions like:

Which system or sub-systems have the highest failure rate?

What is the mean time to failure for a specific component?

What is the expected lifetime of a component?

Which geography and models represent the maximum number of failures?

Which dealers have sold cars showcasing the maximum number of failures?

Which assembly plants have produced vehicle models having higher failure rate?

What are the critical and teasing vehicle issues post-launch of a new model?

Which issues become more prominent as the vehicle age increases?
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 6 of 11
This type of information is of paramount importance for the product‟s life cycle support. It is
also used as feedback during product development in order to pinpoint the main technical
problems with the products, and accordingly prioritize the investment of research &
development, engineering, quality, and management resources.
Graphical reports can be provided to Product Development, Diagnostics, Service & Warranty,
and Quality Management teams that help them to focus their efforts on the most common
failures and identify significant trends that require prompt attention. Some sample reports
are shown below:
Fault in Main
System
500
400
Powertrain
300
Chassis
200
Body
100
Network
0
Jan
Feb
Mar
Apr
May
Ohio
California
Time Frame
Jul
Powertrain Problem by Model
Powertrain Problem by
State
Texas
Hawaii
Jun
Newyork
Model1
Model2
Model3
Model4
Model5
Model6
1400
1200
1000
Network
800
Body
600
Chassis
400
Powertrain
200
0
1 yr
2 yr
3 yr
4 yr
5 yr
10 yr
Age of vehicle
Figure 3: Analysis graphs/reports
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 7 of 11
Conclusion
Automotive OEMs and tier 1 suppliers invest a lot in warranty initiatives. Such initiatives are
aimed at improving collaboration with internal and external supply chain entities to establish
an Early Warning System (EWS).
Organizations invest in the best IT solutions to derive intelligence out of DTC which is logged
from the vehicle. They strive to leverage this information in determining the potential mode
of failure and potential defective parts before they actually fail. If this critical feedback is
provided on time, it can assist in avoiding expensive warranty claims and recalls, and can
provide a robust platform for CAPA programs to various stakeholders across the entire value
chain.
The infrastructure VIZ: Telematics data center, GPS connectivity etc. which is required to
build such a EWS; is already in place with most of OEMs. L&T Infotech has presented and
discussed in this paper about how to build the best analytics solution leveraging this
infrastructure, and how to derive actionable intelligence from vehicle DTC in building an early
warning system within warranty management.
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 8 of 11
Abbreviations and Acronyms
DTC
Diagnostics Trouble Code
OEM
Original Equipment Manufacturer
ETL
Extract, Transfer and Load
EWS
Early Warning System
CRM
Customer Relationship Management
CAPA
Corrective Action Preventive Action
References
IDC
www.idc.com
Warranty week
www.warrantyweek.com
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 9 of 11
About the Author
Sachin Kulkarni leads the Manufacturing Solutions group at Larsen & Toubro
Infotech Ltd. He has 18 years of industry and consulting experience in NPD;
and SCM and CRM domains. He has worked in India, North America, Europe,
and South East Asia in Automotive and Industrial Product Companies. Sachin
holds a BE degree in Mechanical Engineering with an MBA in Marketing. In
addition to this, he is a Certified Supply Chain Professional (CSCP) and Project
Management Professional (PMA).
Yashvardhan Jhawar is a senior consultant in the Auto & Aero Business Unit
at Larsen & Toubro Infotech Ltd. He has 8 years of industry and consulting
experience in the manufacturing, automotive and aerospace domains. He has
worked in India, North America, and China, providing manufacturing solutions
for various clients. Yashvardhan holds a BE degree in Electronics &
Communication.
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 10 of 11
About L&T Infotech
Larsen & Toubro is a technology, engineering, construction, manufacturing and financial
services conglomerate, with global operations and turnover exceeding USD 14 billion. It is
ranked 4th in the global list of Green Companies in the industrial sector by the reputed
international magazine Newsweek, and ranked the world‟s 9th Most Innovative Company by
Forbes International. L&T is one of the largest and most respected companies in India‟s
private sector. A strong, customer–focused approach and the constant quest for top-class
quality have enabled L&T to attain and sustain leadership in its major lines of business over
seven decades.
L&T Infotech‟s horizon is filled with the promise of new and cutting edge offerings in the
technology space including an end-to-end cloud computing adoption toolkit and cloud
advisory consulting services; enterprise mobility solutions covering a smart access platform;
big data advisory services; and in-memory computing. L&T Infotech has developed
intellectual properties (IPs) in all the vertical and horizontal service lines and leverages them
to provide IP-led solutions.
L&T Infotech also delivers business solutions to its clients in the following horizontals/service
lines: SAP; Oracle; infrastructure management services; application outsourcing (testing;
application development, maintenance & support; legacy modernization; BI/DW); domain
services; architecture consulting; EAI & SI; service oriented architecture; software as a
service (SaaS); and product lifecycle management. Moreover, an innovative CIO-thought
partnership program provides a value-driven edge to clients.
For more information, visit us at www.Lntinfotech.com or email us at info@Lntinfotech.com
L&T Infotech Proprietary
Leveraging Vehicle Telematics in building Predictive Analytics &
EWS within Warranty Management
Page 11 of 11