IBM and SAS Offer Manufacturers Solution for TREAD Act Compliance; Warranty Analysis and Early-Warning Solution Available in Time for Reporting Deadline

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CARY, N.C. & ARMONK, N.Y. - 24 Mar 2003: SAS, the leader in business intelligence and analytics, joined IBM today in announcing a strategic alliance to deliver a comprehensive warranty analysis and early-warning solution for the auto industry.

The solution will help manufacturers comply with U.S. government reporting regulations to be imposed nationally on April 1 by the TREAD Act.

TREAD, which stands for Transportation Recall, Enhancement, Accountability and Documentation, requires vehicle and equipment makers to submit reports summarizing information about consumer complaints as well as warranty, legal claims and field reports to the National Highway Traffic Safety Administration (NHTSA).

Faulty products that remain on the market cost manufacturers an estimated $12 billion in warranty and recall payments, as well as countless billions of additional dollars in tarnished brand image and lawsuits. Manufacturers are confronted with tremendous amounts of data from many sources, but are often unable to use that data to detect indicators that may predict defective products. The new solution offered by SAS and IBM will deliver a comprehensive set of warranty analysis and early-warning capabilities to help the auto industry surmount such problems.

The early-warning solution offered by SAS and IBM integrates data from a wide range of sources, including service activities, customer surveys, call-center contacts, production information, public records, part/product sales data and warranty information. In the future, such data will even come directly from vehicles themselves, thanks to advances in telematics. The partners will organize all information collected into a central database, where powerful analytics will interrogate it and quickly alert manufacturers to emerging issues.

Once the data are centralized and analyzed, manufacturers can improve product quality by avoiding defects; they can also reduce warranty costs by accelerating the cycle times of problem identification and resolution. When such quality and recoverable costs are properly managed, benefits derived include improved product quality, increased customer satisfaction and enhanced brand value. These, in turn, will translate into increased business value and significant cost savings for manufacturers and their suppliers.

"When re-engineering an enterprise system, implementation is the key to achieving success. IBM and SAS provide unparalleled experience and processes in rapidly deploying automotive and industrial manufacturing warranty and early-warning solutions," said Thomas Roehm, director of SAS' manufacturing practice. "Both companies are leaders in the field of warranty and quality analysis with current customers including many Fortune 100 manufacturers. The early-warning solution is a natural extension of our experience."

Keys to IBM's and SAS' capabilities include the ability to integrate both structured and unstructured (text) data from many diverse sources and to perform sophisticated analysis, which generate alerts to manufacturers. The new solution is contained in a Web portal that supports users across each customer's organization and is accessible to executives who need warranty, quality and safety scorecard indicators, as well as to root-cause analysts.

"We know that the majority of companies affected by TREAD are wrestling to understand its implications and determine how they will comply with its reporting mandates," said Janette Beauchamp, general manager of IBM Global Automotive Industry. "IBM and SAS are positioned to offer companies an accelerated path to TREAD compliance; we can help position them to leverage such compliance across their enterprises, thereby improving quality and customer satisfaction across the entire lifespan of a vehicle."

The solution from SAS and IBM, which leverages IBM's open, scaleable, e-business infrastructure, is available today and can be implemented in time to meet the government-mandated TREAD reporting requirements. It will also provide insights to organizations working to improve warranty performance.

Learn more about the IBM and SAS solution in the upcoming webinar "Gaining Value through Early Warning" on April 17, 2003 at 2:00 pm (EST). To register go to

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