Automotive Recalls Shrink as Data Mining Expands 

When a mechanic takes a look under the hood only to find that a part was incorrectly manufactured, automakers have a number of choices. In the past, the company would probably have recalled an entire model so that customers would be safe rather than sorry.

While this could unnecessarily convenience tens of thousands of car owners, the alternative was simply to ignore the defect, putting some customers at risk of a crash—that is, until now.

Earlier this year this scenario unfolded when a 2012 Chevrolet Volt was brought in for a repair while the vehicle was under warranty after the owner complained that its brakes had been locking up. It was then discovered that a brake valve had a hole in the wrong spot because the part had been put in the wrong machine during manufacturing. The result was that the valve couldn’t relieve brake fluid pressure when the driver tried to stop the car.

And rather than taking drastic measures such as a complete recall or simply disregarding the defect, General Motors (GM) instead used barcodes and radio-frequency (RFID) tags to track which valves had gone through the incorrect process and find the specific vehicles that now housed them.

While GM was able to accomplish this in less than a month, the real feat was that the company found that the total number of cars affected by the valve recall was exactly four, which meant that GM was able to contact their owners directly to inform them of the defect rather than issuing a blanket recall that would have returned thousands of perfectly manufacturing vehicles.

According to Maureen Foley-Gardner, director of field performance at GM, the company has used this ID tag database system 15 percent more than it did in 2012, and has already seen the actions such as recalls shrink by 40 percent.

“It has become crystal clear to me that it’s having an impact,” Foley-Gardner says.

The result across industry is that small recalls such as this one are happening more and more across the country, which in turn keeps consumers safer and saves money for manufacturers.

Already the auto industry spends between $45 billion and $50 billion a year on recalls and warranty claims, according to analytics company Teradata. For its automotive clients, Teradata says that track-and-trace software like this can cut warranty costs by ten to 35 percent, administration costs by 25 to 45 percent, and compliance costs by 30 percent.