Original Date: 03/06/2006
Revision Date: / /
Best Practice : Phalanx Warranty Program
Increasing threats to global security and a technology need during the 1997-1998 timeframe prompted revival of the legacy Phalanx system. Additional funds were granted to complete Class A overhauls on existing systems. To ensure the reliability of the equipment and the success of the program, Raytheon-Louisville implemented the Phalanx Warranty Program. The program has created a win-win situation in which ships having failures are corrected immediately, allowing Raytheon-Louisville to gather required data to initiate long-term corrective actions on the system. The Phalanx Warranty Program has produced benefits for all involved.
In the mid-1990s, the Phalanx was a legacy system. Due to evolving security threats, the U.S. Navy (USN) determined the need for the capability of the Phalanx. Because there were no other equally threat-capable systems, the program was revived. However, several concerns of the program had to be addressed. The original equipment manufacturer (OEM) was not meeting the expectations of the Fleet and the Navy Program Office for increased reliability. The Program Office and the ship were responsible for technical assistance and the funding of replacement parts. The newly fielded systems had no warranty, and Raytheon-Louisville was not receiving the failure data required to address problems and take corrective action. If the operational availability (Ao) was not maintained or increased, the program could be jeopardized.
Once Raytheon-Louisville received additional funding to complete Class A overhauls in fiscal year (FY) 2003, a bumper-to-bumper warranty was implemented on the systems that would pay for any failure/repairs with the exception of consumable items (e.g., grease, nuts, bolts, etc.). This new process also allowed Raytheon-Louisville to begin gathering failure data. Because the data was being filtered back to them, they could now take the necessary measures to ensure that long-term corrective actions were in place. This allowed the Louisville facility to keep metrics on reoccurring issues in the Fleet, supporting a proactive culture versus a reactive culture.
One key component to the Phalanx Warranty Program is the length-of-warranty period. The Louisville facility developed a warranty term that allows up to 6 months of warehouse time for the systems. This gives the Navy a period of time in which the equipment can be fielded without reducing the operational warranty period. When the equipment is installed and accepted (signed off) by the ship, the warranty period of 12 months is initiated. Once the equipment has been accepted, the In-Service Engineering Agent (ISEA) sends a naval message to the ship. This message also includes pertinent information on how to request warranty repairs or component replacement. When the warranty is nearing the end of its life cycle, the ship also receives a naval message with pertinent information (e.g., expiration date of the warranty, etc.).
When developing the warranty program, Raytheon-Louisville ensured the warranty issues and repairs could easily be requested. If an item is in need of repair, the ship can simply send a naval message to the ISEA. This in turn signals the ISEA to requisition a part or repair from the Louisville facility at no charge. Raytheon-Louisville then fixes the problem or sends a replacement part. The ship returns the carcass back to the Louisville facility for corrective action. If it is determined a sailor has damaged the item or has caused the failure, the Louisville facility is able to file a claim for the non-warranty item through the Program Office.
Raytheon-Louisville’s Phalanx Warranty Program has become a win-win situation for all parties. The ships now have a better issue resolution (repair) turnaround time, and Raytheon-Louisville is getting the information they need to ensure appropriate long-term health of both the equipment and the program. The receipt of this information has allowed Raytheon-Louisville to resolve technical issues such as workmanship and engineering before they become problematic.
Since the implementation of the Phalanx Warranty Program, the trend has shown a decrease in light-off and checkout (LOCO) and warranty failures/parts replacement, lower warranty dollars, and an increase in product reliability.
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