cross functional warranty management- a closed loop approach to boost profitability
TRANSCRIPT
PEOPLE. PASSION.
EXCELLENCE.
>“Cross-functional Warranty Management – A Closed Loop Approach to Boost Profitability”
Presented by Tavant Technologies at Warranty Chain Management Conference 2011, San Diego, CA
Author: Devendra Malekar and Roshan Pinto
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Why This Discussion?The importance of Effective Warranty Management to the Company’s Overall Performance
Satisfaction with the Company’s Current Approach to Warranty Management
Market Pressures Driving Warranty Management Process Used in Support of Warranty Management
Over 80% OEMs feel that Warranty Management is extremely or very important to the company’s performance
67% OEMs are not completely satisfied with their company’s approach to Warranty Management
Customer Satisfaction, Warranty Costs and Profitability are the top concerns
79% OEMs have manual or partially automated Warranty Management process
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Warranty – A Critical Value ChainRevenues
Cash flow
Competitive Edge
Shareholder Value
Profitability
Trust & Loyalty
Customer Satisfaction
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Warranty – A Critical Value Chain>Superior Product Quality
>High Reliability & Uptime
>Comprehensive Warranty
>Speed & Quality of service
Ever Exceeding Customer
Expectations
Controlling warranty spend and ensuring customer satisfaction is always a critical balance
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Factors Affecting Total Warranty Cost
Administration
Material
Labor
Repair jobs
Logistics
Rentals
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‘Warranty’ in Cost of Quality
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Direct CoPQ
>Deficiencies in product engineering / design and analysis
>Manufacturing processes and workmanship defects
>Delay in detection of field issues
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Direct CoPQ> Field service troubleshooting errors and
inefficiency
> Inefficiencies in parts return increase logistics costs and affects reverse logistics processes
> Supplier warranty accountability not defined / apportioned well
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Direct CoPQ> Increasing ‘No Fault Found’ instances with no
collaborative dispute management
> Inefficiencies in warranty software system – High processing times and lack of automation
> Extended Warranties and Service Contracts cost overrun due to lack of dynamic visibility into cash flow
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Losses Caused by Indirect CoPQ
> Customer satisfaction and goodwill
> Time with dissatisfied customers
> Customer confidence in products
> Loyalty to the brand
> Recurring business
> Shareholder value
Good news travels fast; bad news travels faster!
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Enablers for Closed Loop System
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Process Transformation
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Leverage IntelligenceTo Analyse KPIs in -
>Product & Service Performance
>Warranty Costs
>Top Warranty Cost Drivers
>Top Field Service Issues
>Workmanship
>Products & Parts Reliability
>Returns and Recalls
>Supplier Performance
>Reserves & Cash flow
>Aftermarket Sales & Profitability
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Intelligence Hidden in Warranty Data
Warranty Cost as a % of sale Warranty Cost by Product Family Warranty Cost by Product Model
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Top Causal Parts Parts return Cycle Time Mean time between Failures (MTBF)
Intelligence Hidden in Warranty Data
Warranty Cost as a % of sale Warranty Cost by Product Family Warranty Cost by Product Model
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Top Business Rule FailuresOpen Claims Status EW / Contract Profitability
Intelligence Hidden in Warranty Data
Top Causal Parts Parts return Cycle Time Mean time between Failures (MTBF)
Warranty Cost as a % of sale Warranty Cost by Product Family Warranty Cost by Product Model
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Initiatives from Intelligence> Product engineering / redesign
> Design for warranty self repair / Remote fixes‐
> Design for serviceability
> Improve field diagnostics
> Review Supplier Performance
> Reduce instances of ‘no fault found‘
> Increase service limits
> Enhance repair intervals
> Refine sales pricing
> Data for financial audits
> Predictive analysis of costs and reserves
> Reduce Detection to Correction cycle time
> Cross-selling and Up-selling of Services
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Close the Loop for Cross functional ‐Improvements!
Integrate warranty organization more closely with other business functions
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Leverage Technology – Process Automation
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Leverage Technology – Warranty Intelligence
Business
Results
Strategic and Operational Decision
Making
Integrated
Analytics
Dashboards
Early Warning
System
Predictive
Analysis
Actionable
Insight
Collaborative
Approach
Real-Time
Monitoring
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Conclusion
Intelligence
End-to-End Integrated Work flow
Automation
Stakeholder Collaboration
Dealer
Supplier
Customer
OEM
Closed Loop Warranty
•Integrated Processes•Automated System•Dynamic Intelligence•Steering Committee for Cost Reduction
PEOPLE. PASSION.
EXCELLENCE.
>Thank You!Contact Us:-
W: www.tavant.com/warranty
T: (866) 9- TAVANT