Pitfalls in Warranty Management

Article Written By: sai.seemac@gmail.com

The interaction between consumers and manufacturers define the market for the product. In an effective sales process, warranty and after-sales support are formulated in a way that is profitable to both the customer and the manufacturer. While customers often leverage the benefits of warranty for their product, ironically enough, many OEMs still consider it an afterthought. Product warranties continue to play an increasingly significant role in product s net profit metrics.

The following points elucidate on why is it that effective warranty management processes are still not on the radar screens of many manufacturers.

- Warranty Policies are always in place, but seldom does there seem any measure to check the validation of these policies. This leads to increased number of fraudulent claims and loss of revenue due to inventory consumed in such claims. So sometimes, even when a product is not in its warranty period, the service fees and/or part replacement is the result of fraud or pilferage in the tools used to manage such claims.

- With a large supply chain including OEM (Original Equipment Manufacturer), distributor, retailer and then customer, the warranty claims and reimbursement process sometimes become a lengthy process that sometimes even take few months. Detecting fraudulent claims become a challenge, which results in longer warranty life-cycle, inefficient and higher service cost and dissatisfied customers.

- One of the biggest pitfalls while managing warranty is the error-prone nature of manual data. Manual intervention makes the process slow and inefficient, and increases the TAT. With more than one entity involved in processing warranty of any product, the manual paperwork processing like faxing or mailing often throws a distorted picture. This becomes very costly and time consuming to the manufacturer.

- Many companies pay attention on managing the warranty of their product line as a necessary evil that has to be tackled. Seldom do they treat it as a revenue generator or a model to insure higher level of customer satisfaction and loyalty. It is not treated as an asset that can create great business value.

The above mentioned points briefly highlight how companies succumb to the mismanagement of after-sales business processes. It is therefore recommended to align entire post sales warranty, service and support, through a well defined process with effective tools that actually help to meet the expectations of the customers.

About the Author

Rakesh Kumar - Zed Service is leading service management software in India featuring warranty management software etc.

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