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Connected Customer Experience

Optimize Supplier Warranty Management Through Improved Collaboration and Communication

Author Michael R Blumberg on Apr-29-2019

According a recent study by Warranty Week, warranty claims in the U.S. Automotive Industry have remained relatively stable over the last 15 years.    Among Power Train Suppliers, Warranty and Accrual rates have averaged less than 1% of sales during this time frame.   Apart from outlier years due to the Great Recession and a large-scale recall by one manufacturer, Warranty and Accrual rates have averaged between 2.5% and 2.2%, respectively, for manufacturers of Truck and Large Vehicles.

Figure 1

Large Vehicle Makers & Powertrain Suppliers
Average Warranty Claims & Accrual Rates
(as a % of product sales, 2003-2018)

Figure 2

Automotive Warranties
Average Warranty Claims & Accrual Rates
(as a % of product sales, 2003-2018)

automotive warranties_warrantyweek_2003-2018-chat

Given the fact that warranty expenses are a function of product sales, these trends appear to be  good news for the Automotive Industry. Basically, they indicate Automotive Suppliers and OEMs have been able to hold warranty expenses steady.  Yet, over the past five years, product sales have continued to increase suggesting that higher sales volume has not had a compounding effect on warranty costs.

During this same time frame, suppliers and OEMs have made significant investments in software and systems with the goal of automating and streamlining warranty processes. However, despite these investments, warranty expenses have not changed significantly.  Although these investments have improved the efficiency and productivity of administrative functions associated with warranty claims processing, they have had minimal, if any, impact on reducing warranty expenses stemming from product quality issues.

Unfortunately, automotive suppliers face challenges resolving quality issues in a timely manner because they lack the systems to effectively deal with communication and collaboration between all participants in the warranty chain.   They are relying on ad-hoc and inefficient processes using Excel spreadsheets, emails, and disparate systems to manage warranty. As a result, they experience several issues:

  • Movement between multiple OEM Portals, Warranty systems, and data formats
  • Insufficient warranty data to perform Quality analysis and correction actions
  • Higher occurrence of No Trouble Found (NTF/NFF) incidents
  • Longer detection-to-correction cycle times in responding to emerging quality issues

To overcome challenges, suppliers need to implement a single, consolidated warranty system that is integrated with all OEMs and their distributor/dealer networks.  The ideal system manages the complete warranty process for claims, returns, and quality management. The optimal solution connects OEMs with Suppliers to simplify and streamline interactions between them resulting in several benefits including, but not limited to:

  • The ability to process Warranty Claims and Part Returns from OEMs or Distributor/Dealer networks more efficiently
  • Reduction in the detection to correction cycle time through Early Warning System (EWS) and effective Root Cause Analysis
  • Improved collaboration with OEMs and their dealer network resulting in reduced warranty incidents and No-Trouble-found (NTF) issues

By having multiple systems, data formats, and inconsistent capabilities across supply chain, OEMs and Suppliers are wasting lot of resources, time, and software investments. Using a Warranty platform that connects OEMs and Suppliers  to support common data formats, metrics. and quality reports, all  stakeholders can benefit from the increased value creation. The warranty data can be exchanged in real time and can be consolidated from each OEM and supplier perspective. The API and connectors available to the platform can be used to integrate with existing ERP, financial, and dealer claims systems.

This type of Supplier Warranty Management solution is available through Mize, an industry leading platform and Warranty Software provider.  If you would like to learn more, please join us for a live webinar hosted by Mize with the leading experts who will share best practices to optimize Supplier Warranty Management. 

Webinar Topic:  Best Practices to Streamline Supplier Warranty Management

Date & Time:  June 11, 2019 at 1 PM EST/12 PM CST

Presenters:     Michael Roberts, President MR Insights, LLC

                               Eric Marlan, Senior Product Manager, Mize

Moderator: Alan Horne, Business Manager, Automotive Industry at Mize                         

 During this Webinar presented by leading Industry experts, you will learn about:

  • Simplifying and standardizing the data exchange between OEMs and Suppliers
  • Streamlining Parts Returns and Inspection processes
  • Best practices to reduce No Trouble Found (NTF) and Claim rejection rates
  • Tracking corrective actions to drive Quality improvements
  • Implementing systems to improve efficiencies, and reduce costs

Watch Webinar Recording

Topics: Supplier Warranty Management, Optimize, Improved Collaboration

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