A warranty claim represents one of the most severe indicators of poor product performance. The product problem typically occurs during customer usage, and helps them to begin forging a negative opinion about your product. And to make matters even worse, lack of a quick response to the problem will ultimately cause permanent damage to the image of your product and company. Today’s customer expects near perfect quality and near 100% uptime.
A warranty system can be one to the most effective tools for managing your quality. Your ability to identify problems early, to jump on those problems and to solve them quickly can make a significant difference in both your revenue and cost pictures. The alternative is to be left with a crowd of lost customers, and a huge tail of costs.
The most important task to do when a warranty problem occurs is to respond immediately. The longer the customer sits with downed equipment, the stronger your chances are of losing that customer. Your knowledge base should contain, at minimum, the following:
- Servicer contact information
- Your call center numbers
- Repair documentation
- Warranty processing forms
Documentation can include repair manuals, service bulletins, parts diagrams, and any other critical repair information.
Your call center should also be equipped with a CRM case history function to link to known past solutions for these types of problems. This can save diagnostic time for known problems and speed the repair with best practice notes associated with those repairs.
Lastly, you need an inventory system that tracks demands from these warranty claims and stocks inventory (at home or in the field) to meet these demands. Some manufacturers use production inventory for this purpose, which only causes schedule changing shortages on the shop floor.
When you do determine there is a product problem, remember that there are many more that have been sold, or that are currently being produced in the plant. The quicker you determine the exact problems, the faster you eliminate the long tail of repairs that continue to be produced.
To help with this identification process, it is important to be able to track down the source of the problem. This can be greatly simplified by knowing such things as the serial no. of the unit, the supplier parts that were used, the operations that were performed, and the quality tests that were performed. A good ERP system will have serial no. tracking, lot traceability, build histories, supplier lot tracing, quality tracing, and other functions that will greatly simplify this process.
Sometimes the only way to find the ultimate cause of the problem is to actually take a look at the problem itself. A good returns system can make sure those parts are effectively identified and tracked on the way back.
Unfortunately, not every product problem can be resolved in a short period of time. Some will take research by the engineering department, and others may require changes on the plant floor. These product problems can vary in severity from simple usability problems to severe equipment down problems. A good warranty system can help to track these problems with information on severity, cost, and ease of correction. This can help you to utilize your resources in the most effective manner possible.
Another factor that weighs into assigning your resources for correcting product problems is the upcoming trend of that problem. For example, a recent warranty problem may appear to be minor when viewing the monthly cost, and is assigned a low priority code. However, when viewing the trend of the problem, it becomes apparent that this is related to a new product for which few units have been shipped. When compared to actual shipments later on, the problem now looks substantial and is pushed up in priority.
Warranty – Summary
A warranty system can not only lower your warranty administration costs, but can quickly identify and correct problems before they proliferate across your customer base. The most expensive quality problems are those that go unidentified and are shipped to customer after customer. Each of those product problems represents a potential loss of a customer, and a huge cost of repair.
The most effective warranty systems help you to respond quickly on each incident, and to minimize the customer effects. It then becomes critical to prevent the same problem from occurring at other customers. This is best accomplished by quickly identifying what the problem is and what caused it. Your ability to know detailed information about supplier, production, engineering and quality is paramount to solving this riddle.
As no manufacturer has unlimited resources to throw at every product problem, it is also important to prioritize the problems for most effective use of your resources. Your warranty system should help to rank and prioritize your most effective problem solving efforts.
Lastly, it is important to unearth hidden trends that could be eating at the foundation of your product image. Your ad hoc reporting system can help to illustrate the ongoing trends in your warranty area.