The Biggest Challenges in Warranty Management

The biggest challenges in warranty management are in the reduction of service delivery costs to approximately 4-5% of a standard company revenue stream. In recent years, warranty fraud has posed serious challenge to cost reductions as companies have gone global. Warranty management is now an independent revenue center with a separate controller function.

If the biggest challenge in warranty systems is assurance of customer satisfaction, the interest of protecting the company from liability is based on the issuance of brand product guarantee by a manufacturer. Warranties must be in compliance with regulatory rules on warranty accorded to a particular sector. Most manufacturers provide stipulation of an end date on the guarantee in the product warranty card.

Performance on warranty of a product and its parts may be supplied by a distributor or retailer at point-of-sale transaction to the customer. Defective performance in as defined by US commercial rules on warranty states that the non-performance of any part or defect in any part of the product will be made good by the supplier or manufacturer with equal value replacement of the part or product, or in repair of the product.

As part of the value chain to any product based business, warranty systems are a separate function of the channel designed for service parts management. The service parts management stream may also function as an entire business unit; a profit center with independent revenue and cost budget reporting. Warranty systems are typically run by service parts management teams, with service support delivery functions as the primary point of contact with customers under agreement.

As part of reverse logistics functions, warranty as part of channel operations includes: inventory holding of defective parts, parts collection, parts segregation, parts repair, Re export and waste disposal and scrapping, and warranty replacement agreement with OE manufacturer warranty app .

Transformations in the workflow of warranty claims processing has been in integration of warranty management systems with internet and e commerce platforms dedicated to: service warranty database and tracker systems; service request registration interface; inventory systems; parts procurement and authorization; and in connection with logistics service management.

Rapid innovation of products to meet diversified demand in the global market means that now more than ever companies must focus on adequate warranty systems as a strategic element to profit. Liability to products and services increases the value of warranty fraud management as a risk control function in the channel of operations.