Product Warranty the Ubiquitous Aftermarket Service or Is It?



March 23, 2015

Manufacturers have offered product warranty for decades. Many think that warranty is a form of performance guarantee that the product will live up to the customer’s expectations. Sadly it isn’t. Warranty is a business transaction to reimburse customers for the inconvenience of product failure due to quality issues.

Over the past few years, many asset management and service lifecycle management software providers have started offering warranty analytics capabilities in addition to the traditional warranty management functionality around claims management and the financial transactions. Some of these newer warranty analytic solutions start to blur the lines between aftermarket reliability analysis and traditional warranty functions. Some companies charge their design engineering groups with reliability monitoring as an additional duty, which in some cases forces the aftermarket warranty teams to do more in-depth failure analysis due to competing priorities in engineering between design and manufacturing. Others have dedicated aftermarket reliability teams to monitor product performance in the field and support warranty groups with their findings.

Best practice would be to ensure that the product reliability monitoring stays within the reliability and engineering domain while warranty stays in the aftermarket business domain. Granted improved warranty analytics are needed to ensure that quality failures are identified, corrected, safety is maintained and liability risk is reduced all while minimizing costs to the company. Reliability should be working with warranty teams by sharing data but looking at improving the products inherent design to reduce quality problems, improve manufacturability and reduce product operating costs through better availability.

Now, back to the question at hand. With the Internet of Things ( IoT) technology there is going to be transformation of the traditional warranty world through more advanced service offerings. The IoT can streamline claims management through the analysis of the operational data from the product reducing customer wait times and improving feedback to manufacturing and engineering. Improved warranty modeling and forecasting software packages can take this explosion of product data to improve warranty budgeting and planning for warranty campaigns. So, no, I would say warranty is no longer going to be just a simple business transaction waiting for a customer to call or write with a complaint. The IoT is going to truly transform this ubiquitous aftermarket service into a more value oriented offering in the future.

Note: This is the personal view of the author and does not reflect the views of Capgemini or its affiliates. Check out the full article here

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