<ul><li>“ Cross-functional Warranty Management – A Closed Loop Approach to Boost Profitability” </li></ul>Presented by Tav...
Why This Discussion? Over 80% OEMs feel that Warranty Management is extremely or very important to the company’s performan...
Warranty – A Critical Value Chain Revenues Cash flow Competitive Edge Shareholder Value Profitability Trust & Loyalty Cust...
Warranty – A Critical Value Chain <ul><li>Superior Product Quality  </li></ul><ul><li>High Reliability & Uptime </li></ul>...
Factors Affecting Total Warranty Cost Administration Materia l Labor Repair jobs Logistics Rentals
‘ Warranty’ in Cost of Quality
Direct CoPQ <ul><li>Deficiencies in product engineering / design and analysis </li></ul><ul><li>Manufacturing processes an...
Direct CoPQ <ul><li>Field service troubleshooting errors and inefficiency </li></ul><ul><li>Inefficiencies in parts return...
Direct CoPQ <ul><li>Increasing ‘No Fault Found’ instances with no collaborative dispute management </li></ul><ul><li>Ineff...
Losses Caused by Indirect CoPQ <ul><li>Customer satisfaction and goodwill </li></ul><ul><li>Time with dissatisfied custome...
Enablers for Closed Loop System
Process Transformation
Leverage Intelligence <ul><li>To Analyse KPIs in -  </li></ul><ul><li>Product & Service Performance </li></ul><ul><li>Warr...
Intelligence Hidden in Warranty Data Warranty Cost as a % of sale Warranty Cost by Product Family Warranty Cost by Product...
Intelligence Hidden in Warranty Data Top Causal Parts Parts return Cycle Time Mean time between Failures (MTBF) Warranty C...
Intelligence Hidden in Warranty Data Top Business Rule Failures Open Claims Status EW / Contract Profitability Top Causal ...
Initiatives from Intelligence <ul><li>Product engineering / redesign </li></ul><ul><li>Design for warranty self‐repair / R...
Close the Loop for Cross‐functional Improvements! Integrate warranty organization more closely with other business functions
Leverage Technology – Process Automation
Leverage Technology – Warranty Intelligence Business Results Strategic and Operational Decision Making Integrated Analytic...
Conclusion <ul><li>Closed Loop Warranty </li></ul><ul><li>Integrated Processes </li></ul><ul><li>Automated System </li></u...
<ul><li>Thank You! </li></ul>Contact Us:- W:  www.tavant.com/warranty   E:  [email_address] T: (866) 9- TAVANT
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Cross Functional Warranty Management- A closed Loop approach to boost profitability

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  • Why is Warranty an important function of OEM? How Warranty performance/cost affects Business KPIs? – Profitability , Revenues, Cash flow, customer satisfaction (reliability/service/uptime), their loyalty to the brand, recurring business, shareholder value, competitive edge. Warranty Cost plays a crucial role in affecting all these KPIs; hence critical metric
  • How Warranty performance plays a crucial role to meet exceeding customer expectations Superior Product quality, High Reliability/uptime, Comprehensive warranty, Quick/Speedy service, Quality of service High/Exceeding customer expectations (center)
  • Warranty cost elements - Material, labor, repair, logistics, rentals, admin &amp; processing
  • Direct CoPQ - Deficiencies in product engineering/design - Manufacturing processes and workmanship defects - Delay in detection of field issues - Field service troubleshooting errors and inefficiency - Inefficiencies in parts return increase logistics costs - Supplier warranty – accountability, NFF issues and delay in warranty disposition - Inefficient systems to detect Duplicate/Fraud claims - Processing inefficiencies, lack of automation, manual adjudication, paper claims - Extended Warranties and Service Contracts at risk of cost overrun due to lack of visibility
  • Expense Categories of CoPQ External Failures Internal Failures Appraisal Preventive Action Direct CoPQ - Deficiencies in product engineering/design - Manufacturing processes and workmanship defects - Delay in detection of field issues - Field service troubleshooting errors and inefficiency - Inefficiencies in parts return increase logistics costs - Supplier warranty – accountability, NFF issues and delay in warranty disposition - Inefficient systems to detect Duplicate/Fraud claims - Processing inefficiencies, lack of automation, manual adjudication, paper claims - Extended Warranties and Service Contracts at risk of cost overrun due to lack of visibility
  • Direct CoPQ - Deficiencies in product engineering/design - Manufacturing processes and workmanship defects - Delay in detection of field issues - Field service troubleshooting errors and inefficiency - Inefficiencies in parts return increase logistics costs - Supplier warranty – accountability, NFF issues and delay in warranty disposition - Inefficient systems to detect Duplicate/Fraud claims - Processing inefficiencies, lack of automation, manual adjudication, paper claims - Extended Warranties and Service Contracts at risk of cost overrun due to lack of visibility
  • Direct CoPQ - Deficiencies in product engineering/design - Manufacturing processes and workmanship defects - Delay in detection of field issues - Field service troubleshooting errors and inefficiency - Inefficiencies in parts return increase logistics costs - Supplier warranty – accountability, NFF issues and delay in warranty disposition - Inefficient systems to detect Duplicate/Fraud claims - Processing inefficiencies, lack of automation, manual adjudication, paper claims - Extended Warranties and Service Contracts at risk of cost overrun due to lack of visibility
  • Indirect CoPQ - Customer satisfaction - Customer confidence in products - Loyalty to brand - Recurring business - Shareholder value
  • Bullets / Images - End-to-end integrated Workflow Automation Intelligence
  • - End-to-end integration and automation of warranty lifecycle
  • - Importance of understanding and analyzing warranty performance to improve KPIs – cost, reserves, cash flow, customer satisfaction, product quality, reliability - Understand top warranty cost drivers, field service issues in the field
  • Dynamic Business Intelligence - Intelligence &amp; Reporting – Business KPIs: Warranty cost, reserves, cash flow, variance, reliability, Admin KPIs, Dealer KPIs (dashboard)
  • Dynamic Business Intelligence - Intelligence &amp; Reporting – Business KPIs: Warranty cost, reserves, cash flow, variance, reliability, Admin KPIs, Dealer KPIs (dashboard)
  • Dynamic Business Intelligence - Intelligence &amp; Reporting – Business KPIs: Warranty cost, reserves, cash flow, variance, reliability, Admin KPIs, Dealer KPIs (dashboard)
  • Dynamic Business Intelligence Understand top warranty cost drivers, field service issues in the field earlier - identify and prioritize product redesign initiatives to improve product reliability Early warning system / Understand trends – Detect frauds and initiate cost reduction programs Design for warranty self‐repair initiatives enables end‐customers to fix issues remotely and save significant labor costs Design for serviceability helps service centers, technicians and field representatives simplify repair processes and reduce repair times Improved field diagnostics and troubleshooting at service centers to enhance investigation efforts and reduce instances of ‘no fault found.‘ The maintenance engineering function can assess and revisit service intervals and repair limits to enhance the uptime Sales strategies / pricing - Sales function can have a dynamic visibility into product warranty performance data and can effectively negotiate contract warranty terms for new deals. They can also refine the pricing of products to improve profit margins or offer competitive price. Finance can leverage the data for audits and predictive analysis of warranty reserves as well as to refine forecast With integrated and optimized extended warranties and service contracts, aftermarket revenues get a boost with quicker realization of opportunities. The risk of exceeding actual expenses than estimated is minimized if there is dynamic visibility into revenue recognition
  • - Cross-functional deployment to improve Business KPIs - Warranty lifecycle’s integration with business functions Steering Committee for Cost Reduction – Sponsorship, Committee and Governance Corrective and Preventive actions
  • - Warranty System - Automation with Business Rules &amp; work flow engine – ‘tribal knowledge and know-how’ surpassed by technological advances - Process- and system-driven – reduce manual intervention, mistake-proofing abilities
  • Dynamic Business Intelligence Business Results, Strategic and Operational Decision Making, Actionable insight from analysis, Smarter and Timely decisions, Collaborative, Dynamic Monitoring, Predictive Analysis, Integrated Reporting and Analytics, Dashboards, Predictive Analysis, Early warning system Improve detection to correction cycle time
  • Leveraging technology, integration, automation and intelligence, you can implement a closed loop warranty system to drive cross functional improvements and contribute to improve organizational KPIs Dynamic Warranty Intelligence drives cross-functional improvements Collaborative - all stakeholders on one platform to streamline and reinforce warranty management How Tavant helps?
  • Cross Functional Warranty Management- A closed Loop approach to boost profitability

    1. 1. <ul><li>“ Cross-functional Warranty Management – A Closed Loop Approach to Boost Profitability” </li></ul>Presented by Tavant Technologies at Warranty Chain Management Conference 2011, San Diego, CA Author: Devendra Malekar and Roshan Pinto
    2. 2. Why This Discussion? Over 80% OEMs feel that Warranty Management is extremely or very important to the company’s performance 67% OEMs are not completely satisfied with their company’s approach to Warranty Management Customer Satisfaction, Warranty Costs and Profitability are the top concerns 79% OEMs have manual or partially automated Warranty Management process The importance of Effective Warranty Management to the Company’s Overall Performance Satisfaction with the Company’s Current Approach to Warranty Management Market Pressures Driving Warranty Management Process Used in Support of Warranty Management
    3. 3. Warranty – A Critical Value Chain Revenues Cash flow Competitive Edge Shareholder Value Profitability Trust & Loyalty Customer Satisfaction
    4. 4. Warranty – A Critical Value Chain <ul><li>Superior Product Quality </li></ul><ul><li>High Reliability & Uptime </li></ul><ul><li>Comprehensive Warranty </li></ul><ul><li>Speed & Quality of service </li></ul>Ever Exceeding Customer Expectations Controlling warranty spend and ensuring customer satisfaction is always a critical balance
    5. 5. Factors Affecting Total Warranty Cost Administration Materia l Labor Repair jobs Logistics Rentals
    6. 6. ‘ Warranty’ in Cost of Quality
    7. 7. Direct CoPQ <ul><li>Deficiencies in product engineering / design and analysis </li></ul><ul><li>Manufacturing processes and workmanship defects </li></ul><ul><li>Delay in detection of field issues </li></ul>
    8. 8. Direct CoPQ <ul><li>Field service troubleshooting errors and inefficiency </li></ul><ul><li>Inefficiencies in parts return increase logistics costs and affects reverse logistics processes </li></ul><ul><li>Supplier warranty accountability not defined / apportioned well </li></ul>
    9. 9. Direct CoPQ <ul><li>Increasing ‘No Fault Found’ instances with no collaborative dispute management </li></ul><ul><li>Inefficiencies in warranty software system – High processing times and lack of automation </li></ul><ul><li>Extended Warranties and Service Contracts cost overrun due to lack of dynamic visibility into cash flow </li></ul>
    10. 10. Losses Caused by Indirect CoPQ <ul><li>Customer satisfaction and goodwill </li></ul><ul><li>Time with dissatisfied customers </li></ul><ul><li>Customer confidence in products </li></ul><ul><li>Loyalty to the brand </li></ul><ul><li>Recurring business </li></ul><ul><li>Shareholder value </li></ul>Good news travels fast; bad news travels faster !
    11. 11. Enablers for Closed Loop System
    12. 12. Process Transformation
    13. 13. Leverage Intelligence <ul><li>To Analyse KPIs in - </li></ul><ul><li>Product & Service Performance </li></ul><ul><li>Warranty Costs </li></ul><ul><li>Top Warranty Cost Drivers </li></ul><ul><li>Top Field Service Issues </li></ul><ul><li>Workmanship </li></ul><ul><li>Products & Parts Reliability </li></ul><ul><li>Returns and Recalls </li></ul><ul><li>Supplier Performance </li></ul><ul><li>Reserves & Cash flow </li></ul><ul><li>Aftermarket Sales & Profitability </li></ul>
    14. 14. Intelligence Hidden in Warranty Data Warranty Cost as a % of sale Warranty Cost by Product Family Warranty Cost by Product Model
    15. 15. Intelligence Hidden in Warranty Data Top Causal Parts Parts return Cycle Time Mean time between Failures (MTBF) Warranty Cost as a % of sale Warranty Cost by Product Family Warranty Cost by Product Model
    16. 16. Intelligence Hidden in Warranty Data Top Business Rule Failures Open Claims Status EW / Contract Profitability Top Causal Parts Parts return Cycle Time Mean time between Failures (MTBF) Warranty Cost as a % of sale Warranty Cost by Product Family Warranty Cost by Product Model
    17. 17. Initiatives from Intelligence <ul><li>Product engineering / redesign </li></ul><ul><li>Design for warranty self‐repair / Remote fixes </li></ul><ul><li>Design for serviceability </li></ul><ul><li>Improve field diagnostics </li></ul><ul><li>Review Supplier Performance </li></ul><ul><li>Reduce instances of ‘no fault found‘ </li></ul><ul><li>Increase service limits </li></ul><ul><li>Enhance repair intervals </li></ul><ul><li>Refine sales pricing </li></ul><ul><li>Data for financial audits </li></ul><ul><li>Predictive analysis of costs and reserves </li></ul><ul><li>Reduce Detection to Correction cycle time </li></ul><ul><li>Cross-selling and Up-selling of Services </li></ul>
    18. 18. Close the Loop for Cross‐functional Improvements! Integrate warranty organization more closely with other business functions
    19. 19. Leverage Technology – Process Automation
    20. 20. Leverage Technology – Warranty Intelligence Business Results Strategic and Operational Decision Making Integrated Analytics Dashboards Early Warning System Predictive Analysis Actionable Insight Collaborative Approach Real-Time Monitoring
    21. 21. Conclusion <ul><li>Closed Loop Warranty </li></ul><ul><li>Integrated Processes </li></ul><ul><li>Automated System </li></ul><ul><li>Dynamic Intelligence </li></ul><ul><li>Steering Committee for Cost Reduction </li></ul>Intelligence End-to-End Integrated Work flow Automation Stakeholder Collaboration Dealer Supplier Customer OEM
    22. 22. <ul><li>Thank You! </li></ul>Contact Us:- W: www.tavant.com/warranty E: [email_address] T: (866) 9- TAVANT
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