This document discusses three main challenges of warranty management: 1) managing big data and connectivity across the warranty value chain, 2) effective recall management and risk insurance, and 3) efficient repair through payment of market-based labor rates. It then provides more details on each challenge. For the first challenge, it discusses the volume, velocity, variety, and veracity of automotive data and potential solutions. For the second challenge, it categorizes different types of recalls and issues in recall management. For the third challenge, it examines key influences on warranty labor rates such as customer pay rates, dealer size, and parts reimbursement rates.

1. THREE MAIN CHALLENGES OF
WARRANTY MANAGEMENT
Roland Gagel
Vice President Field Services
SGS Transportation

2. 2
KEY SERVICES OVERVIEW
ALONG THE VALUE CHAIN
SOURCE
We test materials
and parts to OEM
and industry
standards to
facilitate the supply
chain
BUILD
We verify that
manufacturers’
vehicle design and
quality meets
regulations and
gains market
access
SELL
We audit delivery
and aftermarket
operations to
ensure quality and
brand guidelines
adherence
POWER
We enhance the
design,
construction and
operation of motor
vehicles, testing
fuels, lubricants
and usability
SAFEGUARD
Our vehicle testing
centres worldwide
verify safety and
minimise
environmental
impact
DRIVING PERFORMANCE AND SAFETY WORLDWIDE

3. 3
THREE MAIN CHALLENGES OF WARRANTY
VALUE CHAIN MANAGEMENT
1
• The big data and connectivity challenge –
Providing data from point of origin to
all stakeholders in the warranty chain
2
• Effective Recall management and
insurance of risks
3
• Efficient repair: Payment of market based
labour rates

4. 4
Car in Workshop
Customer in Service Area
CRM
(1) THE AUTOMOTIVE AFTERSALES REPAIR &
MAINTENANCE PROCESS
Customer
contact
Appointment
making
Assurance
of mobility
Appointment
reminder
Welcome
Vehicle
reception
Workshop
order
Up- /cross
selling
Diagnostic
interview
Dispatch
Diagnosis Parts order
Repair/
Maintenance
End control
of repair
Job card
closure
Control of
job card
Invoicing /
Claiming
Work
approval
Rental
return
Work &
invoice
explanation
Follow up
Schedule
next
contact
Farewell
Warranty
parts store/
send

5. 5
(1) THE BIG DATA CHALLENGE IN
AUTOMOTIVE
Challenges Solutions
Volume
Velocity Technology
Variety
Veracity
Trusted Analytics Supplier processing & analysis
Supplier
Warranty
System
Supplier
Quality
System
Data sources
DMS and
OEM Warranty
System
Frontend
Social Media
Customer
Contact
Centers
OEM processing & analysis
OEM
Diagnosis
systems
OEM Warranty
System
OEM CRM
Systems
OEM Supplier
chargeback
system
OEM Field
Problem
Systems
OEM Quality
System

6. 6
(2) AUTOMOTIVE RECALL SYSTEMATICS
Safety related
• legally required
• Driven by risk
assessment and
governmental
bodies
• Criteria: Harm for
life or risk of injury
to passengers or
third parties.
• Example:
• Parking Brake
might not work
properly
Emission
Related
• Legally required
(fit to Euro 1-6
Emission levels)
• Driven by large
numbers of
vehicles failing
emission tests or
product related
misdesign to fail
emission
regulations
• Very rare
Non
Conformance
• Legally required
• Driven by legal
requirements, e.g.
to mark a vehicle
properly
• Example:
• Missing or wrong
VIN numbers
• Missing Airbag
stickers
• Often not
expensive and
quite rare
Product
Rework
(non safety)
• Large segment
• Rework
components
before they fail
• Driven by high
number of failures
with significant
customer
satisfaction impact
• At OEMs
discretion, Gov.
Bodies can be
involved
Customer
Satisfaction
Update
• „Silent recalls“: Fix
at next workshop
stop.
• Same as Reworks,
but without any
publicity
• Largest Segment
of reworks in the
field
Non-recall activity: Fix upon complaint / field fix/ technical service bulletin / extended warranties on components
and systems

7. 7
(2) THE ISSUES OF RECALL MANAGEMENT
BEFORE
DURING
AFTER
Dealer OEM Supplier
Root cause analysis & information gathering
Finding a solution and implementation
Insurance cover
Forecasting of failure rates
Repairs before recall
Contacting the customer
Fulfillment rates
Managing PR
Parts availability and workshop capacity
Evidence / Insurance
Cost Sharing
Parts production

8. 8
(3) KEY INFLUENCES OF WARRANTY LABOUR
RATE
Labour
Rate
Labour
Time Guide
Diagnosis
Payment
Labour
Rate
Differentia-
tion
Customer
Pay Rate /
Region /
Size of
Dealer
Share of
Warranty
Revenue
on Total
Workshop
Revenue
Regular/
extra-
ordinary
Increases
Parts
Reimburse-
ment Rate
Goodwill
and
Curtesy
Car Policy
2 of 3
Dealer 
Customer pay rate in average
13% above OEM Warranty rate
59% get a Labour Rate
Adjustment minimum once a year
68% of Dealers get an adjustment
based on calculation
85% of Dealers have only
1 agreed Labour Rate
61% of Dealers are happy
with the Labour Time Guide
Well distributed: at cost, working
times, package price, no separate
payment
68% are Happy with
the Reimbursement
68% are Happy with
the Goodwill Level *
72% of Dealers mentioned
the administration as easy *
*) Info from 2014 European Dealer Satisfaction Survey

9. 9
PANEL: MANAGING WARRANTY COSTS AND
SUPPLIER AND DEALER RELATIONS ACROSS THE
VALUE CHAIN
 Assessing markets individually for key
factors and trends
 Controlling current cost areas and making
predictions for future opportunities and
developments
 Finding common ground: Exploring hourly
labour rate at the dealer level

10. 10
PANEL DISCUSSION
Panellists:
 Leo Roeks, Director Global Warranty
FORD
 Charles Martin, Head of Operations - Technical, Warranty &
Customer Relations
Group PSA, UK
 Pascal Bonnaud, Group Project Manager Warranty Treatment
Reliability expert
VALEO
 Axel Berger, Chief Executive Officer
CG Car Garantie
Panel Facilitator:
 Roland Gagel, Vice President Field Services
 SGS TRANSPORTATION