How Warranty Management Can Be A Competitive Differentiator In Manufacturing

OEMs spend huge amount on R&D to develop products in an innovative way. But technology and globalization have made imitation of products easier. Watching contenders mimicking their new items is not less than a nightmare for OEMs. Today, OEMs can't be assured of benefits by just making a product. In fact it’s just the initial step. Expanded revenues and higher incentive would be possible only when OEMs will have the capacity to differentiate their contribution into the market.

As marketing is an essential step, the other imperative step that OMEs can leverage is warranty. Post-sale of spare part, warranty management is an important responsibility of OEM that can enhance customer responsibility, enhance brand value and can create a difference. This post tells the important aspects to keep in mind while choosing a warranty management system.  Best-in-class OEMs, who focus on warranty management, can grab four noteworthy opportunities through this:

• Increase revenues and profits by targeting service contracts
• Dealers can be provided claim money in easy money. Recover money from component suppliers
• Reduce fraud warranty claim
• Streamline warranty processes to reduce payouts by setting clearly understood policies and enforcement

In addition to above mentioned factors, through warranty management system the revenue generation opportunity will be with higher margin for OEMs. Many OEMs have a huge installed base that is many times bigger than new product sales and are candidates for selling service contracts. Monetizing even a small percentage of the installed base can yield huge gains to the bottom line for manufacturers. An example is the auto industry where all the major manufacturers sell and administer vehicle service contracts. The vehicle service contracts could be for extension of warranty duration or additional services like car rental, towing, tire repair, emission control, oil and filter changes, etc. These service contracts, in addition to providing additional revenues, also help in maintaining a good relationship with customers

Warranty Management System

OEMs that treat warranty as simple claims will not be able to reap the benefits shown above consistently. Best-in-class manufacturers have a comprehensive warranty strategy that helps them accrue these benefits. A good warranty management system strategy depends on the product and the industry and needs to be in alignment with the overall corporate goals of a organization. It also depends on what the competitors are doing and needs to adjust according to the feedback from the customer. Ways to prepare warranty strategy:

• Defensive: It focus on low cost keeping
• Offensive: It focus on increasing brand perception and gaining market share

The following fields need to be focused at while choosing a good warranty tool:

• Marketing
• Product Quality
• Service Logistics

OEMs need to develop a comprehensive warranty management system that addresses the field highlighted above. This will provide crucial differentiation from its competitors and will ensure increased monetization across the product life cycle till end and across the customer lifecycle management.

For more details please visit www.intellinetsystems.com