This blog post is based on workshop session by Mize at ENG’s Automotive Warranty Management conference on Oct 16th & 17th in Dearborn, MI. You can download the workshop presentation or read the summary blog post about the conference.
The automotive warranty conference is taking place at an exciting time for the automotive industry as there are huge developments in autonomous, electric, and connected vehicles, along with a shift to ride-sharing and mobility models. But this topic is about automated, digital, and connected warranty with seamless data-sharing and technician mobilization.
Warranty is not just about claims or returns or supplier recovery. Warranty is ultimately about gaining and retaining customers. The industry does not have Warranty cost and No Trouble Found (NTF) problems. They are actually the symptoms of other problems – Warranty cost of poor quality and NTF of poor processes. To solve these root causes, we need to look at different approaches as we cannot expect different results by doing the same thing but just little bit more efficiently.
The current state of Automotive Warranty in the US
Let us first look at how Automotive Warranty has changed in the last 15 years for OEMs and suppliers.
Based on this data from Warranty Week, the warranty costs and warranty as a % of sales have not changed significantly. If you take the last 15 years of data that Eric Arnum put together, the total warranty cost stayed the same other than during the great recession of 2008-09.
OEMs have been implementing programs to increase warranty cost recovery from suppliers. The warranty data from major component suppliers also shows that recovery percentage from suppliers has not changed that much. Overall, the supplier warranty cost recovery is less than 15% of OEM warranty cost
Warranty Platform Model
Even though the technologies in Warranty have changed, and the quality of cars have improved, one key reason the warranty stayed almost the same is that the warranty model has not changed for a very long time. The warranty model or paradigm has stayed very sequential with numerous delays and loss of data quality as the data moves from customer to dealer, dealer to OEM, and OEM to supplier.
Manufacturing has benefited by moving from the assembly line to using continuous flow production line with little waste, the lowest possible cost, on-time, and defect-free production. You can change the warranty also by having all parties in warranty lifecycle coming together to exchange registration, claims, Returns, and metrics in real-time.
The warranty platform model enables OEMs to increase supplier participation in warranty through a supplier portal, reducing frictions in data exchange, or by integrating OEM and supplier systems through real-time web services.
[Read more about Supplier Warranty Portal for Manufacturers (OEMs)]
Using the same warranty platform, suppliers can get data from multiple OEMs and distributors. Suppliers don't like to login to different OEM portals, and they want to create a consolidated dashboard based on the combined data from all sources. The suppliers can use the platform to get a unified perspective of warranty data globally and resolve quality issues faster.
[Read more about Warranty Software for Component and Parts Suppliers]
All stakeholders working together on warranty will reduce the detection to correction time by sharing warranty data in real time.
Leveraging Warranty Data
“In God we trust. All others must bring data.” – W. Edwards Deming
Warranty is all about data - how the warranty data is captured, shared, and analyzed. Friction in data exchange results delays, distrust, and higher costs. Each company has their custom format for the registrations, claims, and RMA transactions. Non-standardized values for key fields such as Complaint, Cause, and Corrective action make it difficult to have a common understanding of the failures.
Mize Warranty Connect simplifies data exchange among all parties with the use of configurable maps as translators. The platform facilitates all stakeholders to
- Exchange the data easily and in real-time
- Provide common metrics to be used in quality analysis
- Generate actionable warranty insights
[Read more about Mize Warranty Analysis and Insights ]
Dealers and service technicians play a critical in capturing the right data at the beginning.
Enabling dealers & Service Technicians
Service Technician is one person in the warranty process who can affect the warranty cost most. The diagnostic and repair decisions, selection of replacement parts, and labor time to perform the repair have an impact on the cost of the repair. Enabling the service technicians with the right tools and knowledge can improve their productivity, and lower the cost of warranty repairs.
Mobile app for technicians working on warranty service can help deliver better customer service while controlling warranty costs. Some of the usage scenarios include:
- On-demand access to all knowledge including service manuals, service bulletins, and training videos at the point of service
- Real-time live video to provide remote assistance on diagnostics and repair procedures
- Inspect parts remotely to reduce parts returns
- Integrate the app with measuring or diagnostic devices to capture more accurate data directly
- Ability to add pictures from the mobile device, scan replacement parts, and report labor time
[Read more about Optimize Knowledge access for Field Service Technicians and Mize On Video]
Three key questions for everyone who wants to improve warranty performance:
1. How can you change the warranty model from a sequential pipeline model to a platform that connects all stakeholders in real-time?
2. How can you reduce the data gap by improving the collection, sharing, and analysis of warranty data? How can you replace physical material flows like part returns with better data flows?
3. How can you enable the dealers and technicians to access all knowledge resources easily and facilitate better diagnostic and repair decisions at the point of service?
You can optimize the warranty management by addressing the time gap, the data gap, and the knowledge gap among the OEMs, Dealers, and Suppliers. Platform model bridges these gaps by bringing teams together, sharing data in real time and enabling technicians with the right knowledge & tools. It is time for Warranty processes also to move to a connected, digital, shared, and intelligent platform.
Mize is the only software company focused exclusively on enabling manufacturers to optimize customer service experience and maximize customer lifetime value. Within warranty, it means to optimize warranty management and maximize higher margin service contract or parts sales. Mize Connected Customer Experience platform and a unique set of Smart Blox enhance service interactions from product purchase to trade-in.
Mize Warranty Management software solution connects customers, dealers, manufacturers, and suppliers to streamline warranty processes, reduce warranty costs, and improve customer satisfaction.
Please contact us if you have any questions or want to see a demo of any of the capabilities discussed here.