How Warranty Management Solutions Help Contain Expenses and Reduce Overheads

Posted on June 21, 2016

For a manufacturer of vehicles, extending warranty coverage to his products is now a legal requirement. First of all, no one will buy a vehicle that has not been covered by the manufacturer’s warranty and secondly, whether there is any warranty coverage or not, there is legal freedom to sue the manufacturer for deficiency in the product or service. The legal guarantee on vehicles can apply even after the expiry of the manufacturer’s warranty. Warranty management solutions therefore need to be devised so that there is a containment of expenses and reduction in the workforce, both of which increase the size of the manufacturer’s profits.

Warranty Management is a Necessity

It is now an acceptable fact that warranty management is an essential price of having to do business in the case of all manufacturers, including those in the consumer vehicles industry. The expenditure on warranty is considerable and therefore manufacturers would definitely like to limit the overall expenses on warranty. However, reducing the cost of warranty administration may not be the right way of limiting expenses. On the contrary, the perfect warranty management solution is one that insists on:

  • Substantial improvement in the quality of the product
  • Quick response to customer’s problems
  • Enhancement in brand management
  • Prevention of unjustified warranty claims
  • Efficient and accurate supplier recovery

When the above solution is effectively executed, the program will automatically bring about improvement in the customer’s confidence.

Management of Warranty Claims

When you work with the right kind of leader you will find there is a dramatic reduction in net expenditure in the payouts on claims that are unjustified, as well as improvement in supplier recovery. Simultaneously, you will be able to bring about considerable improvement in both, process efficiency and cost reduction by leveraging the right kind of technology tools.

The essence of warranty claims management lies in allowing the submission of easy claims by which the customer is able to submit claims from any convenient location, as well as track the claim with total transparency and updates in real time. The other important aspect of a good warranty management solution lies in the inherent ability of the OEM to set rules for processing claims that are not ambiguous. The solution should also allow the supplier to track specific parts which are under claim, so that the responsibility to share the cost fairly can be ensured.

Further, due to the dynamic system, it will now be possible to verify the validity of the claim in an efficient manner, as the details can be checked irrespective of where the dealer is located. The present system also permits all details pertaining to individual claims to be dispatched to specific job codes, both, within the organization and outside it, as dictated by the rules of processing claims in the OEM’s application.

All transactions related to claims can now be completed for individual claims as provided for in the rules which define the parties that are liable and these could be the supplier, the customer, and the OEM.

There are several advantages in the present type of warranty management solution. The basic advantage lies in efficient processing of the submission of claim and thereafter, the manner in which it is routed, the return of parts, supplier recovery, and the final payment. The automation of different manual processes has reduced workforce while there is now a noticeable reduction in the overall cost of warranty administration and the cost of processing warranty claims.


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