Benchmark and Optimize Warranty Management by Mize
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The document presents key findings from SFG's 2019 Warranty Chain Management Survey, highlighting that a significant portion of organizations still utilize manual or partially automated processes for warranty management. It indicates an expectation for annual warranty budgets to increase, with primary challenges identified as claims processing, cost recovery, and product failure analysis. Moreover, strategic actions such as improving planning and analytics, restructuring for oversight, and enhancing training for sales personnel are being undertaken to address these challenges.
Benchmark and Optimize Warranty Management by Mize
- 1. 1/19/2019 1
- 2. Agenda: Benchmark and Optimize Warranty Key Findings from SFG’s 2019 Warranty Chain Management Survey • Bill Pollock, President and Principal Consulting Analyst, SFG State of the Warranty Industry • Eric Arnum, Editor, Warranty Week Best Practices to Optimize Warranty Management • Ashok Kartham, CEO, Mize Q&A with the Panel 1/19/2019 2
- 3. 1/19/2019 3 Bill Pollock President & Principal Consulting Analyst Strategies For Growth (SFG) • Bill Pollock is President & Principal Consulting Analyst at Strategies For Growth℠ (SFG℠), the independent research analyst and services consulting firm he founded in 1992. • Previously, Bill served as President & Chief Research Officer (CRO) at The Service Council; Vice President & Principal Analyst, heading up Aberdeen Group’s Service Management Practice; and Managing Analyst, Services Industry at Gartner. • Bill has also had more than 350 articles, columns and features published on topics including • Field Service Management (FSM), • Service Lifecycle Management (SLM), • Customer Relationship Management (CRM), • Warranty Chain Management (WCM), • Augmented Reality (AR), • the Internet of Things (IoT), • Reverse Logistics, • and others for leading international services publications. • Bill writes monthly feature articles for Field Service News, Field Service Digital, Field Technologies Online, and The Future of Field Service and is a regular contributor to Warranty Week and other services-related publications.
- 4. Research Powered By © 2019 Strategies For GrowthSM “Research Analysts to the Services Industry” The Future State of Warranty Management - Key Findings from SFG℠’s 2019 Annual Warranty Chain Management Survey - Prepared by: January 17, 2019
- 5. Research Powered By SFG℠’s 2019 Warranty Chain Management Survey: Launched on October 30, 2018 Based on data collected through December 17, 2018 “Live” for 48 Days 105 Total Respondents
- 6. Research Powered By (Percent Response) 0.0 20.0 40.0 60.0 80.0 100.0 Process is Fully Automated Process Is Partially Automated Process Is All Manual No Formal Warranty Management Process 27 36 20 16 One-Third (36%) of Organizations Use Either a Manual WM Process – or None at All … n = 44 36%
- 7. Research Powered By (Percent Response) 0.0 20.0 40.0 60.0 80.0 100.0 Process is Fully Automated Process Is Partially Automated Process Is All Manual No Formal Warranty Management Process 27 36 20 16 … and, While Nearly Two-Thirds (63%) Are at Least Partially Automated … n = 44 63%
- 8. Research Powered By (Percent Response) 0.0 20.0 40.0 60.0 80.0 100.0 Process is Fully Automated Process Is Partially Automated Process Is All Manual No Formal Warranty Management Process 27 36 20 16 … More than Half (56%) Are Still at Least Partially Manual … n = 44 56%
- 9. Research Powered By (Percent Response) 0.0 20.0 40.0 60.0 80.0 100.0 Process is Fully Automated Process Is Partially Automated Process Is All Manual No Formal Warranty Management Process 27 36 20 16 … and Only One-Quarter (27%) Are Currently Fully Automated: n = 44
- 10. Research Powered By 0.0 20.0 40.0 60.0 80.0 100.0 Decrease by >10%+ Decrease by 5% to 9% Decrease by < 5% Remain the Same Increase by < 5% Increase by 5% to 9% Increase by > 10%+ 8 0 10 21 31 10 21 Overall, Annual Warranty Budgets Are Largely Expected to Increase* … n = 39 * In the next 12 months. (Percent Response)
- 11. Research Powered By 0.0 20.0 40.0 60.0 80.0 100.0 Decrease by >10%+ Decrease by 5% to 9% Decrease by < 5% Remain the Same Increase by < 5% Increase by 5% to 9% Increase by > 10%+ 8 0 10 21 31 10 21 In Fact, Nearly Two-Thirds (62%) Expect Annual Budgets to Increase* … n = 39 62% * In the next 12 months. (Percent Response)
- 12. Research Powered By 0.0 20.0 40.0 60.0 80.0 100.0 Decrease by >10%+ Decrease by 5% to 9% Decrease by < 5% Remain the Same Increase by < 5% Increase by 5% to 9% Increase by > 10%+ 8 0 10 21 31 10 21 Although, Only One-Fifth (21%) Expect Increases* of >10% … n = 39 62% * In the next 12 months. (Percent Response) 21%
- 13. Research Powered By 0.0 20.0 40.0 60.0 80.0 100.0 Decrease by >10%+ Decrease by 5% to 9% Decrease by < 5% Remain the Same Increase by < 5% Increase by 5% to 9% Increase by > 10%+ 8 0 10 21 31 10 21 Conversely, Only 18% Expect* Their Annual WM Budgets to Decrease: n = 39 * In the next 12 months. (Percent Response) 18%
- 14. Research Powered By 0.0 20.0 40.0 60.0 80.0 100.0 Decrease by >10%+ Decrease by 5% to 9% Decrease by < 5% Remain the Same Increase by < 5% Increase by 5% to 9% Increase by > 10%+ 8 0 10 21 31 10 21 This Results in Expected* Increases-over-Decreases by a Ratio of > 3:1: n = 39 62% * In the next 12 months. Expected to Increase over Decrease by a ratio of > 3:1! (Percent Response) 18%
- 15. Research Powered By (Percent Response) The Greatest Challenges Facing Today’s Warranty Management Initiatives Are … 0.0 20.0 40.0 60.0 80.0 100.0 Sale of Extended Warranties Claims Processing Time & Accuracy Repair Management Cost Recovery from Suppliers ID of Root Causes of Product Failures 28 30 30 45 63 n = 40
- 16. Research Powered By (Percent Response) The Greatest Challenges Facing Today’s Warranty Management Initiatives Are … 0.0 20.0 40.0 60.0 80.0 100.0 Sale of Extended Warranties Claims Processing Time & Accuracy Repair Management Cost Recovery from Suppliers ID of Root Causes of Product Failures 28 30 30 45 63 n = 40
- 17. Research Powered By (Percent Response) The Greatest Challenges Facing Today’s Warranty Management Initiatives Are: 0.0 20.0 40.0 60.0 80.0 100.0 Sale of Extended Warranties Claims Processing Time & Accuracy Repair Management Cost Recovery from Suppliers ID of Root Causes of Product Failures 28 30 30 45 63 n = 40
- 18. Research Powered By (Percent Response) The Greatest Challenges Facing Today’s Warranty Management Initiatives Are: 0.0 20.0 40.0 60.0 80.0 100.0 Sale of Extended Warranties Claims Processing Time & Accuracy Repair Management Cost Recovery from Suppliers ID of Root Causes of Product Failures 28 30 30 45 63 n = 40
- 19. Research Powered By (Percent Response) Other Challenges include High Levels of NFFs, WM Administrative Costs, Warranty Reserves, Reverse Logistics & Fraudulent Claims Management: 0.0 20.0 40.0 60.0 80.0 100.0 Fraudulent Claims Management Reverse Logistics Management Warranty Reserve Accrual Mgmt. Managing Admin Costs for Warranty Fulfillment High Levels of NFFs 5 16 20 23 25 n = 40
- 20. Research Powered By (Percent Response) Other Challenges include High Levels of NFFs, WM Administrative Costs, Warranty Reserves, Reverse Logistics & Fraudulent Claims Management: 0.0 20.0 40.0 60.0 80.0 100.0 Fraudulent Claims Management Reverse Logistics Management Warranty Reserve Accrual Mgmt. Managing Admin Costs for Warranty Fulfillment High Levels of NFFs 5 16 20 23 25 n = 40
- 21. Research Powered By (Percent Response) Principal Drivers Impacting Today’s Warranty Management Initiatives Are: n = 40 0.0 20.0 40.0 60.0 80.0 100.0 Mandate to Improve Service Profitability Dealing with Inferior/Deficient Product Quality Product Defect-related Costs Customer Demand for Improved Warranty Services Desire to Improve Customer Retention Post-Sale Customer Satisfaction Issues 23 23 28 40 43 60
- 22. Research Powered By (Percent Response) 0.0 20.0 40.0 60.0 80.0 100.0 Mandate to Improve Service Profitability Dealing with Inferior/Deficient Product Quality Product Defect-related Costs Customer Demand for Improved Warranty Services Desire to Improve Customer Retention Post-Sale Customer Satisfaction Issues 23 23 28 40 43 60 … First, Customer-Focused … n = 40 Customer- Focused
- 23. Research Powered By (Percent Response) 0.0 20.0 40.0 60.0 80.0 100.0 Mandate to Improve Service Profitability Dealing with Inferior/Deficient Product Quality Product Defect-related Costs Customer Demand for Improved Warranty Services Desire to Improve Customer Retention Post-Sale Customer Satisfaction Issues 23 23 28 40 43 60 … Second, Product Quality-Focused … n = 40 Product Quality- Focused Customer- Focused
- 24. Research Powered By (Percent Response) 0.0 20.0 40.0 60.0 80.0 100.0 Mandate to Improve Service Profitability Dealing with Inferior/Deficient Product Quality Product Defect-related Costs Customer Demand for Improved Warranty Services Desire to Improve Customer Retention Post-Sale Customer Satisfaction Issues 23 23 28 40 43 60 … And, Third, Profit-Focused: n = 40 Profit-Focused Customer- Focused Product Quality- Focused
- 25. Research Powered By (Percent Response) Other Key Drivers Focus on Costs, 0.0 20.0 40.0 60.0 80.0 100.0 Costs Associated with Fradulent Claims Compliance to Regulatory Requirements Need to Improve Supply Chain Performance Mandate to Drive Increased Service Revenues Escalating Warranty Administrative Costs Logistics and/or Reverse Logistics Costs 3 10 13 13 15 18 n = 40
- 26. Research Powered By (Percent Response) Other Key Drivers Focus on Costs, Revenues, 0.0 20.0 40.0 60.0 80.0 100.0 Costs Associated with Fradulent Claims Compliance to Regulatory Requirements Need to Improve Supply Chain Performance Mandate to Drive Increased Service Revenues Escalating Warranty Administrative Costs Logistics and/or Reverse Logistics Costs 3 10 13 13 15 18 n = 40
- 27. Research Powered By (Percent Response) Other Key Drivers Focus on Costs, Revenues, Supply Chain 0.0 20.0 40.0 60.0 80.0 100.0 Costs Associated with Fradulent Claims Compliance to Regulatory Requirements Need to Improve Supply Chain Performance Mandate to Drive Increased Service Revenues Escalating Warranty Administrative Costs Logistics and/or Reverse Logistics Costs 3 10 13 13 15 18 n = 40
- 28. Research Powered By (Percent Response) Other Key Drivers Focus on Costs, Revenues, Supply Chain & Compliance: 0.0 20.0 40.0 60.0 80.0 100.0 Costs Associated with Fradulent Claims Compliance to Regulatory Requirements Need to Improve Supply Chain Performance Mandate to Drive Increased Service Revenues Escalating Warranty Administrative Costs Logistics and/or Reverse Logistics Costs 3 10 13 13 15 18 n = 40
- 29. Research Powered By Putting Things in Perspective: Current Strategic Actions Already in Place: The top Strategic Actions currently being undertaken by Services Organizations to address the Key Drivers/Challenges of Warranty Chain Performance are:
- 30. Research Powered By Putting Things in Perspective: Current Strategic Actions Already in Place: The top Strategic Actions currently being undertaken by Services Organizations to address the Key Drivers/Challenges of Warranty Chain Performance are: ➢ 46% Improve Warranty Management-related Planning and Forecasting Activities ➢ 43% Develop/Improve Metrics, or KPIs for Advanced Warranty Chain Analytics ➢ 34% Restructure for Improved Warranty Management Oversight & Accountability ➢ 29% Streamline Parts Return Process to Improve Overall Efficiency ➢ 29% Institute/Enforce Process Workflow Improvements for Supplier Cost Recovery ➢ 23% Provide Additional Training to Extended Warranty Sales Personnel ➢ 20% Purchase and/or Upgrade an Automated Warranty Chain Management Solution ➢ 20% Outsource some, or all, Warranty Management Activities to Third Parties ➢ 17% Implement a Claims Review Process to Curb Fraudulent Claims ➢ 9% Restructure/Update Existing Warranty Pricing Schedule ➢ 0% Foster a Closer Working Collaboration Between Product Design & Service
- 31. Research Powered By Putting Things in Perspective: Current Strategic Actions Already in Place: The top Strategic Actions currently being undertaken by Services Organizations to address the Key Drivers/Challenges of Warranty Chain Performance are: ➢ 46% Improve Warranty Management-related Planning and Forecasting Activities ➢ 43% Develop/Improve Metrics, or KPIs for Advanced Warranty Chain Analytics ➢ 34% Restructure for Improved Warranty Management Oversight & Accountability ➢ 29% Streamline Parts Return Process to Improve Overall Efficiency ➢ 29% Institute/Enforce Process Workflow Improvements for Supplier Cost Recovery ➢ 23% Provide Additional Training to Extended Warranty Sales Personnel ➢ 20% Purchase and/or Upgrade an Automated Warranty Chain Management Solution ➢ 20% Outsource some, or all, Warranty Management Activities to Third Parties ➢ 17% Implement a Claims Review Process to Curb Fraudulent Claims ➢ 9% Restructure/Update Existing Warranty Pricing Schedule ➢ 0% Foster a Closer Working Collaboration Between Product Design & Service
- 32. Research Powered By Putting Things in Perspective: Current Strategic Actions Already in Place: The top Strategic Actions currently being undertaken by Services Organizations to address the Key Drivers/Challenges of Warranty Chain Performance are: ➢ 46% Improve Warranty Management-related Planning and Forecasting Activities ➢ 43% Develop/Improve Metrics, or KPIs for Advanced Warranty Chain Analytics ➢ 34% Restructure for Improved Warranty Management Oversight & Accountability ➢ 29% Streamline Parts Return Process to Improve Overall Efficiency ➢ 29% Institute/Enforce Process Workflow Improvements for Supplier Cost Recovery ➢ 23% Provide Additional Training to Extended Warranty Sales Personnel ➢ 20% Purchase and/or Upgrade an Automated Warranty Chain Management Solution ➢ 20% Outsource some, or all, Warranty Management Activities to Third Parties ➢ 17% Implement a Claims Review Process to Curb Fraudulent Claims ➢ 9% Restructure/Update Existing Warranty Pricing Schedule ➢ 0% Foster a Closer Working Collaboration Between Product Design & Service
- 33. Research Powered By The Singular Most Important KPIs Currently Being Used Are … The most important KPIs currently being used by Services Organizations are:
- 34. Research Powered By The Singular Most Important KPIs Currently Being Used Are … The most important KPIs currently being used by Services Organizations are: ➢ 56% Customer Satisfaction ➢ 17% Total Warranty Costs ➢ 11% Analysis Cycle Time ➢ 6% Warranty Costs, per Product ➢ 6% Re-imbursement Cycle time (i.e., from Suppliers) ➢ 0% Time from Defect Detection to Correction ➢ 0% Warranty Reserve Variation ➢ 0% Claims Processing Time ➢ 0% In-Warranty Product Return Rate ➢ 0% Warranty incidents, Per Product ➢ 0% Total Revenues from Extended Warranty Sales ➢ 0% Claims Processing Costs ➢ 0% Time from Product Sale to Defect Detection Cited by 35%Cited by 17% Cited by 35%Cited by 56% Cited by 35%Cited by 11%
- 35. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years:
- 36. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction
- 37. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017)
- 38. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 85% in 2016)
- 39. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017) ➢ 9.6 Days Warranty Claims Processing Time
- 40. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017) ➢ 9.6 Days Warranty Claims Processing Time (Declined from 7.6 Days in 2017)
- 41. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017) ➢ 9.6 Days Warranty Claims Processing Time (Declined from 7.6 Days in 2017) However, many Organizations are still not attaining even Industry Average levels of performance:
- 42. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017) ➢ 9.6 Days Warranty Claims Processing Time (Declined from 7.6 Days in 2017) However, many Organizations are still not attaining even Industry Average levels of performance: ➢ 60% Not attaining at least 90% Customer Satisfaction
- 43. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017) ➢ 9.6 Days Warranty Claims Processing Time (Declined from 7.6 Days in 2017) However, many Organizations are still not attaining even Industry Average levels of performance: ➢ 60% Not attaining at least 90% Customer Satisfaction 45% Not attaining at least 80% Customer Satisfaction
- 44. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017) ➢ 9.6 Days Warranty Claims Processing Time (Declined from 7.6 Days in 2017) However, many Organizations are still not attaining even Industry Average levels of performance: ➢ 60% Not attaining at least 90% Customer Satisfaction 45% Not attaining at least 80% Customer Satisfaction 30% Not attaining at least 70% Customer Satisfaction
- 45. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017) ➢ 9.6 Days Warranty Claims Processing Time (Declined from 7.6 Days in 2017) However, many Organizations are still not attaining even Industry Average levels of performance: ➢ 60% Not attaining at least 90% Customer Satisfaction 45% Not attaining at least 80% Customer Satisfaction 30% Not attaining at least 70% Customer Satisfaction ➢ 75% Not Attaining 2 Days or Less Warranty Claims Processing Time
- 46. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017) ➢ 9.6 Days Warranty Claims Processing Time (Declined from 7.6 Days in 2017) However, many Organizations are still not attaining even Industry Average levels of performance: ➢ 60% Not attaining at least 90% Customer Satisfaction 45% Not attaining at least 80% Customer Satisfaction 30% Not attaining at least 70% Customer Satisfaction ➢ 75% Not Attaining 2 Days or Less Warranty Claims Processing Time 58% Not Attaining 4 Days or Less Warranty Claims Processing Time
- 47. Research Powered By Current KPI Values Reflect Mixed Performance Among Respondents … Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high – however, somewhat lower than in past years: ➢ 81% Customer Satisfaction (Declined from 82% in 2017) ➢ 9.6 Days Warranty Claims Processing Time (Declined from 7.6 Days in 2017) However, many Organizations are still not attaining even Industry Average levels of performance: ➢ 60% Not attaining at least 90% Customer Satisfaction 45% Not attaining at least 80% Customer Satisfaction 30% Not attaining at least 70% Customer Satisfaction ➢ 75% Not Attaining 2 Days or Less Warranty Claims Processing Time 58% Not Attaining 4 Days or Less Warranty Claims Processing Time 33% Taking 15 Days or More for Warranty Claims Processing Time
- 48. Research Powered By Key Takeaways from SFG℠’s 2019 Warranty Management Benchmark: Nearly two-thirds (63%) of respondents manage Service as a Profit Center A similar percent (63%) are presently using a partially automated WM process; however, just over one-quarter (27%) are fully automated Annual Warranty Budgets are largely expected to increase for 2018 Principal Drivers currently influencing today’s WM initiatives are: ✓ First, Customer-focused (i.e., Satisfaction, Retention, Improved WM Services) ✓ Second, Product Quality-focused (i.e., Dealing w/ Product Defects/Inferior Quality) ✓ Third, Revenue/Profit-focused (i.e., Increased Service Profitability) Top Challenges facing today’s WM initiatives are: ✓ Identification of root causes of product failures ✓ Cost recovery from suppliers ✓ Repair management Top Strategic Actions currently being taken include: ✓ Improve Warranty Management-related Planning and Forecasting Activities ✓ Develop/Improve Metrics, or KPIs for Advanced Warranty Chain Analytics ✓ Restructure for Improved Warranty Management Oversight & Accountability
- 49. Research Powered By Key Takeaways from SFG℠’s 2019 Warranty Management Benchmark: Top uses of the data/information collected from Warranty-related events are to: ✓ Improve Field Service processes ✓ Improve Warranty Management performance ✓ Make Product Design changes ✓ Make Manufacturing changes ✓ Improve Equipment / Part Return processes Primary Key Performance Indicators (KPIs) currently being used for WM are: ✓ Customer Satisfaction ✓ Product Failure Rate ✓ Total Warranty Costs ✓ Claims Processing Times More than half of Organizations are not currently attaining at least 90% Customer Satisfaction (60%), or 4 Days or Less Warranty Claims Processing Times (58%). Revenues from Extended Warranty Sales have increased somewhat over the past year; but so have Warranty Claims Processing costs Only just over half (57%) of Organizations are “Somewhat/Extremely Satisfied” with the performance of their Primary WM solution vendor
- 50. Research Powered By SFG℠’s Companion Analysts Take Report (Available through Mize) Complementary Distribution via Download through Mize Based on the results of SFG℠’s 2019 WCM Survey Tracking Update
- 51. Research Powered By SFG℠ Contact Information Bill Pollock, President Strategies For Growth℠ (610) 399-9717 wkp@s4growth.com www.s4growth.com @PollockOnService
- 52. 1/19/2019 1 Eric Arnum Editor Warranty Week • Eric Arnum is the editor of Warranty Week, an online publication written for the warranty industry professional. • Based in New York and launched in late 2002 as both a free weekly email broadcast and a website at www.warrantyweek.com, the newsletter has quickly gained a following among manufacturers, retailers, servicers, and insurance professionals. • Weekly topics have included specific market close-ups on product warranties, extended warranties, claims rates in industries such as air conditioning, automotive, PCs, disk drives, printers, consumer electronics, solar panels, construction, mining, telecommunications equipment, plasma TVs, jetliners, sports stadiums, new homes, skateparks, and farm equipment. • On a quarterly basis, trends in warranty claims and accruals by more than 800 manufacturers are detailed in depth. Also featured are periodic articles about industry conferences and warranty claim processing and analysis software providers. • Before launching Warranty Week, Arnum edited two different newsletters about the data communications industry -- Messaging Online, and Electronic Mail & Micro Systems (EMMS) -- while also engaging in custom research projects tracking the growth of the World Wide Web in Europe and the market for Internet services in South America. • Eric Arnum is a graduate of Syracuse University with a degree in economics.
- 54. $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Passenger Cars & Small Vehicles Heavy Trucks & Large Vehicles Fig 1, U.S. Auto Warranty Claims per Quarter, 2003-2018 Source: Warranty Week US$ Millions
- 55. Fig 2, Cars & Small Vehicles Warranty Claims & Accrual Rates, 2003-2018 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% '03'04'05'06'07'08'09'10'11'12'13'14 '15'16'17'18 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% Claims Rate (%)Accrual Rate (%) Source: Warranty Week
- 56. $0 $100 $200 $300 $400 $500 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Powertrain Suppliers Other Parts Suppliers Fig 3, U.S. Auto Suppliers Claims per Quarter, 2003-2018 US$ Millions Source: Warranty Week
- 57. Fig 4, Powertrain Suppliers Warranty Claims & Accrual Rates, 2003-2018 0.3% 0.6% 0.9% 1.2% 1.5% 1.8% '03'04'05'06'07'08'09'10'11'12'13'14 '15'16'17'18 0.3% 0.6% 0.9% 1.2% 1.5% 1.8% Claims Rate (%)Accrual Rate (%) Source: Warranty Week
- 58. $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Computers Telecom Equip Semi & PCB Consumer Elec Medical & Sci Data Storage Peripherals Fig 5, U.S. High Tech Warranty Claims per Quarter, 2003-2018 US$ Millions Source: Warranty Week
- 59. $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Appl & HVAC Homebuilders Build Materials Power Gen Material Handling Security Equip Sports Equip Fig 6, U.S. Residential Warranty Claims per Quarter, 2003-2018 US$ Millions Source: Warranty Week
- 60. Fig 7, U.S. Warranty Cost Warranty Claims & Accrual Rates, 2003-2018 1.1% 1.3% 1.5% 1.7% 1.9% '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 1.1% 1.3% 1.5% 1.7% 1.9% Claims Rate (%)Accrual Rate (%) Source: Warranty Week
- 61. $0 $10,000 $20,000 $30,000 $40,000 $50,000 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Furniture ESCs Appliance Retail ESCs Home Warranties Jewelry ESCs Computer OEM ESCs CE Retail ESCs Mobile Phone Insurance VSCs Fig 8, Extended Warranty Market Premiums Paid by U.S. Consumers, 2009-2017 Source: Warranty Week
- 62. Eric Arnum, Editor Warranty Week 10520 66th Road Forest Hills NY 11375-2179 USA +1 (718) 896-0367 http://www.warrantyweek.com earnum@warrantyweek.com
- 63. 1/19/2019 1 Ashok Kartham CEO Mize • Ashok Kartham is the Founder and CEO of Mize, creator of the Connected Customer Experience platform that enables companies to maximize the customer lifetime value. • Ashok was the founder and CEO 4CS, the leading warranty and service lifecycle management company, which was acquired by PTC in 2012. • Ashok has 20+ years of experience as CEO of software and high-tech companies. • Ashok has 25 years’ experience working with global manufacturers and Fortune 500 companies in delivering enterprise software solutions for Service, Warranty, Parts, Support, and Knowledge Management.
- 64. Best Practices to OPTIMIZE Warranty Management “Warranty as a Profit Center” 1/19/2019 2 Ashok Kartham CEO, Mize AshokKartham@m-ize.com
- 65. Warranty as a Profit Center with Customer focus Customer-Centric Differentiate on customer experience and revenues from customer install base Support-Centric Deliver customer service at lower cost – generally through call centers, returns. Cost-Centric Warranty as Cost center with focus on reducing warranty costs and CPU Product-Centric Warranty as profit center with focus on Product Quality and grow product sales Customer ExperienceProduct Differentiation ProfitCenterCostCenter WarrantyFocus Warranty Strategies
- 66. #1. Simplify Customer On-boarding Experience Perform Pre-Delivery Inspection Register Products and Warranty Attach Maintenance & Service Agreements Enable Customer Self-Service 1/19/2019 4
- 67. #2. Enhance Warranty Service Experience Check for Warranty eligibility & entitlements Warranty Service Check-in Link to Maintenance, Service Bulletins, Inspections Simplify access to Service Knowledge 1/19/2019 5
- 68. #3. Enable Dealers & Service Technicians 1/19/2019 6 Make better Diagnosis & Repair decisions
- 69. #4. Improve Data Quality with Connected Claim 1/19/2019 7
- 70. #5. Streamline Warranty Lifecycle Management 1/19/2019 8
- 71. #6. Collaborate with Suppliers on Quality 1/19/2019 9
- 72. #7. Remanufacture Profits from Returns “U.S. produces more than $45 billion of remanufactured goods per year” – Remanufacturing Industries Council 1/19/2019 10 (i) Reduce Returns with pictures & video (ii) Streamline reverse logistics; Return direct to vendor for supplier recovery (iii) Reman to reduce cost & sustainable profits
- 73. #8. Mine Warranty Data to drive Quality, Profits 1/19/2019 11
- 74. #9. Unlock the Value of the Install Base • Extended Warranty or Service Programs • Maintenance Agreements • Service Parts • Attachments or Accessories • Remote monitoring using IoT • Fleet or Asset management • Value added services • Software Subscriptions • Data analytics to improve customer business • Product Upgrades • Trade-in to purchase new product • Remanufacture and recycle 1/19/2019 12Service Plans Orders Parts ServiceProducts
- 75. #10. Switch from Warranty Pipeline Model… 1/19/2019 13 Schedule repair Customer • Repair Order • Claim entry Dealer • Process • Generate Supplier Claims OEM • Process • Gen Tier 2 claims Supplier • Timeline that spans weeks or even months • Loss of data quality with each stakeholder • Long Detection to Correction cycle time
- 76. #10. to a Connected Warranty Platform • Platform to connect Customers, OEMs, Dealers, and Suppliers • Enhance Service Interactions • Data shared in real-time • Improved Collaboration Service Interactions Customers OEMs Channel (Dealers) Suppliers 1/19/2019 14
- 77. 1/19/2019 15
- 78. Summary: OPTIMIZE Warranty Management Warranty has a critical role in improving customer satisfaction, retention, and service profits Enhance Experience at each stage of customer lifecycle from onboarding to trade-in Enable Dealers and Service technicians to make better diagnostic/repair decisions and delivery better service Connect and streamline all warranty processes for seamless customer experience Connect all stakeholders on the same platform in real-time 1/19/2019 16
- 79. 17
- 80. 1/19/2019 18 Q&A Submit Questions on Goto Webinar panel
- 81. Please join us at WCM 2019 in Orlando, FL 1/19/2019 19
- 82. Contact Us For further questions info@m-ize.com 813-971-2666 www.m-ize.com