5 Key factors to enhance OEM and Supplier collaboration on Warranty
Product OEMs and Parts suppliers agree that more collaboration is needed to reduce warranty costs and improve quality. These five key factors can help to enhance communication and collaboration between OEMs and their suppliers:
- Start with common goal of reducing the overall warranty incidents and costs
OEMs and Suppliers have a common goal of reducing the warranty incidents and costs. Setting the primary goal as continuous quality improvement instead of sole focus on warranty cost recovery will help drive increased collaboration. Both OEMs and Suppliers will benefit from improved product quality and customer satisfaction through early detection and resolution.
- Share all relevant warranty and diagnostic information in a timely manner
Incomplete data, long time lag in sharing claim information, and No Trouble Found (NTF) on parts returned have been some of the thorny issues that result in unnecessary disputes and claim rejections. Most of the claim issues can be prevented by sharing the accurate and timely claim information, providing access to service and diagnostic data, and timely return of parts.
The claim exchange between most OEMs and Suppliers still happens using an antiquated batch file exchange, This process is inefficient and results in delays in claim processing across the value chain. OEMs and Suppliers can work together to have real-time access to claim and diagnostic information using today’s cloud-based and API enabled warranty management software.
- Standardize claim data and failure coding to help with root cause analysis
Despite some industry-wide efforts to standardize claim data formats and coding, most OEMs and suppliers still use proprietary and disparate ways to exchange claim data. Having consistent and complete claim information sharing across the value chain including dealers, OEMs, manufacturing facilities, and suppliers will not only make it efficient but also foster a common understanding of the warranty issues.
Adoption of common templates, standard coding for key data fields such as causal part, component, complaint, cause, and corrective action will improve communication and collaboration across various departments internally and with suppliers.
- Enable dealers and technicians with right knowledge and tools to diagnose and repair effectively
Dealers and service technicians play an important role in controlling warranty costs by diagnosing the issues correctly and performing the right repair procedures cost effectively. OEMs and suppliers can collaborate to help the technicians by providing the right service knowledge, diagnostic tools, and repair procedures to prevent unnecessary repairs and NTF scenarios.
Even though dealer warranty revenue and customer service goals may appear conflicting, OEMs can help dealers to be more profitable through efficient repairs, higher labor rates for certified technicians and faster claim payments for sharing diagnostic information. OEMs and Suppliers can also collaborate on preapprovals and repair procedure recommendations if helpful information and advice can be provided efficiently while enhancing customer experience.
- Share Analysis, Early warning, and problem-solving tools and resources
OEMs and Suppliers can allocate more resources to focus on early detection and resolution of issues instead of claims processing and payment negotiations. The ability to reduce detection to correction cycle time provides significant benefits in reducing warranty costs and avoiding costly recalls.
Increasing collaboration among the quality, reliability analysis and engineering teams across the supply chain will help leverage warranty data to improve product quality. Growth in connected products using IoT also provide opportunities to link the data collected from sensors with warranty data to accelerate problem detection and correction.
Shared metrics, early warning processes and problem-solving methodologies and tools will help reduce warranty failures, improve product designs and drive customer retention.
Enable Connected Warranty
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