building a best practices warranty management program for 2016 – and beyond!
TRANSCRIPT
Research Powered By© 2016 Strategies For GrowthSM
“Research Analysts to the Services Industry”Building a Best Practices Warranty Management
Program for 2016 – and BeyondSpecial Webinar Presentation
March 3, 2016
Hosted by:
“How Best Practices Organizations Are Positioning Themselves to Drive Revenues,
Reduce Costs and Compete More Effectively”
Today’s Main Focus:
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(Percent Response)
0.0 20.0 40.0 60.0 80.0 100.0
Pure, 100% Service Company
Cost Center in Support of Product Sales
Independent Profit Center, with its own P&L
17
34
49
Overall, Most WM Organizations Are Run as Profit Centers …
n = 213
66%
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(Percent Response)
0.0 20.0 40.0 60.0 80.0 100.0
Don't Know / Unsure
Process Is Fully Automated
Process Is Partially Automated
Process Is All Manual
No Formal Warranty Management Process
2
21
49
20
7
Overall, >Two-Thirds of WM Processes Are At Least Partially Automated:
70%
n = 164
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(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
Don't Know / Unsure 0
32
48
20
0
… Even Though, One-in-Five Still Run on an All-Manual Basis:
n = 25
20%
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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%+
0
0
5
60
5
25
5
A Majority of BP WMOs Plan to Maintain Their Annual Warranty Budgets*
* In the next 12 months.n = 20
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0.0 20.0 60.0 80.0 100.0
More than 50%
41% to 50%
31% to 40%
21% to 30%
11% to 20%
6% to 10%
3% to 5%
2% or Less
None
9
0
0
9
5
18
23
23
14
However, Almost 1-in-10 Cite >50% of Revenues from Extended Warranties
40.0
n = 22Mean = 50.0%Median = 3.1%
64%
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0.0 20.0 40.0 60.0 80.0 100.0
Not Important at All
Not Very Important
Neither Important nor Unimportant
Very Important
Extremely Important
0
8
12
56
24
An 80% Majority Believe Effective Warranty Management to Be Important
n = 25
80%
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(Percent Response)
0.0 20.0 40.0 60.0 80.0 100.0
Mandate to Improve Service Profitability Mandate to Drive Increased Service
Revenues
Product Defect-related Costs
Cust. Demand for Imp'd Warranty Services
Post-Sale Customer Satisfaction Issues
Desire to Improve Customer Retention
24
21
27
37
50
56
Overall, WM Organizations Are, First and Foremost, Customer-Focused …
n = 139
Customer-Focus
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(Percent Response)
0.0 20.0 40.0 60.0 80.0 100.0
Logistics / Reverse Logistics-related Costs Mandate to Drive Increased Service
Revenues
Cust. Demand for Imp'd Warranty Services
Product Defect-related Costs
Post-Sale Customer Satisfaction Issues
Desire to Improve Customer Retention
28
24
20
32
60
68
Plus, a Heightened Emphasis on Cost-related Drivers …
n = 25
Customer- Focus
Cost-Focus
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(Percent Response)
0.0 20.0 40.0 60.0 80.0 100.0
Managing Warranty Fulfillment Admin Costs
Claims Processing (i.e., Time to Process, Accuracy, etc.)
Repair Management
High Levels of NFFs
Identifying Root Cause of Product Failures
32
36
36
40
40
The Greatest Challenges Facing Today’s Warranty Management Initiatives …
n = 25
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Selecting the Appropriate Warranty Management KPIs to Measure & Track:- By Area of Focus -
Area Representative KPIs/Metrics to be Tracked
Customer-focused • Customer Satisfaction
Cost-focused • Total Warranty Costs• Warranty Costs, per Product• Claims Processing Costs
Time-focused • Analysis Cycle Time• Claims Processing Time• Re-imbursement Cycle Time (from Suppliers)• Time from Product Sale to Defect Detection• Time from Defect Detection to Correction
Revenue-focused • Total Revenues from Extended Warranty SalesOther • Warranty Incidents, per Product
• In-Warranty Product Return Rate• Warranty Reserve Variation
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Attained KPI Values Reflect High Performance Among BP WMOs …
Mean KPI values currently being used to measure Warranty Management performance appear to be reasonably high for Best Practices organizations:
95% Customer Satisfaction(compared to 85%, overall – plus 10%)
2.22 Days Warranty Claims Processing Time (compared to 5.57 days, overall – 3.35 days quicker)
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0.0 20.0 40.0 60.0 80.0 100.0
Not at All Satisfied
Not Very Satisfied
Neither Satisfied nor Dissatisfied
Very Satisfied
Extremely Satisfied
0
12
28
44
16
Although Roughly 1-out-of-8 are Not Very Satisfied:
n = 25
12%
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What Are the Key Benefits of Providing Best Practices Warranty Support?
Key Benefits of Providing Best Practices Warranty Support
1. Improved revenue streams through the sales of extended warranties
2. Increased knowledge/information flow about product defects and their sources
3. Improved levels of Customer Satisfaction, leading to greater Customer Loyalty
4. Reduction of costs associated with Warranty Claims Processing & Administration
5. Reduction of losses associated with the processing of fraudulent claims
6. Improved Product Design and performance (i.e., “Design for service”)
7. Improved Financial performance:- Increased service revenues- Greater profitability- More predictable revenue streams
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BP Warranty Management- Flexibility to Change
16
KPIs
Identify Improvement
Areas
Implement Changes
Monitor/Control Process
Adjust KPIs
0 60 70
For In
Makin
Improving Depot Repair Processes 28
To Improve Equipment / Part Return… 52
To Improve Field Service Processes
64
10 20 30 40 50PERCENTAGES (N= 25)
Key Uses of Data/InformationCollected
Source: SFG℠’s Warranty Chain Management Survey
To Make Product Design Changes 56
To Make Manufacturing Changes 32
To Make Purchasing Decisions 32
To Make Supplier Selection 20
clusion in Regular Corporate Financial… 20
g Changes to Product Documentation 16
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Tavant Proprietary & Confidential
Warranty Management
System
Flexible
Customer Focused
Comprehensive(Closed Loop)
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17
Tavant Proprietary & Confidential
Highly Configurable
Comprehensive closed loop
Modular & Integrated
Tavant Warranty
18
Warranty Management (registrations, claims
management, EW sales)
Recall/field improvement
campaigns
Field Service
Supplier Recovery
Integrated part returns
Fraud Analytics
CORE(rules, workflow, BI)
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Tavant Proprietary & Confidential
Tavant Warranty on Demand
19
Tavant Warranty On Demand
Sales Cloud, Service Cloud,Marketing Cloud
(Capture customer touch points)
Salesforce Platform(customer information)
Tavant Warranty On Demandleveraging Force.com cloud environment
Highly Configurable
Very Customer Focused
Social Collaboration
Tavant Proprietary & Confidential
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PEOPLE. PASSION. EXCELLENCE.
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