In today’s market, companies are faced with the challenge of growing revenues, improving profits and increasing customer value. Discrete manufacturers are putting less emphasis on product development and sales and looking instead to provide a total solution to their customers with a combination of product and services.
The service organization—which includes such functions as field service, the contact center, spare parts, and warranties and contracts—can be a strategic revenue and profit driver for manufacturers. Yet, according to IDC Manufacturing Insights, manufacturers in the United States spend over $23 billion of product revenue annually on warranty claims alone.
The recently published Manufacturing Insights: Worldwide Warranty and Transaction Management 2012 assessment, also from IDC, states that in order to drive down warranty cost, improve product performance—which in turn will increase customer value—companies require warranty transaction management software. And they need it to include:
- Warranty contract and policy definition
- Web-based product registration and claim entry (which can be external or internal)
- Management of product recalls and service event definition and tracking
- Warranty rules management with automation
- Claim tracking and escalation procedures
- Automation process for return material authorization
- Supplier recovery
- Warranty analytics to provide early warning detection, claim analysis and forecasting
Manufacturers are starting to see that warranty transactions can no longer be managed by homegrown systems or Excel spreadsheets. Inefficiencies stand in the way of effectively delivering a complete product and service solution to customers in a cost conscious way.
Organizations are looking to optimize their warranty and contract management processes, generate better product knowledge in the field, and improve service and product performance. And the key is finding the right software.
The 2012 IDC study goes into some detail, describing various approaches, capabilities and strategies. One approach is the “single system for service” with which organizations can do all their service planning around a product, execute on service delivery, and capture product and service intelligence at the point of service.
A single system for service allows integration of the service organization which will lead to increased profits and revenues, as well as providing customer continuity and satisfaction.
Learn more about growth and change in warranty and contract management. Read the full 2012 IDC study.
How does your organization manage warranty claims?