This post is the third in a series of four addressing best practices in warranty and contract management. The best practices highlighted in the series, we believe, are core to better warranty and contract management, happier customers, and fatter profit margins.
In this installment, we’ll look at how to increase warranty and contract performance knowledge as well as how to map out the warranty and contract management lifecycle.
Manufacturers can use the Warranty Management Capability Maturity Model—a tool courtesy of IDC Manufacturing Insights—as the framework for assessing their current performance in warranty and contract management, and for seeing where they need to improve.
Note that the manufacturer, at any particular time, may not fit perfectly into the model; they may be at one level for a particular dimension of performance measurement, and at a different level for another measurement dimension. Still, the model can help build the vision and set a clear path for process improvement.
The manufacturer’s aim should be to steadily move up the scale from reactive to proactive, and from transaction-focused to quality-driven in warranty and contract management. Smart planning and commitment are required. No stages in the model can be skipped. A product-centric approach can enable it all.
One factor, in particular, has moved leading manufacturers to a value-driven, product-centric strategy for their warranty and contract management processes. It’s their never-ending quest for the latest and best product knowledge.
Management is increasingly aware that practically nothing tracks a product’s performance in the field better than the information gained from service events during the warranty or contract period. This data can literally write a product’s history. It feeds all aspects of the service organization, as well as engineering and manufacturing, with vital insights.
The manufacturer can use this intelligence to improve product outcomes that enhance the user’s experience, and nurture the customer relationship.
The product-centric approach to warranty and contract management puts a single, comprehensive data warehouse of warranty and product information at the center of the warranty lifecycle.
New information on product performance captured throughout the warranty period is stored here. Regularly analyzing this warranty history helps the manufacturer detect service issues and take corrective actions quickly. They can anticipate service needs throughout the product’s serviceable life. This limits warranty exposure and minimizes warranty costs. The manufacturer thus increases service profits while increasing customer value.
How does your organization capture and analyze product performance information?
Stay tuned for next week’s installment of the Warranty and Contract Management Best Practice Series on how to align warranty and contract processes with the as-maintained BOM.
- Warranty and Contract Management: Think Bigger. Be Strategic. Outperform the Competition.
- Warranty and Contract Management: Breaking Down Silos