Viziya is now part of Prometheus Group

Building a Business Case for Managing Warranties

Too little attention is paid to industrial asset warranties. Their existence is often an afterthought, and actual claims tend to be rare. Even when times are tough and maintenance costs come under scrutiny, warranties are often overlooked. Most companies lack a formal, systematic warranty claims process and it is costing them more than they may realize. This surely must change, because a mere 10% swing in costs can make or break an enterprise, hence the need for building a business case.

Premature failure of equipment under warranty leads to costly equipment replacement or repairs with the resultant potential loss of production. Warranty claims can offset some of these costs, but the returns of effective warranty management extend far beyond direct cost recovery. The greater long-term value comes from its indirect benefits. Combined, the immediate and extended benefits can deliver as much as 5% savings to a company’s bottom line. Therefore, transitioning warranty management practices from reactive to proactive can help businesses to control costs and mitigate inevitable business tailwinds.

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