Posted under Blog by VIZIYA WorkAlign® Warranties Team
Too little attention is paid to industrial asset warranties. Their existence is often an afterthought, and actual claims tend to be rare. Most companies lack a formal, systematic warranty claims process and it is costing them more than they may realize.
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. Effective warranty management requires cooperation across multiple business functions and responsibilities within an organization. It spans roles traditionally performed by Supply Chain, Maintenance and Finance personnel, and interfaces with key asset management processes.
Effective warranty management is an information-driven process. Consequently, relying on spreadsheets, manual procedures, and memory will not provide sufficient visibility and responsiveness. The limitations of existing enterprise systems may also make warranties too difficult to identify and track. Warranties are therefore best managed within a common, purpose-built information system that is actively integrated with existing maintenance and supply chain solutions. A sizeable portion of direct maintenance spend is recoverable through legitimate warranty claims.
When a decision is made to more effectively track and manage warranty claims, it is important to choose a tool that is best for the task in order to maximize the results. VIZIYA WorkAlign® Warranty Tracker is a purpose-built maintenance warranty tracking solution that not only helps to reclaim valid warranties but also drives business improvement initiatives. It is tied directly to the equipment and suppliers associated with work orders in the existing corporate asset management system (ERP/EAM), allowing warranty claims to be automatically presented for review.
Mining production is accomplished using complex, mission-critical equipment that is expensive to maintain. Great care is required to ensure maximum asset uptime and reliability in order to meet the maintenance budget and production goals. Typically, warranty claims are made on an ad hoc, manual basis. Now let’s just focus on the 15-20% of equipment types that would produce the greatest returns. Therefore, let’s just look at key production equipment.
Rather than adding new positions or appointing additional resources, the company decided to reorganize the Maintenance Planning department and establish a Rotables Department that would manage the rotating equipment and also be custodians of the new warranty processes.
After successful implementation and go-live, the following results were realized:
Asset-intensive companies have an untapped opportunity: optimize warranty processes and reap both financial and operational benefits. Warranty claim revenue is just the beginning; improved asset reliability and production and better supplier decisions are the ultimate rewards.
Historically, warranty management has been a paper-based, manually intensive administrative task – the kind that is commonly relegated to a nonessential role. Consequently, equipment and fleet assets received service when needed, and the associated maintenance warranties were addressed as an afterthought or missed entirely. Any potential advantages were often perceived to be insufficient to offset the effort to track warranty statuses and pursue warranty claims.
New, software-enabled processes that are intertwined with ERP asset management systems facilitate the coordination and communication of warranty efforts, leading to significant maintenance cost recovery, greater asset uptime and production, and lower asset lifecycle costs.
ERP asset management systems like SAP PM and Oracle eAM contain warranty flag and date fields only, but they lack the ability to systematically capture warranty details and create actionable relationships to work orders. VIZIYA WorkAlign® Warranty Tracker fills the gaps in the ERP warranty processes. It automates vendor claims for warrantable repairs and facilitates cooperation and communication with other departments as well as the various suppliers.
Want to know more? Reach out to a VIZIYA expert to learn how you can start recouping lost warranty dollars!