Managing Automation - June 2008 - (Page 45)

generation of warranty management systems and analytical tools that tightly integrate with existing customer service systems. New regulations are forcing manufacturers to take warranty management issues more seriously. Automakers, for example, became sensitive to the warranty issue in 2000 as a result of the TREAD Act — legislation enacted following the Firestone crisis involving a recall of 6.5 million tires. The law requires vehicle and equipment manufacturers to report possible safety defects to the National Highway Traffic Safety Administration. More recently, following the WorldCom and Enron scandals, all manufacturers are re- “[The Firestone recall and WorldCom and Enron scandals] changed things for warranty folks and woke them up.” — SAS’ Mike Newkirk quired to reveal the net amount they spend on warranty claims when filing financial reports to the Securities and Exchange Commission (SEC). “Those two events changed things for warranty folks and woke them up,” says Mike Newkirk, global industry marketing manager, manufacturing supply chain intelligence, at SAS. The other, more immediate issue is the economic slowdown, which is adding pressure on organizations to respond to consumer demands. “I have found in certain industries, during tough economic times, people are more sensitive to things that break and want to make [warranty] claims,” says Andy Binsley, senior director, manufacturing and asset lifecycle management strategy, at Oracle. Many manufacturers have wrangled with mismanaged warranty data that is scattered among departments and applications, not tracked properly, and not considered mission-critical. But with new warranty management tools emerging, including the use of analytics to improve the “detection to correction” cycle, corporations are realizing that warranty management, if done right and approached as a corporate discipline, can have a positive impact on both the top and bottom lines. “Until recently, ser vice has been an afterthought. And warranty was an afterthought of an afterthought It was just the cost of doing business,” says Brian Sprague, global lead, customer service and support, at Accenture. “But now, some companies are realizing that there is a tremendous opportunity in the data they are gathering around warranty.” For example, if manufacturers can do analysis on the data collected from multiple sources — including customer ser vice, claims processing, and financial management systems — and stored in a repository, they can learn how products are used, what customers are saying about the products, and even ways to reduce warranty fraud or improve design-to-manufacture processes, Sprague says. For that to happen, warranty management must first be elevated from an afterthought to a strategic business process. According to an Accenture report, called “An End-to-End Strategy for Improved Warranty Management Capabilities,” companies must overcome the obstacles of mismanaged data before they can improve warranty management. The report also notes that manufacturers can use warranty management as a competitive advantage if they make the following transformational changes: engage executives in ongoing dialogue about how to use warranty management as a dif ferentiator; consider which department will own the warranty management process; make warranty processes an end-to-end view that reaches customers, distribution networks, and suppliers; and incorporate new technologies to ensure the integration and sharing of warranty data and systems with suppliers and customers. “Accenture has been able to help clients reduce warranty claims by 10% to 20% when focusing endto-end,” Sprague says. There’s more to the story than just reducing Foiling Warranty Fraud T Photos courtesy: SAS, Accenture here’s a new technology quietly moving onto the warranty and service management scene, and it could revolutionize this market, industry onlookers say. It comes in the form of a tiny transmitter that can be embedded within a product, providing manufacturers with details about when, where, and by whom the merchandise was purchased, as well as how it was treated after the sale. Embedded sensors can detect temperature, humidity, light, or acceleration. Understanding these factors can help manufacBrian Sprague turers determine how the product was treated, which could mean reducing warranty fraud. For example, a manufacturer in the consumer electronics market could use this technology to detect moisture, which would mean that the device had been exposed to water, thereby voiding the warranty. Although sensors are not widely used for warranty management, they make a great deal of sense, says Brian Sprague, the customer service and support global lead at Accenture. “When we think of warranty, we think of defective products,” Sprague says. “But there is an equally big story around how to reduce the quantity of returns when no trouble is found.” In addition to using sensor-generated data to reduce returns exposure, manufacturers should focus on product ease-of-use and consumer education. “If you distill the returns issue, it comes down to two key points. One is product usability. Is it easy to understand? And two is customer education, making sure they understand how to use the product at point of purchase, point of use, and point of support,” Sprague says. June 2008 45

Table of Contents Feed for the Digital Edition of Managing Automation - June 2008

Managing Automation - June 2008 Contents Take 1 SAP Cites Functionality, Cost Structure in Modified On-Demand Product Rollout Dassault Exec Predicts More PLM Consolidation The Blackberry Goes Native with SAP CRM QAD Brings MDM In-House with FullTilt Buy Power Experts Look to End Voltage Sags The Progressive Manufacturers Notes Cover Story: Playing the Globalization Game to Win Special Report Integration Transformation Industries Product Scan Advertiser Index Next

Managing Automation - June 2008

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