Aftermarket Insider Issue 73 - (Page 24)
S EGME N T N EWS
Labor Claim Best Practices:
FASTER, BETTER, MORE COMPLETE!
During the Automotive Warehouse
Distributors Association (AWDA)
meeting in Las Vegas, Nev. in the
days preceding AAPEX 2011, the
Manufacturers Advisory Council
(MAC) of AWDA announced the
release of its “Industry Best Practices
for Processing Labor Claims.” Under
development for over a year, the best
practices are the result of a combined
effort by the Car Care Professionals
Network (CCPN), AWDA and the
MAC to address an issue that affects
the entire traditional aftermarket.
“Processing claims related to damaged
or defective parts constitute a huge
drain on the traditional aftermarket
supply chain,” said MAC
chairman Frank Frederick, Walker
Products. “Estimates of industrywide
costs due to inefficiency, delays
and miscommunication run into the
tens of millions of dollars. We saw
this as an opportunity to help bring
more efficiency into the market.”
Repair shops, parts manufacturers
and warehouse distributors have
consistently identified the processing
of labor claims related to damaged
or defective parts as a major source
of frustration, inefficiency and cost.
Common complaints by surveyed
industry parties included a multitude
of forms for processing claims, the
lack of timely responses to shops that
perform the work and an uneven flow
of information about the circumstances
surrounding replacement of an allegedly
defective or damaged part.
Estimates of industrywide
costs due to
inefficiency, delays and
into the tens of millions
of dollars. We saw this as
an opportunity to help
bring more efficiency
into the market.
AWDA’s Best Practices are designed
to provide the following:
In today’s traditional aftermarket,
repair shops and distributors are
sometimes forced to deal with
multiple forms for processing labor
claims. AWDA’s Best Practices
relies on a standard claim form that
includes all the essential information
required by manufacturers
and distributors to understand
and process repair shop claims.
Adherence to AWDA’s Best Practices
will minimize or eliminate redundancies
in the claim processes used by
the various parts manufacturers. The
familiarity of a standard form and
process will drive an increase in the
accuracy and completeness of initial
claims – allowing manufacturers to
focus on analysis and response.
The industry wastes millions of dollars
each year compensating companies
for parts that are not broken
or defective, delaying compensation
for legitimate claims and sorting
through complex and confusing
claims processes. These additional
costs are borne by every partner in
the supply chain, including the end
customer. Use of AWDA’s standardized
processes, enhanced and complete
communication, and strict timetables
can reduce the incidence of bogus
claims, delays in compensation and
incomplete data related to the claim.
Manufacturers need to know what
went wrong with their parts. Was it
truly defective? Improperly designed or
installed? Damaged in shipping? The
repair shop is the best source for this
information. Conversely, shops want
to avoid similar problems in the future.
Was the part correct for the application?
Did they install it properly? If a
defect was present, when/how will it be
remedied? Manufacturers can provide
this information. By opening channels
of communication between manufacturers,
shops and parts suppliers,
vital information can flow, leading
to better products and customer
service for the motoring public.
Repair shops require speedy action
when damaged or defective parts are
encountered. Manufacturers want to
know about damage or defects quickly,
so future problems can be avoided.
24 | AFTERMARKET INSIDER | VOLUME 73
Table of Contents for the Digital Edition of Aftermarket Insider Issue 73
Aftermarket Insider Issue 73
Success Happens When YOU ARE HERE!
AAPEX 2011: A Show to Remember
Toolbox: What’s Your Sign?
Aftermarket Insider Issue 73