Warranty Management Systems – The Need for a Holistic Approach

Warranty solutions evolved simply as techniques to attract customers. What began as a trend in manufacturing units has now evolved into being an independent revenue stream. That is the case in most organizations, and it is used as a robust tool to build long-standing customer relationships.


Warranty Management is often confined to the purview of cost analysis and not treated as an integral entity interlinked to various business units. Most divisions of the warranty chain are compartmentalized into individual units on the pretext of saving costs. Such a one dimensional approach to warranty hinders ROI and that is one of the top reasons why warranty management fails.

Warranty solutions malfunction when organizations fail to channelize them into a cohesive unit that integrates process, product, and people together. The facts that it can aid after-service revenue, and customer collaboration & confidence like none other, are often overlooked.

Traditional approaches to warranty management have been narrow and constricted. They are often viewed as a quick fix for reducing costs. Short-term solutions fail to address underlying challenges that impact results and risk the repute of an organization, its products and service offerings.

One dimensional approach

A one dimensional approach lacks collaboration across the value chain and fails to channelize the power of rich information. The lack of information flow hampers early detection of product quality and creates room for multiple errors. The one dimensional approach prevents collaboration between all key functions and fails to meet ongoing business requirements. It is evident that the need of the hour is to shift to a holistic approach with a strategic focus and flexible infrastructure that can aid customer retention and minimize costs. Flexible need based solutions help in saving warranty reserves and assist in analyzing trends that can boost performance and productivity.

Holistic Approach – What can it do for you?

No organization with a silo perspective can run a business efficiently. When the purpose of an organization is to achieve its overall vision-mission, teams prioritize interdepartmental goals over organizational goals, leading to various discrepancies.

In order to reign over the competition, organizations need to move away from an island focus and incorporate a holistic approach. This is one way in which businesses can harvest the synergy of all key functions and improve scalability remarkably.

The holistic approach encompasses critical business drivers and addresses the interdepartmental gaps to align actions to goals. It helps in quality enhancement, problem resolution, and integration of technology for deeper understanding of the processes and business functions. One of the key functions of this approach is that it filters out important functions from the non-important aspects to enhance the focus on core activities that impact bottom line results.

With a holistic approach in place, managing warranty costs and analyzing business trends are easier. Product quality can be improved based on customer feedback. Costs can be maintained and investments can be channelized in the right direction.

Benefits of a holistic approach

Manage costs – an integrated warranty package minimizes process errors that rob organizations of strategic business focus. It minimizes warranty costs while enhancing the early error-detection process, thus enhancing product quality.

Customer collaboration – structured information ensures greater connectivity with customers during product lapses for immediate information and previous history recall. It boosts brand perception and organizational credibility.

Policy management – processes and policies can be integrated into business logic. Streamlined processes lead to better visibility of warranty information. Based on the overall functioning and evaluation with other policies, improvisation and retention of the best practices can be made.

Expand reporting – product lapse trends can be closely examined for proactive measures to ensure quality control.

Data management – efficient data management fosters collaborative solutions, enhances product quality and customer satisfaction, addresses quality concerns, and improves partner relationships.

While understanding the relevance and significance of a holistic approach to warranty solutions it is also imperative to understand the key perspectives that impact warranty solutions.

Cost perspective 

Minimizing warranty costs has always been one of the most pressing concerns for organizations. While minimizing the warranty spend helps a great length, it is also important to make an objective estimation of the costs involved. One of the key challenges in controlling warranty costs is to determine the right amount to be set aside as warranty reserves accurately. Due to lack of information of every single step involved in the process, and the associated costs, a principle barrier towards charting the right budget becomes evident.

The elements that impact warranty costs go beyond the actual repair costs, overflowing into other areas. To estimate such hidden costs accurately without an integrated business logic is extremely complex. An integrated technology can reflect the warranty costs that assist in better planning of warranty reserves. That aids in formulating a streamlined claims management process, detecting duplicate and fraudulent claims, improving payout accuracy, reducing operational costs and improving product quality.

Customer perspective

Tracing back evolution, warranty management began with a strategic intent of attracting customers, but it has culminated into being an independent revenue channel in most organizations today.

Managing customer experience of warranty solutions is essential, as it helps in understanding the customer’s psyche and buying patterns. It provides companies with actionable data that can be used to improve product quality and pricing, and integrate processes with support mechanisms.

The customer’s perspective in warranty solutions highlights how the customer experience can directly impact the bottom line results. It also tells how customer problems influence the product return rates and the warranty support costs.

Warranty processes can be drastically improved with focus on the customer experience to build robust warranty systems that foster brand loyalty, reduce warranty spend, and build deeper customer connections.

It is thus imperative for organizations to ward off the one dimensional perspective and move towards a holistic approach to warranty solutions. It enables organizations to run their business functions with strategic alignment and purpose that can streamline their processes, enhance brand perception, and maximize scalability.

Author Bio:

Anand Subramanian is currently a Senior Business architect with the Service operations practice at Tavant Technologies. He has worked in several process improvement projects involving multi-national teams for global customers. He has over 15 years of experience in supply chain warranty management, as SME, Client advisor, IT consultant, Business Analyst and as a practicing manager of Business analysts and has successfully executed several projects in Logistics management, Logistics Integration, Reverse logistics, Supplier collaboration and Warranty claims management.


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