How to Implement a Warranty Management Software Solution Without Disrupting Your Business

Warranty management has become a vital and customary global operation across many sectors involving many types of products, ranging from all forms of automotive equipment to industrial equipment, aerospace, electric automobiles, consumer products, and others. As the demand for machinery and equipment is continuously increasing, OEMs are ramping up production, which is leading to a growing quantity of warranties with an increasing level of complexity. This increase in warranty activity shows the necessity of deploying a Warranty Management Software Solution to combat and manage challenges associated with warranties. 

Warranties are a fundamental aid in a product’s ability to sell; however, increasing warranty costs can impact OEMs’ bottom line and profitability. To maintain profitability and margins without jeopardizing customer service, organizations will need to strengthen their warranty management processes. This is easily done using Warranty Management Software Solutions that can streamline operations, reduce costs, and become more efficient with your service.

While the end-game for many OEMs is to improve product quality to decrease warranty claims, in the meantime, the immediate focus should be headed toward the involvement of the warranty processes. While integrated Warranty Management Software can cut costs, it also generates data that can improve their products.

What is Warranty Management?

Warranty management encompasses everything from the creation and registration of a warranty to tracking claims to the approval of requests to improving the process. For manufacturers (OEMs), to effectively manage warranties, it helps to have a sound warranty management solution to run warranties effectively and ensure customers are being serviced as quickly as possible.

Many businesses continue to manage warranties in an old-fashioned way, either through paper or separate tools, which can be unfocused, slow, and inefficient. Nowadays, smart warranty management software automates the warranty management lifecycle, ensuring everything is connected and completing warranty management is quick and easy, while still allowing decision-makers to have the insights needed to make better decisions.

Moving from paper or separate tools to ‘digital’ warranty management software solutions has inherent value in terms of reducing costs, minimizing errors, reducing fraud, and making customers happy. The upfront time investment of moving to a new system is well worth the significant operational gains. The beauty of warranty management software solutions is that they are customisable regardless of the size or industry of the business.

Investing in modern warranty management software solutions allows OEMs to reduce costs, reduce wasted time, and build a more trustworthy relationship with customers while continuing to operate warranty processes.

Key Challenges in Warranty Management

Although warranty management software provides enormous advantages for OEMs, there are still issues, mostly surrounding claims. Here are the critical issues:

Errors & Inefficiencies

Warranty management has many steps—filing claims, reviewing claims, and fixing problems with claims. Without an automatic system, paperwork with methods that are decades old, an OEM increases the potential for mistakes, fraud, delays, and inconsistencies. Even a minute mistake can lead to a total claim review and unnecessary wasted time and money. Manual processes require additional resource input and drive up costs. Traditional warranty management software tends to be slow and is not easily scaled as the business grows. Repair records kept on paper are typically of poor quality and sometimes inaccessible.

Poor Communication

OEMs face poor communication because different departments (internal departments, suppliers, repair centers) are usually involved in a single claim. Due to breakdowns in interactions, it is simple for things to become part of miscommunication, thus creating confusion and delays. Because OEMs are also involved in working with customers and partners, poor communication negatively impacts satisfaction and trust. Over time, mistakes impact presence in the marketplace, and you can lose loyal buyers as a result.

Delayed Updates

Even if there is warranty management software, the process of making claims can be time-consuming and sudden delays can happen. While some delays are bearable, lacking to provide information to the customers can spoil your brand’s name and customer trust. However, for large OEMs handling thousands of claims, updating every customer individually is a huge challenge.

Delays also hurt internal operations. If your warranty management solution lacks real-time updates, it becomes difficult to track trends and make smart business decisions on time.

Missing Feedback

Old-fashioned warranty management software often loses valuable customer feedback during the claims process. Without proper feedback loops, information gets stuck, making it harder to improve products and manage inventory efficiently.

When you can’t track why products fail, the same issues keep happening across multiple batches. Missing feedback also makes it difficult to hold suppliers accountable for faulty parts, since problems become harder to trace. A modern warranty management software solution fixes this by closing the feedback gap—helping OEMs improve products, reduce future claims, and work better with suppliers.

Limited Visibility

Managing warranties in the face of volumes can be difficult – there are so many warranties to manage and so many statuses to track related to customers, claims, and everything in between. If there is an absence of visibility at each step of the warranty management process, it will be difficult to respond to claims effectively. 

Limited visibility causes other problems too. It increases all costs related to inventory, from rush orders to duplicate orders, and drives up your overall warranty costs. Limited visibility also hinders tracking of claims and reduces the amount of money you can recover from your suppliers.

Problems with Supplier Recovery

For OEMs that have suppliers, recovery from suppliers for defective parts (i.e. supplier recovery) is critical to least warranty costs and improve their next model.

However, many OEMs do not have a clear way to process their supplier recovery claims. The common issues related to supplier recovery include:

• Uncertainty over which defective parts can be recovered
• Increased errors and/or delays in submitting recovery claims
• Higher claim rejection rates, especially for incorrect claims and late claims

These issues lead to increased warranty costs and potentially damaged relationships with suppliers. A decent warranty management software solution would provide clarity to the process of recovery and visibility to do it effectively.

Compliance Issues

Warranty compliance is difficult to manage because there may be stringent legal and regulatory compliance rules that vary by industry and geographic location. The compliance rules can relate to warranty terms, requirements, claims processes, and environmental standards, just to name a few. Many times, warranty management software is inefficient, so it is easy to fall out of compliance. Falling out of compliance can result in not only fines and regulatory penalties, but also inconsistent claims processes that can frustrate customers.

Increased Operational Costs

Another huge issue is increasing operating costs with ageing warranty systems. Warranty management systems are often old when a company does not need to replace both time and staff to process claims. As claims increase, so does the number of claims and overdependence on old ways of processing claims will cost more money, take longer and remain less efficient. Statistically, the problems that surface when processing claims using the old warranty systems include slow claims processes, poor recovery rates from suppliers and/or warranty recovery processes, and unpredictable warranty expenses, which can lead to several cost challenges. 

For OEMs that are growing from one to several divisions or expanding their product lines, inefficient systems force less efficient ways of getting work done and taking on operating costs associated with these less effective systems. Modern warranty management software solutions help primarily by automating processes to drive compliance and consistent claims processes, prevent payments for unreasonable warranties, and provide better classification of costs associated with warranties.

The Dangers of Warranty Fraud

Warranty fraud can be harmful to manufacturers, and they lose anywhere from 3-15% of their total warranty costs. If they do not catch it early on, fraudsters constantly reuse the weak areas of an OEM warranty management system until they create even larger losses.

Warranty fraud is difficult to combat because it takes different forms. In some cases, the fraud is attributed to dishonest employees, but in most cases, the fraud comes from the outside, including customers completing claims with dishonesty and even damaging products on purpose to obtain free repairs. Each fraudulent claim wastes time and money on the company, as it increases company costs for no particular reason.

This is where solid warranty management software helps. The right solution will spot aberrant patterns of behavior and prevent the fraud before it affects your company’s profit. Your warranty management process is still vulnerable to scammers if you do not take the proper steps to protect your company from these costly scams.

Who Can Benefit from Warranty Management Software?

Warranty management software is beneficial for every manufacturer. Some industries more quickly adopted warranty management because they specifically needed it.

Automotive

Warranty management solutions were developed in the automotive industry, as the automotive industry has many parts, each with its warranty, making the claims complicated. A good warranty management solution helps make this easier and improves communication between everyone involved while making the process more easily observable and measurable. For car manufacturers, these software solutions reduce costs, enhance turnaround times for the consumer, and strengthen the brand’s name in a challenging industry.

Electric Automobile

Smart warranty management solutions are definitely the right fit for the electric vehicle (EV) marketplace. As many customers switch to EVs, not just as a means of transportation but for money savings and environmental responsibility, warranties are becoming more complicated. The technology of EVs is constantly changing, and breakdowns are largely unpredictable, and many manufacturers often put warranties on different parts of the vehicle. There is also the problem of customer wait time (claim processing) before they get their car repaired, which can compromise trust in that particular brand.

Agriculture Tools

Farmers are massively dependent on modern machinery, making timely repairs very important. When farm machinery fails, an hour lost could jeopardize planting or harvesting. This is an area where warranty management software is critical to manufacturers of agricultural equipment.

As farm equipment becomes increasingly sophisticated, manufacturers will also see an increase in warranty claims with different requirements. Warranty management solutions of today will help manufacturers manage their claims quickly, returning farm equipment back in action and reducing downtime for farmers. By expediting or, better yet, eliminating the entire warranty process, manufacturers will be able to address time-sensitive farming headaches while maintaining a positive relationship with their farming customers.

The right warranty management system will turn warranty headaches into opportunities to demonstrate dependability, which is an added benefit in the agricultural sector since equipment failures may carry serious consequences.

Conclusion

Even if warranty costs may seem negligible in the scope of total sales, effective handling of warranty issues is still vastly important to any maker. An efficient warranty management solution does a lot more than just reduce costs; it can help prevent fraud, process warranties more efficiently, offer increased data for business decisions, and lower costs, among many other things. The warranty system’s information can help companies manage inventory more effectively, monitor future needs, and enhance products.

eComstreet offers extremely intelligent, user-friendly warranty management software with tailored solutions to fit unique business levels. Their customizable solution allows manufacturers to efficiently manage their warranty requests through an OEM-based feature set. Whether you need basic warranty coverage or uniquely designated support for consumer goods, eComStreet has the right functionality to manage your warranty most efficiently while protecting profitability.