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Warranty Management: Still an Afterthought?

Posted By Jeff Moad, May 04, 2011 at 11:11 AM, in Category: The Innovative Enterprise

You would think that, with US manufacturers and other enterprises shelling out an estimated $23.6 billion in warranty claims payments in 2010, management scrutiny of warranty organizations would be intense. But, according to a new survey by IDC Manufacturing Insights, many organizations are doing less than they could to lower warranty liability and improve their brand image through warranty management.

The survey found that less than 20% of companies consistently benchmark the performance of their warranty organizations internally. And, even though poor warranty and repair performance can tarnish a brand, only a little over half of what IDC Manufacturing Insights considers leading companies currently use warranty management proactively to improve their brand image.

"Based on our research, the manufacturing industry's ability to drive warranty improvement is minimal," says EDC Manufacturing Insights Practice Director and ME Community member Joe Barkai. "The use of benchmarking to assess performmance and implement continuous improvement is disappointingly low, and the application of IT tools to manage warranty transactions, perform warranty and quality analysis, and improve financial management is very inconsistent."

Do you agree with these survey findings which suggest that, for many manufacturers, warranty management still amounts to an afterthought?

If so, why isn't there more focus on warranty management?

What is your company doing to manage warranty costs, reduce risk, and protect your brand through warranty management?

Written by Jeff Moad

Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit


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