Warranty recovery involves the tracking and recovery of all vehicle expenses related to manufacturer recalls and vehicle warranty-type repairs. While managing warranty recovery can be a time-consuming and complex task, it can also be one of the quickest ways to improve your operational bottom line.
In today’s environment of escalating operating costs, fleets are more and more focused on the bottom line, says Mark Elstad, customer systems program manager for Paccar Parts, a company that operates a network of parts distribution centers. “If fleets ignore warranty and its recovery, they are literally giving up thousands of dollars per vehicle per year that goes directly to the bottom line.”
Warranty coverage is important because part of the price paid for a new vehicle goes to cover the cost to warrant specific items on the vehicle, explains Chris Swiser, senior sales executive with Collective Data, a leading provider of fleet maintenance management software solutions. The same holds true with certain parts purchased, whether from the manufacturer or an aftermarket supplier.
“Warranty recovery makes sense simply because you need to recover the money spent to fix an item that broke during the warranty period,” he says. “This includes the cost of the replacement part and the labor to change out that part.
“If you don’t implement a plan for warranty recovery, you are literally throwing money away.”
By carefully defining warranty coverages and monitoring warranty matters, fleets should be able to recover a significant amount of these expenses, adds Dave Walters, regional sales engineer for TMW Systems, a leading supplier of solutions covering the transportation services sector. A powerful tool to help do this is a good information management system.
Many fleets still do warranty recovery by hand and don’t have an effective process for maintenance technicians to identify vehicles requiring repairs while still under a manufacturer’s warranty. As such, they are missing out on the benefits that can be had by using warranty management software programs to streamline warranty claims and supplier recovery processes.
“I think the predominant reason is that many fleet managers and their staff just want to get the problem fixed and get the equipment back in service,” Collective Data’s Swiser says. “No one has taken the time to look into automating warranty recovery. It comes down to a matter of education and training, and it needs to come from the top.”
The single biggest factor in warranty recovery is the buy-in, he notes. Someone in management has to acknowledge that by not tracking warranty recovery the company is literally throwing money away.
“If they could find a way to incentivize the process for the people in the shop, then maybe they would get better participation,” says Swiser. “Granted, all employees should know that warranty recovery is the right thing to do, but that just doesn’t always happen.”
“Fleets processing warranty claims by hand have not invested in the tools and technology available to automate many of the tasks, provide real-time coverage analysis and identify all potential claims,” says TMW Systems’ Walters. “Typically, these fleets rely upon the expertise of the service manager to identify potential claims and, therefore, miss many of the claims opportunities.”
“To be effective, a manual, paper-based, process requires an elaborate filing system to keep all the records, and then painful research every time a part is used or the repair involves an outside supplier to determine if they are covered by warranty,” says Paccar Parts’ Elstad, “and it all has to be accomplished very quickly after the completed repair. All this when most fleets do not have dedicated people, to just track and file warranty.”
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