Analytics - Warranty :

Let us see some quick definitions of warranty:

• Base Warranty – original warranty coverage provided by manufacturer at no extra cost, since it is included in the product price.
• Extended warranty – this comes into effect after the base warranty expires.
• Warranty reserves – amount of money set aside by manufacturer for the purpose of servicing the warranty claims. This is based on the forecasted warranty costs.

Warranty Analytics is integration of warranty claims data with customer, product, sales and geographic information, so companies can accelerate detection of failures and reduce time to correction. 

It can help in significantly improve the early warnings of parts failures based on customer complaints and failure patterns, combining structured data with un-structured data (such as call center records) to give alerts and information about developing trends that would have gone unnoticed earlier.

Managing warranty costs is an enterprise wide challenge, impacting multiple departments, including quality, product engineering, customer service, finance & purchase.

Typical areas of applying Analytics on Warranty data involves:

·                 Data mining to Identify the patterns of claims

·                 Text mining to identify problem areas and fixing them, instead of technicians trying to select from hundreds of warranty categories

·                 Predicting the expected number of claims or cost of claims

·                 Predicting fraudulent claims

·                 Investigating the association between different types of claims

·                 Identifying issues before they become showstoppers

·                 What-if analysis such as if we increase the mileage what will be impact on warranty costs

Some of the warranty analytics benefits:

·                 Increased customer satisfaction, product quality & brand reputation

·                 Tremendous impact on bottom line due to early issues identification

·                 Huge reductions in total manual claims processing costs

·                 Prevention of fraud on warranty claims

·                 Optimized warranty policies for maximum financial performance

·                 Increase efficiency of support logistics such as optimum stocking of replacement parts or deployment of technicians