Maximize Supplier Recovery with Systematic Warranty Process

On average suppliers tend to be responsible for almost 40% of warranty claims while bearing only 15% due to inefficient warranty management by OEMs and dealers. This gap in the market has been costing OEMs almost 5% of their product revenue for a long time. Most manufacturers with limited resources tend to suffer the most, as it directly affects their customer retention.

Traditional methods of warranty management have proven to be inefficient in this digitized world and have been replaced with efficient warranty management software that increases supplier recovery and maximizes profit. Through this blog, let us understand how OEMs can maximize their supplier recovery rate and efficiently choose the right warranty management software.

What is Supplier Recovery Management?

It is best described as the process that involves the recovery of cost or compensation from suppliers when the part or material is found to be faulty or of low quality. This includes defects, delays in shipment, non-compliance with the terms of the contract, and potential adulterations.?

Overall product quality is improved and managed by holding suppliers responsible for performance, improving the quality of the product, and reducing the chances of supply chain disruptions. Supplier recovery is essential for OEMs to minimize their losses and promote a healthier supply chain.

Importance of Supplier Recovery?

1. Cost Control

Warranty is associated with recalls, repairs, and replacements, which leads to financial losses amongst most manufacturers. With an efficient recovery process in place, manufacturers can effectively minimize any missed opportunities for recovering costs.?

2. Supplier Accountability?

An efficient model for supplier recovery processes makes it easier to hold suppliers accountable when a product malfunctions due to bad quality. This compels suppliers to provide only the best quality parts to manufacturers, hence, reducing the chances of malfunctions.?

3. Customer Retention

Quick and efficient warranty service and prompt replacement ensures that customers are attended to on time. With attention to detail and efficient warranty management, customers tend to return to the same dealership and ensure loyalty.

4. Data-Driven Insights

The process of recovery involves analyzing data regarding the process, defects diagnosed, the frequency of defects, and the main cause of malfunction. This data is then used to identify any patterns, repeated failures, or defects in the design of the product that are used to make informed decisions.?

5. Collaborative Relationships

Warranty supplier recovery involves the discussion of addressing malfunctions, low-quality parts, and even defective parts. With an efficient warranty model in place, suppliers and manufacturers can build a better relationship and establish trust. This is essential for manufacturers for long-term projects and expansion.?

Now that we understand why supplier recovery is important for dealers, suppliers, and OEMs, let us understand how aftermarket software solutions have contributed to this.?

How Does Warranty Management Software Improve Supplier Recovery?

Leveraging the latest technology to handle something as complicated and time-consuming as warranty management and supplier recovery is an investment worth making. Often OEMs end up spending a lot to streamline this process. They tend to utilize their profits, which could otherwise be invested in other beneficial areas of operation.?

Let us understand how warranty management is made systematic with aftermarket software solutions.

1. Eliminates Warranty Fraud?

Warranty management software solutions effectively follow a systematic procedure that is fraud-proof and safeguards both dealers and OEMs against any financial losses. The software can also recognize illegitimate claims by recognizing previous data and patterns in claims.?

2. Manages Supplier Recovery?

The software seamlessly generates supplier claims and integrates with the OEMs existing ERP systems, SAP systems, etc. This ensures that no claims are missed or lost in paperwork.?

3. Reduces Operational Costs

With a streamlined process and time-consuming tasks being resolved by the software, OEMs do not have to invest in administrative costs, labor costs, and warranty costs. This helps OEMs in reducing their overall cost and investment in warranty management. This significantly improves cost efficiency as well as resource utilization for OEMs. ?

4. Increases Efficiency

With improved operational efficiency through streamlined workflows and automated processes, OEMs can invest their time and money in revenue-generating sectors. This increases their overall efficiency and optimizes operations.

5. Eliminates Human Error

Automation and efficient validation checks conducted by the software significantly decrease the chances of error. This reduces the chances of human error, which was prominent in the case of traditional methods of warranty management. It also keeps a digital record of every action taken on warranty claims that act as proof for risk management.

6. Improves Product Quality

Proactive analyses of the parts or product is a recommendable feature of warranty management software, as it can detect product issues early in the warranty lifecycle. This helps in analyzing the reliability of the product and reduces the overall repair costs. The software is capable of doing this by analyzing large amounts of data from past claims and using it to its advantage.

In Conclusion

Warranty management software is valuable for OEMs to streamline their operations and reduce operational costs. Accurately tracking each claim and documenting each step is valuable for OEMs to stay ahead of crisis management and human errors.

With the ongoing transition and integration of modern technology in warranty management, the process is set to get easier and less time-consuming. AI, the use of predictive analysis, and IoT are all set to make the process more efficient and empowering for OEMs, dealerships, and suppliers alike.