unfortunately there are only a few companies that offer the warranty based on robustness and realiability data, often they look at their competitors and if they say 5 well now the company will have to say 6 or 7 months or years.
many times in the industry I asked the factories I visited "where did you get this #? how did you define it? and what background information you have?
many times the answer goes back to "is what we have documented" but there's no further analisys of data from the filed and where there is some information it's not fully understand.
We are pleased you provided visibility into our IDC study and recent press release on IDC's new industry Warranty Management Capability Maturity Model and wanted to provide some additional clarification. We agree that companies can have good customer service and warranty coverage but at the same time our research shows that many companies are inefficient in doing this and pay dearly in warranty costs.Our study comprised of responses from product companies/OEM's/brand owners and suppliers from across the globe with varying company sizes. The industries that participated included Automotive, A&D, Heavy Equipment, Farm Construction, Industrial Machinery, HVAC, White Goods, Consumer Electronics, Computers, Data Storage, etc.We began this research because of what we were seeing the SEC data we track on warranty claims cost in the US.Manufacturers spend anywhere from 0.5% to 7% of product revenue on warranty claims, which represents about $23B of opportunity in the US alone. Additionally, we found that warranty cost variability is high within industries and year over year within a single company.(Folks who are interested in receiving a complimentary copy of our Annual Warranty Spend Report are welcome to contact me at sbrennan@idc.com.)The objective of our study was to identify companies that were more advanced in their view of the importance of investing in warranty improvement versus those who view warranty as a necessary evil and an afterthought.We looked at the practices, metrics, organizational structures and technologies in place for these companies, versus the actual performance data such as cycle time to process a claim, etc.Benchmarking of the warranty operation, whether internal, against peers or partners or other industries, interestingly did rate low, however this is not to be confused with a companies' tracking the performance of their CM's, suppliers and distributors.The output of IDC's study validated the need for an objective framework for companies with warranty operations (specifically the OEMs/Brand Owners setting the warranty Ts&Cs) to assess their maturity and provide them with a way to develop a continuous improvement roadmap. Hence we developed the CMM. I hope this provides clarification for you and your readers. We held a webconference on May 5th and the play back is available for anyone interested in learning more.Thank you for your forum Barbara.- Sheila Brennan, Program Manager, IDC Manufacturing Insights
Perhaps I would be inclined to rank traceability higher than warranty, potentially because even with a warranty you can still end up with several hundred thousand defective products on the market, and whilst the warranty may cover you up to a certain extent, it is unlikely to ever come close to full reimbursement for all losses.
With traceability you gain something extra, and that would be a guarantee of proper component storage and handling, as a result the failure modes and reliabilities of mass produced products can be more easily calculated, more importantly you will find that most manufacturers of components will have a disclaimer in their warranty that excludes incorrect storage/ handling of their products, i have seen this used in the past by some manufactures/distributers to exclude them from responsibility should the product be found to have failed.
There are also issues related to correctly identifying product/component failure trends, without proper traceability incorrect conclusions can easily be arrived at
@Flyingscot, the case of golf club is a good example of how companies and shop try to rip the consumer. I agree with you that mouth advertisement of such deeds can bring bad image to companies but it actually does not happen as only small portions of items are defective. This actually is government's responsibilty to protect consumers from such companies who do not live up to their claims.
As far as renewing, I say if you go with a 'decent' warranty option, it might beprudent NOT to renew the warranty. For example, if you buy a computer today and get a 3-yr warranty, by the time the warranty is up, it is probably in your best interest to consider replacing the machine if the cost of extending the warranty is near or more than the cost of a new machine (with a new warranty option).
The product normally fails when warranty is about to expire. Although i personally keep all the warranties in safe place but its nrmally nt available when you need it. Also sometimes the cost of using warranty is also high than to buy the product again.
Correct. Like alot of people will attest, when you buy a product, it's not really about what you get up front that consumers carer about. It's all about the service and support you receive afterwards that makes people loyal to companies.
@FLYINGSCOT, I agree with you. Moreover efficient warranty process opens the door for additional revenue opportunities through optional, extended and custom warranty programs.
I was trying to correlate editorial from Barbara and very interesting posts from everybody, this way: the article mention TQM and examples reported bring car manufacturing. Furthmore here at EBN we have discussed several times about outsourcing and manufacturing delocation. TQM reached the success from Toyota at the time of corporate's production not delocated or outsourced. Nowadays the picture is really different: end user buys a product of which components have been produced abroad and each one producer is responsible in terms of warranty for that. Is TQM still valid?
@Flyingscot, good point about car warranties, that's the first thing I thought of: many car manufacturers still tout and promote their warranties, so I think anyone who says that warranties are no longer relevant is probably mistaken.
That being said, I do think in the tech space that warranty policies are often ignored, especially by consumers.
Anyhow, warranty coverage isn't something I generally consider in purchasing because I obviously only try to deal with suppliers who provide quality products. If the failure rate of my purchases seemed unusually high or even slightly noticeable, I would probably switch to a new supplier regardless of their warranty policies: ideally, warranty policies are non-factors because you should never get to the point where you need to utilize them.
I'm generally comfortable with the warranty coverage of the products I buy and if something is obviously wrong, it usually shows up right away and is dealt with promptly.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
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Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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