In a recent blog, Who Warrantees the Products You Buy?, I raised a couple of questions about the warranty process in the electronics manufacturing industry, in response to research recently conducted by IDC Manufacturing Insights. IDC immediately contacted me to answer some of those questions, and the news — at least as it pertains to warranty procedures — isn't good.
“What we found was the overall ability to drive warranty improvement is low,” said IDC's Sheila Brennan in a phone interview. “There wasn’t a lot of commonality in the [manufacturing] industry,” which, for the IDC study, included automotive companies, white goods makers, industrial equipment manufacturers, and consumer electronics companies.
In my blog, I noted that it was unclear from the IDC study where exactly the warranty process was being measured. The answer is anywhere and everywhere — the development and execution of warranty practices can originate in a company's IT department or its legal, manufacturing, or financial divisions. “Every title under the sun was responding to the survey,” said Brennan. “It was clear that there are a lot of discrepancies among manufacturing companies.”
I also wondered if outsourcing has had an impact on benchmarking and warranty performance in finished goods. Although outsourcing wasn't specifically measured in the survey, warranty practices are ultimately the responsibility of one party: the OEM (or brand owner). “No matter how many hands a warranty passes through, a good or bad customer experience will impact the brand owner,” Brennan said. “It becomes very critical that the brand is connected to the warranty execution.”
IDC has recognized opportunity amidst the chaos — it has developed a model by which companies can self-assess their warranty practices. IDC intends to make the Warranty Management Capability Maturity Model available through non-profit organizations such as the Institute of Warranty Chain Management. In addition to benchmarking, the model helps companies use the data they generate to improve performance.
“What we'd like to see is an emergence of voluntary compliance practices,” Brennan said. “We'd like to turn [the model] over to an organization that can help its members evolve. Once we saw what we had, we thought 'let's develop it and put it in the right hands going forward.'”