The automotive and automotive aftermarket industries are some of the oldest and most established industries. Historically, these industries have faced less disruption than their equally-established counterparts. But aftermarket industry as a whole is drastically affected by several major disruptions, in particular, digitization, shifting competitive dynamics, and changing consumer preferences. And, unlike other sectors, it is changing faster, and the shift has been dramatic.
First, new players are beginning to enter the automotive market and established companies have been changing their business models – a trend that is expected to continue in the future. When it comes to consumer preferences, millennials are less interested in car ownership while stricter regulations on emissions are giving rise to electric vehicles.
Additionally, with the sudden expansion of next-gen technologies such as AI, IoT, cloud computing, and human-machine interfaces, the automotive aftermarket is facing a wide range of challenges.
Some challenges faced by enterprises today in the aftermarket industry include:
- Aftermarket processes suffer from high latency and lagged response due to legacy and disjointed systems,
- Lack of customer analytics across channels
- Increasing regulatory, quality and environmental compliance needs
- Long cycle time for ‘detection to correction’ in case of issues to be resolved
- Revenue leakage to spurious spare parts in the market
- Lack of feedback system for gauging the effectiveness of change management, warranty management
- Legacy systems are not enabling the customer to do self-service
Yet, along with these challenges, warranty management remains one of the industry’s most important and imperative issues. Auto manufacturers and their dealers must leverage an effective warranty management system to win and retain customers.
Adopting a few important approaches can help businesses address these challenges, optimize their warranty costs, and enhance their customer experience.
- Consolidate warranty systems & processes
Build extensive validations into the claims entry processes to capture accurate and consistent claims data to manage entitlement verification, pre-warranty authorization, claims verification, and approvals automatically.
An efficient and streamlined claims process is important to automate warranty management. Instead of maintaining several systems, centralize all aspects of warranty management including analytics, registration, claims, part returns, and supplier recovery. An integrated system that provides a single view of all information will undeniably cut down duplicate manual efforts and also improve the data consistency.
- Minimize repeat part returns to reduce warranty cost
Companies should only request returns if they need to perform failure analysis or drill down the trends in consumption to proactively identify future problems. For this, it is crucial to automate your supplier claim process to:
- Decrease the amount of time from failure to claim
- Minimize the corrective action cycle to avoid continuing to manufacture defective products
- Reclaim more warranty costs faster from a broader base of suppliers
- Create a more credible and cleaner supplier claim data
- Promote supplier collaboration in cut down warranty costs
- Improve Warranty, Quality, and Reliability Analysis
Gaining good failure data from customers, dealers, and distributors will enable brands to enhance product quality and recover a higher percentage of warranty costs from suppliers. Businesses need to analyze warranty data to identify and address emerging issues and factors contributing to warranty costs. Also, to prevent further warranty failures, organizations need to monitor key warranty metrics such as warranty as a percentage of revenue, cost per unit (CPU)
- Incorporate warranty management into your analytics and decision support systems
Managing a warranty in a reactive mode is no longer adequate in today’s digitalized manufacturing industry, which is under a lot of pressure from evolving customers’ expectations. Companies need to react to customer demand more efficiently, and for this, they need to have proactive warranty management to make an analytics-driven decision in three significant areas, such as:
- Issue prediction, detection, and warning
- Warranty and accrual forecasting
- Service parts demand management and service contract optimization
Based on this data, organizations can anticipate emerging issues and determine potential recall, predict future warranty costs, scrupulously forecast spare parts demand, and subsequently, plan inventory and production accordingly.
Build customer experiences from meaningful insights
Businesses must integrate the customer data, store the information in place and keep it integrated for a personalized experience to delight their customers. Get a unified 360-degree view of your data to enrich personalization, segmentation, behavior analysis, and loyalty programs to improve your customer experiences.
The Road Ahead:
The digital transformation can lead to a significant opportunity for aftermarket businesses to streamline their operations. It can be done by shedding non-value-adding functions and unlocking capital from redundant infrastructure while taking in a broader service portfolio that contributes to better margins.
The task of optimizing controls on warranty spend is daunting. The needs of the dealer as well as customer experience, both are of paramount importance at every stage. However, leveraging an intelligent aftermarket platform, organizations can realize a significant reduction in warranty costs, increase operational efficiency while improving product quality and customer satisfaction.
Reshape business with AI
Our customized warranty solution with its artificial intelligence and machine learning capabilities can help you increase aftermarket revenues, calculate accurate warranty pricing – as well as manage claims and warranty reserves. Tavant Warranty On-Demand is an AI-powered enterprise warranty platform offered on the Salesforce cloud. The on-demand platform offers end-to-end warranty lifecycle management and is the only solution of its kind on the force.com platform. It provides cross-functional integrations with legacy and ERP systems for data consistency and integrity and enables organizations to reduce warranty costs, increase supplier recovery, and improve aftermarket efficiency.
Want to Explore More?
To gain better insights and to learn how to optimize your warranty cost mail us at [email protected].
