After Market Analysis :

Warranty in IFE Segment

A Snapshot

1
An Overview – Business Scenario

 OEM’s are moving towards reducing total Warranty Cost

 Need for tracking Defective Parts
 Excessive warranty payouts that erode profitability
 Ineffective supplier recoveries – Only pay for parts and not labor
 Mandated reporting to Regulatory Authorities
 Labor intensive and time-consuming warranty processing  Online submission and
processing is just catching up but not completely present
 Need for early identification of emerging Concerns
 Constant IT Intervention for changing Business Policies
 Minimizing turn around time between Problem Identification and Corrective Action

 Warranty for individual parts like Engine, Transmission, Hydraulic System, On board
Computer
 Extended wty is normally purchased for Power train and hydraulic systems  3 yrs or
50,000 miles Vs 1 yr / 2000 hrs)
 Components within an OE warranty will have different hours / dates

2
Issues that will impact warranties in the next
5 years – IFE Segment

 Labor rates/costs
 Transportation/freight/mileage costs
 Trained/qualified service staff/technicians/dealers
 Customer expectations/demands/needs
 Federal/state/international legislation
 Length of warranty/extended warranty
 Internet/automated processing systems
 Vendor quality/inferior offshore parts
 Trained operators
 Parts costs

3
 Warranty & Claim Management - Preliminary Issues, Business
Capture & process Warranty
Claims
Gaps/Issues
 Multiple systems enabling warranty
claim registration process
 More manual effort involved for
warranty claim settlement process
Business Impact
 Need to maintain multiple warranty
systems
 Require extra effort by to process
claims
 Potential impact to dealer satisfaction
due to delay in claim processing
 High processing cost per claim
Needed
 Need robust Rule engine within warranty  Automated process for
system
 Dealer training to ensure capturing
correct claim details
 End-to-end process to be defined for all
the regions
Impact & Needed Capabilities
Perform Warranty
Financial Settlement
 Manual distribution of
Dealer credit Note
 Manual handling of
country specific labor
Cost variation
 Longer time for making
payments to dealer
 Extra time and effort
consumed for
communicating credit
note
 Dealer dissatisfaction due
to claim amount
difference
credit note communication
 Reduce cycle time for claim
settlement and payment to
the dealer
 Effective financial &
performance feedback
mechanism for dealer
Execute
Warranty Audit & Recall Analyze Warranty Statistics
Campaign
 Manual and time consuming  End-to-end warranty information
Warranty Audit process available in single system
 Fool Proof system to track  Visibility to Supplier Recovery
fraudulent claims  Warranty Budget Monitoring
 Manual execution and System for CST
tracking of Recall Campaign
 Extra effort required for  High Cost impact due to no
conducting audit and visibility on recovering of warranty
communicating Audit results cost from supplier
 Increase in cost impact due to
manual effort
 Lack of visibility in Recall
Campaign efficiency and
coverage
 Automate Warranty Audit
 End to end warranty process with
activities
supplier recovery visibility
 Need system to track
 Need to monitor warranty budget
warranty audit follow up action
at the regional level
 Automate Recall Campaign
communication and tracking
4
Need of the Hour

 Reduce cost through Automation of Warranty process  Web

enabled claims settlement
 Improves response time and service to the end customer as well as
business partners
 Effective Tracking of return material through advance material
management framework
 Track warranty claim status via real time web interface
 Improved communication with suppliers, Allows to manage
supplier recovery and returns
 End-to-End Warranty Processing for all / Similar Regions

Enablers
Web Portal & Workflow Systems
Data Warehouse
Robust Rule Engines
Statistical Analysis Tool
5
Dealer Business – Service Offerings

Extended Coverage Registration System

Product Support Warranty Digital Image Processing
& Service Dealer Solution Network (Call Centre)
Warranty Claims Processing & Analytics

STRATEGIC
ALLIANCE with
XAPT