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The road ahead – an intelligent warranty forecast

The road ahead – an intelligent warranty forecast

by Michael Wepsalainen, MSX Global Director of Warranty and Technical products

For a smooth transition to digitalization, OEMs are further empowered by the automatically generated insight gained from telematics data that enables realtime decisions to take place for maximizing warranty management across their networks. Managing warranty control is a key area where OEMs have additional room for improvement to boost efficiency and profitability.

On average, a single OEM spends $1-2 billion per year on consumer warranty claims. Approximately 10% of claims are reviewed manually for accuracy and efficiency. This translates to an OEM allowing 90% of warranty claims through limited checks. The reviewing process for warranty claims is challenging. The network uses technologies that are generally incompatible with current claim management systems. For this reason the majority of data is stored in silos, many claims are processed manually and details around quality and customer satisfaction are unattainable. It’s expensive for manufacturers to overcome these challenges. But it makes little sense for every OEM to make these investments in the current competitive environment. But a solution is on its way. New developments will help OEMs discover potential guaranteed savings through the review of 100% of their warranty claims. M: WISE from MSXI is a total solution for managing warranty claims, providing OEMs with the data to unlock real business intelligence and process efficiency. Cost efficient operational delivery is fundamental to maintain the highly skilled workforces with language capabilities, serving the market and optimizing the cost efficiencies with offshore alternatives. In this competitive automotive market, it’s these teams of people, who play a hugely important role and require all the tools necessary to be successful in providing sophisticated, world-class warranty services to dealers, their customers and OEMs.

There are many challenges throughout the dealer network. With an increase in vehicle complexity, warranty processes and dealership competency levels need to improve to remain competitive. The number of first-time fixes is a key performance indicator of warranty efficiency metrics. Dealerships vary in capability depending on many factors such as inventory, training, and capability in providing quality service across the board. For example, one shop may have an impeccable first-time fix rate service record, due to investing in modern facilities, a skillful and intelligent workforce, implementing best practices and brand value on a local level. This boosts customer loyalty and increases revenue for that location. Keeping up to date on current model service information and proactively stocking the correct parts for a common fix is boosting the market saturation and increasing efficiency and customer confidence.

On the other hand, there are dealerships within the same network area who are struggling with their firsttime fix rates. These dealerships are underperforming. Digitalization provides data specific, actionable information to support better decision making in the future and to help improve dealer performance whilst driving out warranty waste. The comparison of two service garages concerning first-time fix rates is just one example of efficiency versus inefficiencies when warranty management assessment tools are in place. When it comes to warranty management, better decision making involves automotive experts initializing the M:WISE digitalization platform across the OEM’s dealer network. The digital platform is capable of enhancing the day-to-day, minuteby- minute claim performance data that translates into an improved quality of service. This equates to

improvements in workshop productivity, customer confidence and brand loyalty. Additionally, boosting the digitalization platform with real-time diagnostic information from the customer’s vehicle supports the claim management process. When integrated with technical support, this information helps the workshop to correctly repair a vehicle, reducing warranty cost and bringing the warranty performance to a new level.

Mobility trends are pointing towards a new mindset when it comes to vehicle ownership. Individuals, especially in urban areas, prefer to use ride sharing services. The trending curve suggests OEMs intend to increase fleet operations. Projections indicate in this segment that consumers purchase rides, as opposed to owning vehicles. The warranty management costs will solely reside with the fleet owners of ride-sharing networks. With the advent of new mobility opportunities, especially autonomous vehicles, scheduling technical updates and maintenance programs boils down to keeping the cost of ownership as low as possible. OEMs will increase their penetration in future mobility concepts with fleet ride-sharing networks to remain competitive and profitable. Keeping the OEM‘s best interests in mind, a digitally integrated warranty management platform is the intelligent answer to cost control in the future of mobility.

Digital solutions are vital to OEMs and their dealer networks to navigate the road ahead. The MSXI warranty journey delivers the OEM a foundation to enable the required transformation of warranty processes, allowing MSXI as a partner to bring best practices in the industry, and to be part of the shared objective of a reduced warranty bill, optimized costs control and a predictive, low risk infrastructure.

Benchmarker 2019


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