New Generation Warranty Management Systems – What Makes them Better than Traditional Warranty Management Systems?
New generation warranty management systems are the perfect combination of the latest technology platforms and business processes, and are a way to help product manufacturers in improving their warranty management activities. These warranty management systems present the opportunity of improving cost saving, customer satisfaction, and product quality. The rise of the manufacturing sector across the globe, and the cutthroat competition in the consumer goods market are the chief factors leading to an increased demand for warranty management systems.
Manufacturers of discrete products are well aware of the fact that managing the warranties of their products, though unpalatable due to the sizeable portion of revenue consumed in settlements, is an unavoidable part of their businesses.
Manufacturers face a wide array of pitfalls in the field of warranty management. While settlements for genuine claims eat up revenue, fraudulent warranty claims are difficult to avoid, and supplier recovery and counterclaims for counterfeit parts is also a painful task. Many traditional warranty management systems have worn-out practices and machineries in place that do not have the facilities to connect the various departments involved in warranty management, which can make the departments aware of practices followed by the others, and capture and archive data related to quality problems.
According to a new report published by Transparency Market Research, the global market for warranty management systems, valued at US$10,553.6 million in 2013, will rise at a healthy CAGR of 12.8% between 2014 and 2022.
The global warranty management systems market serves the manufacturing sector through two key offerings: warranty management software products and warranty management services.
Browse Market Research Report of Warranty Management Systems Market:
Of these two segments, the services segment accounted for nearly 79% of the revenue in the market in 2013. This market segment is also the fastest growing, owing to the rising demand from original equipment manufacturers (OEMs) for system integration and BPO services so as to manage warranty claims processes more efficiently. Factors such as a constant rise in claims processing outsourcing and increased efforts of warranty vendors towards the development and maintenance of warranty management applications are also expected to boost demand for warranty management services.
The Case for Better Warranty Management
It is estimated that product manufacturers lose anywhere from 0.5% to 7% of their revenue annually in warranty management. According to a 2012 study by Warranty Week, the total annual expenditure for warranty management by U.S.-based product manufacturers alone is nearly US$24 billion. Globally, this number was estimated to be more than US$70 billion.
What’s alarming in this scenario is the fact that a larger chunk of these expenses is consumed in associated processes rather than the actual settlements. Thus, replacing traditional manual warranty systems with automated systems offers a promising way to reduce costs incurred in associated tasks.
Manual warranty management processes are also subject to inevitable manual errors and several bottlenecks in the overall chain of processes. These issues often arise due to a lack of coordination between departments and the resulting discrepancies in decision-making capabilities.
Browse Press Release of Warranty Management Systems Market:
On the other hand, product manufacturers can only benefit from an overall reduction in warranty costs, improved quality of future products, and faster customer service, leading to increased customer satisfaction. Moreover, using advanced systems can allow product manufacturers in gaining a greater compensation in cases of unjustified claims, recovery from suppliers, and actionable false warranty claims.