Manufacturers continue to spend considerable amounts to honor their warranty obligations. In the United States alone, this figure in 2010 equates to over $23.6 billion. While manufacturers were focused on reducing warranty expenses in 2010, most sectors have shown little improvement. While there may be an increased awareness by the manufacturing industry of the high financial exposure of warranty and the impact on customers, the industry is in need of greater rigor and better tools to manage warranty operat
IDC Manufacturing Insights just released our annual update of warranty industry financial trends. The report provides a summary of warranty spending in U.S. manufacturing from 2006 through 2010 by industry — automotive OEM and suppliers, aerospace and defense (A&D) OEMs and suppliers, and high tech — and offers an outlook and recommendations for manufacturers and warranty solution providers alike.
The 2010 warranty data shows a trend of improved warranty performance, and IDC Manufacturing Insights believes this trend is likely to continue. However, we do not believe that besides reducing warranty incidents caused by poor quality that most organizations will be able to achieve significant improvement over what they have already accomplished without making a deliberate investment in improving the overall capabilities of their warranty organizations.
Manufacturers can start this process by utilizing an assessment methodology such as IDC Manufacturing Insight's Warranty Capability Maturity Model to evaluate the current state of their warranty operations. Utilizing a systematic methodology to develop a comprehensive road map for continuous improvement will help manufacturers minimize the impact of warranty events, decrease reaction time, and have better control over the variability of response when product failures occur.
What is your opinion about the maturity of warranty practices? What should industry do to improve? Have you or your organization developed best practices you'd like to share? Start a discussion within the community or write to me at firstname.lastname@example.org with comments or questions.