A clear articulation of future state capabilities with a supporting business case for the same will ensure easier buy-in from the leadership. A warranty transformation program should be treated as an opportunity to improve all the relevant upstream and downstream processes of core warranty operations. Warranty is not just about claims management.
This requires a mindset change to avoid focusing the reworking as a pure IT system replacement. This is where a process framework that serves as a guiding baseline for transformation would help.
Warranty claims under German law on the sale of goods
Some of the upstream and downstream processes and their metrics have to be evaluated holistically to improve upon warranty business function. At a high level, there are at least four key areas that need to be considered:.
For each of the process areas, building an analytics platform gives a view of key performance indicators that provide the current baseline and a target to which to aspire. While most organizations have standard performance analytics, the key element is the consistency in data quality and being able to build a closed loop linking the various groups from product development, sales, service, warranty, and quality. Achieving a unified view of the warranty program across geographies and business units is also a great opportunity for transformation.
This approach, what we call "One Warranty," can result in significant opportunities for internal benchmarking, and provide seamless information sharing of best practices and warranty data. The warranty process framework would lay the foundation for such an enterprise-wide initiative. Depending on the organization and industry, the processes impacted could vary, but the theme remains the same. A warranty process framework gives a common and consistent definition to all warranty process areas and ensures linkages. This also provides opportunities to compare processes, set benchmarks and measure warranty performance in a consistent fashion.
As one works on building a business case and a process framework, it is important to communicate and collaborate with both internal and external stakeholders. The diagram below depicts the typical stakeholders involved in warranty transformation.
By collaborating with various internal stakeholders on business case and future state articulation, one can ensure a better buy-in for business process improvements. Along with internal stakeholders, the distribution channel and suppliers also play a key factor toward warranty program maturity. When you consider your dealer network, not all the dealers are at the same performance level, even if you compare those with similar sales volumes, size, and spread of operations. Some dealers do a great job of ensuring the service is completed correctly the first time.
These dealers have lower claims volume as opposed to other dealers who do not spend enough time on training technicians. A comprehensive dealer performance scorecard linked to warranty performance is a great way to build transparency with the channel and also drive improvements in warranty cost reduction. A holistic maturity assessment of various stakeholders -- dealers, distributors, joint venture partners, etc. Similarly, when it comes to suppliers, most organizations tend to think just supplier recovery. A bigger value can be obtained if this program is considered as an opportunity to improve on supplier collaboration.
In many cases, suppliers are provided with insufficient data for them to do a thorough root cause analysis and prevent failures. This problem is even greater when it gets down to Tier 2 and lower levels. If the suppliers were given access to key failure information from the OEM upfront, then this would enable suppliers to collaborate with the OEM on failure trend analysis and field failure fixes.
Besides the conclusion of an effective contract of sale, the only requirement is the delivery of an item that is defective at the time the risk is transferred. If the vendor does not fulfill its cure obligation, despite being allowed a reasonable extension of time, the buyer may demand rescission of contract, a reduction in the purchase price and compensation and reimbursement for wasted expenditures. Rescission is the process of dissolving the contract with retroactive effect, so that the entitlements resulting from the contract also lapse. Services already performed must be returned.
Instead of rescinding the contract, the buyer may reduce the purchase price. In this case, the price reduction must be commensurate with the difference between the value of the item in a fault-free state and its actual value.
In the event of a dispute, the reduction is calculated by the court. The buyer is entitled to compensation in addition to a cure, rescission or price reduction if the vendor is responsible for the damage, i. Limitation period The usual warranty period under the law on the sale of goods is two years. In the case of movable items, the limitation period for claims for defects commences upon delivery. For immovable property and buildings , the period is five years and commences upon handover.
Warranty claims under German law on the sale of goods – Legal knowledge portal
The limitation period is thirty years if the defect lies in a right in rem of a third party on the basis of which the surrender of the purchased object may be demanded, or in another right entered in the land register. In the case of contracts with end consumers, the warranty period for new items may not be shortened, either by general terms and conditions or by individual agreements. The parties may, however, limit the warranty for used goods to one year. Special arrangements for commercial parties If the purchase is a mutual commercial sale, the buyer must inspect the object purchased immediately upon receipt and immediately make any complaints.
If he does not fulfill this obligation, the goods are deemed to have been approved, meaning that all claims against the supplier on account of that defect are excluded. Warranty vs guarantee The guarantee is a voluntary obligation assumed by the vendor or manufacturer, on top of the warranty period, whereby it guarantees that an item will not develop any defects within a particular period. When you sell a good or a service to a consumer online or via other means of distance communication by telephone, mail order or outside a shop from a door-to-door salesperson , the consumer has the right to return the item or cancel the service within 14 days.
This is sometimes referred to as the cooling-off period or the withdrawal period. No reason or justification has to be given by the consumer. EU law also stipulates that you must give the consumer a minimum 2-year guarantee legal guarantee as a protection against faulty goods, or goods that don't look or work as advertised. In some countries national law may require you to provide longer guarantees. If the product you sold turns out to be faulty — or doesn't look or work as advertised — within the timeframe of the legal guarantee, you are responsible for this.
When can your customer claim redress?
In some countries this can also be the case if you are the manufacturer or importer. Be aware that you are legally bound by any public statements you make about your products, especially through advertisements or on labels. If you are a retailer, your customers can ask for redress under the legal guarantee provided by EU law - if an item:. If you inform your customer that the product you are going to sell has quality problems, they cannot then claim redress from you about this particular defect.
Related Future Processes of Warranty (German Edition)
Copyright 2019 - All Right Reserved