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Harnessing and Coordinating Warranty Best Practices in a Global Enterprise

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Terry Adams of Ingersoll Rand, the parent company of Trane, presented on harnessing and coordinating warranty best practices. IR includes Trance, Thermo King, Schlage, Steelcraft and others for about $17B worldwide. All these acquisitions have experience and systems so Ingersoll Rand has a vision of a Business Operating System to drive common tools and methodology across the enterprise. This business operating system has 6 focus areas – Global Leadership, Customer Value, Innovation, Strategic Management, World Class Operations and Life Cycle Management. This last contains service contracts, warranty administration, parts and accessories and re-marketing/used equipment.

All business units have warranty management and a Warranty Management Program that includes tracking and improving warranty issues and costs. The aim is to create a single process but there is a recognition that different groups start from different places. The roadmap involves a warranty council. This council is a cross-sector team to share best practices and discuss warranty issues. The objective was to achieve world class levels which means less than 1% of revenue spent on warranty through prevention and recovery. The council also has a focus on enterprise alignment and so interoperates with other groups like quality council, design and innovation council etc.

To make an impact they realized they had to drive prevention (unauthorized work and problem elimination and other things have less impact). To make this transformation you need data, a focus on incident rate reduction and to design for six sigma. They have three key areas and a program to address each:

  • Robust warranty process to ensure basic administrative excellence
    Adopted Tavant platform and focused on best practices
  • Data analytics to enable prevention through data
    Analytic tools and data mining not just BI
  • Reliability and quality culture
    Design for six sigma, automated trend detection and corrective action loops

To develop a model of warranty maturity they identified 9 key attributes around an engine built on their warranty/non-warranty/analytics platforms. For each of these areas they have defined maturity levels and measures for those levels. The areas are organization structure, policy, product registration and tracking, claims submission and approval, parts return and inspection, supplier feedback, supplier recovery, claims auditing and failure code utilization. Each business group takes the assessments for these areas and this is tracked and rolled up for reporting. This assessment feeds into a business assessment and action plans to improve these things – accountability. A set of common tools and a common structure helps drive a culture of continuous improvement.

Interestingly I don’t think there is any reason why this approach would not work for any area.

Don’t forget to check out the white paper I have at decisionmanagementsolutions.com/warranty

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