Manufacturers Need To Take Closer Look At Warranty Costs

Unnecessary costs are being incurred after a warranty claim is made according to a recent study by Manufacturing Insights. At the June 6 conference of the Automotive Industry Action Group's Early Warning System, survey results from top U.S. manufacturing companies revealed that the North American auto industry spends almost $14 billion annually on warranty claims.

"The survey results support our hypothesis that there are several contributing factors to the increase in warranty expenses subsequent to the warranty event," states Joe Barkai, director of research for Manufacturing Insights' warranty and quality management program. "The No Fault Found and first time fix data that we collected should persuade auto executives to reevaluate their current warranty repair process and their ability to meet the increasing demand for accurate first time repair."

The study indicates that cost recovery could be one area of improvement. Adds Barkai, "This data suggests that there is a disconnect between executive perceptions of warranty costs and those actually managing the warranty process. It's time for executives to incorporate warranty management into their daily dashboard."