Warranty Maturity Assessments - Key Improvement Tool
Are you one of the many equipment manufacturers who offer a warranty or service contract on your product or service, and who doesn’t, then you probably would like to know how to improve your warranty offering, while improving your overall warranty management process and ultimately, achieving better business performance. Conducting a Warranty Assessment can help with warranty process optimization.
Baseline Your Current Warranty Management Maturity
It’s very hard to know how to improve a business process, let alone how much you have improved, without a baseline number and road map for improvement. There’s a well-established concept within the warranty management community known as the Warranty Maturity Management (WMM) Level. Baselining your existing warranty process is a key step to follow to optimize warranty management and improve your business profitability. It will help ensure you have an optimized warranty management solution.
Data Driven Decision Making
The WMM is roughly analogous to the more familiar Software CMM or Capability Maturity Model in that it grades your process maturity level. It is a powerful maturity model assessment tool and using it is part of optimizing warranty management. Because it is a holistic grade of all of your various warranty processes, it provides a convenient objective point of view of your warranty maturity level. It helps you with your warranty process optimization efforts.
Perform a Self-Assessment of Your Business
The idea of a self-assessment has deep roots in the U.S. military. In fact, every organizational unit within the USAF (United States Air Force) and other branches of the military, is tasked with performing an annual self-assessment of their outfit. But it isn’t just a compliance exercise. The output of these assessments is meant to provide meaningful input to a continual improvement process which gets aggregated and passed up the chain-of-command.
The Self-Assessments and your progress against each of the identified areas needing improvement is evaluated on a regular recurring cadence. A practical example of how this works comes from this author’s experience as an F-16 maintenance officer back in the day.
During one of the units previous Self-Assessments, an engine mechanic had identified the lack of proper lighting within the shop area. An engineering study had been performed of the lighting within the shop environment and the need identified for both more and higher quality windows (a long-term solution) and more powerful engine inspection lights (a shorter-term solution).
Impact On Shop’s Quality Was Being Affected
For the reader, it may be hard to envision what an F-16 jet engine looks like, but just know that it is huge, noisy, and before it is delivered to our customer, which in this case, was the Tactical Fighter Wing, Aircraft Generation Squadron (TFW-AGS), who installed these newly overhauled multi-million dollar engines into the single-engine F-16, it had to pass an engine run on the engine test cell. Failure was not an option.
You see, one of the reasons I wanted to mention the lighting issue within my engine shop was that my engine shop had been experiencing quality issues, at least some of which could be traced back to mistakes being made by poor visibility conditions on the shop floor.
The lighting improvement project, which now had a funding number, had yet to actually receive the funding allocation, and in fact, this issue had been present for many years prior to the particular time I was in charge of the shop. As OIC, I had many such projects, and millions of dollars in many such projects on the books, all identified in numerous internal self-assessments.
Daily Spend Target – That’s Why We Don’t Have Nice Things
Ultimately, all of these projects, funded or not, cascaded down into a daily spending target. In fact, I had an NCO whose job it was, was to ‘push me’ to spend allocated funds against those projects, but in alignment with current priorities, like, say, going to war, in this case, Desert Storm. It turns out, spending large sums on a sustained basis is a huge challenge. But that’s what you have to do if you want to continuously improve.
First Pass Test Cell Results
Though fixing the poor lighting was only one element of improving our product, it was actually a significant part of the improvement. The other was the use of Statistical Process Control (SPC), which I have some background in. Through a series of improvements, including the lighting upgrades, process improvements, additional personnel training, and several other initiatives, we were able to go from it taking an average of five runs across the test cell before we got it to pass down to one. That may not sound like a big deal to the average reader, but it sort of was.
A Simple Tool I Wish I Had Back Then
As you might imagine, conducting a self-assessment can be difficult. You’re basically being asked to find fault with yourself and your organization. That’s not something most managers want to do. But conducting a self-assessment using a simple checklist tends to result in low information assessments. What you really need is a grading standard. That’s what the Warranty Maturity Assessment Tool is – a dynamic, online, free self-assessment tool.
Warranty Management Maturity Assessment Tool Usage Guidelines
You’ve probably seen tools like this before, just never used in quite this way for this particular application. It has 4 Categories and 5 possible grades for each one:
Vertical Dimensions (Your Grade in Each)
For each of these dimensions, you can use the following explanations to grade yourself, in other words, perform a self-assessment. The calculator will automatically score your results for you and award you a WMM level.
- Optimized = Focused, Data-driven, Customer Loyalty, and Predictive
- Quality & reliability drives design improvements
- Proactively manage quality, finances and customer loyalty
- Predictive analytics driving decisions at enterprise level
- Advanced analytics, supports design, parts, service, and quality
- Integrated = Warranty, EPP, PD, Maintenance, and Rebuild
- Blended KPIs into transaction, finance, customers, and quality
- Periodic benchmarking internal and external
- High visibility within organization KPIs and goals
- Investment in systems and analytics to drive decisions
- Managed = KPIs, Quality, Recovery, Systems, and Benchmarking
- KPIs focused on financial metrics and basic quality & reliability
- Benchmarking discussed some execution & sharing
- Supplier cost recovery emphasized with structure
- Investment in tools to manage transactions and finance
- Standardized = Transactional focused
- Transactional focused processes
- Lacking systems and best practices not recorded
- Lacking integration/collaboration
- Poor visibility to life-cycle solutions
- Ad-hoc transaction-based processes lack structure
- Exception management limited processes
- No investment in product life-cycle solutions
- Limited Communications
Warranty Maturity Management Tool
Baselined WMM – Where Do You Go From Here?
Once you have conducted your own internal Warranty Maturity Management Self-Assessment, and have your score Warranty Management Maturity Score, your next steps really depend on how you scored yourself. If you come to realize that you’re at the Ad-Hoc level but would really like to get to the Optimized level, then you’re going to need an improvement roadmap. That’s where our team can help. We can work with you to both validate your Self-Assessment results and we can go much deeper with a full-blown Warranty Management Maturity assessment exercise, with a defined set of deliverables.
If, on the other hand, you find that you’re already at the fully optimized level of warranty management maturity, then perhaps you just keep doing what you’re doing now. But don’t forget to let your customers know how wonderful you are by providing the very best, industry leading warranty you possibly can.