Successful warranty programs manage warranty claims accurately and efficiently, improve customer service, and provide insight into internal, customer-, and supplier-facing processes. The SAP ACS warranty solution provides automated processes that integrate with the financial and reporting modules of your existing SAP system.
However, the SAP ACS warranty management solution is not just about greater efficiency and more features. Implementing the SAP ACS warranty management solution can have a real impact on your business’s bottom line. A few of the business benefits to the SAP ACS warranty management solution include:
Improved Quality Control
Implementing a warranty program is good customer service because it lets customers know you stand behind your products when they fail. However, SAP S/4Hana (or ECC) maintains a database of products under warranty, the timing of warranty claims received, and the defects repaired under those claims.
This database provides a resource for business leaders to identify problems in the design, manufacturing, and use of the products that result in warranty claims. This information can be fed back into the product development process to improve the products as well as the organizational processes used to guide product development.
The SAP ACS warranty management solution supports this feedback approach for enhancing product quality awareness and management. SAP’s warranty management solution is fully integrated with SAP’s quality management (QM) module. This is part of the SAP supplier quality management improvement cycle.
Integrated Vendor and Supplier Recovery
When subcontractors, vendors, and suppliers provide defective parts and assemblies, many supply contracts allow for recovery by the manufacturer. Manufacturers often leave money on the table because they are unaware that warranty claims are directed to defective parts obtained from third parties. Information from ASPs, dealers, and even in-house service centers may be locked up in organizational silos that never reach the legal and accounting departments responsible for vendor and supplier recovery.
Additionally, some manufacturers find the documentation needed to recover from third party suppliers too cumbersome to justify the added revenue.
However, the SAP ACS warranty management solution stores warranty data in the organization’s master database, allowing ready access by legal and accounting to recover from vendors and suppliers for defective parts. Moreover, each warranty claim can contain documentation from the customer, ASPs, dealers, or in-house service center to support a supplier recovery claim. The supplier recovery process allows you to recoup back some of the money paid to third-party suppliers for defective parts or assemblies.
Most importantly, the SAP ACS supplier recovery process standardizes the sometimes onerous steps it takes to recover costs for defective parts and materials from vendors. This results in a shorter process flow time and ensures that the vendor recovery claim case is accurately documented.
Streamlined Warranty Parts and Services
Integration with SAP ERP allows the management of parts and materials needed for authorized warranty services. Warranty claims that require spare parts shipments to ASPs or dealers can be created seamlessly in SAP from the SAP ACS warranty management solution.
The costs for those shipments can be allocated based on predetermined rules. For example, if the manufacturer bears the costs associated with shipping, the shipments can be sent free of charge. If the customer bears the costs of shipping, the ASP or dealer can be billed so the shipping cost can be passed on to the customer.
More importantly, supply needs can be anticipated based on service notifications, technical service bulletins, recalls, or even an observed wave of claims directed to the same warranty issue. Suppliers or vendors can be notified of the need for parts to satisfy the anticipated warranty claims, and the parts can be shipped to ASPs, dealers, and held in inventory at in-house service centers, or at DC’s.
Increased Information Sharing with OEMs, ASPs, Service Centers, and Dealers
The dealer portal and integration of SAP ACS warranty management solution into SAP can facilitate information sharing and messaging about warranty services between you and your ASPs and dealers. Automated messages can be created and sent when warranty repairs are approved or declined. Similarly, messages can be automatically generated when spare parts are ordered, shipped, and delivered, and warranty repairs are completed.
Having dealers and ASPs reporting warranty repairs through the dealer portal gives you a better picture of what is happening with your products. This information can be difficult to collect if you have an extensive network of dealers and ASPs, mix third-party service providers and in-house service centers, or provide field services.
Improved Support for Service Agreements and Extended Warranties
SAP Standard Warranty (LO-WTY) has no built-in support for service agreements and extended warranties. However, the touchpoints between service contracts and warranty claims can be facilitated by SAP ACS warranty management. For example, ensuring adequate spare parts and labor are available for service contracts can be managed using SAP and SAP ACS warranty management.
Moreover, SAP ACS warranty management supports a fully configurable warranty entitlement check as described previously. This allows entitlement checks for extended warranties to be mapped to any business rules that govern extended warranty parts or service.
This configurable entitlement check can also be used to verify entitlements under service agreements. Click here to learn more about Detering Consulting’s SAP service contract billing solution.
Decreased Warranty Service Cost
Greater insight into warranty claims can help your business to decrease the number of claims and the cost of warranty services. The SAP ACS warranty management solution provides real-time data about the lifespan, failure rates, and failure modes of your business’s products. This information can be used in statistical process controls, such as Six Sigma, to improve product quality and decrease both the number and cost of warranty repairs.
Increased Product Safety
Product safety is improved by the SAP ACS warranty management solution in a few different ways:
- Reporting: Reports can be generated to enhance the visibility of warranty repairs and product defects.
- Recall support: SAP ACS warranty management can also manage recalls and service bulletins, including identifying customers associated with serial numbers subject to recalls and service bulletins.
- Claim history: SAP’s warranty claim history can be used to identify trends in warranty claims and possible defects.
For example, if the data shows that a particular part breaks due to misuse, the SAP BW or Power BI database can quickly identify which part, as well as the part serial numbers. With this information, you can determine if the defect was due to a design problem or a manufacturing problem isolated to a specific batch of parts.
Moreover, the business can alter its warnings and instructions to inform users that the misuse can result in breakage and even update its warranty to exclude breakage due to misuse from coverage. Once the source of the problem is identified, the design or production can be re-engineered to prevent the misuse or the breakage in the event of misuse.
As a result, the product will be safer, fewer warranty claims will be submitted, and customer satisfaction with the product will improve.
More Accurate Financial and Accounting Attribution
SAP ACS warranty management is integrated with SAP ECC and SAP S/4HANA. This allows the sales department to fulfill its role in the spare part sales and return material authorization (RMA) process.
Sales can send replacement parts to the customer, ASPs, or dealers, process RMA returns, and, most importantly, attribute costs and revenues from warranty repairs to business units, profit centers, and sales departments. Sales can also help with the financial tracking of warranty service activities by creating invoices for warranty parts and services.
Similarly, finance and operations can use the integration of SAP FICO and SAP ACS warranty management to track finances and logistic movements associated with warranty activities in real-time. Claim histories and other reports can help fine-tune postings of warranty accruals and actual warranty expenses to the general ledger. SAP ACS warranty management also enables automation of warranty provision to parts and base installations.