by Charlie Mantione, EVP & Chief Revenue Officer
We work with a lot of consumer electronics firms and most of the manufacturers we’ve talked with frequently see their in-warranty repair turnaround time take 30 days or more.
The warranty turnaround often plays out like this, or as we like to say “The Adventure Begins when the D*mn Thing Breaks”:
- Product breaks
- Customer starts the repair cycle & ships it in for repair
- You receive the product
- She (customer) waits
- You add her repair to the batch
- She waits
- You source parts
- She steams
- You repair
- She tweets
- You ship
- She receives her repaired product
- it’s next month already
While a 20-30 day turnaround may fit into an appropriate timeframe for you (the manufacturer) there’s little chance that 14 to 30 or more days without their new product will satisfy your customer’s expectations – or make them a raving fan.
What could it mean to your brand to reduce your in-warranty repair turnaround time from whatever-it-is-today to a lightening fast 4 days?
There are a number of benefits to a 4 day Turnaround, both for the brand and the bottom line;
1. Overall Brand benefits
- Your warranty guarantee would, at 4 days, lead the industry as few or none of your competitors could offer same
- Improved customer satisfaction and retention
- Opportunity for enhanced social media driven consumer feedback
- Opens the door for an additional sales or upgrade opportunities
- The perception of having more open lines of communication between the end consumer, the repair facility and the manufacturer
- Improved loyalty of shops, partners, distributors, and consumers
and probably the key overall brand benefit:
- Fast repair turnaround (like 4 days) solidifies the perception that despite requiring repair, your products are of a higher quality
2. Bottom Line benefits
- Reducing your warranty turnaround time to 4 days will drive cost savings in logistics (3PL or in-house), labor, and utilities
- A reduction in overall warranty costs
- A 4 day turnaround requires highly optimized processes which in turn would require an optimized supply chain process therefore reducing costs
- More accurate trend forecasting for volume projections and accounting advantages
- Reduced logistics, transportation and inventory costs
- Improve accuracy in applicable financial compensation
the most significant benefit:
Perhaps the most significant value added by reducing your warranty turn-around time to four days is the opportunity to affect customer perceptions.
4-day repair turnaround is a targeted marketing opportunity in disguise. Positive feedback serves as a sales catalyst! There is an opportunity cost for customers to repair their devices rather than replace them – shorter cycles tip the model in favor of repair for the consumer.
Since many consumer electronics firms focus on assembly, manufacturing, QA, and getting the products shipped out the door it makes sense to improve non-optimal links in the chain; i.e. Repair times.
The turnaround time for warranty repair has a potential derailing effect for operations and, as we pointed out, can pose a threat to customer satisfaction which may result in slimmer margins if a firm sends replacement products or replaces faulty components rather than repairing them. Either option is expensive but coupled with potentially lengthy turnaround times these routes have latent inertia to upset customers.
Continuous improvement of the warranty cycle
Often the length of a warranty repair window can be directly attributed to one thing – process. Smaller firms may have to wait for an available resource to conduct repairs, others may want to wait until they have a certain quantity of units to repair and “batch them up”. Still others may not have a formal repair process in place and simply swap out components or units, again in batch mode.
Regardless of the process, repair turnaround time is seldom less than 14-30 days.
- So how would continuous improvement (kaizen) of a warranty repair cycle appear?
- Reduced touch time and indirect labor (negative influences on bottom line)
- Improved process, quality, throughput and overall indirect yield (positive influences)
- Reduced scrap and waste leading to greatly improved asset management for clients
- Environmental regulations or goals can be met or surpassed via 3PL engagement
An optimized repair process may be self funding, by repairing the components themselves rather than swapping them, a manufacturer can significantly reduce waste and improve resale value. Unique components for repair that might have otherwise been swapped and placed on a shelf indefinitely now have progressive value. For instance, a $200 scrapped component now adds value to the bottom line by having reuse and resale potential.
Optimizing the in-warranty repair lifecycle certainly doesn’t receive as much attention as product design, manufacturing or launch but the in-warranty repair is your customer’s first interaction with your company post sale.
Reducing turnaround time for in-warranty repair from 30 to 4 days has significant benefit to your brand and your relationship with your customer.
PanurgyOEM offers quality 3rd Party Logistic (3PL) services to consumer electronics, industrial control and office automation vendors worldwide. Located in Rockaway, NJ and founded in 1984, PanurgyOEM is the industry’s premier partner for 4-Day Turnaround repair cycles.