Warranty Reduction…
aka the art of saving money and increasing customer satisfaction…
Warranty returns... Seems simple enough, your company makes product, ships product, the customer receives the product and uses the product and is satisfied happily ever after. Or, in the case of warranty returns your company makes product, ships product, the customer receives the product and shortly thereafter returns the product…
Many firms live this scenario everyday and simply accrue for warranty return as a monthly expense. Product goes out, product comes back, no problem we will send you another or if you like we’ll send your money back! What more could a customer expect? What a lost opportunity and what a waste of a chance to assure customer satisfaction and gain market share.
Who doesn’t remember getting up early one Christmas morning or birthday to be greeted with our long awaited, dreamed of toy train, bicycle, pogo stick, game or doll? As we are ripping open the package, removing the wrappings, our excitement is at a peak! The joy of receiving the gift of our dreams is however quickly dashed when the missing bolt, nut, spring is discovered and suddenly the object of our desires is now a broken, non-functional mere shadow of what we dreamed it would be…
What happens next is easy, after hearing us cry and seeing the anguished look on our face our mother or father grabs up the former object of desires and drags it back to the local Wal-Mart or to wherever it may have been purchased from and believe me that broken toy train, bicycle, pogo stick, game or doll will not be soon forgotten - nor will its manufacturer…
What endures in our memories long after the price has been paid is the pain of seeing the hurt in our child’s eyes and the thought of what should have been a perfect event, is the memory of the moment being ruined by the defective bicycle or toy. It will be a long time before we buy another whiz bang Road Runner catcher from “Acme”. These memories come screaming back at us when we buy a new radio or cell phone and discover missing parts or a scratch. The bitterness of poor quality is again foremost in our minds, long after the sweetness of low price is forgotten…
Warranty returns? These are lost dreams, hurt children, shattered illusions and they are also opportunities. Opportunities? If we are smart enough to not just treat these as the cost of doing business and something that is simply accrued for we can gain from these returns and assure customer satisfaction and even use them to advance our market place.
How do we learn from and use these opportunities? Start by capturing the voice of your customer. Many may ask why? Why should we listen to these complainers, they aren’t engineers or businessmen – what do they know? I’ll tell you what they know, they know for darn sure that they aren’t buying another “piece of junk” from you again…
I have long ago put to memory an old adage that goes something like, if you buy a product and find it to be everything you had hoped for you may tell one or possibly two friends or acquaintances. If however, if you buy a product and it is defective you will go out of your way to tell everyone you know or meet to be aware of the junk from XYZ company! Case in point, how many “Yugo’s” do you see on the road?
Be smart enough to capture the voice of your customer. What failed, what wasn’t liked, what was scratched, where was it scratched? Capture this information, record it, and assess it and then take action. Perform a Pareto of the data to find where to first focus your efforts. Obviously, if you had 12 bicycles returned due to low air pressure in a tire, 350 with a scratch in the paint, 75 with a squeaky brake, 5 with a missing sticker, a Pareto would tell you to focus first on the highest rated defect. The only wild card to this is if one of the failure modes could cause injury or harm. Defects that can cause injury or harm need to be eliminated immediately.
Simple as it sounds, initiate corrective actions to eliminate the causes of the defects. Do a complete through investigation, too often the true root cause of the defect is not found and as a result the problem is not solved. Seldom will “Joe did it” or “operator error” prove to address the true root cause. By finding the true root cause and eliminating the problem you will lower the costs of warranty returns at your plant or factory and eliminate the dissatisfaction realized when that package is first opened and the scratch is discovered.
With this stated corrective actions not the total answer, they are reactionary. The key is to eliminate the possibility of the problem from occurring in the first place. Take the extra step, design quality into your products with advanced product quality planning to assure that the products are designed correctly and are producible… Assure your processes are capable and control them. Go the extra mile; prevent the defects from happening instead of just reacting to them. The pay off will be in the form of customer satisfaction and increased market share. Your company’s future may depend upon it…
Written By,
David Michaels, ASQ MOQ / OE
Quality Achievement Solutions Group, LLC.
Partner
The intent of this article was not to go into detailed APQP methodology, in depth problem solving, corrective and preventive action techniques but rather to give the reader direction to assure warranty reduction and increased customer satisfaction.
