Among the critical junctures where expectation meets reality is when a customer seeks to exercise its supplier’s warranty program. It’s when a promise once made can now be kept, which is perhaps a company’s highest and best opportunity to solidify and cement its customer relationships. Indeed, how well warranty transactions are handled can and often does spell the difference between loyal and repeating customers and those that disappear to the competition, usually sooner rather than later.
Beware, however, that poorly disciplined warranty programs have introduced financial stress to many a middle market company. Consider that if net profit margins run five per cent, then unnecessarily scrapping and then replacing a returned unit squanders the net profits from the sale of almost 20 units. In this unhappy scenario just a two per cent return rate spells nearly a 40 per cent reduction in net profit.
These are among the reasons why middle market companies can ill afford to risk their economic futures with specialty outsource providers, typically mom and pop enterprises with fewer than 50 employees whose principal core competence is PCB subassembly. The scale and scope associated with these well meaning and often quite capable suppliers simply is not a good match for the much deeper requirements, broader opportunities, and higher risks confronting the middle market.
That’s why AMI’s warranty management service is strategically integrated with its comprehensive test and diagnosis center; its full-product repair service staffed with an experienced complement of IPC certified technicians; and its field replacement and asset recovery programs.
Keys to success are an expert cadre of program managers and a well established RMA tracking and reporting process with differentiated tracks and customer-specific decision points for warranty and non-warranty returns, and, within those categories, products designated as “no fault found” versus those designated either for repair or for asset recovery.
Important outputs of AMI’s RMA system are annotated diagnostic reports that attack root cause by supporting the planning and execution of design and process improvements that increase product reliability, thereby driving down the number and expense of warranty returns.
AMI, whose portfolio of post-sale services includes effective and full-featured warranty management, is the right size and the best choice for the EMS middle market.