Sept. 6, 2004 – Controlling warranty
September 6, 2004
Filed under Features
By Bill Shenk
From the PowerHouse Top Gun cockpit…
This year has been a very big year for warranty in many dealerships. You would think that when there is a larger than normal volume of warranty claims to process we would be doing a better than normal job submitting and collecting. What I am finding all too often is just the opposite. In many dealerships today there are huge amounts of money uncollected.
We find that just like every other piece of the dealership operations, if you are going to be profitable it comes down to good systems and trained personnel.
There are several components to a successful warranty program. First, you must get the job in, completed and be organized enough to sell additional work. What better time is there to personalize your customer’s bike than when it is already at the dealership?
Second, you must treat the job just like any other. The very instant it is completed mechanically the paper work must be completed as well and it MUST be billed out to the OEM. This is no different than with any other customer. Remember: NO job is really complete until it is paid for.
Third, someone must track the pending warranty credits. This is no different than with any other “credit” customer. With most OEM’s it is not too tough IF you have completed EVERYTHING as the job comes off the bench. When I hear managers complain about the short window of time they have to submit, I instantly know there are system problems and inefficiencies within the department. It is always more efficient to do a task when the details are close at hand and fresh in one’s memory.
Fourth, there is the warranty parts handling. Seems simple from the outside looking in, and it can be, but in most dealerships it is a time consuming eyesore at best that robs the dealership of valuable floor space.
Following is the easiest and most effective method I have found for controlling the warranty parts sprawl and still comply with the OEM’s requirements.
Get four large stackable storage bins; each bin must be large enough to hold at least a one-month supply of warranty parts. Label each bin one to four. Now, on the 1st of the month begin putting all warranty parts from that month into bin 1, beginning the 1st of the next month start putting all warranty parts into bin 2 and so forth. At the beginning of the 5th month you can dispose of all the parts in bin #1 for they have now been held the required amount of time and you can reuse that bin.
I like to store warranty parts in the warehouse in an area accessible by forklift and use bins that are stackable and made to be handled by a forklift. This keeps things orderly, controlled and efficient. If there is a request to see a part it is now a fairly simple task to find the defective date and locate the bin containing parts from that date period. If you use bins made to be handled by forklift it is now a simple one person job to move those items to the dumpster and dispose.
Now take out your end of month housekeeping list (if you don’t have one now is a good time to start one) and add a line that says “Rotate warranty parts holding bins.”
To take your dealership to Top Gun status contact Bill Shenk toll free at 866.896.3759 or email Bill@phdservices.com. psb