Reduce Maintenance Cost With Warranty Contract Management – Part I
Maximo includes a standard Warranty Contracts application which is a core, or base application designed to facilitate the application of warranties to assets. One user reported saving 50% of repair costs on warranty-covered assets through use of this tool. If you are not using this functionality, you will want to read on. It’s effective and requires a reasonable amount of effort to implement. Experience shows that the greatest benefit from this tool is achieved, not solely from the technical qualities of a particular installation, but with equal import, from the way it is configured and utilized. As is often the case, a good working partnership between the implementer and the user is necessary when planning to use the Warranty Contracts application in order to reap the returns.
The Warranty Contracts application provides a standard means of creating warranty-specific contracts in Maximo. Warranty attributes such as coverage terms and dates are captured, which then provide appropriate notifications whenever someone is about to perform work on a warranty-covered asset. The most obvious benefit here is that you are empowered to enforce the vendor warranty terms: preventing unnecessary work and its associated costs and schedule loading. In an airport setting, moving walkways and escalators may be covered by a manufacturer’s warranty, in which case the coverage may include parts and labor. If you were to create a work order to check and repair a non-functioning unit, Maximo would notify you when saving the work order by presenting you with an additional reminder that the unit is covered under a warranty.
If you are using Maximo for Transportation, you have expanded capability which allows you to create Warranty Contracts for not only assets, but also for items. This means that even separate components of assets which may have their own unique warranties can be uniquely identified and managed. This has added value with assets such as vehicles, which may contain component assemblies with unique warranties, such as engines, transmissions, and potentially even road-hazard coverage for tires. We’ll get into this further in Part II of this article.
To begin, don’t let this topic intimidate you. Setting up Warranty Management really is a reasonable task, and while implementing it will require a good solid plan – and someone to take ownership of the completed process, it does not pose a major organizational challenge. The number of users who will need to learn how to use it depends on where it is implemented in your workflow, but is typically limited to a small number, so you won’t need to justify training a large number of employees. This is a management tool, meaning that, while it provides a degree of automation and process standardization, it allows for some flexibility in that users will be notified when there is the potential for warranty coverage in lieu of expending internal labor or material costs. However, the user will need to act appropriately in order to take advantage of an opportunity.
Why do you want to manage warranties?
Recall that Maximo is all about two things: Visibility and Control. Warranty contract management provides work order creators visibility into the availability of warranties, but primarily gives management control of the cost of maintaining certain assets by standardizing the way repair and replacement costs are covered – which may include determining where and by whom complex repairs should be performed. Human nature dictates this need. Consider that a crew often prefers to increase a work backlog for numerous reasons. Individuals may want overtime pay; Supervisors may want to demonstrate the importance of their authority by showing high hours demand; “Use it or lose it” thinking can exist within certain groups wanting to justify next year’s budget. You can likely think of other reasons which may exist in your unique environment.
So, this capability is already in your Maximo toolbox. It provides automatic notification so you don’t need to have anyone check up on it every day. It requires a reasonable amount of effort to set up and use. It doesn’t require large blocks of training hours, and it saves money. What is there to think about?
In today’s competitive business climate, someone who saves an organization money is a hero. Do so repeatedly, and you’re a superhero. If you’re not managing warranty and service contracts in Maximo now, get started and you’ll be one step closer to being fitted for your own cape and mask.
If you need a hand planning or setting up your contract functionality, just give us a call – we’re always glad to help out. If you are already using this part of Maximo, congratulations. Look for Part II in our next newsletter, where we will review warranty contracts in more depth.