How can I optimize the benefits of my asset warranties? a.k.a. Saving money on asset maintenance!

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Most new, rebuilt, or remanufactured assets will carry some level of warranty against defects or failures.  Significant savings can be realized by maximizing the benefits of these warranties by either recovering costs your organization has incurred performing warranty repairs or by avoiding incurring the costs by having the vendor or manufacturer perform the repair.

In the June 1, 2011 blog titled ‘Triggering Item Warranties in Maximo for Transportation’, we described how to manage item or spare part warranties.  Today we will focus on managing asset warranties.

Warranty coverage that is specific to an asset is defined in Maximo for Transportation’s Asset Warranty Contracts (Tr) application.  This can be defined as full coverage (every component and part on the asset is under warranty) or as component coverage (a specific component of the asset, say the engine, is under warranty).

Full coverage is often referred to as bumper to bumper warranty when talking about vehicles. For example, you might say an asset has a bumper to bumper warranty or full coverage for two years or 50,000 miles, whichever comes first.

Component coverage, as the name implies, is for a specific component of an asset. You may define the coverage as being only for the engine of a vehicle for a period of one year or 25,000 miles. You can also optionally say that not only is this component covered by the warranty, but all subcomponents within the component are also covered. In the example of the engine, then the cylinder block, crankshaft, pistons, etc. in the engine are also included in this coverage.

When planning or executing work and issuing or purchasing materials or services, Maximo will validate the record against its asset's warranty coverage. Warranty situations are identified (a Possible Warranty field on the records) and configurable notifications are provided to the user.

If you are in the process of planning work or repairs, you will be notified of a possible warranty situation.  Such things as work orders, work order tasks, purchase request lines, purchase order lines, planned labor, planned materials, planned services, etc. are validated for warranty.  If your organization is not authorized to perform the warranty repair, you now have the opportunity to engage the vendor or manufacturer to perform the repair and avoid incurring the cost of the repair yourself or voiding the warranty on the asset.

If your organization is authorized to perform warranty repairs, you can proceed with the work following the appropriate warranty repair procedures to insure you are not at risk to void the warranty.  Actual labor, materials, and services consumed to perform the warranty repair will be identified by Maximo as possible warranty situations.  Once the work is complete, these can be used as the basis for a warranty claim to help you manage the process of recovering any costs you have incurred while performing the warranty repair.

Let's look at some examples.

Asset A123 is on an asset warranty contract with warranty coverage defined as follows:

Warranty Coverage: Full Coverage for 2 years or 50,000 miles.

A work order is created for this asset; tasks and planned material and labor are included. When the work order is saved, Maximo will validate the work order, all tasks, and planned labor, materials and services for possible warranty. In this case, there are records marked as possible warranty based on the defined warranty coverage.

This organization is not authorized to perform warranty work so the manufacturer is contacted and performs the repair at no cost.

This is recorded on the Maximo work order as a warranty repair providing detailed information on the assets repair history and history on the activities related to the asset’s warranty.

Everyone is happy as the asset is now repaired and your organization avoided incurring the cost of the repair!

Asset A456 has a rebuilt engine installed with warranty coverage defined as follows:

Warranty Coverage: Component Coverage for the engine and its child components for 1 year or 25,000 miles.

A work order is created for this asset; tasks and planned material and labor are included. On one task and its associated plans, the repair is to be made against the timing gears, a component of the engine. When the work order is saved, Maximo will validate the work order, all tasks, and planned labor, materials and services for possible warranty. In this case, only the records for the engine and its components will be marked as possible warranty.

This organization is an authorized warranty repair depot for this manufacturer, so the work order is approved and the repairs are performed. As labor, materials, and services are issued or purchased for the work order, they will be validated for possible warranty and flagged accordingly.

Once the work is complete, the warranty officer or shift leader can quickly generate a warranty claim based on the warranty repair information in the work order (no duplication of data entry) and process to recover funds expended.  When reimbursement is received from manufacturer, the work order and asset are credited for the cost of the warranty repair.

Once again, everyone is happy.  The asset is repaired and the manufacturer pays the bill, not your organization!