Cut warranty costs by reducing fraud with transparent processes and balanced control
Warranty Fraud Management provides a clear, practical framework for reducing fraudulent warranty claims and other excess costs in warranty and service operations. Packed with actionable guidelines and detailed information, this book lays out a system of efficient warranty management that can reduce costs without upsetting the customer relationship. You’ll dig into the whole spectrum of warranty fraud, from simple sloppy procedures to systematic organized crime, and get to know the fraudulent parties, the victims, as well as the objectives and methods of the fraudulent activities in different scenarios. You’ll learn how to implement controls to detect and reduce fraudulent claims and decrease the overall warranty costs. The impact of fraudulent claims is plainly spelled out alongside detailed descriptions of typical symptoms and process gaps present in diverse companies. A comprehensive, multi-modal framework for robust warranty management is presented as a template for revamping your own company’s strategy.
Fraudulent warranty claims occupy an estimated 3-15 percent of the average company’s warranty costs, which generally average between 1-4 percent of sales. Many companies are unaware of the issue or struggle to take action against the claims for fear of upsetting business partners, or because they lack tangible evidence. This book details a robust warranty control framework that institutes transparency and control over the whole warranty chain–supporting the process far beyond just fraud reduction.
* Understand the different actors (customers, sales channels, service agents, warranty providers, etc.) and different forms of warranty fraud
* Uncover issues in your company’s warranty processes
* Learn methods to detect and prevent fraudulent activities
* Implement a robust system of warranty cost control
Warranty fraud is a major cost-control issue for most companies, but the sensitive nature of the topic leaves most reluctant to share their experiences and divulge their strategies. Warranty Fraud Management brings warranty fraud out into the open, and provides a clear, actionable framework for cost-savings through fraud reduction.
Table des matières
Foreword xiii
Preface xvii
Acknowledgments xxiii
About the Authors xxv
Chapter 1 Overview 1
Warranties 3
Warranty Servicing 4
Warranty Costs 5
Warranty Fraud 6
Impact of Warranty Fraud 9
Warranty Fraud Management 10
Study of Warranty 10
Goals of the Book 12
Structure of the Book 12
Note 14
Chapter 2 Products and Product Warranty 15
Products 16
Product Performance, Failure, and Reliability 19
Product Maintenance 24
Product Warranty 26
Maintenance Service Contracts 36
Insurances 37
Notes 38
Chapter 3 Warranty Servicing 39
Parties in the Warranty Service Network 40
Warranty Service Process 46
Outsourcing of Warranty Service 54
Contracts 56
Notes 62
Chapter 4 Warranty Costs 63
Different Perspectives 65
Factors Underlying Warranty Costs 68
Warranty Cost Metrics 72
Warranty Reserves and Accruals 77
Warranty Cost Control 78
Notes 79
Chapter 5 Warranty Management 81
Evolution of Warranty Management 82
Service Life-Cycle Perspective 84
Product Life-Cycle Perspective 95
Organizational Structure 100
Warranty Management Systems 105
Warranty Management Maturity Models 122
Notes 124
Chapter 6 Warranty Fraud 125
Fraud in General 126
Actors and Victims of Warranty Fraud 128
Classification of Warranty Fraud 129
Fraud Patterns 130
Consequences and Impacts of Warranty Fraud 135
Customer Fraud 139
Service Agent Fraud 147
Sales Channel Fraud 162
Warranty Administrator Fraud 166
Warranty Provider Fraud 169
Notes 175
Chapter 7 Warranty Control Framework 177
Contracts 180
Transaction Controls 181
Analytics 183
Service Network Management 187
Chapter 8 Customer Fraud Management 189
Customer Contract 190
Customer Entitlement 200
Material Returns Control 207
Analytics 208
Notes 213
Chapter 9 Service Agent Fraud Management 215
Service Agent Contract 216
Entitlement and Repair Authorization Processes 237
Claim Validation Process 239
Analytics 248
Material Returns Control 278
Service Network Management 280
Notes 291
Chapter 10 Fraud Management with Other Parties 293
Sales Channel Fraud Management 294
Warranty Administrator Fraud Management 299
Warranty Provider Fraud Management 305
Chapter 11 Structures Influencing Warranty Fraud 307
Effective Service Process 308
Service Organization 315
Notes 318
Chapter 12 Implementing a Warranty Control Framework 319
Assessing the Current Situation 320
Crafting an Improvement Plan 322
Defining Policies and Rules 322
Building the Capabilities 323
Deploying the Change 325
Business Case Considerations 327
Implementation Challenges 328
Achieving the Transformation 329
Chapter 13 Epilogue 331
Opportunities to Improve Warranty Control 333
New Research into Warranty Fraud 335
Appendix A Detailed Claim Data 337
Appendix B Agency Theory 343
Appendix C Game Theory 347
Glossary 351
Acronyms 355
References 357
Index 363
A propos de l’auteur
Matti Kurvinen is an independent consultant focusing on service strategy and operations in general and warranty management in particular. After twenty-three years and various leadership and content expert positions in an international top-tier management consultancy, he started his own consulting practice in 2014.
Ilkka Töyrylä, Dr.Sc., is a management consultant with over twenty years of both industry and consulting experience. His key areas of expertise include service operations and warranty management. His doctoral thesis on traceability studied different opportunities for utilization of item level product and serial number data, warranty management being one of the application areas.
D.N. Prabhakar Murthy is professor emeritus at the University of Queensland in Brisbane, Australia, where he lectured on various topics in engineering and technology management for over 30 years. He has researched many different topics in reliability, maintenance, and warranty, resulting in many books and technical papers.
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