Warranty Processing via the new Automotive Dealer Portal
Intro
The new Automotive Dealer Portal sports three integrated applications: Vehicle Sales Management, Spare Part Sales and Warranty Management. All three make up the new Automotive Dealer Portal, typically hosted by the manufacturer or importer and extended to the dealer or service provider as a portal web front-end. This blog is about the third component, Warranty Management within the new Dealer Portal. In this blog I am going to describe challenges in Warranty Management, how the Dealer Portal helps address these challenges, as well as give solution details and benefits.
For a complete overview of the Dealer Portal see About The New, New Automotive Dealer Portal
OEMs, importers and dealers seek to automate their warranty processing as much as possible. Speed, automation, claim validity, providing actionable defect data, and claim visibility are vital to the OEM’s warranty business.
The Dealer Portal is a tool for both OEMs and their importers. The OEM works directly with local dealers in their home country and other countries. When a separate importer’s agency is involved, that importer’s role is to receive, verify, and aggregate claims from their dealers, and forward claims to the OEM. The OEM in turn processes and adjudicates claims, and responds with approvals and payments back to the importer.
Both OEM and importer business scenarios are conveniently handled by the Dealer Portal.
Picture 1: Dealer Portal Warranty Claim example in change mode
Dealerships are very much cash-flow businesses: The dealership issue is not so much reimbursement but what is required for reimbursement[1]. In other words, what do dealers have to do to get reimbursed? Visibility is an important factor; visibility of claim status as well as visibility into recall campaigns, vehicle histories, spares inventories and shipments. Visibility is gained to stock the right parts needed for manufacturer’s recall and warranty programs.
OEMs, importers, and dealers are faced with these challenges; the Dealer Portal adequately addresses many challenges; consequently making the Dealer Portal a strategic part of an OEM’s IT solution portfolio. Employing a portal helps manufacturers, importers, dealerships and service networks as described below.
Warranty Business Challenges
Warranty departments must provide quick and accurate processing of claims, while keeping transaction costs low. Focusing on warranty claims submission from the dealer network to the OEM, typical challenges are:
- Rising Warranty related costs, and controlling warranty processing costs.
- Processing high claim volumes with the aim of finding root cause data is a challenge for quality and engineering groups[2]. Developing accurate quality problem definitions and effective actions and counter measures, with the goal to detect product defects sooner is the goal.
- The difficulty to collect and decipher evidence from claims is hurting the OEM’s ability to attribute defects to suppliers, impeding vendor recovery.
With these challenges in mind, how does the Dealer Portal help address these challenges?
How the Dealer Portal Warranty help address challenges – Key benefits
Benefit 1: “Dealer Portal works like the Dealer works”
The Dealer Portal makes relevant information visible and actionable: all required information is on the Customer Care Representative’s fingertips: Customer history, contracts, customer vehicles, parts previously installed, warranty registration of VIN and its aftermarket parts, etc. help greatly improve visibility to improve claim data quality. Claims may be created based on a template, by copying, and can be simulated and saved before submitted. Once submitted, claims are tracked by claim acceptance status, and financial payment details reported separately. This enables dealer business to communicate with OEM online, in real-time.
Benefit 2: Benefit Part Returns Process Support
SAP’s Dealer Portal facilitates the parts returns process: It takes less time and handling effort, because a return part list is automatically compiled by the system. All data required for shipping label printing falls in place automatically. SAP automatically notifies the dealer when a part has to be returned to the manufacturer so that parts can be tagged for later shipment. At that time, a return-parts-list is presented to the shipping agent - this slick functionality allows saves lots of shipping and handling issues, as well as tracking. Also the OEM benefits by knowing which return parts about to be received systematically.
Picture 2: A transmission is packaged for return shippment
Benefit 3: Real-time Data Validation improves cash-flow and reduces cost
Dealerships are very much cash-flow businesses. The D.P. features a high level of validation and integration; e.g. customer, Vehicle Identification Number, spare part numbers, dates, allowed service labor hours and codes are immediately validated against the OEMs central warranty rules engine before the claim is submitted. A claim can be simulated and saved if necessary. The result is less claim rejection and fewer requests for additional information: Benefiting both, the Dealer and the Manufacturers warranty group. Less manual rework, highly automatic processing and faster payments lead to improved cash flow for the dealer network, further strengthening the OEM – Dealer relationship.
Cost savings being achieved through claim simulation, templates, less claim rejection and manual rework.
Benefit 4: Improved cross- and up-selling opportunities
At the point of service, while the customer care representative successfully resolves an issue for the customer, that happy customer feels more secure, is more receptive to extending an existing warranty contract or buy further parts or services. Better visibility of existing contracts, spares availability and full vehicle fleet visibility is greatly benefiting cross- and up-selling.
| Challenges | Benefits |
| Controlling warranty costs | Achieving cost savings through claim simulation, templates, fewer claim rejection and manual rework, and improving visibility and claim data quality |
| Finding root causes of quality problems due to the high claim volumes | High level of automatic validation and integration via central warranty rules engine |
| Following the supply chain tree to determine whether a vendor warranty is in effect and to recover warranty cost | Well organized parts returns process gives the ability to quickly determine the supplier and attached warranty and ability to claim vendor warranty on the same claim as dealer warranty |
Table 1: Dealer warranty management — Challenges and corresponding benefits
Summary
Warranties are at the tail-end of the customer interaction cycle. When a part in the vehicle or product fails, a warranty claim is submitted. If that vehicle is under warranty or service contract, its warranty agreement determines the scope of coverage. With the Automotive Dealer Portal, a customer care agent can look up customer, vehicle, parts, and contract scope, which leads to this warranty claim in one integrated system. That is a huge benefit over the old manual back-office process. We all recall the multiple manuals, paperwork, phone calls etc. in the paper based back-office system. Too much time was spent tracking paperwork – working out quotes, what is covered and not.
With a Dealer Portal, dealers can provide the customer with immediate, precise quotes, contract and spares details, by simply entering the VIN number in the Dealer Portal. Claims progress is monitored effortlessly, claim rejection and acceptance reviewed in real-time. Recall campaigns list all recalled vehicles or vehicles with technical campaigns.
The Dealer Portal represents an open approach to warranty claims management, not limited to automotive dealerships. For example, warranty business process outsourcing (BPO) firms, and ASP networks may also be looking towards the Dealer Portal as a strategic solution for a hosted application for their user base.
SAP recognizes the untapped opportunities for efficiency gains, vendor revenue recapture, and improved customer service satisfaction within the warranty chain. With the Automotive Dealer Portal, best-in-class SAP customer and their service network partners are taking steps to gain greater visibility into and control of their warranty chain processes and performance.
A follow-on to this blog is in work: detailing Dealer Portal claims functionality, with screen shots and more tidbits!
Stay tuned!
Yours truly,
Soren Detering
[1] Finlay, S. (July 1, 2005). Speed Up the Process. Ward's Dealer Business, 7, 39. p.NA.
[2] One problem is that Dealer Claims don’t exhibit the required coding and completeness, long text boxes contain poignant information, ‘correct’ codes may not have been selected due to missing training or lack of time.
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