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Blog August 2023 Updated May 2024

Leveraging Fleet Data for Enhanced Warranty Management: Your Path to Profitability

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Bob Hausler

Vice President Transport, North America, AMCS

Fleet maintenance can be a tricky business with plenty of details, especially when it comes to managing warranties. A fleet, large or small, always has several active warranties that cover a multitude of assets, parts, and components. But far too often, this benefit from OEMs and aftermarket companies is not effectively leveraged. In many cases, maintenance tasks that include covered parts and labor are completed by the fleet operator, and the cost is never recovered.

Understanding and managing your warranty landscape is more than just a task to check off your list. Having the tools to classify your asset and part warranties, then automatically detect potential claims while capturing all relevant data can result in significant cost recovery and provide a boost to your bottom line.

This blog will guide you through the basics of warranty management in fleet operation, helping you to control costs and increase efficiency.

Why Warranty Matters in Fleet Management

At its core, warranty is an assurance and a vendor’s statement of faith, a testament to their belief in their product. It's a promise from manufacturers, suppliers, or rebuilders to your company, a pledge to take responsibility every time it is determined when a component has failed due to poor craftsmanship, material, design or construction.

At any given time, various components in a fleet, ranging from engines to braking systems, from transmissions to electronics may be covered by one or more warranties. For large fleets, managing these diverse warranties can become a complex maze of information.

But these standard warranties are not all that's available to fleet operations. These can evolve into tailored contracts specific to your fleet's unique needs and philosophy. These warranties fall under four main categories:

Understanding Different Types of Warranties

Standard Warranty: This is the manufacturer's assurance to cover any faults in workmanship, material, or product construction within a defined limit of time or usage. It often includes powertrain, major component, corrosion, and emissions control system coverage.

  • Extended Warranty: A contract, either mutual or purchased, that extends the standard warranty in terms of duration or mileage, or both. It may include extended service plans, optimized contracts for special service vehicles, corrosion service contracts, environmental protection plans, and fleet service plans.
  • Policy Warranty: This serves as a contract to rectify chronic failures and latent defects, going beyond the standard or extended warranty. It can consist of owner notification programs, goodwill adjustments, and service recall programs.
  • Specific Service Warranties: Often unseen by the public, these warranties are tailored to unique trade situations, negotiated individually and often highly beneficial in cases like full-service lease fleets.
  • Aftermarket Parts Warranties: Rather than covering the complete asset or a portion of it, these warranties cover individual parts. These parts may be sourced from the asset manufacturer or a parts supplier.

Warranties can originate from different sources, including original equipment manufacturers (OEMs), component manufacturers, parts replacement suppliers, and rebuilders. Each offers unique value and safeguards against potential pitfalls in your fleet operations.

Common Reasons for Warranty Claims in Fleet Management

By tracking and understanding the most common causes of warranty claims in fleet management, you can streamline processes, improve operational efficiency, and identify recurring issues. Here are some common reasons for warranty claims, ranked by their impact on costs.

  1. Engine: Engine-related issues, such as problems with components like the cylinder head, piston, or crankshaft, and situations related to oil leaks or overheating.
  2. Frame: Issues related to the vehicle's structural integrity – such as cracks, corrosion, or deformations.
  3. Brakes: This includes problems with wear and tear on brake pads, issues with the master cylinder, brake lines, or anti-lock braking system (ABS).
  4. Body: External damage - dents, scratches, or problems with doors and mirrors.
  5. Transmission / Clutch: Problems related to gears not shifting smoothly, transmission leaks, clutch slippage or failures.
  6. Cooling system: This involves problems with the radiator, water pump, or thermostat, which can cause the engine to overheat.
  7. Bogie / suspension: Issues with the suspension system that can affect ride quality and handling. This includes problems with shock absorbers, springs, or struts.
  8. Air system: Problems with components that provide pneumatic power to various systems, like brakes.
  9. Air conditioning: Any issues with the HVAC system affecting comfort levels for the vehicle's occupants.
  10. Fuel system: Problems with components like the fuel pump, injector or fuel filter can affect the vehicle's performance and fuel efficiency.

Tackling Challenges in Warranty Management

Warranty management can be fraught with challenges, including difficult warranty settlements that lead to vehicles being out of service, inflating costs due to damaged or non-returnable parts, and time-consuming claim filings.

Accurately capturing data related to warranty claims, accident investigations, and legal records can help overcome these challenges. Implementing a management information system like the Vehicle Maintenance Reporting Standards (VMRS) can provide a standardized format for identifying costs and facilitating cash recovery.

Harnessing Fleet Data: Matching Warranty Information to Specific Failures

Your fleet data is a treasure trove of insights. It can help you identify patterns, predict future issues, and optimize warranty management.

Accurate fleet maintenance systems streamline warranty management, potentially increasing warranty recovery by up to 50%. They ensure notification of potential claims at the time the work is being done, timely submission of claims, claims follow through, and credit. This reduces costs and fleet downtime. Keeping track of and maintaining failure records are also relevant for state inspections, accidents, expenses, recalls, repeat repairs, and modification tracking.

Furthermore, tracking parts' lifecycles can reveal whether warranties still cover components needing replacement. Efficient tracking systems can help identify recurring issues with certain components, enabling you to provide robust evidence of defects to suppliers and prevent unnecessary repurchase costs.

AMCS Fleet Maintenance gives you the ability to go back and look in the work order records and see the last time a part has been replaced. You say, hey, we changed that turbocharger only three months ago. Now you can go back to whoever rebuilt it and put in a warranty claim.” - Global Container Terminals

Balancing Manufacturer Guidelines and Warranty

Preventive maintenance, while necessary to limit component failures, needs to be balanced with warranty requirements. For young fleets, this balance may lean more towards labor-intensive diagnostics and warranty-focused maintenance. In contrast, older fleets may need more repair, rebuild, upgrade, and replacement actions.

It's essential to follow the manufacturer's guidelines while under warranty but remember: some manufacturers may push for more preventive maintenance than needed to minimize warranty claims. After the warranty has expired, you can adjust the maintenance tasks based on your fleet's experience and the equipment's failure history.
Achieving this balance isn't magic. It requires good record-keeping and a capable Fleet Maintenance solution.

Building OEM Partnerships for Quality Improvements

Cultivating strong relationships with Original Equipment Manufacturers (OEMs) can greatly improve your fleet's vehicle and equipment quality. Regular communication and feedback can help OEMs tailor their designs to your needs, often leading to reimbursements for chronic issues.

As OEMs standardize their procedures based on feedback and insights, costs drop and competition rises—a win-win for both the fleet and the industry as a whole.

Powering Your Fleet with AMCS Fleet Maintenance

AMCS Fleet Maintenance is a powerful solution that simplifies warranty management. It captures and reports your vehicle maintenance activities using VMRS codes, providing a robust basis for warranty claims.

You need only define a warranty once; tell the system what areas it covers (via VMRS) and how long in time or usage meter (distance, hours run, etc.) it is in force. Then, simply associate the appropriate warranties with your assets.

The system will automatically determine if a Task on a Work Order is covered by a manufacturer’s warranty based on the VMRS coding of the Work Order. If so, it will alert the technician and automatically create a potential claim. This takes the guesswork out the claim eligibility and eliminates the costly manual creation of the claim. It also ensures that all of the information needed for the vendor to evaluate and process the claim is included.

Replacement part warranties are defined by the terms of your vendor/aftermarket manufacturer agreement. In a similar fashion, if a part is being replaced on an asset and the current part is covered, the same notification and claim process happens.

The system uses barcodes for parts, vehicles, and equipment to streamline data entry and prevent errors. You can employ the manufacturers barcode, UPC, or any available barcode. You can also print your own labels if desired.

To make things even easier, you can capture and then subsequently scan barcodes using a mobile device, making technology adoption hassle-free for fleets. There's no need for custom solutions or major system overhauls.

In simple terms, AMCS Fleet Maintenance handles the complexities of warranty management, freeing you to focus on the road ahead, and ensuring that you get the cost recovery owed to you when a covered system or part fails.

In Conclusion

Cracking the code of warranties can boost your fleet's efficiency and profitability significantly. As we move into an increasingly data-driven era, efficient warranty management will become even more crucial, especially with stricter OEM conditions for warranty claims.

Regardless of the size of your fleet, understanding and managing warranties should always be a top priority.

Looking to optimize your fleet's efficiency? Explore what AMCS Fleet Maintenance can offer your business today.

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