Case study: Warranty costs estimation according to a defined lifetime distribution of deliverables

Abstract

This paper pretends to describe a real case of warranty assistance, analyzing its management in the framework of a manufacturing company which provides deliverables during a specific period of time and following a scheduled distribution. With the sale of a product, the manufacturer is nowadays obliged contractually to perform warranty assistance to the buyer. Decreasing the incurred costs is clearly not the only aspect to achieve, since the decision has to be global and strategical inside the company in order to purchase a reliable and robust product, offering as well an appropriate after-sales service to the user. Therefore, key aspects will be presented along this study in order to estimate costs and, consequently, to take proper decisions for leading correctly the company to a successful goal. For that purpose, not only managers and responsibles in a well-established and controlled organization must take part, it is also of importance to consider the experience given by the technical staff for maintenance and warranty. As result, this paper will show basically how analyzing the past performance is possible to foresee and control the future. In our case, it will be possible to observe how the evolution of costs during the lifetime of a warranty assistance program can help to correct and foresee with more accuracy the expected total cost of the activity considered at the beginning of the program. The paper is based on an usual procedure in special supplies for the public sector (for instance, a fleet of customized vehicles), between companies inside the supply chain or directly to the final user, where this final user is for example a public entity and the budget for the complete warranty assistance is already known from the beginning of the project.