May 4, 2004

ISSN 1550-9214         

Warranty Industry Associations:

Readers respond to a brief survey, expressing a clear preference for an independent cross-industry warranty group and a multi-day warranty industry conference focused on quality, best practices, measuring return on investment, and benchmarking efforts.

The informal reader survey attached to last week's column produced some very definitive answers to several questions. Of the 110 Warranty Week readers who took the survey, massive majorities said they were interested in joining a warranty industry association and attending a warranty-focused trade show and/or conference.

There was a bit less agreement as to whether the association should be a new and independent organization or whether it should be part of an existing group, and there were a range of opinions about the preferred location, duration, purpose, and topics covered by a warranty industry conference.

Not a Gallup Poll

The survey, which remains online for archival purposes, wasn't "scientific" in that respondents selected themselves rather than being selected randomly. It also wasn't representative given that only 8% of the newsletter's known readers participated. However, since the goal of the survey was simply to solicit advice about next moves regarding warranty groups and meetings, the results served their purpose well.

The Warranty Week readership is a diverse mix of people that cannot easily be broken down into groups. Many are warranty professionals working for one of 300 or so manufacturers, but a big slice of readers are working for companies further up or down the warranty food chain from the actual product manufacturer. Some are out in the distribution channels, working for retailers, dealers, repair centers, claims adjusters, etc. A good number are involved in the sale or administration of extended warranties. Some work in allied industries such as insurance and investments, for whom warranties and service plans have now moved to the center of their radar screens. Others work for consultancies or software developers who advise and supply manufacturers with their warranty processing systems.

The point is, it's a diverse group for which unanimity is difficult to achieve. Yet two of the ten questions included in the survey registered greater than 93% "yes" responses. The existence of the survey itself seemed to also polarize some people in a negative sense. More people requested that their subscriptions be canceled in the past week (eight) than in the past three months combined (seven).

Your editor is far from the most objective critic of these columns, but the April 27 column was far from the worst ever, and wasn't even the worst so far this year. In fact, what would seem to your editor to be the most disposable of recent column topics (skateboard warranties) turned out to be one of the most heavily accessed pages of all, with 66,131 page views counted during the week. Interestingly, four of last week's cancellations were Hotmail or Yahoo Mail users who signed up around the time of those AstroTurf and skatepark columns in March.

Still, in this survey some important questions were asked, and were answered definitively. The survey asked, "Would you be interested in joining a warranty industry association?" The answer was 94% yes and 6% no, based on 107 responses. The survey also asked, "Would you be interested in attending a warranty industry trade show or conference?" The answer came back 93% yes and 7% no, based on 104 responses. We won't bother with a pie chart for those. They'd look like the cheesecake at a South Beach Diet luncheon.

Declaration of Independence

The responses were only slightly less one-sided to the question, "Should such an association be independent or part of an existing group?" Of the 99 responses, 82% suggested independence while 18% said the association should be part of an existing group.

Q: Should a warranty industry association be independent or part of an existing group?

Source: Warranty Week readers

There was no clear advice among the responses to questions about which existing group might be the best fit for warranty professionals, but in phone conversations and emails readers seemed to be in favor of an association with the American Society for Quality.

The third question in the survey asked readers if they have ever been a member of any professional societies or industry associations that relate to warranty. The ASQ along with the Society of Automotive Engineers tied for the lead, with responses tallied as follows:

Q: Are you or have you ever been
a member of the:

  Industry Association or Society   Responses
  American Society for Quality 20
  Society of Automotive Engineers 20
  American Society of Mechanical Engineers  8
  Original Equipment Suppliers Association  7
  Society of Manufacturing Engineers  6
  Automotive Industry Action Group  6
  Association of Equipment Manufacturers  5
  Consumer Electronics Association  4
  Institute of Electrical and Electronics Engineers  4
  National Association of Manufacturers  3
  American Electronics Association  0
  Telecommunications Industry Association  0

Source: Warranty Week readers

Said one reader who works for a computer manufacturer, "I'm a long time member of ASQ and am certified as a Reliability & Quality Engineer. My overall thoughts on the organization are mixed. On the good side, they do have the various certification exams; they support a wide range of quality-related activities and training events; they produce generally useful (practical) publications; and they do cross many business sectors."

But on the not-so-good side, the reader said the ASQ tends to focus too heavily on ISO 9001, Lean Manufacturing, and Six Sigma initiatives, sometimes forcing these concepts into areas where they're not an ideal fit. As the esteemed psychologist Abraham Maslow once said, "When all you own is a hammer, every problem starts looking like a nail."

ASQ Warranty Division?

Another reader who works for a Tier 1 automotive supplier found the ASQ�s core focus areas to be an asset. "I believe the ASQ is a perfect fit," he said. "Take reliability engineering, for example. Combine this with their Six Sigma and customer focus programs, and there�s potential to create the framework for a new division within the Society. There�s a wealth of experience and expertise that we can tie into that directly relates to product lifecycle and customer satisfaction �- the foundations of warranty."

A reader who works for an auto OEM commented, "I've always viewed manufacturing quality such as process yields and process capability the tip of the iceberg for warranty. One doesn't have Six Sigma quality until your warranties are at a Six Sigma level. I'm amazed how much people don't look at the total life cycle of a product, from design through manufacturing to warranty. From most of my interactions with members of ASQ, I believe most think similarly. Many members of ASQ are members to more than one division, depending on what they do for a day job."

However, again on the not-so-good side, several ASQ members admitted that they found it very easy to be not-so-active members. Your editor's brother, in fact, turned out to have been an ASQ member for the past eight years. He even carries his ASQ membership card in his wallet, though he has never felt the need to go to an event or meeting, nor has he ever joined any of the group's sections, divisions, or interest groups.

Still, a full ASQ membership is only $89 per person per year. The associate memberships that become available on July 1 will cost $69 per year. The discounted membership tier that allows a person to join just one forum will be priced at $29 per year. The point is, at those price levels, an only mildly active membership is nowhere near as tragic a waste of money as it would be if the dues were a few thousand dollars per year.

Nevertheless, the ASQ Automotive Division's warranty conference last month as well as warranty- and TREAD-related events staged by the Original Equipment Suppliers Association and others earlier this year and last year have clearly demonstrated that given the right circumstances, warranty professionals will travel to and will actively participate in meetings relevant to their vocations. The warranty industry doesn't need just people who pay dues; it needs people who collaborate and participate.

Location, Location, Location

As mentioned, an overwhelming majority of respondents said they would attend a warranty-themed conference. Their suggestions for location were not so definitive. A plurality said location didn't matter, but for those who expressed a preference, a business hub city was preferred by a slight margin.

Thanks to a bug in the survey software, responses typed into the "other" field were not captured properly. However, rather than seeking the name of the perfect city, the question was really looking for the type of city. Should it be a vacation destination such as Orlando or Las Vegas? Or should it be a business hub with lots of direct flights and hotels? Or perhaps it should be held in a location closer to the manufacturers, further from the coasts, and not as costly to visit as some of the big cities? Here's what you chose:

Q: Where should such a conference be held?

Source: Warranty Week readers

There is one alternative that wasn't among the choices, and that would be to stage a road show of sorts that would travel from one town to the next. The problems with that concept are two-fold. First, as any musician or circus performer knows, the cost of moving all that gear from town to town is very high. And unless Britney Spears and Madonna are willing to discuss their warranty philosophies, such costs are unlikely to be covered by the price of admission alone. Second, and perhaps more importantly, a road show would not serve the important goal of industry cross-pollinization. All the automotive folks would go to the events in the Midwest and all the electronics guys would go to the event in the Bay Area. And they'd never get to meet and trade stories.

One question asked about topics for the conference, and another asked about themes and purposes. Among topics, three options garnered 80 or more responses: 1) driving improved quality through warranty; 2) determining ROI on warranty initiatives; and 3) warranty benchmarking and metrics. Two more attracted 70 or more responses: 4) early warning reporting systems, and 5) best practices in supplier recovery. Outsourcing of warranty claims processing registered 62 responses, and estimation of warranty reserves got 59 responses. The "other" category received a sprinkling of suggestions, including warranty software, extended warranties, warranty registrations, and Sarbanes-Oxley.

Among themes or purposes, the clear favorite was the sharing of best practices and new ideas, with 99 responses. Standards development and networking and social opportunities were further down at 70 and 68 responses, respectively. Finding and recruiting warranty talent was a distant fourth, although one reader strongly suggested that a warranty industry salary and compensation survey would be very well-received. We'll leave that whole realm to another survey in the future, however, which asks readers to help define next steps we take in job-finding and recruitment services aimed at warranty professionals.

Two-Day Event Preferred

As for the perfect length of a warranty-themed conference, readers expressed a clear preference for a two-day event. Of the 103 responses, 63 said they would prefer a two day/one night schedule. Only 12 preferred a longer program, and only 24 preferred either an all-day or a half-day format. Amazingly, only 4 respondents preferred an online Webinar format that didn't require any travel, which suggests to us that the alleged post-9/11 aversion to business travel isn't as deep-rooted as it's reported to be.

Q: Would you prefer a conference that was:

Source: Warranty Week readers

Only seven people said in question 4 that they would not want to travel to a warranty-themed conference, but in a subsequent question, 24 reasons were checked off for why they would not go to such an event. Six said they could not find the time to attend, and five said their company would not pay for the required travel. Two said the topic was already covered by other groups and meetings, and six said they prefer the teleconference or online Webinar format. Before the mathematicians get all confused by the apparent contradictions, keep in mind that for some questions only one response was permitted while on others people could check off multiple choices. In this case, the 24 responses came from only eight people.

Extended Warranty Webinar

Readers who prefer not to travel or spend money will be happy to hear that Warranty Week has scheduled another free monthly Webinar for two weeks from now. On May 18 at 2 pm EDT, Randy Moudry and Jim Sebastian from Service Administration & Financial Enterprises LLC will talk about how they have helped several major retailers, appliance makers, and consumer electronics giants set up their extended warranty programs, and how they linked them with administrators and underwriters. Mark your calendars, and in a few days you'll be invited to register.

4CS iWarranty


This Week’s Warranty Week Headlines

Detroit Diesel Corp. appoints Glenn Lysinger as Chief Quality Officer, a new position, and gives him a seat on the Executive Committee. Jeff Wallis appointed as Senior Vice President of Parts, Service, and Customer Support, also will oversee warranty department.
PRNewswire, May 3, 2004
Samsung India predicts 40% growth in hard disk drive sales this quarter thanks to longer warranties and shorter turn around times for service.
ChannelTimes, May 3, 2004
Lakemont Homes president details company's response to service issues and expansion of warranty staff in Burchell Hill development.
Oakdale Leader, May 3, 2004
James J. Padilla, new chief operating officer at Ford, to concentrate on profitability even if it means lower marker share; wants quality over quantity.
Business Week, issue dated May 10, 2004
Ford engineer wrote memo in 2000 blaming parts supplier Donnelly Corp. for alleged manufacturing defect in light truck door latches, but the company declined to order a recall.
Detroit News, May 2, 2004

More Warranty Headlines below

SAS Institute


Warranty Headlines (cont’d)

Wal-Mart accepts first shipments of RFID-tagged products; seven Dallas-area stores receive RFID-tagged pallets and shipping cartons from eight suppliers.
InformationWeek, April 30, 2004
Dell Computer Australia to open shops and kiosks in several major shopping centers around Sydney, allowing first-time buyers to configure their own PCs with the help of on-site staff.
iTnews Australia, April 30, 2004
ClickSoftware announces the roll out of a field service scheduling system supporting Maytag Services’ nationwide All Brand Factory Service operations.
Press Release, April 29, 2004
Last Oldsmobile rolls off the assembly line; General Motors refers warranty work to other dealers but not always to the closest available location.
Lexington Herald-Leader, April 29, 2004
Two Australian resellers recount their problems with Fujitsu MPG hard drives and how they discovered too late that the manufacturer was issuing warranty credits in addition to repairs and replacements.
PC World, April 28, 2004

More Warranty Headlines below

NEW Customer Service Companies


Warranty Headlines (cont’d)

Minneapolis law firm Blackwell Igbanugo P.A. opens offices in Troy, MI and Washington, DC; appoints Jacqueline Sellers to run the firm's Warranty Litigation Practice Group.
Press Release, April 28, 2004
J.D. Power and Associates' 2004 Initial Quality Study keeps Toyota Motor Sales USA Inc. in first place with a two-way tie for second between American Honda Motor Co. and Hyundai Motor America, and BMW of North America in fourth place. Big quality gains also seen at Hummer, Land Rover, Jaguar, and Mercedes-Benz.
Press Release, April 28, 2004
Ford Motor Co. vice president for quality Louise Goeser says carmaker's warranty costs fell by 27% from 2001 to 2003. Company expects higher initial quality marks from J.D. Power this week.
Detroit Free Press, April 27, 2004
DaimlerChrysler balks at further investments in Mitsubishi; focus on quality of core brands said to be distracted by investments in Chrysler in 1998 and Mitsubishi in 2000. Investors cheer the news; DCX stock price rises sharply.
The Car Connection, April 26, 2004
ServiceBench Inc. says Mitsubishi Digital Electronics America to use its PerformanceCenter Web-based data mining, analysis and reporting tools.
Press Release, April 26, 2004

More Warranty Headlines below

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Warranty Headlines (cont’d)

Cardiff Bus reconsiders airport bus order placed with TransBus International since the manufacturer's parent company went into receivership. Trustees overseeing the bankruptcy now say they will not honor warranty claims.
Western Mail, Wales, April 26, 2004

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Entigo, founding sponsor of Warranty Week


Warranty Headlines (cont’d)


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Entigo, founding sponsor of Warranty Week


Warranty Headlines (cont’d)


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