With the shift in perception of its importance, warranty management has been making its way to the list of top corporate priorities. Not too long ago, companies used to overlook the significance of warranty management and see it simply as an unavoidable expense. However, nowadays, more and more organisations start recognising the role warranties can play as a potential source of revenue and a tool to improve aftermarket presence and brand image.

The current economic slowdown stresses the importance of after-sales services provided to the customer. As a result, warranty management is becoming an essential aspect of the sales strategy of the organisation and companies are trying to attract new clients and retain the old ones by offering superior after-sales service as well as global and extended warranties. It is crucial at this point of time for the companies to realise that managing warranties in the proper way will enable them to gain competitive advantage by giving customers more than just an after-sales service.

A company which has the right warranty strategy in place will not only extend its service revenue, but also reduce costs by sharing warranty liability with the suppliers. Today, most of the organisations tackle the conditions for warranty recovery as a part of the initial negotiation with the suppliers. However, research indicates that there are still many organisations which do not systematically share liability with their suppliers, thus missing an opportunity to reduce costs and improve products’ quality