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Warranty Return Rates - Are you up to the challenge?

The WRR is definitely one of the elephants in the metric toolbox. The Warranty Return Rate (WRR) metric is often viewed as demanding much and delivering little. It is certainly not the first metric you should consider introducing to your service organisation; it's not even the second, but once you have the basics in place and you are convinced of the benefits a good CMMS system provides, the lofty WRR provides a high-level view of future potential problems coming your way.

A few weeks ago we commented on the difficulty of sustaining decent FTF figures. The WRR makes FTF  look like child's play.  The WRR (or Return Rate Under Warranty (RRUW) metric strikes fear into the heart of most stock managers and service coordinators for one reason. While the WRR can be measured and monitored, there is nothing you can do to directly improve the figure except for a single drastic action - change supplier. Sure, if you are purchasing directly from the manufacturer, and you have a strong relationship with them (IOW, you purchase large quantities of their products) you may be able to apply pressure for them to improve quality. For most of us, this is not the case.

Changing supplier may be a very difficult proposition, impossible even. So what's to be done when your WRR is falling below acceptable limits?

The answer to this lies, not in the WWR figure itself but, in what it measures, and how it affects your ability to provide services to your customers.  WWR is used to indicate the quality of the parts, components and items  provided to your customers, either as a direct sale or as part of a service or repair. But using a WRR figure purely to support your sales efforts is a dreadful waste of such a hard-earned figure. Of course, WRR allows you to monitor a high-level performance indicator of factors external to your business, but it also gives you breathing room to manage up-coming unscheduled events.

If you know, for example, that the same part supplied by ABC Corp's northern factory has a greater chance of failure than if it is supplied from their southern factory, then that is a relatively easy problem to fix. However, if you know that 10% of ABC Corps widgets will fail within 100 hours of installation, regardless of factory (and assuming they are the only supplier) the high WRR still provides you with valuable information that will help you minimize the costs that are collateral to the failure. Knowing that the widgets prematurely fail after 100 hours allows you to change the maintenance interval, the major service interval, or any other factors so you can keep the affected piece of equipment in service.

Sometimes, making a small, monitored change to your servicing plans can result in a wonderful difference on your up times, or your service costs, your First Time Fix (FTF) rates or any number of desirable outcomes.

Sometime, making a small, monitored change to your servicing plans requires a good view of the larger picture, and WRR certainly provides that.

Posted by Mark Chimes
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