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Handling Explosive Growth – 4 Keys to Scaling Your Warranty Service Globally

Last modified: May 21, 2018

The term “explosive growth” sounds great at first. It’s less positive when you consider that one definition of “explode” is “to burst, fly into pieces, or break up violently. That’s hardly the goal of most start-ups. However, it can result when businesses prioritize fast growth without careful planning and preparation.

To avoid flying into pieces, hardware start-ups should live by these four strategies when scaling warranty repair services, returns management, asset recovery and asset destruction during a period of immense growth.

1. Sales & Service Go Together

Customers don’t require perfection but they do expect efficiency, so set up a returns management infrastructure ahead of sales, or at least implement one simultaneously.

It’s common sense, but not a common occurrence. Too often, companies begin selling products in a country or region without localized warranty services support.

When the sales department announces it sold a product in a new market, the company jumps for joy. But the service division immediately responds with a big bucket of cold water when it says, “I don’t have any way to support those customers.”

A better growth strategy is to begin planning for warranty repair services at the same time Sales responds to leads/interest in that area. Otherwise, you are limiting the ability to support new customers when something inevitably breaks. Your company is set up for warranty failure, disappointed customers, and bad publicity.

Effective repair services planning requires deciding in advance how to support your warranty and returns-management processes. Options include:

  • Partner-managed services. These are popular in Japan, where the companies that sell the products manage repairs.
  • OEM-managed support. Many large companies are focused on new product development and selling. Repairs are treated as annoyances instead of opportunities to improve product quality and customer satisfaction.
  • Service supply chain providers. The best service supply chain partners do more than repair products. They provide critical business intelligence that helps improve quality, efficiently manage global expansion, and expand your company’s footprint beyond minimum density.

Additionally, calculate how much sales volume is required to offset regional distribution costs. In most cases, you need more than just one customer to justify the expense, but who wants to turn away a new customer? A service supply chain partner can be a stopgap while you ramp up sales in an area.

2. Spend When You Have To; Save When You Can

Talk with your customers. A commonly made warranty mistake assumes everything must be repaired and shipped back within 4 hours, or a similarly arbitrary deadline. That may not be the actual repair situation.

For example, no one is going to take down an entire network to replace one piece of hardware. Replacement typically happens during the scheduled maintenance window.

Similarly, a customer needing a replacement part for a remote location may get delivery service only once a week or once a month.

Neither scenario requires an expensive overnight shipment with early-morning delivery, so matching the delivery schedule to the customer’s service calendar saves money.

Consider aligning your repair services with customer needs by :

  • Understanding the requirements of your contract/service agreement with the customer.
  • Knowing when they expect the part and/or when they’ll perform the equipment repair.
  • Preparing shipments and delivery services to control costs and meet customer needs.

Finally, you’ll also want to find out if the customer needs help completing the repair. Customers with equipment in co-location facilities generally do, while those with servers on-site may or may not. The answer can save the expense of sending a repair technician when the service isn’t wanted or needed.

Cash conservation can be a constant challenge for start-ups, especially in early funding stages. Setting clear spending guidelines on warranty services can help repair services teams support both customer and company success.

3. Know Your Product’s Mean Time to Repair (MTTR) & Mean Time to Failure (MTTF) 

These basic metrics can’t be ignored. MTTR and MTTF metrics are essential to developing your plan for implementing warranty repair services.

Focus your implementation plan around which parts or units are expected to need servicing first rather than setting up support services for units not scheduled for maintenance farther out on the calendar.

For instance, if maintenance is required before the MTTF, address that issue immediately and also determine how to allocate maintenance responsibility:

  • Will the customer have primary responsibility?
  • Will you dispatch a technician to the site?
  • Will the customer return the part to a repair depot?

Always consider the entire unit’s MTTF, not just individual components, because you’ll also need to have a spare-parts plan in place to support customer uptime.

This is especially the case If a product isn’t fault-tolerant or redundant. The window of risk (WOR) could sneak up and potentially cause catastrophic data loss for the customer.

Along those same lines, consider the average lifetime of a particular unit to prepare for asset disposition and destruction requirements. If you playing part in this process, you’ll want to have the pieces in place to safely and securely retire equipment, especially if on your customer’s behalf.

4. Know Where Your Product Is Located After It’s Sold

Geography and transportation infrastructure has a tremendous impact on service supply chain management. For example, it’s the biggest supply chain challenge in India and an issue in fast-growing African markets. Regional transportation infrastructure can affect supply chains in industrialized countries as well.

Take the legendary traffic problems in the world’s most congested city – Los Angeles. Just having a component in the general vicinity of an asset isn’t good enough. You may have the required part located at your repair depot on one side of the city, but it may be physically impossible to maneuver through a “jamzilla” and meet the 4-hour service window at a site on the other side of the city.

Product registrations also matter. When companies activate their warranty and enter information, make it easy for them to input the physical location (including actual street address, not just the city or region) and the number/serial numbers of assets at that location. This information helps you make location decisions and provide better service to your customers.

As global supply chains lengthen, every new link represents a risk. Start-ups are in a particularly tenuous position with customers because there’s no history of good service and product reliability. Their “goodwill bank” has a very low balance, so early missteps can cause tremendous harm.

As an experienced service supply chain partner, Flash Global handles the compliance paperwork, transportation logistics, and service/repair heavy lifting, allowing entrepreneurs to focus on what they do best: ideas, innovation, and product improvement.

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