The Cat Fight over DoA

Warranty issues related to Dead on Arrival (DoA) products have long been a serious bone of contention between vendors and channels. Although each vendor has set its own DoA policy, depending on the
products. However, the lack of clarity of this policy
among channel partners is something which is creating
differences between the two. In general DoA products
are defined as products that fail to function substantially
in accordance with published specifications due to
defects in manufacturing or materials during the first
year from the date of purchase. Buyer must report this
situation to the seller within 48 hours after delivery of
the product.

VENDORSÂ’ DoA POLICY
Almost all principal companies do have a DoA policy
in the system, but it varies from case to case. As per
IntelÂ’s DoA policy, a product is considered DoA if the
failure happens within 30 days of sale. Customer has
to visit the distributor with the invoice copy and the
product. Distributor validates the invoice and checks
for the damage. The product will be replaced if the
invoice is valid and meets the terms and conditions of
the product warranty. R Ravichandran, director, sales,
Intel South Asia pointed out, “There are many factors
that drive DoA, for example how things are handled
during shipment/transportation, sometimes simple
software, and driver issues etc can cause DoA.”

Vishal Mhalsekar, country service manager, Asus
(India) mentioned, “Under our DoA policy, software
failure is handled by service center on immediate
repair basis. Any failure due to virus issues also comes
under normal cases and is repaired. However, physical
damage, customer induced damage and liquid flash
is not covered under our DoA policy.” Asus claims
its motherboards are the only motherboards that
are covered for 100% burnt and corrosion warranty
throughout the warranty span of the product which
is 3 years for most motherboards and 5 years for TUF
series motherboards.

Sunil Grewal, sales head, Gigabyte Technology India
defined, “Our DoA policy involves 3 stages. Firstly, any
product that does not power up properly, function
properly and has non-informed bug/defect; secondly
all products failed during installation at end customer
or within 120 days of date of manufacture; and thirdly,
within 45 days of date of shipment from distributor,
or products failed during installation at end-customers
within 7 days of date of invoice.”

Nikit Rambhia, director, Panache Infotech said, “As
per our company, if the product as a whole or any of its
components fail to function during 15 days period after
the shipment, we treat it as DoA. If DoA warranty claim
comes to us we replace the entire unit not a particular
component. There arenÂ’t any stringent terms, it is just
that if claim has been made after 15 days then it falls
under regular RMA.”

DoA FACTORS
DoA can imply different things to different people.
From the manufacturer perspective, if a product does
not perform as per stated specifications when the
product is freshly taken out of the box then it is DoA.
However, for a customer if the product does not work
in his environment then it is DoA. As evident the issues
related to compatibility, environmental conditions,
damage during transit etc, are bit of gray areas which
either side may try to play to their advantage.

Ravichandran highlights, “DoA can happen due to
various reasons like customer handling, integration
errors, compatibility issues or real product issues.
Actually DoA covers only the product failure and the
handling or integration or compatibility issues. So, Intel
tries best to investigate the real reasons behind DoA
on a case to case basis.” In the words of Atul Khosla,
director, Om Nanotech, “DoA could hap pen because of
faulty manufacturing process but it can also happen
due to poor transit condi tions like vibrations or shocks
during transit, high humidity or water seepage or even
electro static discharge.”

It could also happen that the equipment used by
the customer may not be of standard. So depending
upon the manufacturerÂ’s percep tion, the manufacturer
may form a tight DoA policy to insulate himself from
such conditions. Due to such fine print the customer
may feel frustrated. Rambhia of Panache Infotech says,
“The prime reason of delay in DoA cases is logistics
and transportation fail ures/delays. Non-free movement
of goods between states and jurisdi ctions tend to
defeat us on our turnaround time promise. Though we
are highly efficient in this area too, but still if IndiaÂ’s
logistics infrastructure had been better or even if document
processing for interstate goods transfer been
quicker we could have promised a replace ment within
24 hours.”

Agreeing with him, Sanjoy Bhattacharya, product
group head, IT products, LG India says, “The lack of
standardization of warehouse and poor handling of
the products by porter are some of the other gray
areas which amount to DoA cases. Although we have
introduced special packaging to avoid such cases, but
still once the product moves to the distributor ends,
we have no control to monitor such negligence.”

The main cause behind DoA cases is logistics as it
is managed by a third-party and during transportation
products get damaged and so are reported as a DoA
case. Emerson has several checklists before the product
reaches to the end customer such as products are
packaged as per global standards, for transport and
rough handling taking their weight and dimensions into
consideration. From manufacturing facilities in India
and abroad, the hard ware passes through warehouses,
distributors, sub-distri butors, partners, and local offices
before finally reaching the custo mer. “We take complete
responsibility of the hardware till it is delivered to
the distributor from the warehouse, after which the
distributor manages the logistics. If some part of the
consignment gets damaged during transportation to
the distributor, it is reported and the logistics provider
has to pay a penalty,” said Ankesh Kumar, director,
channel products and marketing, Emerson India.

BEST PRACTICES
Vendors follow various best practices to mini mize DoA
cases. “Low margins in the industry are hitting DoA
policies for many companies. This is why we ensure
everyone associated with us earns good margin so that
he can support his down channel till end customer. We
feel the most important factor is to make sure that the
customers, resellers, distributors, freight forwarders
and our own service centers follow our guidelines on
how to handle our products and also follow our return
merchandise authorization procedure and policy,” said
Ajay Kogta, country manager, Indian Subcontinent,
Strontium Technology.

For Strontium, DRAM modules DoA cases are
negligible since the company uses only major brands
chips to produce modules; the company claims it has
hardly got any such cases in the last 6 months. Yes,
in flash products some cases came up, but again the
ratio was very nominal, less than 0.0005% of the total
products sold in any year. “We take these cases with
utmost priority and provide over-the-counter immediate
replacement at all our service locations which are
spread across India at 52 locations,” said Kogta.

Gigabyte claims it offers on the table replacement.
“If buffer is not available, we are committed to offer
replacement within 3 days in metro cities, and within 7
days in non-metros/upcountry markets,” said Grewal.
“
Tech-Com has facilitated complete box-replacement
at the point-of-purchase itself within 48 hours
so as to save the customer the harassment of visiting
different places to get their work done. Also, it saves on
time economy as there is no incessant waiting for the
customer to get their phone operational.” explained
Shridhar Bagade, head, product support, mobile phone
division, Tech-Com.

CHANNEL COMPLAINTS
Though most of the vendors claim their DoA cases are miniscule in numbers and have satisfactory mechanism
to settle DoA cases, partners have a different story to
share. According to resellers, the issue of DoA is not so
much about getting the replacement as it is about the
time taken and the indifferent attitude of distributors
and vendors.

Most of the partners are discontent with the
vendorsÂ’ biased attitude towards small city resellers.
“In large cities, replacement takes 10 days, while in
most cases we have a turna round of 30 or more days.
Also, there are no local vendor representatives that
we can escalate the problem to and are always at the
mercy of dealers who are least interested in resolving
the issues,” said Kishore Makhija, CEO of Raipur-based
Priyanka Computers.

“There is an inordinate delay in getting replacement.
Most vendors have a replacement policy of 30 days, but
that commitment is never met. Often the distributors
refuse to accept DoA cases asking us to speak to
vendors. While, vendors say that the distributors have
been provided with replacement stocks and we should
deal with them,” explains Jitin Gupta, owner, Usha
Infotech.

Agreeing on the same, a Kerala based-partner said,
“The problem is really very acute with component
vendors who have a practice of back-checking the
incidence of damage. Once the product is reported as
DoA by the reseller, the vendor will check whether it
happened at the customer end or resellerÂ’s or dealerÂ’s.
This process alone takes several weeks and often, once
the DoA is verified, we are told that the product is out
of stock.”

Gupta asserted, “By the time the replace ment arrives
the product pricing has changed or a newer model has
been launched and this adversely affects our margins. While a lot of vendors provide price protection of 30
days, replacement usually takes longer. Our committee
will also highlight such anomalies in vendor policy.”

Mhalsekar of Asus said, “We are aware of this
problem and to counter the same, we offer free pick
and drop service in 768 locations in the country which
comprise chiefly of C, D and E class cities. This ensures
faster turnaround time as well as convenience for our
customers. In remote locations, sometimes the same
product is not available on an immediate basis, but
we either arrange the products on immediate basis or
offer an alternative to the customer.”

He further added, “Mainly, the disagreements are due
to improper understanding of the DoA policy. At Asus,
we do our best to educate our partners and customers
about our DoA policy so that such a situation doesnÂ’t
arise.” Khosla of Om Nanotech asserted, “Yes, in some
cases the warranty policies have too many ifs and buts
and pre-conditions or compliance to be made before
the DoA warranty is honored. We have total confidence
in our products and hence, we offer no strings attached
to amazing warranty.”

Eric Yang, country manager, Edimax Technology
India suggests, “DoA policy needs to be defined
properly and educating partners is required which
most of the companies do not adopt or their team is
unable to convey in the market. Companies should
have a channel-friendly DoA policy so that partners are
able to manage effectively.”

Kumar of Emerson says, “Yes, the problem in
smaller cities is higher for DoA. This is due to the fact
that by the time the product reaches the small city it
might have gone through 3 or 4 shipments and enough
care may not have been taken to keep the product
safe during transit. To counter this problem we use
better quality packaging which is tamper proof and is
robust to withstand expected mishandling. With such
measures we are able to safeguard our products to a
large extent from DoA.”

“In India there are still no established regulations
in areas such as logistics or taxes, so as a vendor we
have to take the fall at times. Though processes are in
place at our end, we have to take some quick decisions
on the ground. At times it costs us additional taxes or
transport costs because the customer doesnÂ’t want to
wait, but we have to consider these extreme cases to
provide good service. However, as the number of DoA
cases is very less it doesn’t affect us in the long run,”
says Bhattacharya of LG India.

PARTNERSÂ’ EDUCATION MUST
Kumar explains, “We have seen DoA cases happens
due to the lack of understanding of partners. At times
a partner might over commit on a particular product to
close a sale, though that machine would be suited only
for a particular kind of application.” For example if a
machine that is fit for IT networking applications is put
under industrial load, it will not work. The customer
obviously claims it is a DoA case. “It becomes a very
difficult situation for us because we understand that
even if the unit is replaced it wonÂ’t work. Partners and
also vendors must ensure that these details are not
overlooked. Every product is meant for something and
works best in that application,” he added.

In the conclusion it is obvious that any vendor does
not take its DoA policy lightly, because a customer
with a bad experience will never come back with a new
order.