WARRANTY: Is Excellence Not Possible?

The most discussed topic among IT Channels to day is the implementation of
warranty.

The channels comprise of vendor, distributor, service provider and
reseller/systems integrator, and they form what we call the supply chain. We
transact in order to profit in terms of money and all of us are on one side. Our
(resellers) combined objective is to ensure customer satisfaction. The key to
customer satisfaction lies in providing excellent service. It is essential that
we set high benchmark for service.

I find that the service levels expectation as mentioned in warranty
guidelines authored by SCALE, seem to based on the assumption that excellence is
not possible. It may be noticed that the guidelines are not in sync with the
end-user expectation. Let us examine some of the issues.

DEAD ON ARRIVAL

"Items received on DOA would be given back within seven days,"
says the guideline. Imagine a situation where a PC is being installed in a
middle-class household. The entire family would be eagerly waiting and when the
monitor is connected, it does not function at all! So should the family wait for
seven days?

One should learn from APC. If the product is DOA, a replacement is provided
at customer site within four hours. similarly, why can´t IBM and HP do this?

DOA material should be replaced the same day or in the worst case the next
business day.

PURCHASE DETAILS

Every manufacturer has a unique serial number for all the products
manufactured. Why then should purchase details be provided for exercising
warranty? Why should reseller/integrator waste his time because of inefficiency
of manufacturer?

Once again, take the APC example. The customer calls the service provider
directly and gets a replacement within four hours.

No Proof of purchase change hands. Compare this to a hard disk failure that
we faced. We had to submit the hard disk along with proof of purchase to the
local dealer. He in turn submitted his proof of purchase along with the
defective piece to the importer. Is it logical for us to go through all these
processes resulting in waste of time? By reducing time spent by so many people,
can´t we bring down the cost of the product?

There should never be any talk of proof of purchase, which is essentially a
babu tactic for buying time and irrelevant in this Internet era.

POST-INSTALLATION REPLACEMENT

It is imperative that service providers keep adequate replacement stocks.
The level of replacement stocks, the quality of the products and efficiency in
turning around spares should be maintained high.

We recently had a hard disk failure. The replacement came after about 30 days
which is ridiculous. Which customer will tolerate a 30-day delay in hard disk
replacement? Why should an integrator who makes mere Rs 1000 on a full system
provide a standby? Or can we all (vendors/distributors/resellers/integrators)
decide that in case of hard disk failure, the customer has to wait for 30 days?

Compare this to APC service. Any failure is not questioned. A replacement is
provided without asking any questions. Why can´t hard disks be provided at the
door steps of the customer within four hours ? After all, the failure rate of
hard disk is much lower than that of UPS.

Products should be replaced/repaired within four hours and in the worst case,
next business day.

WARRANTY

Warranty should be provided for the life time of any item. Typically, in IT
industry, this is about three years. Samsung hard disk comes with three years
warranty, APC UPS comes with four years warranty, 3COM products come with life
time warranty.

Why should we accept terms like 90 days warranty and one year warranty?

We should insist on minimum three years warranty on all products.

In an open environment, customers´ expectation has also gone up
tremendously. Along with changing times, we need to change our policies in line
with customers´ expectations. Time has also come for IT channels to realize
that they will never make profit unless all warranty related costs are covered
back to back by the vendor and this should be done without compromising on
customer service. This is only possible if we demand excellence from all
suppliers.

POST-WARRANTY SUPPORT

One of my customer is always asking me "Why does Seagate Hard Disk fail
on the fifteenth month?". I am using this as an example to make a point. It
is unfortunate that a major vendor like Seagate does not have a repair center in
India. Why can’t they support hard disks supplied by them by repairing them?
Is it right to disown a product as soon as the warranty period is over?

I can take the example of Aeon UPS which we bought about 6 years back. This
model has been discontinued by the manufacturer. Still they took the unit,
repaired it and charged me Rs 500. This is very important in Indian context. I
still use 10 GB hard disk in my home PC.

You know how much time it takes for replacement if a 3COM switch fails? It
take three to four weeks! Show me one customer who can accept LAN down time of
three to four weeks? APC provide 24 hours replacement in any part of the
country.

I keep coming back to APC as they have definitely set a benchmark in service
standards. We have to see a day when when Maruti vans with banners of Samsung,
HP, IBM, etc. always whizzing in the town competing with each other to better
competition’s replacement time. If APC can do it in four hours, Seagate should
strive for three hours. If Canon does it in two hours, Epson should try for one
hour. Response time should be measured in hours and not days.

Traditionally, the reseller/integrator has always been acting as a buffer
between the distributor and customer. Resellers used to keep standby units,
which were used to insulate the customer from the inefficiencies of the vendor.
Some times, the reseller would replace the defective by buying a new piece and
wait for the manufacturer to give back the defective piece duly repaired and
recycle it. In today’s situation of dwindling margins, it is not economical
for us to continue with this practice. This is reflected in the profit-and-loss
statements which shows that no reseller is able to meet his costs. If and only
if all the vendors reach excellence in servicing and ensure that reseller is
able to service the customer at the least possible cost will the resellers once
again start making profits.

These are the views of Dhananjay in his personal capacity and not the views
of AIT, Bangalore.