Managing Warranty Agreements

Outcome

After you manage warranty agreements, one of the following outcomes is possible:

• When equipment or a spare part is sold, a warranty fund amount is registered in the warranty fund and sales statistics are updated.
• A warranty claim is approved. The amount to be paid is split between the customer and the company. An invoice is sent to the customer and internally to the warranty department.
• The supplier has approved the warranty claim and an invoice is sent to the supplier.

The following tables are updated during the process:

• MILOSW - Equipment warranty
• MILOTW - Equipment warranty details
• ACUORH - Maintenance customer order details
• ACUORL - Maintenance customer order line
• ACUORM - Maintenance customer order payer
• ACUINV - Invoice specification
• ACLHED - Claim header
• ACLVER - Claim version
• ACLSPC - Claim specification.

You can monitor and follow up all warranty events and transactions in the M3 Equipment Profitability application.

Before you start

• A warranty type must be defined in 'Warranty Type. Open' (MOS710).
• A content type must be defined in 'Content Type. Open' (COS470). The content type details must be defined in 'Content Type. Open Details' in (COS471).
• The warranty type must be connected to a control object in 'Warranty Type. Connect to Objects' (MOS700).

Follow these steps

1. Establishing General Warranty Agreement Conditions

   This process is used to establish general warranty conditions for standard and extended warranties.

   You can define the following warranty conditions:

   • What to include in and exclude from the agreement, such as labor and material
   • The warranty period, based on calendar time or operational hours, for example.

   You can define and connect warranty conditions to different objects such as item/model, product group and item group.

   You can define conditions either for the equipment as a whole or for single components within that equipment's structure.

2. Selling Equipment

   Already during the quotation phase the warranty agreements must be considered as a part of the total quote.

   When selling equipment the following will happen:

   • A warranty fund is created.

     The warranty fund is the estimated internal cost of future warranties, where warranty claims to the suppliers are not expected to be fully approved. The warranty fund updates the M3 Equipment Profitability application.

   • Warranty records are generated from a standard warranty setup.

     The generation of warranty records is done on the equipment level and also for installed components, if specific warranty conditions are defined. You can change the generated records if the warranty conditions are changed or new conditions are added.

   The sale of equipment can also include an extended warranty agreement. The extended warranty agreement is defined by a separate customer order line which can be priced. The extended warranty agreement can also be sold separately to a customer.

3. Selling Spare Parts

   When selling spare parts you enter the equipment ID for which the item is a spare part on the customer order line. When you enter the equipment ID, a warranty entitlement check verifies whether the equipment is a part of a warranty agreement. The warranty agreement influences the pricing of the equipment.

4. Repairing Equipment with Warranty

   When you repair equipment in the field or depot, a situation can arise in which warranty will be claimed.

   The warranty entitlement and split payer functions perform the following tasks:

   • Check used material, labor and other costs related to a work order.
   • Select the predefined payer according to a warranty agreement. Several warranty agreements from different suppliers can be valid for the equipment.
   • Create a warranty claim header.
   • Automatically assign a person responsible for the warranty according to the warranty condition setup.

   A warranty alarm is created when you define work order requirements.

5. Claiming Warranty

   The warranty claim process is supported by the claim transaction. The claim transaction includes a header and lines that are updated by customer order line information, repair information including error codes, for example.

   The claim function supports the following:

   • Internal evaluation of the warranty conditions
   • Defining the claim demand on the supplier
   • Creating a claim version to support negotiations with supplier
   • Invoicing supplier of the claim amount
   • Receiving a credit invoice from supplier
   • Warranty fund charge (equipment profitability) by internal warranty cost which is not covered by the claim.

6. Following up Warranty Fund

   All warranty events and transactions that affect the warranty fund financially are followed up by the M3 Equipment Profitability application. In this application, the warranty fund and all transactions can be visualized and monitored.

   The warranty fund is connected to the equipment and not the equipment owner. This can be changed during the warranty period or the equipment life cycle.