Chapter 5Warranty Management

Chapter 2 described products, failures, reliability, and warranty concepts. Chapter 3 looked at warranty servicing, and Chapter 4 at the costs incurred. This chapter describes warranty management as a whole and how it has evolved over the last 50 years. Warranty fraud management is an elementary part of warranty management, so this chapter sets the context for Chapters 6 to 11, where we discuss warranty fraud and warranty fraud management.

The outline of the chapter is as follows. We start with a discussion of the three stages of warranty management and highlight the salient features of each stage. Stage 1 focuses mainly on warranty administration. Stage 2 is based on managing the servicing of customer incidents under warranty (we call this the service life-cycle perspective). Stage 3 views warranty as a strategic element of new product development, addressed from the very first stage of product life cycle (we call this the product life-cycle perspective). These are discussed in the subsequent sections of the chapter. Then we look at the organizational structures required for effective warranty management. Data play a critical role in warranty management, and we discuss systems to manage the data. We conclude the chapter by looking at two available models for companies to assess the maturity of their warranty management capability.


Murthy et al. (2007) have defined three stages in warranty management:

  • Stage 1—Administrative ...

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