HVAC manufacturer Goodman Manufacturing was using a paper-based system to track its warranties. It recently transferred to an electronic, software-based system, which reduced the claim process time by three weeks. The Web-based database system features analytics to help Goodman to track trends and modify best practices.
Goodman Manufacturing Company L.P. was drowning in handwritten extended-warranty applications that contained illegible, missing, and incorrect information. Claim processing took up to four weeks and payout was a laborious process—all without the capability to capture data effectively, according to Rachel Cater, manager of extended services for Goodman.
Goodman, which says it is the second-largest manufacturer of residential air-conditioning and heating products, experienced a major change for the better when it initiated ServiceBench’s Warranty Management and Extended Warranty Management modules—a Web-based software and services solution. Goodman implemented the basic warranty system in 2005 and the extended-warranty module was, as of press time, scheduled to launch in October 2007.
The initial program streamlined Goodman’s process, captured data on the entries, and added analytics to the mix. The warranty system provider and Goodman worked together for eight months to map out how the initial warranty program would function. The warranty system provider wasn’t creating a new process for Goodman, but was optimizing its current system and met with the HVAC OEM to learn and understand its processes.
Because the warranty system company provides an outsourced solution, meaning it houses and hosts all of the software, it was imperative that the Goodman’s process was mapped out carefully so that a smart version of its claim process would be accurate. “ServiceBench is a part of the flow of [Goodman’s] information; we help optimize it and customize our business rules around their process,” said Michael Dering, CEO for the warranty service provider. “We map their process out and make suggestions, and once it is up, we customize it around them. We build rules around their processes.”
Once the software was developed, tests were entered and Goodman collected sample data to compare against its current system. The basic warranty module was a success, but there was a disconnect when trying to process extended-warranty claims. The company turned again to the warranty service provider for another solution, so it could cover both sides of its warranty process.
The solution was an add-on module that included all aspects of the product life cycle. “Everybody that is in this chain—from the management team to the service providers to the consumers to the repair people to dealers and distributors—are hooked up to the system and we map that process,” explains Dering. “The underlying transaction of warranties is taken care of. We collect the data in a central depository and they are allowed to conduct analytics, which helps them focus on what they should have warranties for, what the service level should be to consumers, what the consumers’ experience is, what problems they are having with parts, and so on.”
The new program allows the HVAC producer and its dealers to manage the warranty process with one database that is easy to enter and manage, and gives the company the ability to apply analytics that track and quantify preventive maintenance. For example, the new system can point out what products are selling according to region and what parts have leading replacement rates. Another benefit is that the applications never get old, with software updates occurring about every four weeks, allowing Goodman to make changes to its process according to its current business needs.
Even though the extended-warranty module is only in the beginning stages, the relationship between the OEM and the service provider is ongoing. “ServiceBench has been flexible, innovative, and they’ve come back to us and shared best practices from other industries and helped us work on our own processes to see if there is a better way of doing things,” says Cater of Goodman. “We’re interested in other services of theirs and will continue working with them to improve our business processes.”