Manufacturing and FMCG industries are constantly concerned in regard to Visibility and Transparency in their supply chain network. And above this Warranty management and infusion of Counterfeit products leads to most significant expenses for Manufacturing and FMCG companies. Study by IBM found that in the electronics industry, only 1/3rd of the warranty costs goes towards replacement or repair of defective goods whereas the major chunk i.e., 2/3rd is being spent on processing and administration.
When we talk about warranty fraud studies in the United States, found that the dealer fraud cost a whopping $2.61 billion annually, and this is due to the lack of real-time monitoring, lack of intelligent and proactive claims monitoring and ineffective internal fraud controls.
Are you dealing with such issues? So, what is the solution?
Blockchain can help such industries in managing such issues, and it is not limited to that only, the potential use cases of Blockchain are ever expanding, from financial services to asset ownership, to intellectual property to integration with the Industrial Internet of Things (IIoT) & Internet of Things (IoT).
So, what is Blockchain?
Blockchain is a “expanding list of cryptographically signed irrevocable transactional records shared by all the stakeholders in a value chain from suppliers to manufacturers to distributors till customers.”
This gives blockchain its inherent qualities such as superior transparency, stability, and data security. Above all, it makes the multi-party transactions friction-less and cost-efficient, which can be especially beneficial for the manufacturing ecosystem which has multiple parties interacting with each other at every step of the value chain.
Therefore, automated warranty value chain can provide benefits like-
- 50% – 70% reduction in document verification time
- 40% – 60% reduction in fraudulent claims
- 60% – 80% reduction in warranty information mismatch
- 89% Gaining greater cost savings
- 81% enhancing traceability
- 79% enhancing transparency
- 50% reducing risks
- 44% creating new business opportunities
- 38% being more customer-centric
Is Block chain the new Future?
Yes! The business value addition of block chain is expected to exceed $3.1 trillion (approx.) by 2030, Source-Gartner.
How block chain help in warranty management?
Since the block chain based public record is accessible everywhere and the complete lifecycle of a parts/product is available through this trusted public record, warranty providers would have the option to validate the claim and the warranty status anytime in the warranty management process so that quick decisions are made. Additionally, utilizing the track-and-trace capability of the trusted record, even the minor details like when the part transited through the warehouses of the supplier/distributor, when it arrived at the seller’s inventory, and when & to whom it was finally sold. These specific details would make it extremely easy to detect counterfeits. As the counterfeits which would fail to show the expected transition history through the supply chain of original manufacturers, distributors, and sellers. The detailed history of the product alongside its parts throughout the value chain would also help the manufacturer to make decisions on the claims.
Therefore, the block chain based systems would make the whole warranty management process fraud-resistant, faster, simpler, and will drastically reduce the administrative and processing costs. The only side-effect of a transparent, fast, and efficient warranty management process would be increased customer experience.