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The Tricks of the Trade


5/1/2003
By Kris Walker

 

The words I most fear (OK, maybe fear is a bit strong) on the telephone are,
"I have a really good customer who..."

Never have these words begun a sentence that ended with "wanted to compliment you on being a good supplier" or "appreciates the quality and service of the products you deliver." For a supplier, sometimes the only way you can measure customer appreciation is by repeat purchases.

We are being conditioned as a society to find blame for our problems. If its not the Republicans, its the Democrats, the left or the right, the conservatives or the liberals, big business, the government, the manufacturer, the supplier, the retailers, the stock market, the CEOs, the unions, somebody - but certainly not me.

Occasionally, we get hit with: "My dealer wont buy anything more from me until somebody pays him." And that scenario typically plays out before any product analysis or after a labor rejection. The exchange that follows may be: "Whats the claim?" or "$100" or "Is this customer worth $100 to you? And if so, why havent you taken care of your customer, and if not, why should somebody else give away money?"

Sometimes you just have to hitch up your britches and face the facts. Its not easy, and its not supposed to be easy. It seems at times that we forget business is based on competition. You try to outdo me, and I try to outdo you. I think of something clever that you dont do, and you quickly emulate what I do. Back and forth is the battle of one-upmanship. As long as theres competition, it will never end. And sometimes we make mistakes. And sometimes there are extenuating circumstances that compound the situation.

In my opinion, if the manufacturer didnt have to absorb bogus warranties, the whole issue of labor claims would go away. But manufacturers cant absorb the cost of bogus warranties and a supplemental labor reimbursement program (that would be the politically correct way to say labor claim.) But, we live in an era of consumerism. Supply exceeds demand. Ball joints and brake pads arent difficult to find. Therefore, we do just about anything to keep our customers happy. "Wont fit, wrong application" - send it back. "Wore out" - send it back. "Received like this" - send it back. And if you dont handle it, somebody else will.

There is no way a manufacturer in todays global economy could survive with a defect rate reflected by the experienced warranty rate as a percentage of sales. Nobody could survive with 3 or 4 percent defects. Its impossible. But thats the environment weve created. The manufacturer is too far removed from the point of installation to really administer a warranty program. The manufacturer relies on the WD, who relies on the jobber, who relies on the installer to fairly and honestly administer the warranty program. But nobody wants to say no.

And Im not naive to think that there are zero defects or no circumstances under which the policy needs to be bent in order to satisfy a situation or a customer, but hasnt the no fault policy environment weve permitted cost all of us enough money and profit? In years past, werent yellow shocks routinely replaced as warranty items just because? Dont the chassis parts with the manufacturer stamping on them lead to the Saturday afternoon phone call from the customer you rarely do business with that begins: "Hey, whats the warranty on...?" Dont we routinely replace electrical components because the vehicle wont start or charge? Maybe we should call those components "replace the cables" and "charge the battery" instead of starters and alternators.

We live in an era of no fault consumerism. Everything, it seems, has a lifetime warranty. Many products have a customer satisfaction warranty. Most stated warranties are to replace products with defects in workmanship or materials, not products with wear and tear. I think sometimes we forget cars and trucks are made up of systems and components that live in a highly dynamic state. They are always moving. I was told shocks and struts move once every three feet of vehicle travel. Thats 1,760 oscillations per mile, 176,000 per 100 miles, 176,000,000 per 100,000 miles, and still most of the vehicles in the bone yard have their original struts. (I know some people who cant walk around the block without getting worn out.)

And in this dynamic state, there are a few components that are isolated to the point that the related items, system components and other intangibles dont impact the functionality of any one component. But we continue to replace the parts without solving the problem, which leads to repetitive unnecessary, and costly, warranty claims.

Yesterday, I spoke with a service dealer who had replaced an alternator five times. My initial comment, tongue-in-cheek, was, "The owner must be the unluckiest person on the face of the earth." I figured if one in 10 alternators is defective, the odds of having five defective alternators in a row is 1 in 100,000. And those are some long odds. However, this logic was totally lost on the dealer.

I used some probing questions to bring out the real story. Apparently, the consumer had lied to the dealer about some high-powered stereo system that may or may not have been in the vehicle during this sequence of events. The dealer claimed to have written on the initial work order that there may have been more electrical draw present than the charging system was designed to handle. The car owner claimed to have even taken the vehicle to a GM dealer in search of an optional high-output alternator, which wasnt available.

I asked the dealer if, based on the information that was just supplied, if he really thought there was a defect in workmanship and/or materials of the alternator or if there was something else going on. The dealer told me that the manufacturer should have tested the alternator to determine if there was an overload in the system that had caused the unit failure.

I think this is where theres a big misconception of what the engineering analysis of labor claim related products really are. The consumers think the manufacturers have a "CSI: Crime Scene Investigation" set up with all kinds of elaborate test equipment to work backwards from the unit failure to determine the cause of the failure. In reality, the manufacturers analyze the units to determine if the workmanship and materials meet certain design specifications. Theres no way the manufacturer can duplicate an infinite number of application environments as were described here.

The manufacturers rely on the technicians to do the diagnostics. Thats when you invariably get the line: "Ive been building and replacing alternators for 20 years, and I know..."

OK, lets review: The customer was lying about the electrical requirements of the vehicle; the dealer wrote on the initial work order that he suspected there was trouble ahead; theres no production high-output alternator readily available, and the odds of getting five defective alternators is long; and in your 20 years of experience, certainly you must see that something besides the alternator is causing your problem.

"Yes, but whos going to pay for my labor?"

That thud you heard was me banging my head on my desk. "It must be the Republicans - it certainly cant be me."















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