Warranty vs Proven Reliability

[rScotty]

Warranties seem to be a big reason why people buy new things. But just how useful is a tractor warranty anyway?
Not all warranties are equal, or treated equally at all dealers. So what makes a good warranty and why have one?

From a manufacturing viewpoint, warranties are a big money saver. Putting a warranty on a product saves a lot of money compared to the cost of making one with less failures - or one that just cannot fail.

What about from the tractor buyers viewpoint - is a warranty worth the cost? Or would you rather have something else?

rScotty

 

[ericm979]

It's almost always cheaper to make the product reliable enough than to try to make up for an unreliable product with the warranty. But it's not always easy to do.

 

[sea2summit]

It's almost always cheaper to make the product reliable enough than to try to make up for an unreliable product with the warranty. But it's not always easy to do.

There's this term "planned obsolescence", it's a very real thing. Need to design it so it outlives the warranty....or make the warranty last until you want them to buy new? Big money to be made or lost with marketing plans tied to design/engineering.

 

[AndyMA]

There's this term "planned obsolescence", it's a very real thing. Need to design it so it outlives the warranty....or make the warranty last until you want them to buy new? Big money to be made or lost with marketing plans tied to design/engineering.

As a design engineer I've never been pushed to design a product fail at a certain point. Always designed the best product we could based on cost to build.

Andy

 

[rScotty]

As a design engineer I've never been pushed to design a product fail at a certain point. Always designed the best product we could based on cost to build.

Andy

I did design engineering for awhile (20 years) before going into another branch of engineering. We always designed something the best we could - and then sometimes had to battle over cost.

In my opinion, the whole concept of "designed obsolescence" is a folk tale. Maybe it started as speculation or a PhD project by some university economics or engineering department somewhere.
Planned obsolescence sounds good enough to be true - and maybe some where it is - but reality in manufacturing is that designing something to last a certain amount of repetitions then fail isl just about impossible.

It's hard enough designing it to last. Trying to hit a target of designed obsolescence would be incredibly expensive. Consider the testing time involved in each design iteration.... no way.

Not sure how it would relate to warranties, though.

rScotty

 

[rScotty]

It's almost always cheaper to make the product reliable enough than to try to make up for an unreliable product with the warranty. But it's not always easy to do.

Probably true. But where the warranty really saves the manufacturer dollars is in the component testing and resulting redesign. Testing is real time consuming and expensive. At some point you have to quit testing and put it on the market. Whatever is saved there, can be handled by the warranty.

If a manufacturer has been around long enough to have experienced designers, they have the luxury of going with the "best guess" by those experienced designers.
I think the "premium brand" tractors may fall in that category, although design excellence is oddly cyclic.
When it happens that way, the customer becomes the test department - and warranty becomes very important.

rScotty

 

[finn1]

Probably true. But where the warranty really saves the manufacturer dollars is in the component testing and resulting redesign. Testing is real time consuming and expensive. At some point you have to quit testing and put it on the market. Whatever is saved there, can be handled by the warranty.

If a manufacturer has been around long enough to have experienced designers, they have the luxury of going with the "best guess" by those experienced designers.
I think the "premium brand" tractors may fall in that category, although design excellence is oddly cyclic.
When it happens that way, the customer becomes the test department - and warranty becomes very important.

rScotty

Any manufacturer who relies on product testing is living in the past.

It’s all about upfront design, modeling and simulation now, and has been for over twenty years. Testing is more or less restricted to proof of concept and final product validation. The old ways of design, test, break, redesign rinse and repeat takes too long to get a product to market in a timely manner and is just too expensive.

Having worked in product development, I agree with the others that say planned obsolescence is some writer’s pipe dream. You design to meet product performance and cost targets, not to just make it through the warranty period.

Warranty failures are tremendously expensive to deal with and can bankrupt a company. I often said that the best cost reduction program is a redesign or process change to reduce warranty costs.

 

[AndyMA]

Any manufacturer who relies on product testing is living in the past.

It’s all about upfront design, modeling and simulation now, and has been for over twenty years. Testing is more or less restricted to proof of concept and final product validation. The old ways of design, test, break, redesign rinse and repeat takes too long to get a product to market in a timely manner and is just too expensive.

Having worked in product development, I agree with the others that say planned obsolescence is some writer’s pipe dream. You design to meet product performance and cost targets, not to just make it through the warranty period.

Warranty failures are tremendously expensive to deal with and can bankrupt a company. I often said that the best cost reduction program is a redesign or process change to reduce warranty costs.

Agreed, Manufactures alco need to retain a warranty reserve on their books to cover warranty costs. Typically about 6% of product cost

 

[Torvy]

In my experience, the more robust the warranty, the less likely it will be needed. Every manufacturing process will have potential flaws. The more parts, the more potential failures. Manufacturers with better processes and tighter tolerances and controls tend to have fewer problems than their competitors. That's one reason why I like to see aggregate data rather than anecdotes. Everyone knows of someone who had good luck or bad luck with a particular make/model. It is only in the aggregate that you can use data to reduce your chances of bad luck. Of course, most of us will still lament our decision if we draw the short straw.

 

[rScotty]

SNIP

Warranty failures are tremendously expensive to deal with and can bankrupt a company. I often said that the best cost reduction program is a redesign or process change to reduce warranty costs.

Wouldn't a redesign just add to the cost of the warranty repair?

The dealer still has to do the repair - and be compensated by the manufacturer - who now also has to design and make a new part, stock it, educate mechanics, and scrap all the old ones.

Established companies can probably survive that expense better than small ones.
So it sort of comes back to the question of what is a warranty worth....

Warranties from different brands may not be equal value even if they do cover the same things.