Sub-Zero halves warranty claims by employing analytics
Sub-Zero Group, Inc. has reduced service incident rates 50 percent in five years by using analytics to detect emerging issues and proactively resolve them. But the big ROI isn’t just measured in dollars saved – it’s in the confidence to innovate that a data-driven process nurtures.
“We’ve had double-digit improvements in our service incident rate, and subsequently our warranty cost has decreased substantially over the past 10 years,” says Bob Schroeder, Vice President of Quality, Reliability and Customer Service at Sub-Zero.
Sub-Zero, the leading manufacturer of American-made luxury refrigeration, freezer and wine storage, and sister brand Wolf, the premier maker of residential cooking appliances, are continually recognized for the highest achievements in refrigeration and cooking innovation and customer satisfaction.
Based in Wisconsin, Sub-Zero has been in business since 1945. The manufacturer designs its products to last for decades, not years, with basic warranty coverage as part of the product cost. And to continue to engage with high-end customers, the company invests heavily in R&D, adding new features and enhancing existing ones.
We’ve had double-digit improvements in our service incident rate, and subsequently our warranty cost has decreased substantially over the past 10 years. Bob Schroeder Vice President of Quality, Reliability and Customer Service Sub-Zero
No more 'bucketeers'
Before using analytics, the company invested much time in determining the real reasons for service calls. “We had people who would go through warranty claims and ‘bucketize’ them. They were affectionately known as the ‘bucketeers.’ They would try to categorize failures and relate them to parts or other types of failures,” Schroeder says.
The quality and reliability engineers became interested in the emerging field of warranty analytics. Working with SAS, they implemented a solution called SAS® Field Quality Analytics.
This solution combines repair technician notes, warranty claims data, call center records, and product information; categorizes the information; provides early warning of issues; and enables root-cause analysis. It eliminates the problem of a technician selecting a code to describe a failure and then writing notes that suggest an entirely different problem because the code doesn’t quite match what is happening.
“It gave our technicians the ability to describe the failure mechanisms in their own words,” Schroeder says.
The benefits became clear immediately. “We quickly realized that we could shave four to five months off the process of discovering an endemic problem,” Schroeder says. Not only did that allow Sub-Zero to proactively reach out to customers who might have a part on the verge of failing, but it gave them a head start on fixing the issue before the appliance left the factory. It also freed up staff members to work on solutions to potential issues, rather than trying to figure out what the issues were.
Sub-Zero – Facts & Figures
years of decreased warranty costs
A new way of designing products
When a manufacturer has a near-real-time view of warranty issues that can be shared easily with product teams, it changes how products are made. If an ice dispenser part is failing, the customer care department is taking care of the customer, the manufacturing and quality teams are looking at whether it was a part or process problem, and the design team – which might be selecting a part for the next generation of ice dispensers – is seeing the emerging issue and can decide whether to use a different part or to consult with the supplier.
This approach has brought sustained savings, allowing the company to continue to find ways to improve its products that go beyond just finding faulty parts.
One of the recent successes was discovering that incorrect installations accounted for up to 12 percent of service calls on certain product lines. The company now offers a one-year extended warranty to encourage customers to use a certified installer. As a result, installation-related service calls have dropped.
Aided by analytics, Sub-Zero’s success has been noted by reviewers, peers and consumers. The company consistently tops the JD Power home appliance rankings for refrigerators and cooking products. For multiple years, the repair incident rate reported by Consumer Reports has dropped sharply, and to top it off, the appliance maker recently took home an Excellence in Warranty award from the Global Warranty and Service Contract Association.
Insight for every level in the company
Schroeder says it’s important to point out that analytics isn’t just used by workers in the trenches. The management team holds regular reliability reviews and can see accurate, current information on quality trends and potential issues thanks to SAS.
“Our executives can review the service incident rate for the different product families along with historical trends,” Schroeder explains. Product teams can drill down into part failures, and the engineers can look at details such as manufacturing date, part content and customer information to determine the root cause of a failure.
Next steps: Harnessing the Internet of Things
Schroeder is excited about using sensors that will stream information on how the appliance is functioning back to the customer care or quality teams. “There is room to use analytics even more than we are today as we embark on connected appliances,” Schroeder says. “The ability to apply analytics even more proactively prior to a service call occurring – that’s untapped. But we can see where it will be deployed in the future.”