One of the deciding factors in a new lift truck purchase is the warranty that comes with it. Decision-makers will go over what’s covered, and for how long, sometimes in agonizing detail to make sure they’re getting the lift truck that will serve their organization best in the long term as well as the short term. Many will even take on extended warranties immediately to ensure they’re getting the best warranty bang for their lift truck bucks.
Unfortunately, all too often once the paperwork is signed and the lift truck is put into service, the warranty gets tucked away in a drawer, never to be seen again until the truck is sold or the company holds a “flush the files” day where old paperwork is cleaned out to make room for the next generation. As a result, organizations can end up paying for parts or service which they’re already entitled to receive for free—or at least at a reduced rate.
Although most organizations are aware of warranty coverage for a catastrophic failure, many warranty contracts have additional coverage or clauses that may not be so obvious. In addition, certain components on a lift truck may carry their own warranties, separate from the overall warranty on the truck, that provide additional savings—if you know they’re available. Here’s why that may not be as easy to track as it sounds.
Warranty Management Challenges
One of the biggest challenges facing the owner of a fleet of lift trucks is the sheer number and variety of trucks in the fleet. It’s rare for a warehouse or distribution center (DC) to have a single type of lift truck from a single manufacturer. Instead you likely have hand pallet trucks, walkie pallet trucks, forklifts, turret trucks, wave trucks and/or other varieties.
In addition to the unpowered ones, you could have a mixture of gasoline-powered and electric trucks. Each of those will have a separate warranty, and many of those warranties will have nuances within them.
Then there’s the fact that it’s unlikely all your trucks were purchased on the same day, or have warranties that expire on the same day. In most cases, a warehouse or DC starts with a small number of trucks and adds to them as the need arises. Yet even if all the trucks were purchased on the same day, their lifespans will vary greatly depending on the quality of each truck, how it’s used, how it’s maintained and other factors. When lift trucks are replaced as they reach their end of life, the expiration dates of warranties become less orderly as well.
There are also brand considerations. While some enterprise organizations are committed to a particular brand and use it exclusively, most prefer to have the freedom to negotiate the best deal between several manufacturers. Since warranties vary from manufacturer to manufacturer and terms can change as a part of a competitive negotiation, the overall warranty picture becomes even more complex and often muddled.
Warranties within Warranties
“Warranties within warranties” include individual component coverage outside of the standard agreement. If you’ve ever looked through the paperwork of a new car you know how that works.
Your car may have a three-year/36,000 mile bumper-to-bumper warranty. But anything related to emissions control is actually warrantied for five years/50,000 miles by law. In addition, the tires carry their own warranty backed by the tire manufacturer. Other components, such as the powertrain, may also have their own warranties, depending on the vehicle manufacturer.
It’s the same for lift trucks. Electric trucks may have a separate warranty for the power generation system and/or battery; both gas and electric trucks likely have separate powertrain warranties. If you are unaware of the terms for each truck, you could end up spending money on repairs that should’ve been covered under one of those warranties. It happens more often than you may think.
Now, if your “fleet” consists of five trucks it may not be that difficult to manage. But if you have 100, 200, etc., the degree of difficulty increases exponentially. Put those hundreds of lift trucks in multiple locations around the country, or around the world, and ensuring you’re getting the value to which you’re entitled from each warranty (and sub-warranty) quickly becomes a logistical nightmare—especially if you’re trying to manage all this via paper-based or spreadsheet-based manual systems.
Getting the Full Value
One of the best ways of getting the value to which you’re entitled is by researching whether the OEM or dealer has an electronic warranty management system that will help remove much of the management burden from you.
With this type of system, you don’t have to know whether a failed part is under warranty. You simply file a claim online and the system will check to see if that part on that particular truck is covered and to what level—parts only, parts and labor, partial coverage, etc. Depending on the provider, it may even give you an alert regarding other parts that may need replacing based on the overall service history for that model of lift truck. That way you can make several warranty part replacements while the truck is down rather than having to take it down each time a part fails.
Calculating the cost of each hour of downtime across, say, half a dozen parts times the number of trucks in your fleet, you can see how the savings can add up quickly.
What’s In It for Them?
Why would the OEM or dealer want to alert you to additional warranty work? Because they have a vested interest in helping you keep your fleet running. Simply put, the better your trucks operate, and the better you feel about that particular OEM or dealer, the more likely you are to purchase from them again. You may even be willing to pay a small premium up-front, knowing that your total cost of ownership (TCO) over the life of the truck will be lower. It’s a very effective way of shutting out the competition.
One other significant advantage of using an online, electronic claim system is it helps minimize the human factor. Claims data is only entered once, by you, rather than having to send in a paper form or calling in over the phone where someone on the other end can make a mistake. Accurate claims entry helps ensure a faster resolution, which is better for everyone. It also makes it easier for you to check on the status of claims you’ve already entered because the information is there on the system.
Other Best Practices
Stay abreast of trends regarding particular parts—All the warranties in the world won’t do you any good if the parts are not available. Before entering into a contract, check with the OEM or dealer to see if they have an alert system that will tell you when certain parts are facing a temporary scarcity (and whether any trucks in your fleet may be affected due to part life expectancy) so you don’t get caught short. If they don’t have an automated system, be sure to develop a relationship to ensure they will call you if there is a concern.
Be cautious about using knockoff or gray market parts for non-warranty repair—–Once a lift truck or a component goes out of warranty, it may be tempting to use knockoff or gray market parts to reduce your repair costs. But often such practices will invalidate any remaining warranties. Know what you’re getting into before making that call. You may save a few dollars today, but cost yourself hundreds down the road.
Consider refurbished parts—–Whether refurbished by the OEM or a reputable third party, these parts often provide the performance of new at a lower cost without the risks that come with gray market or knockoff parts. They may also carry their own warranties which effectively extend your coverage well past the original terms of your agreement.
Look into extended warranties carefully—–Put plainly, some are worth the money and some are not. Before jumping in to gain the “peace of mind” of having warranty coverage, look into what’s covered and what’s not. Also look into the service history of the trucks you own to see how likely expensive parts are to fail. You may find it’s cheaper to pay for parts and labor as-needed (especially if you have your own internal repair group) than to pay each month for an extended warranty you rarely use.
Look to the future—–One of the most exciting developments is telematics: the ability for your trucks to communicate with the OEM or dealer via the Internet to tell them when a part is nearing failure so a new one can be shipped and you can take advantage of planned downtime to make the repair. While it may still be a few years away, having telematics on your lift trucks could be a game-changer in terms of maximizing the value of your warranties over the short and long terms.
The quality, length and coverage of a warranty are important considerations when making a new lift truck purchase. But there is more to it than those obvious factors.
Like the trucks themselves, lift truck warranties have many moving parts. This means it can be extremely difficult to ensure you’re deriving your full value from them. The more you can automate the process by working closely with your OEM or dealer, the more likely you are to get the biggest bang from your lift truck warranty buck.
Mark Vigoroso is senior vice president, global marketing and alliances for Servigistics (www.servigistics.com), a provider of service lifecycle management solutions for global enterprise organizations. He can be reached at [email protected].