Warranty logistics issues in auto engine industry

Warranty logistics deals with various issues relating to the servicing of warranty. Proper management of warranty logistics is needed not only to reduce the warranty servicing cost but also to avoid customer dissatisfaction since it has a negative impact on sales and revenue. Controls should be instituted to minimize the total cost of logistics rather than minimizing each component of the total cost. Warranty logistics mainly deals with the transportation of spares, warehousing, and warranty claims settlement and reverse logistics of the failed components. This paper illustrates a real life case study of an automobile engine manufacturer. There are two players; one of them is an engine manufacturer who supplies these engines to an automobile OEM. Various issues involved in forward and reverse logistics of the spare parts and failed components respectively have been studied. Issues faced by manufacture are discussed and solutions to overcome these problems are suggested.