CJ Miller's Warranty Recovery Program Cements Vendor Relationships

By G.C. Skipper, Contributing Editor | September 28, 2010

When you take 40 years of fleet-management experience and spend another year putting all you've learned down on paper and documenting it, you could windup attracting a lot of attention.

That's what happened to Dale Warner (pictured), CEM, and equipment manager for CJ Miller. In March, Warner was publicly recognized when he received the 2007 Fleet Masters Award. The 40-year experience and documentation were part of his entry for the award.

One nugget from Warner proves an old adage that says, "You catch more flies with honey than vinegar." In Warner's case, "flies" can be translated into warranty recoveries and "honey" into good vendor relationships.

"When I came here, the vendor relationship wasn't good," Warner says. "We put a new shop supervisor and a new truck foreman in place and then taught them to understand that you can't keep beating up on people to get things done." They learned quickly, he says, and have become successful. They are now responsible for tracking warranty claims in their respective areas.

Warner calls warranty programs "campaigns," and says you cannot have a successful campaign without good vendor relationships. "You've got to have that to achieve what you want to do. Our preferred vendors are viewed as business partners, not just as suppliers of goods and services. Our organization strives to build good relationships with partners who invest their time and resources in an effort to understand our needs."

The driving force behind the company's relationship with a supplier, according to Warner, is the vendor's ability to support the product or services after the point of sale. Price is a factor, he says, but it is not a primary consideration.

How that philosophy impacts day-to-day business practices at CJ Miller is illustrated in one of the company's mandates: There must be a clear understanding of product service warranties that are provided. A clear understanding of the vendor's expectations for warranty compliance is shared throughout the company. "It is equally important that all warranty options available from the vendor are made clear," he says.

By having a clear channel of understanding that extends from his company to the supplier to the product OEM, a triangle is formed that facilitates warranty claims and recoveries.

This understanding not only benefits CJ Miller, says Warner, but also the vendor. "You can't expect a vendor to support your request without proper documentation. Everything we do is supported by such documents as work orders and oil-analysis reports. The advantage to the vendor is that he has the documentation in front of him when he goes back to the OEM.

"It's like going to court," he says. "You can't just make a claim. You have to have solid evidence."

One of CJ Miller's preferred suppliers is Standard Equipment Co., a John Deere dealer. Jim Burch, sales manager, says he benefits from Warner's clear-channel-communication on warranties.

"First of all, anything made by man will have problems," Burch says. "We don't sell warranties as a profit center. Instead, warranties are a tool to secure proper utilization and use of the customer's investment. Because of CJ Miller's infrastructure, we give them great flexibility. In some cases, we allow for reimbursement of in-house warranty work, work we do not perform.

"We troubleshoot a problem; they troubleshoot a problem, so they also invest their man-hours into a repair. We like to allow them to recover that. We and John Deere know, when it comes to making decisions, that CJ Miller is not crying wolf, so to speak."

Standard Equipment allows only qualified technicians who are OEM-trained in a particular machine group to make the repairs. "If a technician isn't OEM-trained, he can't go out on warranty," Burch says.

Good relationships between CJ Miller, Standard Equipment and John Deere pay off for everyone, says Burch. For example, both he and John Deere make certain that procedures for filing warranty claims are spelled out and understood by CJ Miller: who to contact, how to facilitate the process for requesting warranty service, and that assistance is available beyond traditional business hours.

Not only do such lines of communication have to be in place, but they also have to be reevaluated on a continuing basis. "We meet monthly to see if there are any shortfalls in our ability to service accounts like CJ Miller," Burch says. "We look at what's working and what's not working. We continuously reevaluate and then reinvent."

Openness among end-user, distributor and OEM may sound obvious, but that isn't always the case, Warner says. "I had one vendor who was selling equipment here before I arrived. I wondered how he arrived at the numbers and when I looked into the situation, I learned that the dealer was taking the warranty out of the equation and rolling the dice and hoping that he wasn't going to have any problems.

"That's fine," says Warner, "unless you have a job in another state. Then you have no transferable warranty. If we go out of state and work for a month or two and a machine flies apart, I'm not covered. Also, if I wanted to sell a machine, I would have no collateral to help sell it."

When Warner found out how the distributor was working, he took him out of consideration for any future equipment purchases. "Talk about phone calls, crying and all that: I heard it all," he says. "I told him if you want to sell us a machine, put the warranty into the bid."

In addition to the obvious, positive contractor-distributor-OEM relationships have another plus, not often realized, says Warner. "By using oil analysis as part of your regular maintenance program, you can start to trend a piece of equipment, or a group of machines. You monitor their wear either individually or by groups," he says. "If you get a group of problems that are, for instance, power train or hydraulic related, you can possibly still get adjustments even if they are out of the warranty period. If you show the distributor and OEM what's going on, you can document that the problem developed during the warranty period and should have been covered. This is an opportunity that many people miss by not using oil analysis on a regular schedule."

Some triangles get you in trouble — marital and Bermuda among them — but the equipment triangle is a profitable winner for those like Warner who become a part of it.