Facilities’ warranty management program achieves $1M in cost avoidance in its first year

It has happened to nearly everyone. We purchase an expensive item like a car or piece of equipment. Something goes wrong, and we’re suddenly faced with a large repair bill or equipment replacement. Before grabbing the credit card, it’s always best to check to see if the item is under warranty. It can result in saving large sums of money that would otherwise have been spent on repairs or replacements. By pursuing this course of action, Sandia has achieved $1 million in cost avoidance within a one-year period.

Sandia partners with multiple businesses and contractors on construction projects across the Labs every year that involve the purchase of a wide variety of materials and equipment. The projects range from constructing new buildings to installing new roofs or heating and cooling systems. Replacing parts or equipment involves spending valuable resources that need to be diverted from other areas.

To mitigate this risk, the work coordination and control department in Sandia’s facilities infrastructure services center launched a new warranty recovery management program in February 2019. Before the centralized warranty recovery program was established, warranties tended to be tracked on a less formal basis, resulting in missed opportunities to have contractors and equipment vendors correct malfunctioning products and services covered under warranty.

“This program was established so that Sandia could be a better steward of taxpayer dollars,” said Gloria Hill, a Sandia warranty coordinator. “Every dollar saved having to correct something under warranty recovers resources for the Labs.”

Same system, new function

Under the new warranty recovery program, the team leverages Maximo — the computerized maintenance management system used to monitor and execute maintenance service requests at Sandia — to track and flag equipment and construction projects under warranty. This allows for more thorough correction of items that fail while under warranty, placing the responsibility on external partners rather than the Sandia organization to pay to have them repaired.

Because the program holds Sandia’s partners accountable for correcting materials and equipment that break or malfunction while still under warranty, Sandia has spent fewer dollars on correcting defects, allowing the Labs to use the money saved to fix and enhance other areas. And with fewer repairs to oversee, maintenance and construction managers can focus greater attention on their core job of meeting customer needs.

Another benefit of the warranty recovery program is that by holding partners responsible for replacing defective or malfunctioning assets under warranty, Sandia is establishing a standard for quality work. Additionally, using Maximo’s warranty module to track warranties makes the process more efficient for maintenance and construction managers, who would spend valuable time determining who is responsible for fixing the problem.

“This program has allowed us to do a better job of tracking warranties,” said Abigail Vogel, a Sandia construction manager. “Contractors are required under the warranty to fix project deficiencies within a certain time period, and they do a good job of correcting problems quickly, which benefits our customers.” 

Customers also play a crucial role in the warranty process, as they know what is needed for their particular project. For example, during construction of the Battery Test Facility, Armando Fresquez was involved as a technician in the construction process. He participated in the building walkthrough when construction was finished to ensure the building met the project’s requirements.

“It’s critical that the customer be involved and look at it with a fresh set of eyes because they can identify potential issues that might have been overlooked,” he said.

The partnerships of customers, maintenance managers, construction managers, contractors, the warranty team and other departments are crucial to the success of this new program. By avoiding over $1 million in repair costs, the warranty program has allowed Sandia not only to save resources, but also emphasize the importance of quality in construction projects throughout the Labs.