Examples of Coverages for Assets

You can view warranty contracts at all levels of an asset, or its related assets, in Maintenance work order execution.

Here are several modeling examples of Coverages for assets:

Scenario	Coverage Modeling Suggestion
A supplier extends a warranty term of 1 year across all items in their catalog that are purchased during the year 2023.	You typically will create a single Warranty Coverage for a warranty provider to cover the items in a supplier’s product catalog. The provider’s warranty would supersede any manufacturer warranties for the individual items. For warranty assignment during item purchase, you would define an item with a single supplier reference in the coverage. When a new catalog is released for the next year, a new coverage would be created, and the old coverage would be end dated. This scenario would cover both assets that are the top-node of an Asset hierarchy, and any replacement parts that would be installed as child assets under the top-node of an Asset hierarchy.
A supplier extends warranty terms of 1, 2 and 3 years for different items in their catalog that are purchased during the year 2023.	You must define multiple Warranty Coverages for the same warranty provider to cover the specific items in the supplier’s product catalog and the applicable warranty periods. The provider’s warranty would supersede any manufacturer warranties for the individual items. For warranty assignment during item purchase, you would define each unique item with a single supplier reference in the specific coverage for the applicable warranty term.
An Original Equipment Manufacturer (OEM) extends a warranty term of 1 year for items purchased from some or all their distributing suppliers. Warranty tracking and claims management will be directed to the OEM and not to the supplier from whom the item is purchased. The OEM must be set up as a supplier and not simply as a manufacturer in the system.	You typically will create a single Warranty Coverage for an OEM warranty provider to cover the items that will be purchased from one or many suppliers. In this case, the OEM provider’s warranty would supersede the purchase supplier warranty terms for the individual items. For warranty assignment during item purchase, you could define an item with or without a specific supplier reference in the coverage. As the warranty is from the OEM across suppliers, if there isn't supplier reference, the same warranty is extended no matter from which supplier an item is purchased from.
A supplier sells a finished product that's manufactured and/or assembled using components from different suppliers and OEMs. The supplier will extend the warranty on all components for the first year. After that time, only certain components will be covered by their source supplier or OEM for an additional warranty that covers years 2 to 5 after the purchase or entry into service.	You must first decide how you are going to model and track your Assets. At a minimum, you will need to create the top node Asset for the purchase, receipt, tracking, warranty, and work order execution of the finished product Asset purchased from the supplier. However, you must decide how you are going to track installed components that may have additional warranty. For example, the supplier covers the cab, interior, box, frame, and additional components such as head lights and tires for a delivery truck. Other components such as the engine, transmission, and rear axle are first covered by the supplier for the initial warranty period, then are covered directly by the OEMs for remaining warranty periods. You typically will create a single Warranty Coverage for a warranty provider to cover the purchase of finished goods from the supplier with a duration of 1 year. The provider’s warranty would supersede any OEM warranties for the individual items during this period. A single Warranty Contract would be created for the top-node Asset. You then will have to decide if components are to be tracked as part of the Asset’s initial hierarchy. For components that are covered directly by the OEMs either immediately or after the initial supplier warranty period – such as the engine, transmission, and rear axle the recommendation is to update the top-node Asset’s hierarchy to include these child assets. If you choose not to track its additional installed components as Assets, then it will be difficult to track their individual OEM warranty over time. You then would create Warranty Coverages for each OEM warranty provider to cover the items that are part of the finished good for their respective time periods. In this case, the OEM provider’s warranty would become effective after the original supplier’s warranty expires. Once these Coverages are defined, you can instantiate Warranty Contracts manually for each installed component Asset individually for the top-node Asset. Other components, such as an alternator, would most likely not be tracked as part of the initial top-node Asset’s hierarchy. Therefore, only when they are removed and replaced will they be updated on the top-node Asset’s hierarchy. The component that's removed must be evaluated for a warranty based on the top-node Asset.
A supplier extends a warranty term of 5 years, 5,000 hours, or 100,000 miles for a new vehicle.	You typically will create a single warranty coverage that includes multiple calculation methods. Use the coverage essentials to define a duration of 5 years or 60 months. This will be used to calculate a contract end date value based on a contract start date + duration value. Use the coverage meters to define 2 different utilization meters with intervals: Odometer – the meter should have a starting value of 0 (zero) and an interval of 100,000 miles Hour meter – the meter should have a starting value of 0 (zero) and an interval of 5,000 hours These meters will be used to calculate a contract calculated expiration date based on the first expiring meter interval, asset utilization rate and latest asset meter reading in history. Note: An understanding of assets, meters and daily utilization rates is necessary to understand how meters can be used to estimate the future expiration date of a warranty contract. The same method is used to forecast future due dates in a preventative maintenance program. Both dates will be displayed in the contract and the system uses whichever date comes first rule to determine when to expire a contract. You will use the scheduled job Process Supplier Warranty Contracts - Additions and Changes to update the contract status and calculated expiration dates over time. After contract creation, you may optionally choose to update the contract meter intervals with a different start value based on the actual mileage or hour reading at the start of their warranty period. This will then update the contract calculated expiration dates as well.
A supplier extends different supplier warranty terms for different systems on the asset. The powertrain systems are covered for 10 years, but the hydraulic system is only covered for 5 years. Only 1 asset is created and will be used to track of all related systems.	You must define multiple warranty coverages for the same warranty provider to cover the specific systems and the applicable warranty periods. This will result in multiple warranty contracts for an asset that are system specific. Additionally, you can define repair transaction codes in a coverage as a method to uniquely identify which systems are covered. During work order execution, the system will be able to use repair transaction codes in the operation transactions to determine which coverage is applicable for the creation of a warranty claim and entitlements for the reimbursement of the operation costs. The scheduled process Generate Supplier Warranty Entitlements considers repair transaction codes during claim creation.
A supplier extends different supplier warranty terms for different systems on the item. The powertrain systems are covered for 10 years, but the hydraulic system is only covered for 5 years. Multiple assets are created for tracking each major system that can be independently managed as an asset.	If you manage your asset using a physical hierarchy, you will create a structure of parent and child assets. Supplier warranty can be managed at the parent asset, child asset or both levels. Maintenance work orders are typically created for a parent asset. However, supplier warranty can be managed at the parent and child levels concurrently in the work order. Therefore, based on the type of maintenance being performed, supplier warranty claim assessment can happen across all levels of an asset. You may define multiple warranty coverages for the same warranty provider to cover the specific systems at a parent and child asset levels for each applicable warranty periods. This will result in multiple warranty contracts for assets that are system specific. Additionally, you can define repair transaction codes in a coverage as a method to uniquely identify which systems are covered. During work order execution, the system will be able to use repair transaction codes in the operation transactions to determine which coverage is applicable for the creation of a warranty claim and entitlements for the reimbursement of the operation costs. The scheduled process Generate Supplier Warranty Entitlements considers repair transaction codes during claim creation.

Scenario

Coverage Modeling Suggestion

A supplier extends a warranty term of 1 year across all items in their catalog that are purchased during the year 2023.

You typically will create a single Warranty Coverage for a warranty provider to cover the items in a supplier’s product catalog. The provider’s warranty would supersede any manufacturer warranties for the individual items.

For warranty assignment during item purchase, you would define an item with a single supplier reference in the coverage.

When a new catalog is released for the next year, a new coverage would be created, and the old coverage would be end dated.

This scenario would cover both assets that are the top-node of an Asset hierarchy, and any replacement parts that would be installed as child assets under the top-node of an Asset hierarchy.

A supplier extends warranty terms of 1, 2 and 3 years for different items in their catalog that are purchased during the year 2023.

You must define multiple Warranty Coverages for the same warranty provider to cover the specific items in the supplier’s product catalog and the applicable warranty periods. The provider’s warranty would supersede any manufacturer warranties for the individual items.

For warranty assignment during item purchase, you would define each unique item with a single supplier reference in the specific coverage for the applicable warranty term.

An Original Equipment Manufacturer (OEM) extends a warranty term of 1 year for items purchased from some or all their distributing suppliers.

Warranty tracking and claims management will be directed to the OEM and not to the supplier from whom the item is purchased. The OEM must be set up as a supplier and not simply as a manufacturer in the system.

You typically will create a single Warranty Coverage for an OEM warranty provider to cover the items that will be purchased from one or many suppliers. In this case, the OEM provider’s warranty would supersede the purchase supplier warranty terms for the individual items.

For warranty assignment during item purchase, you could define an item with or without a specific supplier reference in the coverage. As the warranty is from the OEM across suppliers, if there isn't supplier reference, the same warranty is extended no matter from which supplier an item is purchased from.

A supplier sells a finished product that's manufactured and/or assembled using components from different suppliers and OEMs.

The supplier will extend the warranty on all components for the first year. After that time, only certain components will be covered by their source supplier or OEM for an additional warranty that covers years 2 to 5 after the purchase or entry into service.

You must first decide how you are going to model and track your Assets. At a minimum, you will need to create the top node Asset for the purchase, receipt, tracking, warranty, and work order execution of the finished product Asset purchased from the supplier. However, you must decide how you are going to track installed components that may have additional warranty.

For example, the supplier covers the cab, interior, box, frame, and additional components such as head lights and tires for a delivery truck. Other components such as the engine, transmission, and rear axle are first covered by the supplier for the initial warranty period, then are covered directly by the OEMs for remaining warranty periods.

You typically will create a single Warranty Coverage for a warranty provider to cover the purchase of finished goods from the supplier with a duration of 1 year. The provider’s warranty would supersede any OEM warranties for the individual items during this period. A single Warranty Contract would be created for the top-node Asset.

You then will have to decide if components are to be tracked as part of the Asset’s initial hierarchy. For components that are covered directly by the OEMs either immediately or after the initial supplier warranty period – such as the engine, transmission, and rear axle the recommendation is to update the top-node Asset’s hierarchy to include these child assets. If you choose not to track its additional installed components as Assets, then it will be difficult to track their individual OEM warranty over time.

You then would create Warranty Coverages for each OEM warranty provider to cover the items that are part of the finished good for their respective time periods. In this case, the OEM provider’s warranty would become effective after the original supplier’s warranty expires. Once these Coverages are defined, you can instantiate Warranty Contracts manually for each installed component Asset individually for the top-node Asset.

Other components, such as an alternator, would most likely not be tracked as part of the initial top-node Asset’s hierarchy. Therefore, only when they are removed and replaced will they be updated on the top-node Asset’s hierarchy. The component that's removed must be evaluated for a warranty based on the top-node Asset.

A supplier extends a warranty term of 5 years, 5,000 hours, or 100,000 miles for a new vehicle.

You typically will create a single warranty coverage that includes multiple calculation methods.

Use the coverage essentials to define a duration of 5 years or 60 months. This will be used to calculate a contract end date value based on a contract start date + duration value.

Use the coverage meters to define 2 different utilization meters with intervals:

Odometer – the meter should have a starting value of 0 (zero) and an interval of 100,000 miles
Hour meter – the meter should have a starting value of 0 (zero) and an interval of 5,000 hours

These meters will be used to calculate a contract calculated expiration date based on the first expiring meter interval, asset utilization rate and latest asset meter reading in history.

Note: An understanding of assets, meters and daily utilization rates is necessary to understand how meters can be used to estimate the future expiration date of a warranty contract. The same method is used to forecast future due dates in a preventative maintenance program.

Both dates will be displayed in the contract and the system uses whichever date comes first rule to determine when to expire a contract. You will use the scheduled job Process Supplier Warranty Contracts - Additions and Changes to update the contract status and calculated expiration dates over time.

After contract creation, you may optionally choose to update the contract meter intervals with a different start value based on the actual mileage or hour reading at the start of their warranty period. This will then update the contract calculated expiration dates as well.

A supplier extends different supplier warranty terms for different systems on the asset. The powertrain systems are covered for 10 years, but the hydraulic system is only covered for 5 years. Only 1 asset is created and will be used to track of all related systems.

You must define multiple warranty coverages for the same warranty provider to cover the specific systems and the applicable warranty periods. This will result in multiple warranty contracts for an asset that are system specific.

Additionally, you can define repair transaction codes in a coverage as a method to uniquely identify which systems are covered. During work order execution, the system will be able to use repair transaction codes in the operation transactions to determine which coverage is applicable for the creation of a warranty claim and entitlements for the reimbursement of the operation costs.

The scheduled process Generate Supplier Warranty Entitlements considers repair transaction codes during claim creation.

A supplier extends different supplier warranty terms for different systems on the item. The powertrain systems are covered for 10 years, but the hydraulic system is only covered for 5 years. Multiple assets are created for tracking each major system that can be independently managed as an asset.

If you manage your asset using a physical hierarchy, you will create a structure of parent and child assets. Supplier warranty can be managed at the parent asset, child asset or both levels.

Maintenance work orders are typically created for a parent asset. However, supplier warranty can be managed at the parent and child levels concurrently in the work order. Therefore, based on the type of maintenance being performed, supplier warranty claim assessment can happen across all levels of an asset.

You may define multiple warranty coverages for the same warranty provider to cover the specific systems at a parent and child asset levels for each applicable warranty periods. This will result in multiple warranty contracts for assets that are system specific.

The scheduled process Generate Supplier Warranty Entitlements considers repair transaction codes during claim creation.