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Warranty Leakage: Why You Are Paying for Repairs That The OEM Should Cover

Warranty Leakage: Why You Are Paying for Repairs That The OEM Should Cover

Are you fixing machines that are under warranty? Learn how "Warranty Leakage" inflates your maintenance budget and how to keep warranty dates in front of your technicians.
Warranty Leakage: Why You Are Paying for Repairs That The OEM Should Cover

Fabrico analytics dashboard with insights into maintenance operations

Key Takeaways

  • The Invisible Cost: Plants miss warranty claims simply because nobody knows the asset is under warranty when it breaks.

    For the system that tracks this kind of cost, see what a CMMS is.

  • The "Voiding" Mistake: When an internal technician opens a gearbox to fix it, they often inadvertently void the OEM warranty.

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  • The Data Gap: Warranties are usually trapped in PDF purchase orders or emails, not in the CMMS where the technician is working.

  • The Solution: Keeping warranty dates on every asset in Fabrico, so the technician sees them when opening a corrective work order.

You buy a $10,000 industrial motor. It comes with a 1-year OEM warranty.

Six months later, the bearing seizes.

Your technician, focused on getting production back up, pulls the motor, tears it down, and replaces the bearing. The machine runs. Everyone is happy.

Everyone except the CFO.

Why? Because you just spent $500 on parts and $300 on labor to fix a motor that the manufacturer would have replaced for free.

Even worse, by opening the casing yourself, you likely voided the warranty for the remaining six months.

This is Warranty Leakage. It is the money flowing out of your maintenance budget that should be covered by your vendors. And in most factories, it is completely untracked.

Why We Miss Warranty Claims

Maintenance teams are not designed to be accountants. They are designed to be fixers.

When a machine breaks at 10:00 AM, the technician's first thought is "How do I fix this?" not "When did we buy this?"

The data required to make that decision (Purchase Date, Warranty Expiration Date) is usually buried in a filing cabinet in the procurement office, or hidden inside an ERP system that the technician cannot access.

The gap between Procurement Data and Maintenance Action is where the money leaks out.

The Financial Impact

For a plant with $10M in active assets, warranty recovery can represent significant savings.

  • Scenario: You install 50 new pumps during a capital project.

  • Failure Rate: 5% fail due to "Infant Mortality" (manufacturing defects) in the first year.

  • Leakage: If you repair those 2-3 pumps internally instead of claiming them, you lose thousands of dollars in parts/labor, plus the value of the replacement asset.

Recovering just one major warranty claim on a compressor or chiller can pay for your entire CMMS subscription for the year.

The Solution: Warranty Data at the Point of Work

You cannot rely on human memory ("Hey, didn't we just buy this?"). You need a system that shouts at you.

Fabrico bridges the gap by embedding the commercial data into the operational workflow.

1. Warranty Dates on Every Asset

When you onboard an asset in Fabrico, you set the Installation Date and Warranty Expiration Date.

  • Example: "Warranty expires December 31, 2026."

2. The Corrective Work Order Check

When a technician opens a corrective work order on that asset, the warranty expiry date sits on the asset record, next to its history and documents.
Add a first checklist step to corrective work orders, so the question is answered before anyone opens the casing:
"Is this asset under warranty? If yes, do not repair internally. Contact the vendor."

3. The Claims Evidence

Vendors often deny claims because you can't prove you maintained the asset properly.
"You didn't grease it, so we won't replace it."

With Fabrico, you can export the full Maintenance History (PM compliance logs, lubrication records) in one click. You hand the vendor irrefutable proof that you upheld your end of the bargain, leaving them no maintenance-based reason to reject the claim.

Notice Deadlines in B2B Purchases

Warranty rights can also be lost by waiting. Under section 377 of the German Commercial Code (HGB), when a purchase is a commercial transaction for both sides, the buyer must inspect the goods without undue delay after delivery, as far as this is practicable in the ordinary course of business, and notify the seller of any defect without undue delay. A defect that only shows up later must be reported without undue delay after it is discovered, otherwise the goods are deemed accepted, unless the seller fraudulently concealed the defect. Record the date each defect was found, and send the notice the same day.

Summary: Stop Fixing Free Things

Your maintenance budget is tight enough. Stop spending it on repairs that have already been paid for.

Warranty management isn't about being cheap; it's about being smart. It ensures that your vendors are held accountable for the quality of their equipment.

Let the software watch the calendar so your technicians can focus on the machines.

Ready to stop the leakage?

See how Fabrico keeps warranty dates and maintenance history on every asset.
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