SMB00-288-2021-0

VOLVO CAR
SERVICE AND PARTS BUSINESS
Service Manager Bulletin
TITLE:
Warranty Retailer Counseling Process (WRCP) Program
GROUP:
NO:
ISSUING DEPARTMENT:
CAR MARKET:
00
288
Quality
United States and Canada
REFERENCE BULLETINS:
Superseded SMB 00-288 July 3, 2019
Service Personnel:
Read and initial
SERVICE
MANAGER
SERVICE
WRITER
ISSUE DATE:
STATUS DATE:
2021-01-14
2021-02-17
WARRANTY
ADMINISTRATOR
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“Right first time in Time”
Program Overview
Retailer warranty spending is tracked through the Warranty Retailer Counseling Process (WRCP).
The WRCP is used to gauge individual retailer performance on objective measures over time. This
tool assists Retailers by setting clear performance expectations and parameters focusing on individual
processes and procedures, to help achieve the ultimate goal of qualifying for self-authorization status.
Contributing factors escalating a Retailer’s warranty expenses may be beyond the retailer’s control, such
as repair(s) claimed in that reporting period in which parts and/or labor are of a significant expense.
VCUSA does not discourage necessary and appropriate repairs that are justified supporting all parts and
labor. However, when a Warranty Score is outside the normal index, many times there are out-of-line
factors identified due to influence by retailer personnel.
In Q2 2020, the COVID-19 pandemic impacted all markets resulting in unreliable and skewed data. As a
result, Volvo suspended all retailer warranty performance reporting. This allowed for the opportunity to
revisit and improve the reporting metrics, including the WRCP.
Volvo is pleased to announce the New Warranty Retailer Counseling Process Program. As of January 1,
2021, we have moved to a National Index to measure Retailer warranty performance. The new process is
outlined in detail below.
Note: A timeline will be provided that will outline what actions will take place at each Level and how
Volvo will contact and counsel retailers, as well as what expectations and deliverables retailers will be
expected to meet.
Produced in the USA and available as an electronic document. Hard copy documents are printed in USA on recycled paper containing
a minimum of 50% wastepaper and 10% post-consumer waste.
© 2021 VOLVO CAR USA, LLC
Service Manager Bulletin 00-288
Program Launch
We have applied this new methodology to all Retailer’s performance as of September 2020. We will
post each month’s updated reports on the Retailer Portal, so each retailer can begin to monitor their
individual performance based on the New National Index parameters. The monthly reports you receive
will be based on the following data.
December 2020: September, October and November.
January 2021: October, November and December.
February 2021: November, December and January.
March 2021: December, January and February.
April 2021*: January, February and March.
*Qualifying scores will begin with the January 2021 results. The Program will officially launch with the
results you receive in April 2021 which represent your actual performance for the first quarter of 2021.
New Warranty Retailer Counseling Process Parameters
Scoring:
Retailers will be measured and reported on 7 categories.
A.
B.
C.
D.
E.
F.
G.
Warranty Cost Per Unit*
Rejected Jobs %*
General Operation %*
Repeat Visit %*
Jobs per Vehicle*
Average Claim Entry Days
Jobs without Material %
Retailers are measured on 5 of the 7 categories with separate weightings, all index scores are capped at
200% and measured in USD.
A. Weighted Cost per Repaired Vehicle Index: Weighted (35%)
Variables:
Ø Total Labor = All labor costs excluding non-warranty claim types for 3 month-rolling period
Ø Total Material = All material costs excluding non-warranty claim types for 3 month-rolling
period
Ø Total Sublet = All Sublet costs excluding non-warranty claim types for 3 month-rolling period
Ø Vehicle Count = # of unique vehicles serviced excluding non-warranty repairs
Calculation:
Ø
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Service Manager Bulletin 00-288
Ø
B. Rejected Jobs per Repaired Vehicle Index: Weighted (10%)
Variables:
Ø Total Jobs = All jobs excluding non-warranty claim types for a 3 month-rolling period
Ø Vehicle Count = # of unique vehicles serviced excluding non-warranty repairs for a 3 monthrolling period
Calculation:
Ø
Ø
C. General Operation Index: Weighted (10%)
Variables:
Ø Total Gen Time = Sum of all General operation labor hours excluding non-warranty repairs for a
3-month rolling period
Ø Total Time = Sum of all labor hours excluding non-warranty repairs for a 3-month rolling period
Calculation:
Ø
Ø
D. Jobs without Material Index: Weighted (0%) [For reporting purposes only].
Variables:
Ø Total Jobs = All jobs excluding non-warranty claim types for a 3-month rolling period
Ø Total Jobs Without Material = Count of all jobs without material excluding non-warranty claim
types for a 3-month rolling period
Calculation:
Ø
Ø
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Service Manager Bulletin 00-288
E. Claim Entry Time Index: Weighted (0%) [For reporting purposes only].
Variables:
Ø Entry Days = Difference between R.O. Repair date and QW90 Entry Date
Ø Total Jobs = All jobs excluding non-warranty claim types for a 3-month rolling period.
Calculation:
Ø
Ø
F. Rejected Jobs Index: Weighted (30%)
Variables:
Ø Total Rejected Jobs = Count of all rejected jobs for a 3-month rolling period out of total jobs
Calculation:
Ø
Ø
G. Repeat Visit Index (15%)
Variables:
Ø Multiple Visits Total = Count of vehicles with 2 or more visits
Ø Visits total = Count of all vehicles repaired in a 3-month rolling period.
Calculation:
Ø
Ø
The sum of the measurements outlined above will equal the Weighted Score.
Calculation:
[(WCPUS Index × 35%) +
(Jobs per Veh Index × 10%) +
(Gen Op Index × 10%) +
(Rejected Jobs Index × 30%) +
(Repeat Visit Index × 15%)]
Weighted Score
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Service Manager Bulletin 00-288
Dealers will be measured by the Warranty Score
Calculation:
Ø
Ø
Process Levels:
Retailers will be reviewed monthly based on the previous 3 months Warranty Scores. (3-month rolling).
Each level is determined by a point system:
Ø 5 points: Warranty Score is not above 1
Ø 1 point: Warranty Score is not above 2.5 and is greater than 1
Ø 0 points: Warranty Score is above 2.5
The chart below provides some possible outcomes based on the last 3 months scores (points). Each
month the oldest month and score is dropped and replaced with the most recent months score.
Month
1
2
3
5
5
5
5
5
5
1
1
1
0
5
5
5
1
1
0
1
1
0
0
5
1
0
1
0
0
1
0
0
0
Cumulative
Points Scored
(3-month Period)
15
11
10
7
6
5
3
2
1
0
Corresponding
Level
Level 1
Level 1
Level 1
Level 2
Level 2
Level 3
Level 2
Level 2
Level 3
Level 3
Level 1: Self Authorizing
v Status: Solid performer, Compliant
v Action: No Action
v Approval:
o Achieve/Maintain Self- authorizing privileges
o 1.5 Hours Gen Op approval
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Service Manager Bulletin 00-288
Level 2.1: Enter the retailer counseling process at Level 2 for the first time
v Status: Above National Index, Needs guidance
v Action:
v Step 1: SM, GM and AMM are notified via email of retailer’s entry to Level 2.
v Step 2: KPI and Level 2 Retailer Claim Analysis Training required with Senior Warranty Analyst
v Step 3: Training must be scheduled within the current business month of the reporting period
v Approval:
o Maintain Self- authorizing privileges
Level 2.2: Reentry to the retailer counseling process at Level 2 (after KPI training)
v Status: Above National Index, Needs guidance
v Action:
v Step 1: Desktop Review with a Senior Warranty Analyst
v Step 2: Self-Review and Action Plan required
v Step 3: 100% TMA review will be conducted simultaneously with Steps 1 and Step 2 above.
v Approval:
o Self- authorization for up to 0.5 hours Gen Op time.
o Goodwill Self-authorization remains active
o Repeat repair self-authorization suspended
Level 3: Remain in the counseling process and advance to additional review measures.
a. Status: Consistently Above National Index
b. Action:
v Step 1: 100% warranty claim review & correction
v Step 2: Dealer Audit will be conducted
v Step 3: 100% TMA review will be conducted simultaneously with Steps 1 and Step 2 above.
v Approval:
o All Warranty and Goodwill self-authorization privileges are suspended.
New Dealers:
New retailers will have a grace period of 3 months where they are set to level 1. When there are 3
complete months, they will be scored based upon the criteria outlined above.
PLEASE NOTE:
VCUSA may conduct Audits outside the scope of this program at any time.
There may be instances when conditions outside this process warrant immediate action. As a result,
audits, TMA parts returns or any other action deemed necessary may be conducted outside the scope of
this process at VCUSA’ s discretion.
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