Warranty contracts in Maximo
Maximo offers the opportunity to maintain warranty contracts. Yet, many organizations do not maintain their warranty contracts adequately. In this blog, we will discuss the advantages of maintaining warranty contracts on assets and equipment in Maximo.
Why use warranty contracts?
When warranty contracts are not maintained adequately, this results in repairs or replacements at additional costs, instead of at the cost of the warranty provider. Properly maintaining warranty contracts can, therefore, reduce work and costs.
In some cases, assets have a warranty agreement which states that certain repairs must be done by the warranty party, or the warranty may become void. In this case, doing the repair work will not only lead to additional costs and work but also break the warranty contract. By maintaining the warranty contracts in Maximo, these situations can be prevented.
Furthermore, maintaining warranty contracts will help you keep track of warranty periods, so you can make sure assets still operate correctly before their warranty period expires. Maximo will help you keep an overview of your warranty contracts and the assets under them.
What are warranty and service contracts?
In Maximo, we can distinguish between two types of warranty contracts; warranty contracts and service contracts. Both are contracts with an external provider. A warranty contract is an agreement for assets and locations under warranty. A service contract is an agreement to provide services for assets and locations. At the end of a warranty period, a warranty contract may transition into a service contract.
Warranty Contracts in Maximo
Both warranty and service contracts are maintained in the Warranty Contracts application in Maximo. Warranty and service contracts are maintained similarly in Maximo but work differently on the work orders. First, we’ll explain how to create or maintain the contracts, then we’ll discuss how they are used on the work orders
To create a new contract, indicate whether the contract type (1) should be a warranty or service contract and enter the start date (2) and vendor (4). Optionally, provide an end date (3).
Like many Maximo applications, Contract management uses revision history. The default status (5) of a contract is ‘DRAFT’. When the contract is ready, change the status to ACTIVE to actively use it.
In the menu bar, you can find the Properties tab and Terms and Conditions tab. Under properties, details regarding extensions and terminations can be maintained. In the Organizations application, contract types can be defined, and these definitions will determine the initial settings of the terms and conditions and properties.
In the actions menu, there is an action for adding one or more SLAs to the contract, as well as an action for authorizing sites.
Each contract can have one or more contract lines. On a contract line, define the line type (1), which can be Service or Standard Service. For Standard Service, a service item is required, where for a Service a description is required. Also indicate the duration (2) of the contract line. Optionally, add the coverage of the contract line in percentages or amounts (3). Finally, there is a checkbox (4) to indicate whether the contract line covers children of the assets or locations on the contract.
Instead of a duration of a set period (e.g. 3 years), the duration of a contract can also be based on a meter, for example up to 100.000 kilometers, or a certain amount of run hours. This can be indicated in the Meter Lines section.
Approving the contract
Before the contract can be approved, one or more sites must be authorized. Only these sites can use the contract. Use the action ‘Authorize Sites’ from the ‘More actions’ menu. In the pop-up, select the required site(s) and confirm.
Once the sites have been authorized, the contract can be approved. Use the ‘Change status’ action to approve the contract.
Adding assets and locations
When the contract has status approved (‘APPR’), you can associate assets and locations with the contract in the ‘Associated Assets’ tab. Here, assets and locations can be selected and associated with the contract.
How do warranty contracts work in Maximo
Once a warranty contract has been created and associated with an asset, Maximo will give a warning when a work order is created for this asset. Also, the Warranties Exist checkbox will be checked.
Therefore, whenever a work order is created for an asset under warranty, you will be made aware of the warranty. You can then decide whether to continue with the work order or to take other actions. Besides, with the action View Warranties, you can view the warranties on a work order or task. From the Asset and Location applications, you can view the warranties with the View Contracts action.
How do service contracts work in Maximo
When a work order is created for an asset under a service contract, there is no notification. The service contract can be selected manually in the Job Details section. When the service contract has been selected, the Vendor is filled automatically in the Responsibility section. The work can then be paid by raising an invoice with a Contract Reference to the service contract, and references to the work order on the invoice lines. Just like warranty contracts, service contracts can be seen from the Work Order Tracking application with the View Contracts action.