Cost of Poor Quality Reserves
Definition
Warranty management for embedded software involves tracking claims, eligibility, and reserves. Poor calculation leads to **cost of poor quality** from rework, returns, and unrecovered supplier costs.
Key Findings
- Financial Impact: 2-5% of annual revenue in warranty reserves; AUD 40,000+ for mid-sized OEMs on claims processing
- Frequency: Quarterly reserve reviews; claims monthly
- Root Cause: Lack of analytics for defect prediction and manual tracking
Why This Matters
The Pitch: Embedded software providers in Australia 🇦🇺 lose AUD 20,000-50,000 yearly on miscalculated warranty reserves. Automated calculation tools prevent over/under-provisioning.
Affected Stakeholders
Finance Controller, Service Manager
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Unbilled Customisation Services
Rework from Poor Customisation Tracking
Legal Disputes from Poorly Managed Systems
Delayed Invoicing from Untracked Design Wins
GST Reporting Errors from Forecast Inaccuracies
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