Extendable Engine Service Coverage Product
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Solution Overview
Problem
Current extended engine warranties are expensive, require upfront payment, are limited to new machines, not transferable, and have limited duration, leading to a significant loss of revenue opportunity for qualified service providers as machines age and maintenance agreements expire.
Innovation Solution
The extendable engine service coverage product combines a standard engine warranty with additional obligations and post-standard engine warranty service coverage, allowing incremental payment and extension, catastrophic coverage, and transferability, while integrating qualified maintenance agreements to provide extended coverage beyond traditional limits.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Duration of action of moving object
If extended engine warranty is offered for longer duration, then customer coverage period is improved, but cost and complexity of the warranty product increases
Solution Approach 1:
The warranty product is segmented into modular components: base warranty coverage, extendable coverage periods (additional 12, 24, or 36 months), and optional maintenance packages. Each component can be independently selected and combined, allowing customers to customize coverage duration without creating a completely new complex product structure.
Solution Approach 2:
The warranty system incorporates dynamic elements including: (1) flexible extension periods that can be selected based on customer needs, (2) transferability that activates under specific conditions (sale or lease of equipment), and (3) maintenance requirements that adapt to different coverage levels. This dynamic structure allows the warranty to scale in complexity only when needed.
2Loss of energy
If extended engine warranty requires upfront payment, then service provider revenue is improved, but customer financial burden increases
Solution Approach 1:
The system establishes preliminary agreements on payment terms and maintenance requirements at the time of warranty purchase, but defers actual payment collection to occur progressively through: (1) upfront payment only for the base warranty, (2) subsequent payments for extensions made later, and (3) bundled maintenance payments made periodically. This preliminary structuring allows revenue recognition while improving customer cash flow.
3Adaptability or versatility
If extended engine warranty is made transferable, then customer flexibility is improved, but service provider revenue stability decreases
Solution Approach 1:
The transferability mechanism incorporates feedback controls: (1) Transfer fees are charged to compensate for administrative costs and potential profit margin impacts, (2) Transfer is only permitted under specific triggered conditions (sale or lease of equipment), and (3) The new owner must assume maintenance obligations. This feedback structure allows transferability while protecting service provider revenue stability through controlled conditions and associated fees.
4Reliability
If manufacturer recommended maintenance costs are required to be paid annually, then warranty coverage retention is improved, but total customer cost increases
Solution Approach 1:
The warranty product merges maintenance obligations with coverage retention requirements into a single integrated package. Instead of treating maintenance as a separate annual cost, the system bundles maintenance into the extended warranty product itself, where: (1) Maintenance is performed at authorized service centers, (2) Costs are bundled into the warranty premium or paid periodically, and (3) Failure to maintain automatically triggers coverage review. This merging reduces total cost by eliminating separate maintenance contracts and administrative overhead.
Data Source
AI summary
A method of providing extendable service coverage for an engine of a machine. The method includes executing a qualified maintenance agreement, installing an apparatus on the engine, utilizing the apparatus to perform a fluid service associated with the engine, and performing all services listed in the qualified maintenance agreement.