Originally Posted by Poolside
Define the strict traceability pursuant to the term "dispose". The truth now
Rather than the service manager, it is the dealership parts manager who typically takes responsibility for the management of the retention, storage, filing, and systematic periodic scrapping of failed/take-off warranty parts. Each manufacturer's WPPM (Warranty Policy and Procedures Manual) spells out exact requirements that tend to follow a rather narrow common industry standard.
All failed/take-off warranty parts must be tagged with pertinent repair order information like RO number, part number, and date. Items are then to be stored in a "ten-bin" shelf system, where each of the possible ten last-digits of the RO have a shelf assigned.
Items are to be retained until one of three things happen:
1) The manufacturer (rarely to very rarely) requests the dealer to ship the failed/take-off item from a specific RO back to them, which typically happens immediately after the warranty claim is submitted by the dealer to the manufacturer. Failure to comply causes claim to be rejected.
2) The dealer has been paid by the manufacturer for the warranty claim, and on-site scrapping command has been given for the part. Some manufacturers specify scrapping after a specific number of days has elapsed since the paid-date of the claim; others periodically issue a list of specific paid claims whose parts must be scrapped on a specific day. Manufacturer forbids dealer from scrapping any item early, and from retaining any item after its scrap day. Periodic visits to the dealer by authorized factory service field reps include monitoring the dealer's compliance with warranty parts retention requirements, including spot-checking of items shelved in the ten-bin retention area, with factory warranty scrap report in hand. Skilled parts managers find manufacturer requirements in this sector of the dealer's operation to be rather easy to meet; tag the part and scrap it at the right time, and act immediately on all (occasional) send-back requests.
3) The dealer warranty claim is rejected by the manufacturer. In this case, usually resulting from dealer claim processing procedural error, part becomes once again the property of the dealer. Rejected claims are great in number at most poorly-managed dealerships.
Do top-skilled career parts managers establish so high a degree of compliance in this area that their factory reps come to know this well enough to reduce periodic parts-retention-area inspections to the occasional glance? Many do. I do. But I could also weather a rigorous inspection by the same guy any day, and he knows it. One thing I will never do is give a failed/take-off warranty part to a customer. Never. Ever.