Solving High No Fault Found Rates in Industrial Equipment Warranty Management

Every functional unit returned costs your operation twice—once in processing, again in lost margin.

In Brief

High NFF rates signal poor diagnostics and unnecessary returns processing. AI validates claims against equipment telemetry and service history, flagging returns that lack failure evidence before refurbishment teams waste resources on functional units.

The Cost of Unnecessary Returns

Warranty Reserve Erosion

NFF returns consume warranty reserves without fixing customer problems. Processing costs stack—logistics, testing, restocking—while the original issue persists in the field.

35-45% Typical NFF Rate

Refurbishment Bottlenecks

Testing labs waste time diagnosing functional equipment. Each NFF unit delays genuine repairs, extending turnaround time for legitimate warranty work.

$800-$2,400 Cost Per NFF Unit Processed

Unpredictable Reserve Accruals

Without systematic NFF detection, finance teams lack visibility into true failure rates. Warranty reserves become guesswork, impacting quarterly guidance.

2-5% Warranty Reserve as % Revenue

AI-Driven Claims Validation

Bruviti validates warranty claims against comprehensive equipment history before authorizing returns. The platform ingests telemetry from PLCs, SCADA systems, and IoT sensors, cross-referencing claimed failures with actual operating data. When a claim describes bearing failure but vibration data shows normal operation, the system flags the discrepancy.

The AI correlates service records, parts history, and environmental conditions to predict whether returned equipment will test functional. This pre-validation prevents NFF units from entering the reverse supply chain, reducing processing costs while improving diagnostic accuracy for legitimate failures. The system learns from refurbishment outcomes, continuously refining its fraud detection and misdiagnosis patterns.

Operational Impact

  • 40-60% reduction in NFF rate through telemetry-validated claims before return authorization.
  • $1.2-3.6M annual savings per 1,000 warranty claims by eliminating unnecessary logistics and testing.
  • 85% accuracy in predicting functional returns, freeing refurbishment capacity for genuine repairs.

See It In Action

Industrial Equipment Context

Equipment Lifecycle Complexity

Industrial machinery operates for decades under varying conditions. A CNC machine installed in 2005 generates different telemetry than current models, yet both require warranty support. Pumps running 24/7 in chemical plants accumulate wear patterns distinct from intermittent-use compressors. Without equipment-specific baselines, determining whether a returned turbine is genuinely faulty or victim of poor maintenance becomes expensive guesswork.

Long service obligations compound the challenge. Parts obsolescence forces substitutions, undocumented field modifications alter performance signatures, and original documentation gaps make failure diagnosis unreliable. The platform accounts for these variables, building failure models that adapt to equipment age, usage intensity, and maintenance history rather than assuming uniform behavior across an installed base.

Implementation Priorities

  • Start with high-value product lines where NFF costs exceed $1,500 per return for fastest ROI.
  • Integrate SCADA and PLC data feeds to establish equipment-specific operating baselines before claim validation.
  • Track NFF reduction rate monthly; target 50% improvement within six months to justify expansion.

Frequently Asked Questions

What causes high NFF rates in industrial equipment returns?

Poor initial diagnostics, inadequate customer training, and intermittent failures that don't reproduce in testing. When customers lack access to equipment operating history, they guess at root causes. Environmental factors like voltage fluctuations or contamination may trigger symptoms that vanish once the unit is removed from service.

How does AI reduce NFF rates without blocking legitimate claims?

The platform flags claims with low failure probability for human review rather than automatic rejection. It presents evidence—telemetry showing normal operation, absence of error logs, similar claims that tested functional—allowing warranty teams to make informed decisions. The system escalates ambiguous cases and learns from overrides to reduce false positives.

What data sources does the system require for claims validation?

Equipment telemetry from PLCs, SCADA, or IoT sensors; service history including maintenance records and parts replacements; warranty claim text describing the failure; and refurbishment test outcomes. The platform correlates these sources to identify patterns distinguishing genuine failures from functional returns.

Can the system handle equipment lacking continuous telemetry?

Yes. For non-connected equipment, the platform analyzes claim text against service history and parts failure patterns. It identifies claims inconsistent with typical failure modes—like reported bearing failure on recently replaced bearings—and flags them for verification before authorizing returns.

How quickly can we see NFF rate improvement?

Most industrial manufacturers observe 20-30% NFF reduction within the first quarter as the AI flags obvious misdiagnoses. Improvement accelerates to 40-60% by month six as the system learns refurbishment patterns and refines its validation rules. Results vary by equipment complexity and data quality.

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See how AI-validated claims can cut warranty costs and free refurbishment capacity for genuine repairs.

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