Reducing Warranty Claims with Early Fault
Detection and Alerts: How IIoT Empowers OEMs

Nageshwar Mahanta
April 18, 2025

✅ TL;DR – Smart Monitoring Reduces Warranty Costs

Unexpected machine failures = high warranty claims for OEMs.
IIoT monitoring helps you:

🔍 Detect faults early with real-time alerts
⚙️ Schedule proactive maintenance
📉 Cut warranty claim costs significantly
🚜 Improve machine reliability and uptime
🤝 Boost customer satisfaction and loyalty

Whether you're manufacturing construction, mining, or agricultural equipment, early fault detection with IIoT helps you save millions and strengthen your brand.

Overview:

If you’re an equipment manufacturer, you already know the pressure: warranty costs eating into margins, customer dissatisfaction over unexpected failures, and the race to improve product reliability faster than ever.

Here’s the good news: Industrial IoT (IIoT) is not just a buzzword anymore. It’s your opportunity to flip the script on warranty claims — moving from reactive firefighting to proactive control.
At DATOMS, we’ve seen firsthand how connected machines can dramatically cut warranty expenses while boosting customer satisfaction. Let’s dive into how you can achieve the same.

The Warranty Claim Problem You Face

Warranty claims are expensive — and unpredictable. A machine failure not only leads to direct repair costs but also damages customer trust, sometimes irreparably.

Without early fault detection, here’s what typically happens:

Issues go unnoticed until a major failure occurs, often at the worst possible time.
Emergency repairs are triggered, many times under warranty terms, increasing operational costs.
Costs pile up — including technician dispatches, replacement parts, downtime penalties, and customer compensation.
Customer frustration rises, resulting in poor satisfaction scores and lost future business.

And here’s a crucial fact you can’t ignore:

Over 80% of machine failures are random, not related to machine age or maintenance schedules.

This means traditional preventive maintenance schedules — based on calendar dates or operating hours — often fail to prevent real-world failures.

You need smarter, real-time insights that go beyond routine checklists.

How IIoT Changes the Game

Industrial IoT platforms fundamentally shift the way you manage fleet health and service operations. Instead of relying on periodic inspections, you get continuous, real-time visibility into every critical component of your machines.

With sensors embedded across assets, you can track variables like:

Temperature fluctuations that indicate overheating issues.
Abnormal vibration patterns hinting at early-stage mechanical wear.
Drops in pressure that signal leaks or seal failures.
Engine load variations pointing to operator misuse or component strain.
Hydraulic fluid levels that reveal potential system issues.

When this data streams into a centralized IIoT platform and is analyzed by machine learning algorithms, you can detect anomalies immediately — often weeks or months before a component failure would occur.

👉 Real-time data + AI-driven insights = proactive service, lower warranty exposure.

You’re not guessing anymore. You’re making decisions based on live machine intelligence.

What Early Fault Detection Delivers for You

Let’s look closer at the key benefits you gain by using IIoT-driven early fault detection:

1. Proactive Maintenance

Instead of reactive emergency service calls, you move toward a proactive service model.
For example:

If a sensor detects a cooling system running hotter than normal, you can schedule a checkup before the engine overheats and fails.
If vibration sensors flag abnormal readings on a drivetrain, a technician can replace a bearing before it damages the gearbox.

👉 Smaller, planned repairs cost a fraction compared to major warranty replacements.

2. Downtime Reduction

A single breakdown on a remote site can bring operations to a halt.
Early detection lets you fix small issues during scheduled maintenance windows, avoiding unplanned machine stoppages.

👉 Improving uptime directly boosts your customers’ productivity and loyalty to your brand.

3. Lower Warranty Costs

According to McKinsey, implementing predictive maintenance can:

Cut machine downtime by 30–50%
Extend machine lifespan by 20–40%
(Source: McKinsey Digital Report, IIoT and Asset Management, 2021)

👉 Every early fix you make is a warranty claim you avoid — saving thousands across your fleet.

4. Stronger Data for Warranty Validation

IoT telemetry creates a digital trail of how each machine is used. When a warranty claim arises, you have hard evidence to check:

Was the equipment operated within specs?
Was the service schedule followed?
Were there external factors (like misuse or overload) that void coverage?

👉 This not only prevents invalid claims but also strengthens customer accountability.

📢 Did You Know?

John Deere operates a Machine Health Monitoring Center that oversees 90,000+ connected machines globally.

They detect failure patterns early, alert dealers proactively, and resolve issues before breakdowns — saving millions annually in warranty and service costs.

(Source: Geospatial World)

You too can achieve similar results with the right IIoT foundation.

What to Look for in an IIoT Solution

Choosing the right platform is critical for success. Make sure your IIoT partner provides:

Real-time data acquisition across all key machine systems (engine, hydraulics, electrical, etc.).
Support for industry-standard protocols like CAN bus, Modbus, OPC UA to integrate easily with your controllers.
Edge analytics capabilities to detect faults even when machines are offline.
Smart, customizable alerting — via SMS, mobile apps, and email — to ensure your teams act instantly.
Fleet-wide analytics to uncover trends across machine models, batches, or regions.
Easy sensor and machine onboarding to scale your connected fleet without major IT headaches.

At DATOMS, we’ve built our platform around these principles — delivering faster fault detection, centralized machine insights, and actionable analytics to OEMs worldwide.

The Bottom Line

Warranty claims don’t have to be unpredictable cost bombs. By leveraging IIoT-powered early fault detection and alerting, you can:

Cut warranty expenses
Reduce field service emergencies
Improve machine reliability and uptime
Strengthen your customer relationships
Feed real-world usage insights back into R&D for better future products

Early detection isn’t just a maintenance strategy — it’s a competitive advantage.

By acting now, you not only protect your bottom line but also create new service opportunities: remote monitoring packages, predictive maintenance contracts, uptime guarantees — all new revenue streams powered by data.

Final Thoughts

In today’s highly competitive heavy equipment market, reacting to failures after they happen is no longer a viable strategy. OEMs who embrace early fault detection through IIoT are not just solving today’s warranty challenges — they are laying the groundwork for smarter, more resilient fleets that adapt and evolve with operational realities.

By putting real-time data and predictive insights at the heart of your asset management, you position your brand as proactive, reliable, and indispensable to your customers’ success.
It’s no longer about simply building great machines — it’s about delivering continuous value across the entire equipment lifecycle.

The future belongs to OEMs who think ahead — and act early.

Stop Letting Warranty Claims Drain Your Profits!

Smart IIoT Monitoring gives you the power to detect failures before they happen, slash warranty costs, and keep your machines running flawlessly — without the guesswork.

💬 Talk to an IoT Expert — Discover how real-time monitoring can save you lakhs and protect your brand.