Case Study: How an Operational Audit Cut Warranty Claims by 79% at a European Bathroom Equipment Manufacturer
A family-owned European SME, founded in the late 1980s, had survived four decades and the slow downscaling that comes with a satisfied owner. Over a 10-month engagement from June 2025 to March 2026, En Garde Consulting reduced warranty claims on a flagship product line from 11.5% to 2.4%, lifted gross margin per unit on the same line by approximately 40%, eliminated regulatory fines that had been recurring for years, and brought average claim resolution time from above the legal response threshold to well within it. One employee was permanently freed from operational firefighting and reassigned to research and development.
By Petar Zivkovic, Founder | Principal Consultant · Published 27 April 2026
01
The challenge
A profitable company quietly accumulating risk
The company was profitable every year. Margins were thin, but the bottom line was always above zero, and the cumulative profits the company had generated over decades were enough to keep the founder satisfied. He was on site six days a week and convinced he knew everything that was happening inside his own building.
Underneath that surface, three problems were stacked on top of each other.
01. No clear ownership of any process
Veterans of the company informally knew "who does what," because they had worked side by side for years. When something went smoothly, this worked. When something went wrong, the blame game began. There was no documented owner for procurement, lead management, fleet management, sales, or warranty handling. No reporting lines anyone could point to on paper.
02. No single source of truth
Customer claims, vendor communications, and order tracking lived across personal notebooks, scattered email threads, and a handful of disconnected spreadsheets. Nothing was the canonical record, which meant everything was contested when it mattered. A representative incident:
03. An aging owner who was content
The company was making a small profit every year. Younger workers had repeatedly tried to introduce changes and had been met with resistance from the owner and the long-tenured staff. The status quo was defended out of comfort, not out of conviction. This is the most common deadlock pattern we see in family-owned SMEs of this generation, and it is often the hardest to break, because nothing is technically wrong.
02
The approach
Map first, prescribe second
The engagement followed the En Garde two-step model: the Organizational Healthcheck 360 first, then the Boutique Approach.
The Organizational Healthcheck 360 phase ran for three weeks in June 2025. We mapped every core process the company ran: procurement, lead management, fleet management, sales, inventory, manufacturing, warranty handling. The output was a single graphic representation of the company's operational reality, with discrepancies and inefficiencies marked in red.
The owner, on seeing the map for the first time, said this:
I knew everything that was happening in this company. I am here six days a week, one day more than my workers. But once they showed me the process map, glaring red with every issue noted, my first reaction was, 'this cannot be.' Inefficiencies and operational errors had built up so slowly that we never reacted. I am over 190 centimeters tall, but I could not tell you the day I became tall.
The Founder, on first seeing the process map
That moment unlocked the rest of the engagement. The Boutique Approach phase ran from July 2025 to March 2026. Eight months of staged implementation, working alongside the team rather than over them, delivered in this order.
01. RACI charts for every function
Sales and marketing, inventory, fleet management, procurement, manufacturing, warranty handling. Every recurring task received a Responsible, Accountable, Consulted, and Informed designation, with names attached to roles. Once roles were on paper, the blame game lost its oxygen.
02. Standard Operating Procedures, drafted with the people who do the work
Each SOP was tied to a specific section of the process map, drafted with the relevant team members, and rolled out in stages. Effort became measurable. Execution became predictable. New hires no longer needed a veteran shadow to function.
03. A single source of truth, built without buying anything
No new software was purchased. A shared spreadsheet, properly designed and rigorously used, became the operational database for the sales pipeline and for every customer claim. The discipline was the deliverable, not the technology.
As the engagement progressed, an in-house task manager was built on top of the same data. Warranty claims now trigger an automatic alert if no response is logged within three days, escalating to a backup owner if the primary owner does not act. Status changes trigger automated emails to the customer. When a replacement unit ships, the customer receives both an SMS and an email. The procedural rigor was retrofitted into automation only after the procedure itself worked on paper.
04. Reactivation of dormant accounts
Once the sales pipeline lived in one place, dormant accounts that had drifted out of view were systematically re-engaged. Several returned to active purchasing within the engagement window.
Resistance was real for the first two months. Once the early SOPs and the shared single source of truth started removing daily friction, the same workers who had pushed back became internal advocates and pushed for more. A team member, looking back at the change, described it this way:
Now it is a completely different story. I used to have trouble waking up, having to explain to myself why I needed to go to work that day. Now I feel energized, and my potential is actually being put to good use.
Team member, manufacturing function
03
The results
By the end of the engagement
- 11.5%
↓ 2.4% Warranty claims on the flagship product line
Once one team member had been freed from operational firefighting, that person was assigned to research and development. Their first project was a structured vendor search for a problematic imported product line. They identified a new supplier whose product showed a 2.4% defect rate in independent batch testing. The company switched. The 11.5% line was retired.
- +40%
Gross margin per unit, same product line
This is the net figure, calculated after all costs including the new (lower) warranty exposure. The new lineup is better designed and commands a higher unit price; the elimination of middlemen on direct sourcing accounts for the rest of the lift.
- Zero
Regulatory fines since implementation
The company had received several consumer-protection fines over the years, primarily driven by dropped-claim incidents of the kind described above. Since the SOPs and the shared single source of truth went live, fines have stopped completely. Not reduced. Stopped.
- Above threshold
↓ Within Average warranty-claim resolution time
The average response time used to sit above the legal threshold for responding to consumer claims. It now sits comfortably within the threshold, and the company routinely receives written commendations from customers and partners on responsiveness. Same people, same product, different operating model.
- 1 role to R&D
One headcount permanently freed for product development
Before the engagement, every employee carried multiple operational roles, often duplicated across the team. After, the elimination of duplicated work and the introduction of light automation meant a senior team member could be permanently moved off operations and into product research. This is the role that found the 2.4% supplier.
- Blame
↓ Ownership Cultural shift
The hardest result to quantify, and the one the team itself talks about most. Once roles were documented and the single source of truth was canonical, the question stopped being "whose fault is this" and started being "what do we do next."
04
What this engagement says about the model
Three takeaways
A process map shown on one page changes minds faster than any presentation. The owner had run the company for nearly four decades. Three weeks of mapping was enough to dislodge a position he had held for twenty years. We see this pattern often enough that we now consider it the central mechanism of the Healthcheck 360.
A single source of truth does not require buying anything. A shared spreadsheet that everyone actually uses is more powerful than a CRM no one fills in correctly. Discipline beats tooling. Automation is a layer added on top of working procedure, never a substitute for it.
Resistance is a phase, not a verdict. The same people who pushed back hardest in the first two months were the loudest internal advocates by the fourth. Early changes have to remove genuine friction from the day, not add ceremony to it; once they do, the team starts pulling.
Questions readers ask about this
- How long did the full engagement take?
- Ten months end to end, from June 2025 to March 2026. The first three weeks were the Organizational Healthcheck 360 (audit and roadmap). The remaining eight months were the Boutique Approach implementation phase: RACI assignment, SOP drafting, the single source of truth, and the staged rollout of the in-house task manager.
- How quickly did the warranty-claim numbers actually move?
- The procedural change (logging every claim in the shared single source of truth, with automatic three-day escalation) eliminated dropped-claim incidents almost immediately, within the first month of go-live. The drop in claim rate from 11.5% to 2.4%, however, came later, after the supplier switch on the flagship product line. Two distinct improvements stacked on each other.
- Did you replace any of the company's existing software?
- No. No new software was purchased during the engagement. The single source of truth was built on a shared spreadsheet, properly designed and rigorously used. The in-house task manager was added later, on top of the same data, only after the procedure itself worked on paper. Discipline beats tooling, and automation is a layer on top of working procedure, not a substitute for it.
- Can the engagement be verified by a prospective client?
- Yes. The client is anonymized publicly, but qualified prospective clients can request a 15-minute reference call with the client's head of business development and sales. Email enquiry@engarde-consulting.com with the subject line "Reference call: bathroom equipment manufacturer," and we will arrange it.
- Is this case study representative of typical SME engagements?
- The size (21 employees), the family ownership, the deadlock pattern (a satisfied founder and a younger team trying to push change), and the absence of a single source of truth are all common. The specific results (warranty claims down 79%, regulatory fines eliminated) are unusually clean because the company had a single, very visible operational symptom (warranty claims) that responded quickly once the underlying procedural and sourcing issues were fixed. Other engagements show similar mechanics with different headline numbers.
- What did the pricing look like for this engagement?
- The Healthcheck 360 phase was the standard fixed fee for the company size band (more than 50 employees was not applicable here; the company was below 50 at engagement). The Boutique Approach phase was scoped and priced at the end of the Healthcheck, based on the findings, on a fixed monthly retainer with a defined scope and exit points. Total engagement cost was agreed in writing at the start of each phase, with no hourly billing.