How Tech and Process Design Work Side-by-side in Reverse Logistics
Experts usually warn against bringing in technology to automate workflows before redesigning processes from the ground up. That’s usually good advice, but reverse logistics is different.
B2B returns, repairs, and warranties are so complicated that it’s impossible to build efficient processes until you have full visibility of the entire workflow. You need to know what’s happening at every step, and only the right case management software can get you there.
If you have that visibility, you can work with a process improvement partner who understands reverse logistics and can help you fix those broken processes.
What Makes Reverse Logistics Different?
Manual processes are hard to track when it comes to reverse logistics because:
- Many different departments are involved (Sales, CSRs, Purchasing, Finance, etc.)
- Vendor and customer approvals are required
- Authorizations bounce back and forth between different departments when more info is needed
- Different categories of returns have their own requirements
You can’t expect employees across 6 different departments, who have their own jobs to do and aren’t even incentivized to handle returns, to follow SOPs for each type of return.
What you’re left with is a broken process and zero chain of custody visibility. That leads to extra labor costs, AR disputes, and other returns-related P&L killers.
A case management system with full ERP integration can give you the visibility and data you need to build better processes.
Here’s how Tropic Supply, an HVAC distributor from Florida, did just that. We made a webinar diving deep into their story, which you can watch here.
How Tropic Supply Fixed Their Warranty Process
Tropic Supply had warranty automation as a key corporate objective last year, focusing on warranty claims from one of their biggest vendors, Ruud Rheem.
Focusing on a top vendor is a smart approach because usually, 2 or 3 key vendors make up the vast majority of warranty claims. Beyond the 80-20 rule—it’s more like 90% of all claims.
By focusing on key vendors, you prioritize integrating the tech with their systems and building out approval processes to collect the exact information they need on their end.
Assessing the Manual Process
My team and I flew down to South Florida to understand Tropic Supply’s challenges, like:
- Slow warranty processing times at physical stores (20-30 minutes)
- Long waits for contractors standing in line to file claims
- Lack of visibility into replacement parts data without deep research
- Challenges reconciling vendor credits
We talked directly with in-store staff, warranty staff members, and other employees to understand their processes, gathering data on how long it took to enter a claim and what slowed them down. We also mapped Tropic Supply’s internal processes to build custom workflows into our technology.
Next, we worked directly with Ruud Rheem to connect our platform to their API and make sure the workflow gave them everything they needed to approve claims and issue vendor credits.
What I find interesting is that when you speak to HVAC distributors, they often calculate their cost of warranty processing by assessing how many individuals are in the warranty department, but what is often forgotten is the time:
- Counter staff spends time collecting information, identifying replacement parts, creating replacement orders, and crediting those orders
- The Finance team spends time chasing credit memos only to not know where to match those credit memos
Launching the Pilot and Collecting Feedback
Tropic Supply started with a pilot store, incrementally rolling out the platform to gather data and finetune their processes along the way.
On the webinar, Chief Accounting Officer John Birdsall told us the tech made initiating claims so much easier that staff at other stores started asking when they could use it. Change management goes smoother when you make people’s jobs easier.
But the big takeaway isn’t what you do right in the first round. What you do after you implement the tech is just as important. That’s how tech and process design work together.
A few things Tropic Supply learned through this approach:
- In-store staff told us that we could speed up the process by auto-populating the “Contractor” field in the warranty claim form, so we built a solution that pulled the data from the ERP and dropped it into the field
- Tropic Supply realized they didn’t need to receive parts back from contractors, which were filling up their warehouse space
- Unreconciled vendor credits offered a huge opportunity to boost the bottom line, which the data from the dashboard revealed
The more you learn from returned data, the more you can improve your processes and optimize workflows. The more you optimize those workflows within the software, the more insights the tech delivers. It’s all about continuous improvement.
Optimize Your Processes with Continuum
Continuum is more than a reverse logistics platform. We’ll work side-by-side with you to customize our tech and build out your processes to maximize ROI—and protect your bottom line.
Schedule a call today to learn more.
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