Discover the 2 Big Mistakes Distributors Make—and How to Fix Them
There are two big mistakes distributors make when choosing technology to improve their reverse logistics strategies.
The first mistake has to do with the ERP. I can’t tell you the number of times I hear distributors say “[insert ERP Name] doesn’t handle returns well.” But what they don’t realize is that no ERP does.
That’s mistake #1—using your ERP for case management.
We’ll explain why that doesn’t work in more detail below, but what you really need is a case management solution that lets you track and process returns.
You can’t just choose any off-the-shelf case management tool, though.
Mistake #2 is choosing case management software that doesn’t fully integrate with your ERP.
Most case management platforms don’t integrate with ERPs. Think Asana, Jira, Salesforce Case Management, HubSpot tickets, etc.
They’ll give you the visibility you need, but without ERP transaction automation, you’ll force your staff into a world of duplicate entry—killing efficiency (more on that below).
The good news is that you can fix these problems, achieving visibility and efficiency without compromising either one. Here’s how to do that in 3 steps.
Step #1 | Stop Using Your ERP for Case Management
ERPs are designed to manage transactions, and they’re great at doing that. But reverse logistics requires case management because again, I can’t stress this enough:
Every B2B return, repair, and warranty claim should be treated as its own project.
You can’t manage projects the same way you manage transactions, especially with reverse logistics, because every order, every quote, and every return category is different, requiring its own workflow.
Your ERP won’t be able to:
- Classify different types of returns (e.g., stock vs. non-stock returns)
- Block bringing back inventory you don’t want before engaging the vendor automatically
- Auto determine restock fees, optimize for return locations, and route to the appropriate internal teams for approvals.
- Capture vendor-specific information—so you can track unrecovered vendor credits
- Show you what has happened in the approval process so far, at any given stage
Step #2 | Build ERP Integration into Your Case Management Software
Many companies gain visibility through case management software, but if it doesn’t integrate with your ERP, then everyone has to access and update both systems at each stage.
That’s hugely inefficient, and it impacts your P&L through:
- Extra labor costs
- Increased errors and possible rework
- Making it slower to receive vendor credits
- Taking longer to issue customer credits or ship replacements (impacting customer satisfaction and leading to possible customer churn)
I understand why companies use case management. It provides great visibility and ensures no transaction slips through the cracks. But while you gain is visibility, what you lose is efficiency.
Find a case management solution that integrates with your ERP and allows you to customize workflows and optimize returns processes.
Step #3 | Build Custom Workflows for Each Transaction
Since every type of return is unique and requires its own workflow, it’s difficult to get everyone on the same page when it comes to SOPs.
You may have a few reverse logistics gurus in your organization, but what happens when they leave? All that tribal knowledge leaves with them.
That’s how approvals get slowed down, vendor credits get lost, and AR disputes destroy the customer experience.
Our research shows it takes an average of 12 months to get CSRs up to speed on complex supply chain challenges, and we found that 40% of distributors are struggling to hire people with deep supply chain management knowledge.
By building out custom workflows, you’ve got a system that can guide your team members at every step.
The trick is to segment out return types and sub-types, reason codes, and other details. Then build out workflows that let everyone know what happens next in the process.
Then you can study the detailed KPIs that help you spot bottlenecks. You can track delays by department, spot unreconciled vendor credits, and more.
Visibility leads to better processes, and better processes create even more visibility. It’s a virtuous cycle, but before you put it in motion—you need the right systems in place.
See Continuum in Action
Continuum is a returns management platform that integrates seamlessly with leading ERPs and lets you do deep workflow customization.
Schedule a demo today and see how it works.
Comments