Developing an efficient distributor returns strategy is key to maximizing profits, and we’ve written a number of articles about how to implement an effective returns initiative.
In this post, we’re going to delve into some of the hidden barriers to optimizing returns—from tribal knowledge to manual processes that create major bottlenecks and drain profits. We’ll also explain how innovative, tech-powered processes can solve these problems and clear the path toward smoother scaling.
Keep reading to learn how to address these hidden barriers to efficiency, free up resources, improve scalability, and open the door to serious growth.
Tribal Knowledge Kills Efficiency and Your Ability to Scale
Whatever we call it, we’re all familiar with tribal knowledge. Established businesses often develop ways of handling tasks and managing operations without creating and following formal processes. That knowledge remains in the hands of a few reliable employees, which works well… until it doesn’t!
Bob or Susan might know exactly which steps are required to move products back up the supply chain, get customers their refunds, coordinate with accounting departments at each organization involved, and keep everyone happy. That’s all fine and good—until Bob retires or Susan takes a new job.
At that point, everyone is scrambling to figure out how to replicate what Bob and Susan did for years or decades. Customers get frustrated (some may even jump ship), and your company loses hours of productivity just trying to recreate what feels like wizardry.
Suddenly, nobody is left who understands restocking fees, documentation standards, multi-department approvals, unique workflows, and other key elements of the returns process.
Then there’s the problem of scaling. Even when your reverse logistics wizards stick around for decades, what happens when you want to open new warehouses in another state or country? Without established processes and tech-powered RMA automation for distributors, you end up with fragmented, inconsistent processes that kill productivity and lead to customer churn.
The Solution to Tribal Knowledge in Returns Processing
We recommend taking a two-pronged approach to addressing tribal knowledge and ensuring your ability to scale.
First, you’ll want to take a strategic approach to returns processing, building a returns management initiative that includes clearly written policies and processes that everyone can follow and replicate. Second, you’ll want to automate the process as much as possible, which you can do through technology like Continuum—which is designed specifically to support returns management for distributors.
Looking to expand to new territories? Here’s a great article from Mike Kunkle outlining key steps you can take to grow your territory faster.
Lack of Visibility within Internal and External Communication
An old-school, non-strategic approach to communicating about returns—which is the way the vast majority of distributors handle things—results in inefficient communication and rework.
How so? A typical B2B return requires a great deal of follow-up, which may take place via phone calls, emails, and other forms of communication. Customers reach out with questions about the status of their returns and shipping procedures, and different departments within each organization attempt to verify approvals, credits issued, and more.
The old adage about the left hand not knowing what the right hand is doing doesn’t even come close to describing the complexity of B2B returns.
It’s more like a giant squid with tentacles darting out in all directions, creating an inefficient mess.
The Solution to Communication Challenges
Creating visibility and streamlining communication is easy with the right software. Just like Enterprise Resources Planning (ERP) software streamlines day-to-day activities like accounting, warehousing, and logistics management, there is software designed specifically for managing reverse logistics (i.e., B2B returns).
The Continuum platform features hubs for customers, warehouses, finance departments, and manufacturers, where everyone involved in the returns process can log in, enter requests, track progress, and ask questions.
It’s a centralized platform where nothing gets lost, and our data shows it reduces the need for endless communication by more than 60%.
This not only makes scaling easier, but it frees up time to work on more high-value tasks—boosting productivity, reducing costs, and increasing profits.
Inaccurate Information and Unforced Errors
Distribution logistics is complicated business, and reverse logistics even more so!
Challenges arise that disrupt the supply chain, from natural disasters to political unrest, and experienced professionals know how to deal with those challenges. That said, nothing hurts more than an unforced error, such as a mistake in relaying information that could have been avoided with the right tech.
That’s what happens when distributors rely on manual data entry, or when customers provide incomplete or inaccurate information. Without a self-service portal, your staff needs to chase down inaccurate information and waste their time on damage control.
The Solution to Inaccurate Information Transfer
A centralized platform that allows customers to initiate returns themselves, through a portal with predefined business logic, ensures correct data-entry from the start.
Your customers can do this through the Continuum Customer Hub, which automatically validates returns against invoice data to increase accuracy. It also captures “reason codes” and asks customers to provide product photos that feed directly into your ERP—preventing unapproved or incomplete returns from entering the workflow.
Manual Entry for Return Merchandise Authorizations (RMAs)
Another similar bottleneck is tied to RMAs. Most distributors still rely on manual data-entry for RMAs, requiring customers to fill out paper or PDF forms that your staff must re-enter into your ERP by hand. Naturally, this leads to more errors, which could be avoided by automating returns processing.
The Solution to Errors Caused by Manual RMA Entry
Use technology like Continuum to automate RMA creation through an integrated returns management portal. This reduces errors and ensures that returns data is reconciled with finance and accounting data. Automating RMAs frees up employee resources, increases efficiency, and greatly improves the customer experience.
Ready to Take Back Control of Your Returns Process?
Discover how Continuum—the world’s first-ever reverse logistics network and platform—simplifies returns lifecycle management. Continuum will help you boost productivity, increase profits, and scale your business successfully.
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