Keeping demand aligned with supply in the modern extended supply chain is growing more and more challenging. Globalization, increasing freight rates, capacity constraints, regulatory pressure and partner collaboration are just a few challenges that need to be constantly addressed to maximize the effectiveness of the supply chain.
In this series, we’ve begun to describe the six P’s that make up the modern extended supply chain and highlight how we leverage the Reveal oVo® Methodology to help companies using SAP to run their supply chains to transform their supply chains in an optimal manner. In the first part of this three-part article series, we discussed the Produce and the Procure processes, and in this article, we will proceed to describe the Provide and Product Return processes.
As mentioned, this article will focus on the Provide and Product Return supply chain processes. In the next article, we’ll deal with the Perform and Process in detail.
Provide covers the process of capturing a demand for a product all the way through to the fulfillment of that demand. We could also refer to it as the Order to Cash (OTC or O2C) process. We need to Provide the product to the customer on the promised date.
As part of Reveal’s oVo® Methodology, we follow best practices for the Provide process. That is, we leverage the power of SAP to drive the OTC system activities, and we focus our efforts on educating the applicable resources around the related master data and business rules that apply to the OTC process. In many cases, an extensive change management exercise is needed in order to effectively match the technology (SAP) with the process (execution within SAP) and with the people (get the organization aligned).
The key sub-process for the Provide process can be described as follows:
In accordance with our oVo® Methodology, and with reference to the Provide process diagram shown above, you can see that the process has three distinct major sub-processes:
Continuing on down the supply chain, we get to the process that we hope never to execute against, the Product Return. It is a process that needs to be made as simple as possible for the consumer. If they are wanting to return a product, it’s usually for a negative reason; making the process any more cumbersome than need be will only drive that customer further away. One of the reasons that Amazon and Costco are so successful with a high customer satisfaction rating is because of their simple Product Return policies.
One key aspect of a successful Product Return process is capturing the needed information, from the customer, into the system. Most of the time, we follow a proactive approach to capturing this information, such as pre-printing a return label and shipping it with the product. If the customer wishes to return the product, they can simply apply the return label and send it back to the postal system. By doing this, we ensure we have all the needed details in order to effectively receive the product back into our warehouse and provide a timely credit to the customer.
As part of our oVo® Methodology, we again follow best practices for the product return process. Once again, we focus our efforts on matching the technology (SAP) with the process (execution within SAP) with the people (get the organization aligned) in order to achieve the desired business goals.
The key sub-process for the Product Return process can be described as follows:
Variations to this process can vary greatly, especially when dealing with third parties in the repair process or a Return to Vendor (RTV) scenario where a third party receives and dispositions the product, and you are responsible for the financial credit to the customer. Ensuring a standard process across the scenarios allows for the changing of those third-party companies with minimal disruption to the product return process.
In accordance with our oVo® Methodology, and with reference to the Product Return process diagram shown above, you can see that the process, once again, has three distinct major sub-processes:
To sum up, in order to effectively execute your SAP-based supply chain, you will need the following to work together:
In the next article, we’ll deal with the Perform and Process in more detail.
Tags: Order to Cash, ovo, returns, Supply chain, supply chain management