Strengthen Your Post-Sales Supply Chain

Companies that want to compete in an increasingly globalized marketplace need an effective, efficient supply chain to get their products into their customers’ hands. But, truly successful businesses understand that sustainable success depends on keeping customers satisfied before and after the sale.

Regardless of quality, some of your products will inevitably need repair or replacement, which makes a quick, dependable post sales supply chain crucial to keeping customers happy and coming back for more. This is especially true for companies that offer service level agreements (SLA) and warranties as a competitive advantage–the longer customers must wait to get their SLA or warranty fulfilled, the more likely they are to turn to a competitor next time around.

There are misconceptions that cause companies to undervalue post-sales supply chains, which can keep them from establishing an effective way for customers to return and service products. In fact, post-sales revenue is a profit engine for many companies, contributing as much as 50% of some businesses’ annual profit.

What makes for a successful post-sales supply chain? For starters, you have to make it easy on your customers.

Your returns system can be an important representation of your business to your customers. Having a dependable system to service or replace your products can be an effective tool to ensure repeat business, according to a recent Forrester Consulting study about online returns commissioned by UPS.

To help improve your return system’s efficiency, take the guesswork for your customers out of the returns process. Start by implementing an effective returns system, and then communicate clearly to your customers how to properly return products.

One of the simplest scenarios is a Web-based returns system that lets customers keystroke in a part or product number to automatically print accurate shipping labels on their computer.

Also, processing returns electronically allows you to keep your customers informed of their product’s in-transit status every step of the way. Customers trust that they’ll receive quick service or a replacement if a product under SLA or warranty breaks, and it is human nature to want to know the status of the in-progress return.

Breaking that trust with a slow response time and no or limited tracking capabilities can cost your business valuable future sales. It can also increase your customer support costs with “where’s my return” inquiries.

It’s also important to synchronize your post-sales supply chain.

Companies of all sizes can benefit from synchronizing their post-sales supply chains. If you offer post sales service or returns on your products, going global is almost impossible without a quick, dependable system for returns or repairs.

UPS research shows seven out of 10 businesses don’t have a formalized process to handle international returns, and some simply abandon international returns because they feel it’s not worth the money or trouble.

A disjointed post-sales supply chain can have major pitfalls. Miscommunication, excess inventory, slow fulfillment times and limited visibility are all symptoms of a poorly managed post-sales supply chain.

A synchronized system, on the other hand, can help you satisfy your customers. You might consider partnering with a third-party logistics provider (3PL). Unless it’s a core competency of your business, in-house management of your post-sales service and parts inventory can be a costly way to allocate resources.

What’s more, a synchronized post-sales supply chain helps you do more with less by optimizing inventory levels across networks, quickly replenishing field inventory, expediting returns and repairs to reduce the need for new inventory, maximizing field engineers’ productivity and reducing obsolete inventory.

Perhaps most important, a solid system for managing the entire supply chain will improve customer service, which is always good for business.

Brad Mitchell is president of UPS Logistics and Distribution.

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