Typically, we calculate the profitability of products by comparing sales revenues with manufacturing costs, taking into account also the costs of transportation, storage, sales, promotion along with other components in accordance with the company's cost allocation model. How should we treat the costs of handling complaint-based returns in this approach?
Typically, these are the costs that are associated with warranty service, that is, the costs of: receiving, warehousing, inspecting the return, repairing and/or replacing the defective product and providing the customer with one that is already defect-free. The situation is also made more difficult by the way the company is organized: the separation of sales and after-sales service, that is, the management of complaints and returns. Different people are responsible for sales, receipt of complaints, their handling and all the logistics of the process, which takes place in the background. That's why it's so important to pay a lot of attention to this cost component and to use well-thought-out IT solutions that provide a full picture of the situation in after-sales service.
BTECH has prepared an extension to the standard functionality of returns handling with an eye to optimizing the process. After implementation, users receive a solution that enables accurate mapping of returns processes, automatic generation of necessary documents and full insight into the flow of information at all stages of the returns process. Using our solution, you will make the handling of the process of complaint-based return, repair or replacement of defective equipment much easier.
We achieve similar benefits for such activities as: inspections of returns (regardless of their location), keeping a record of the movement of replacements, tracking the consumption of spare parts needed for repair, issuing adjustment invoices or invoices for repair (when a complaint is rejected) or reporting on individual phases of the process.
As a result, it will take less time to handle a complaint comprehensively, and it will be easier to record all costs, especially those that were previously difficult, or even impossible, to determine. This, in turn, is the way to better manage prices, profitability and the entire life cycle of the products offered. Of course, the details depend on the individual needs and specific processes of each company.