In high-tech manufacturing industry, it is of great significance to effectively control and track product returns.
For an industry whose product cost ranges from several yuan to several hundred thousand yuan, the ability to manage the return process is very important, and the lack of tracking and control may lead to a loss of millions of yuan.
In addition to the direct economic losses caused by free maintenance and replacement of non-insured products, there are also problems of product quality and customer satisfaction.
In addition, improper design and implementation of the return process may have a huge negative impact on the performance of enterprises and even the future.
In order to improve customer relationship, enterprises pay more and more attention to the management of return process.
The new SCOR model (4) released by Supply Chain Association in June 2000+June 2000+June 2000.
Version 0) adds a return process, thus expanding the scope of the supply chain operation reference model to the customer support field after product sales.
The key to manage and control the return channel is the return process.
In high-tech manufacturing, the performance and reliability of products are the key to the success of enterprises. Customers need a channel to return defective products, and immediately attract the attention of manufacturers and solve them.
This paper discusses how to use ERP software (SAPR/3) to analyze and design RMA process in high-tech manufacturing.
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RMA process RMA process involves the logistics of return process and the information flow related to it.
Return logistics includes internal logistics (customer return), maintenance cycle (including materials needed for maintenance return) and external logistics (repaired products).
The information flow of RMA process consists of all RMA states, including customer contact date, transportation information, return receipt, maintenance history, scrapped parts, replacement products, quality data, etc.
The RMA process begins with the customer reporting the manufacturer's defect or fault about the product.
Usually in the initial contact, the manufacturer will try to do some preliminary fault diagnosis to see if it can help the customer solve the problem immediately.
In many cases, faults are caused by software problems, and these faults can usually be diagnosed and solved by telephone or Internet.
If it is a hardware problem, the manufacturer will instruct the customer how to return the goods.
Manufacturers usually assign a unique number to each customer's request to track and control the RMA process.
Customers will use this RMA number as a reference when dealing with manufacturers on the same product in the future, and enterprises will also use this number to collect information related to this product.
After the return arrangement is completed, the repair is completed or the replacement is issued, the RMA process is over.
Figure 1 shows the ram flow chart.
Figure 1RMA Flowchart 3
ERP and SAPR/3 enterprise resource planning (ERP) system is an integrated software package, including a set of mature business applications and tools, which are used for enterprise finance and cost accounting, distribution, material management, human resource management, production planning and computer integrated manufacturing.
By combining these basic software modules, enterprises can build and reorganize their business processes.
In order to realize enterprise informatization and manage the whole organization more effectively, many enterprises are implementing ERP system.
ERP system can be used to coordinate and control order management, production process, customer service, product inventory, capital flow, financial management and so on. In addition, through the ERP system interface between enterprises and the Internet, enterprises can form a partnership and realize B2B e-commerce.
Obviously, this is a huge and complex system, and the implementer should not only understand the functional departments, but also understand the operation of the whole enterprise.
Software companies that provide ERP systems mainly include PeopleSoft, Oracle, Baan, JDE, SAP, etc.
This paper mainly introduces SAP, the leader of ERP market, and its product R/3.
SAPR/3 is a client/server ERP system, which can provide distributed application capabilities from the perspective of the whole enterprise, such as planning, scheduling, cost and other functions can be applied to multi-level organizations (such as various work centers, branches, business divisions, companies), and it also has global application capabilities such as multi-language and currency.
According to the report of the famous ERP consulting company in the United States, the software sales and maintenance tax in 1997 ERP market is144 billion USD, and it is increasing at the rate of 20% every year.
Among them, SAP occupies more than 15% market share, and its market position makes SAPR/3 an informal industrial standard.
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RMA and SAPR/3 are valid for software concentrated in one functional department, as long as the decision is within this functional scope.
However, many decisions have cross-functional input and influence, which limits the effectiveness of traditional software systems.
When an enterprise tries to make two or more function-based software systems communicate with each other, it will cause more problems, and the result is often inefficient operation, chaotic data and more software support.
ERP software takes a completely different approach. It has only one database, and all applications use the same database.
The design idea of ERP software is to ensure the integration of functional modules. This method may reduce the functional level of the original independent system, but this functional reduction is negligible compared with the ability to make all application modules work together.
The main advantage of ERP system is that it can manage a business in a balanced way from beginning to end.
It is powerful to let software control the workflow, but enterprises must reorganize the workflow and eliminate unnecessary or redundant operations.
In the implementation of ERP system, people can reorganize the process to match the software function, or customize the software to match the existing process.
Although the former method is proved to be more reasonable and effective, the implementation of ERP system should first solve the key problems of changing enterprise processes or customizing software.
In the past, one of the most common reasons for the failure of ERP system implementation was that enterprises found that ERP system did not support an important business process in the enterprise during the implementation process.
The solution to this problem is either to change the business process to match the ERP system process, or to customize the ERP software to adapt to the enterprise process.
Both methods have their own shortcomings. Changing business processes may lead to confusion in enterprise organization, and modifying software may delay the project and increase the difficulty of upgrading software in the future.
The best way to solve this problem is to compromise between the two, neither completely redesign the enterprise process nor make a lot of changes to the software.
However, many enterprises still tend to accept the suggestions of their ERP software suppliers and pay more attention to process changes.
A study by Deloitte Consulting, a well-known consulting firm, shows that a quarter of the companies that implemented ERP systems pointed out that their performance declined after the actual operation of ERP systems.
The study also reveals that this initial performance decline is the most common result after the change of business process, and it usually takes 3 to 9 months for enterprises to recover from this management performance decline.
This also shows the possible impact of changing business processes without fully understanding the consequences, which supports the view that not all business processes need to be completely changed to keep up with ERP software.
ThomasDavenport summed up some successful cases in his book MissionCritical, in which the implementation of ERP software was used as an incentive for process reengineering.
He said in the book: "Companies are beginning to realize that activity-based data brings opportunities for companies to redesign basic business processes, which can lead to a new set of decisions.
This study points out that enterprises can achieve management improvement by implementing ERP system and corresponding business process changes.
For example, in the past system, users reported the defects and faults of the products they wanted to return, and this information usually only existed in the information system used by those contacted by customers.
If these people are in the customer service department, they may record some customer information in a limited way to ensure that the maintenance personnel can reply.
When maintenance personnel reply to customers, they usually only have limited user information, such as the model of the user's product or some original records recorded by customer service personnel.
In this case, the customer and the manufacturer usually have to provide and enter the same information again.
One way to solve this problem is that the company allows an employee to access multiple database systems in order to get the information needed to help customers.
But this increases the burden on staff, who have to switch back and forth between different systems in order to find the data.
Another way is to separate the access and control of data, so that the customer's request can only be completed by a few people. Usually, this solution will annoy customers.
Some people involved in solving problems may be scattered in sales, product engineering, manufacturing, material management, financial accounting, quality management, software development and other departments; Because there are so many potential steps in RMA process, some enterprises have established special institutions to handle the return process.
There is also a problem, that is, when customers want to know their RMA status, how to provide them with these status information.
To solve this problem, someone needs to spend a lot of time tracking the current RMA status.
After using ERP software with centralized data storage like R/3, customer service staff can answer many questions raised by customers without paying attention to the physical progress of the work.
Of course, this is not a perfect solution to the RMA process problem, because people don't want to automate an inefficient process.
The following part puts forward an RMA process, which uses SAPR/3 to provide centralized information resources and establish the necessary management and control structure for a fast and effective process.
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There are several tasks to be done in the analysis and design of RMA process in the initial stage of developing information system, including understanding the process, collecting relevant information and requirements, and finding out the problems existing in the existing process.
Let's talk about the analysis and design of RMA process.
Material tracking (lot number or serial number)-In order to control returns, serial number is required.
This serial number usage strategy must also be implemented throughout the enterprise, which provides closed-loop tracking of products.
Customer returns without serial numbers will affect the ability to determine the source and use time of materials.
Unplanned Return Receipt-If the RMA reference number in the delivery receipt is not provided, the product returned by the customer will cause the material to be received as an unplanned return.
In the past, these materials will be transferred to the recycling bin, and the RMA process will end without filing the materials.
Tracking RMA-free materials is a value-added activity and should be excluded.
Underwriting information-If there is no material tracking (the first question), it is time-consuming to identify when the product is sold and determine whether the guarantee is effective according to the sales order.
Lack of material tracking will also lead to the situation that the product sales order provided by the customer is within the warranty period, but the returned product is not guaranteed.
Without material tracking, it is difficult to identify these situations. Free maintenance of products that have passed the underwriting period will cause losses to enterprises.
Product replacement-decide who should send the replacement first according to the customer's priority.
The problem here is how to end the RMA process by tracking the return.
Maintenance level of returned goods-This question is related to underwriting information, and customers can return goods according to the product order number during the warranty period.
During the maintenance process, the return maintenance is free at the current level.
The information system supporting the process of military revolution must deal with the above problems; In addition, the system should also have the following capabilities: collecting inspection and test results for the quality management database; The information system should be able to collect the inspection results of returned goods and then transmit these data to the quality management database.
Return failure and failure reasons are the key information to evaluate product quality.
The information base of products purchased by key customers can be determined: this information is used to accurately calculate the failure rate of customer products; With this information, enterprises can determine under what circumstances the failure rate of products returned by customers is higher than the normal failure rate of the products or product series.
Customer Return Evaluation: This information is used to evaluate the potential return abuse, and the input data for this evaluation needs to be collected from the return channels and end users.
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SAPR/3 scheme of RMA process Figure 2RMA generation flow chart SAPR/3 system supports RMA process through a function called return processing in distribution module.
In addition, the system also supports customer complaint record, which is realized by quality management module and maintenance order processing service management module.
The return processing function refers to the quality management module and the service management module refers to the return processing function.
The return processing of SAPR/3 solves many of the above analysis and design problems.
The generation of RMA needs some information, which provides necessary management and control for effective RMA process, including sales order number, customer number, batch number (or serial number) and product ID (model identification).
Many problems in warranty and replacement can be solved by collecting the necessary information in RMA process.
The process of RMA begins with the generation of RMA, and the generation of RMA begins with receiving and recording users' problems.
When the customer service staff determined that it was a product problem, there was no maintenance point at the user's location and it was necessary to return the product for maintenance, RAM came into being.
Figure 3RMA material receiving flow chart Figure 4RMA material issuing flow chart Figure 2 shows the RMA generation flow chart.
The key elements of this process are determining the serial number (required input) and determining whether the product is under warranty.
At the end of this process, RMA is saved and SAPR/3 system assigns it an internal file number.
This document number can be used for internal and external RMA status tracking and related activities in the future, and can also be passed to external customer relationship management (CRM) system (if any).
In this way, people outside SAPR/3 system can also check the RMA status, and through the interface of this system (SAPR/3 and CRM), relevant information can also be published on the website for users to query.
After the RMA is generated, the next step of the macro RMA process is the return receipt.
Handling the return receipt in RMA is realized by the delivery function in the distribution module and the goods movement function in the material management module.
This special process is also called "receiving and handling of returned products"
Figure 3 shows the material receiving flow chart of RMA.
In this process, RMA and maintenance orders are updated after receiving materials.
Because the picking process is a commodity flow, it is necessary to set a file number internally and attach it to the RMA file flow. This information can be used to maintain a database of products purchased by key users.
Another process in the integration of distribution module and material management module is the distribution of replacement products (if the return is within the warranty/replacement period, see Figure 2).
This process includes sending replacement products to customers free of charge. Figure 4 shows the flow chart of this function, which also includes generating a free sales slip in the distribution module.
SAPR/3 generates history for this order type (free of charge).
When processing a sales order, the documents of each step (picking, packaging and shipping) are attached to the order, which is attached to the RMA.
The downward function of SAPR/3 allows users to view all this information at different levels of detail.
The whole process of RMA includes connecting the four processes mentioned above with the repair order process (Figure 5).
The maintenance process includes inspection and testing of the returned materials, ordering the parts needed for maintenance and return, carrying out maintenance (including product upgrade according to the maintenance level), calculating the maintenance cost and returning the goods to the warehouse after maintenance.
This process involves service management module and material management module, and also integrates control module (cost accounting).
Figure 5 gives a general description of the logistics of the repair process. If the enterprise adopts outsourcing maintenance, it needs to update RMA with the data provided by the outsourcing factory or the outsourcing factory has access to this SAPR/3 system.
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Conclusion The RMA process solution proposed in this paper can eliminate multiple (more than five) department management systems that are not integrated, and each of these systems needs an administrator to maintain and update.
The solution of integrating the whole process into an ERP system only needs to train one or two analysts to use SAPR/3 to support this process, thus eliminating unnecessary human resources and improving operational efficiency.
The solution shows that an integrated software system is needed to effectively handle customer requirements, and the functional modules in SAPR/3 provide the necessary elements for high-tech manufacturing to support RMA process.
By integrating several different modules (distribution, material management, service management, quality management, accounting and control) in SAPR/3, the problems in the existing RMA process can be solved.
The function of SAPR/3 in Figure 5 allows the RMA process and all related documents to be fully tracked. This scheme can also save costs in many aspects, including guarantee fees, return loss, improved data quality and better customer information.
SAPR/3 implementation of RMA process is an effective method to deal with the return process.
Because ERP system is expensive, it is not worthwhile to implement ERP just to improve RMA process.
But for enterprises that have implemented or are implementing ERP system, the function of software system should provide opportunities for enterprises to improve RMA process.
This paper puts forward a scheme to improve RMA process by using ERP system.
Further research needs to evaluate the results after implementation, including cost savings, improved customer service and shortened process cycle.
In addition, the evaluation of other ERP systems and their RMA functions is also worth studying.
References: p
Backsmann
Koenig, Logistics and Service Management, springer Publishing House, Heidelberg, new york, 2000.
Remonff
Boykin, "Enterprise Resource Planning Software: Solving the Problem of Returning Materials"
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Mission Critical: Realizing Enterprise Defense System, Harvard Business School Press, Boston, Massachusetts, 2000.