One easy way to improve supply chain efficiency is to automate customer claims processing. In my experience, a company making 75,000 deliveries each year will have to manage about 15,000 – 20,000 claims over that time. And while there could be a million reasons for refusing to pay all or a portion of the invoice – these are often because of damage, unsatisfactory service, faulty products or incorrect pricing.
In a non-automated environment, claims processing works like this:
- Collect paperwork
- Look up data in systems
- Copy delivery and invoice documents
- Investigate claims that matter
- Assign a status to the claims for future credit (or not) to the customer.
Apart from investigating the root causes, the only value that a human adds here is to make sure that data is where it’s supposed to be.
On the other hand, in an automated environment, all relevant documents are:
- Filtered through business rules
- Categorised into a database.
All of this happens without human touch. However, once this data is in a database or system, that’s when humans can glean valuable, actionable information, such as which customers have a pattern of making claims for the same reason month after month.
This is when your supply chain team adds the real value – critical thinking, analysis, and creative problem-solving. The result is actually a reduction in the cost of claims.
In a non-automated environment: human added value = processing claims.
In an automated environment: human added value = reducing claims!
In automated environments, it really is possible to redeploy staff to more profitable work, and these roles are bound to be more satisfactory because of the added challenges and greater opportunities for creative thinking. And that can make all the difference in attracting the supply chain leaders of the future (because talent management could actually give your supply chain a competitive edge).
How do you make the shift from non-automated to automated environments?
In 1992, the Harvard Business Review published the influential and now famous article: Staple Yourself to an Order, a piece about how organizations can eliminate inefficiency and bad customer service by following each step an order takes across the supply chain.
This is what you need to do when it comes to order and claims processing…read more