Monthly Archives: October 2010

Reverse Logistics Tips from World Trade Magazine

A recent article in World Trade Magazine, Reverse Logistics: Money Tree or Money Pit?, had some good suggestions on how to streamline your reverse logistics supply chain to reduce costs and increase customer satisfaction. Quoting a recent study from the Aberdeen Group that found that best-in-class firms reduce return times by over 75%, increase customer satisfaction by 15%, and reduce repair costs by 10%, the article noted that companies best-in-class in reverse logistics have a few things in common.

  1. Standardized Return & Repair Process

    hodge-podge processes drive up costs

  2. Ability to Recover Costs from Suppliers

    a contract that allows for the recovery of costs is one thing, the ability to recover those costs is something else

  3. Real-Time Information Retrieval

    when a customer calls, it is imperative to be able to provide them with an update on their return status

  4. Multi-Channel Visibility

    returns can be initiated in the store, on the website, or over the phone, and can be shipped from the store, a reseller, or the home

This leads to the following best practices:

Multi-Channel Visibility

Customers expect a seamless experience. The ability to return an item ordered online to a store or an item bought at a store over the phone if the store is far away is critical. This requires the returns system to be integrated across all of the channels.

Centralized Returns Facility

Reverse logistics goes more smoothly through a dedicated facility which is set up to allow for sorting, testing, repackaging, and shipping of goods to repair centres or supplier distribution centres. These facilities can provide a way of visually identifying common problems quickly and efficiently. Consider the example of the weed whacker manufacturer who was able to identity the reason for a 266% increase in returns by noticing that the switches were white instead of blue, which was the colour of the approved switch.

Quick Problem Identification

Considering that 70% of goods returned as defective actually work, it’s imperative to quickly determine which goods are truly defective and need to go to the repair centre and which goods can be repacked for resale. In addition, with many of today’s products being (built-in) battery powered, many times the problem is just a bad battery, and the repair is as simple as swapping out a defective battery for a good one — something that can be done in the returns depot, saving an expensive return to the repair centre.

Since even the best efforts to improve quality won’t eliminate defects entirely, and since customers will continue to return products that aren’t really defective (or that just need a new battery), it’s important to have a streamlined reverse logistics process to ensure customer satisfaction stays high while costs stay low.

Coupa: Crouching Cheetah, Hidden Hippo

For those of you who have been following along, I recently did a 3-part series on Coupa (Part I, Part II, and Part III), a company that has been taking off like a rocket in the e-Procurement space (growing almost 200% year-over-year with one stunning customer win after another), where I asked if their strategy had shifted to customer acquisition first and building a better platform second, as it seemed to me that their rate of product innovation over the past year has not kept pace with their historical rate of product innovation. And while I will freely admit that the most important thing in business is customer acquisition and retention, and that this often means focussing on customer requests, which usually fall under the category of renovation, first and innovation second, I really admired Coupa for their devotion to innovation first and figuring out what the customer needed before they asked for it.

I’m happy to say that Coupa took me up on my challenge and decided to spend a few hours reviewing in detail not only what they have done, but what they are working on now and future directions they have mapped out. The short story is that the product team has been very busy not only fleshing out the core platform, but on finding ways to take its accessibility, usability, and generality to the next level.

From an accessibility viewpoint, they’ve started porting to the platform. While they haven’t announced it yet, and don’t plan to for a few months, Coupa Expenses is now available on the appexchange2, and can be found by a simple search. users can now use Coupa Expenses to accurately determine their cost of sales (which allows them to more effectively forecast revenues, estimate expenses, and allocate resources). This app not only allows you to track expenses, assign them to opportunities, and get up-to-date reports against budgets at any time, but also includes the “frugal meter” that lets an employee now when a cost is frugal or high compared to averages and / or limits. And there’s more to come.

They’ve also been working extensively on their API. This may sound boring as all get out, but the real value of a Procurement platform is only realized when all of the spend is accessible through that platform. In other words, unless you have an integrated view of spending that includes direct, indirect, Contingent Labor/SoW, and T&E spend, you really don’t know how much you’re spending and, more importantly, the TCO of categories where the products you are buying require support services and T&E expenses to manage both the manufacturer and/or services provider. If a company is using one (Best-of-Breed) platform for direct, one for T&E, and one for indirect and/or contingent labor, then the spend is distributed across multiple systems and no one system gives an accurate view, unless it is integrated with all of the other relevant systems. Generally speaking, these integrations are expensive as most of these systems (and classic ERP systems in particular) don’t have good APIs and only experienced, expensive, third parties can accomplish the integrations. But with fully documented open and transparent APIs that expose all of the data elements and core capabilities of the platform, any decent development team can accomplish the integration. Not only has Coupa fully exposed and documented their API to allow for easy integration with ERPs and Supplier Networks, but they have also built an extensive site at to allow their customers to integrate with any systems they need to quickly and easily. (And with their Boomi partnership, most customers can integrate Coupa with their ERP systems with very little effort.)

From a usability viewpoint, not only is the current instantiation of the UI (intelligent-)search based, but the UI workflow is being streamlined to make regular tasks as quick, easily and painless as possible for the average user. From auto-calculating miles in expense reports (using Google Maps) to auto-classifying receipts (using OCR when possible), it’s all about making it even easier to use than Amazon or eBay, so that organizations get the adoption necessary to make their eProcurement initiative a success.

From a generality viewpoint, they’re working on features and functionality that will take e-Procurement to the next level in the average mid-market company, regardless of vertical. Look for a few announcements late this quarter / early next quarter on how they’re going to do that (and how they’re going to not only address the weaknesses with their new benchmarks and budgeting capabilities, but take them to a new level as well). The development cheetah has been running at full speed in the background, and once the product management hippo gets excited, it’s going to charge with an almost unstoppable force.