The following guest posting is a contrbution from Atul Chandra Pandey, Industry Head- Enterprise Applications Integration and Service with Infosys Technologies.

I met with Bob Ferrari at Sterling Customer Connect event in Dallas in late April of this year and we were exchanging thoughts on emerging themes and trends in the supply chain space especially in the context of the recent economic downturn.  It was quite an interesting and engaging interaction where we discussed a host of topics ranging from logistics to order management / fulfillment, supply chain planning and customer service. One of the key thoughts which we synchronized on was how customer service is becoming central to organizational thinking and how supply chain execution – especially reverse logistics- can play a central role in creating differentiation. In this blog I have outlined how reverse logistics can help create this differentiation.

As mentioned in my blog on key value chain trends earlier this year, customer side equations are taking prominence over rest of the value chain. Based on my interactions with my clients so far this year, I have found this trend to be further strengthening. This is especially prominent for customers in the high tech / consumer electronics sector where new products are introduced now almost every quarter and with reducing differentiation between brands (product quality and reliability is a given now), retaining customers is becoming ever more challenging.

Based on my observations (types of IT projects getting funded, new initiative lists from the business stakeholders), these clients are increasing focus on strengthening all dimensions of customer touch points including both pre-customer acquisition processes (lead management, opportunity management, qualification / conversion) and post-customer acquisition processes (customer service, warranty management and technical support).

One of the key areas of focus in this renewed thrust on customer service is to leverage reverse logistics which traditionally has been a cost function and often not seriously attended to. The recent economic downturn drove organizations to rethink the entire value chain and look at every opportunity to squeeze costs and retain customers. Reverse logistics provides critical link in connecting sales & marketing and customer service chains and provides significant opportunities for reducing customer pain and increasing satisfaction, controlling costs, and gaining deeper visibility into customer choice and preferences.

Based on my interactions and analysis of my clients, leveraging innovative reverse logistics practices can help create differentiated customer experience at multiple levels. These can be divided into 3 lifecycle stages of customer experience 1) minimize occurrence of disruptive event 2) minimize pain in the event of disruption and 3) enhance product design to offer enhanced future experience

Performing remote diagnostics and remote correction on high value hardware / software assets (high tech equipment – such as networking gear, storage devices and servers) is great example of minimizing occurrence of disruptive event. Combined with electronic delivery of required software patches / fixes, the lead time to correct disruption is also significantly reduced.

Apple’s genius bar in Apple’s retail stores is an excellent example of the second category – minimize pain in event of disruption. All you need to know is the location of the nearest store – which again could be found from an app on your iPhone!  The entire product return / exchange process is managed seamlessly by these outlets. Minimizing wait time for replacement / fixing the issue and absolving customers from the headache of returning product helps minimize the disruption in customer experience.  .

Getting first hand visibility into customer issue and feeding it back into R&D, engineering and manufacturing can greatly help in enhancing future product releases and improve user experience. Usually Engineering, R&D and manufacturing orgs are not seamlessly connected with customer service. Further customer service itself may not be the first direct link to the actual customers. A great example of this scenario is mobile equipment. If there is a problem with a cell phone handset, (say Samsung), customers will not go first to Samsung, they will first go to the carrier (Verizon, Sprint). Carriers will do the initial diagnostics and then pass it on to manufacturers. In many of these cases the manufacturer may not even know the situation in which the customer experienced the disruption. (I actually had this problem just a couple of weeks back when I ordered first cell phone for my daughter – which went blank the next day. We went to the Verizon service center and got a replacement handset, however I am not sure when / whether Samsung will get the complete details of my problem). A great deal of customer choice and product usage data is also not available to manufacturers directly in these cases.

In all the above cases information technology has great role to play to support and take reverse logistics to the next level. Leveraging information visibility to anticipate disruption (smart sensors / diagnostics / asset management), manage disruption (guide customer to minimize disruption / take to point where disruption can be managed) and leverage disruption data and linking it to the back end functions in the value chain can help create much better future experience than simply focusing on the physical side of managing returns.

I anticipate the face of reverse logistics to significantly include and leverage value chain information than only be limited to physical asset recovery and disposition functions.

As always, would look forward to your thoughts and comments.

About the author – Atul Chandra Pandey , Industry Head – Enterprise Application Integration and Services with Infosys Technologies and has more than 14 years of IT experience. He is responsible for sales and engagement for Enterprise Application Integration (EAI) and services such as supply chain, customer care and Master Data Management (MDM) for manufacturing and the banking capital markets industry. Atul is also involved in program management, process consulting, IT outsourcing, implementation and sustenance services, project management and delivery, business analysis across leading package and technology services.
Atul shares his views on supply chain management at www.infosysblogs.com/supplychain

Further Disclosure: Infosys Technologies is one of other paid sponsors of the Supply Chain Matters blog.