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With apologies to authors of who-done-its, when customers complain about a mistake, the knee-jerk reaction is to say "The Warehouse Did It." Often, the warehouse didnít make the mistake Ė someone in the office or field did. In this lousy economy, it takes only a few mistakes to lose business -- or lose customers. Retaining customers requires that some "back office" processes be as error-free as warehouse processes.


Customers get angry when the quotes they receive contain wrong items/quantities/prices. Sometimes, after only one mistake, they buy elsewhere. No one wants to spend time proofing low-value quotes before sending them to customers. But quotes worth more than a certain dollar amount should be checked by someone other than the person(s) who worked them up, and checked before being sent.


Unlike quotes, which should be reviewed before being transformed into orders, orders that do not originate with quotes should always be checked to some extent; especially orders that are received electronically. Although sales orders are checked by the computer system for such characteristics as item code, few systems check for "reasonable quantity" for the customer and items involved. "Reasonable" could be based on the average or maximum quantity ordered within the prior 6 months or season. This step can detect the mistake of keying an extra zero when entering a quantity ordered.


For some customers, orders received late are useless. So for "future orders", use the system to generate an alert if there is not enough inventory "available" X days before the due date. For such at-risk orders, someone should determine if needed inventory is likely to arrive in time; it may be necessary to temporarily rob Peter to pay Paul.


Studies have shown that many special orders are money-losers when all costs are taken into account. No one should increase that loss, or turn a profit into a loss, by making a mistake on a special order. As with quotes, special POs worth more than a certain dollar amount should be checked by someone other than the person(s) who worked them up, and checked before being placed.


If there are a "large number" of credit memos issued daily to customers because of distributor-made mistakes of any kind, do not print invoices without at least spot-checking invoices in pro forma format. A large number could be more than Ĺ% of the total number of invoices printed/transmitted daily. And, of course, attack the root causes of these errors.


Traditionally, if items returned by customers might not be re-saleable, no credit is given until someone makes a determination. For customers sold on credit, donít wait; give them a credit memo as soon as data for returns is entered into the system. If they can be trusted to pay their bills, they can be trusted to go along with debit memos that would be issued if items are found to have been damaged by them.


Dick Friedman, the author, is a recognized expert on inventory management and warehouse operations and technology for distributors. He is an unbiased Certified Management Consultant and does NOT SELL software, systems or warehouse technology. From 30 years of experience, he developed unique techniques for keeping inventory low without hurting customer service. And he developed a 115-point Quality Methods checklist he uses to help distributors prevent warehouse mistakes and reduce operating costs -- often through inexpensive, quick changes. Call 847 256-1410 for a FREE consultation, or visit for more information or to send e-mail.