Focus on Inventory: ERP Lets SMB Get Warranties Under Control - InformationWeek

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10/26/2010
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Focus on Inventory: ERP Lets SMB Get Warranties Under Control

I recently checked in with Greg Woodward, who is heading up Torelli Bicycle Company's enterprise resource planning (ERP) implementation project for SAP integrator Navigator Business Solutions. I asked Greg what gains Torelli will realize from the technology makeover it's receiving.

I recently checked in with Greg Woodward, who is heading up Torelli Bicycle Company's enterprise resource planning (ERP) implementation project for SAP integrator Navigator Business Solutions. I asked Greg what gains Torelli will realize from the technology makeover it's receiving.One of the major items on the list of benefits for Torelli, according to Woodward, can be summed up in a single word: warranties. "Probably the biggest thing for [Torelli] is that previously under [its] QuickBooks application, warranty-related issues were a big question for the company," he said.

It came down to the ability to assign a unique serial number to each product, such as the company's imported bicycle frames, which carry a lifetime warranty. "Torelli really didn't have a formal process by which [it] could track not only warranty issues related to the manufacturers of the frames, but also for the end users of the frames."

While the previous accounting system had no support for assigning, recording and tracking serial numbers, Torelli's new SAP-based ERP solution for small and midsize businesses (SMBs) is providing the bike company with the means to serialize its incoming inventory from Italy and Taiwan, and then track each individual item from the manufacturer, to the dealer and ultimately, to the end customer - and maintain that information throughout the life of the product. "One of the nice things about that is now [the people at Torelli] are actually aware of who the end consumer is, which I believe is the limit of their warranty. They provide the warranty only to the original purchaser of the frame," Woodward said. "So that in itself - the ability to go through and validate when a warranty claim is submitted whether that claim is valid or not - I think that is a huge step forward for the company."

In the absence of a record-keeping system that tracked individual SKUs and the eventual owners of each SKU, Torelli essentially had to rely on the honor system to judge whether a customer was telling the truth about being the original purchaser of a Torelli bike. "I'm not sure what criteria [Torelli] would use in the past to know whether a phone caller was pulling its leg or not, but I know that if it was me relying on that, I would quickly be out of business," Woodward said.

"The Torelli company has kind of built itself up and tried to set itself apart from the other bike manufacturers in the sense that the company has a very, very high customer touch point, and frankly, I think with this new serialized warranty function built into SAP Business One, it will only get better at improving that high value customer touch that it provides."

For more examples of how ERP technology is transforming SMBs like Torelli, join Greg Woodward and other key players in Torelli's technology transformation for a live webcast. "Extreme SMB Technology Makeover: Torelli Races for the Finish Line with New ERP System" takes place Wednesday, Oct. 27, at 2 p.m. EDT (11 a.m. PDT).

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