The problem is all too familiar: a customer calls and asks why they were charged for 10 cases of product when they only received eight.

When a situation like this arises, often a distributor’s customer service representative will tell the customer they will look into it and call them back. The rep then embarks on the time-consuming process of rummaging through filing cabinets that store hundreds of thousands of tickets. Once finding the delivery ticket in question, the rep then checks it over to see what had been delivered, makes sure the customer signed off on it and then calls the customer back. But sometimes a ticket cannot be found because it has been misfiled or lost. In these unfortunate cases there is no way for the distributor to prove that the product had been delivered to the customer, and the upset customer often will refuse to pay the bill.

However, some jan/san distributors, like Indianapolis-based HP Products, are sidestepping these scenarios by investing in proof of delivery (POD) software to streamline the otherwise outdated and pricey process of manually tracking down proof of delivery documents.

POD software is designed to help automate business processes in distribution environments that rely heavily on transactional documents, such as packing slips and delivery tickets. Specifically it’s aimed at automating the process of verifying that goods have been delivered or received.

By capturing and storing electronic signatures and barcoded documents at the point of receipt, the latest POD software initiates the creation of an invoice and eliminates manual processes associated with matching and collating various paper documents. The software then allows authorized users, such as accounting and warehouse personnel to instantly view and retrieve related documents via their computer network.

Software To The Rescue

Most notably, implementation of POD software allows jan/san distributors to eliminate losses caused by misfiled invoice copies with customer signatures, reduce the time spent to find delivery documents and provide immediate response when a customer requests proof of delivery, says Mark Willoughby, chief financial officer for HP Products.

Surprisingly, many distribution companies are still using the traditional paper-based method to track proof of delivery. In these instances, when delivery drivers return from their runs, invoices are typically delivered to management, who then distributes them to personnel who are in charge of filing them away.

But with as many as several hundred invoices per day being generated, a distributor’s filing department can quickly fall behind. So, invoices could essentially sit in a stack, untouched for a day or two until staff can get to them.

Realizing that this method was requiring too much of its manpower, JanPak Inc., Davidson, N.C., implemented POD software into its operations a few years ago.

“We had a file clerk that manually was spending all their time pulling literally pieces of paper out of the file, making copies of them and faxing them off to customers,” says Chris Householder, the company’s executive vice president of distribution services. “Then we migrated to being able to scan that data in and it certainly made it easier to retrieve, but it was every bit the same amount of work to file it away. Now with this new system, everything is truly electronic. We eliminated the need for a file cabinet or the massive amount of scanning and now it’s just a few pages.”

Currently, JanPak’s delivery manifests are printed in the morning and distributed to its delivery drivers. On each manifest is each delivery stop, a designated place for a customer’s signature as well as a barcode.

When the company’s drivers make a stop, they have customers sign a printed invoice to verify that the correct product and amount was received. In some cases other important notations may be made on the invoice, such as that the entire order could not be delivered or that the customer has returned product from a previous order for credit.

“There’s barcoding on it so when it’s scanned its tracked back to the original order, and it takes the signature information, product information, the dated information, the piece count information, that hand written information and it puts it on the invoice,” says Householder.

What’s most important is the time it has saved the company’s personnel from scanning in the hundreds of delivery tickets at the end of each work shift. Because the company’s delivery manifests now can store up to 30 deliveries on one or two sheets of paper, it has consolidated the scanning process.

“That saves us the step of scanning 15 to 30 documents a day for each delivery truck,” says Householder. “We still have to scan that document, but it’s one sheet of paper that is scanned or maybe two pages if it’s a 30 delivery day.”

Once scanned, the system reads the bar code printed on each invoice, which contains the customer number, invoice number and document type. So, by the time the office opens the next morning, all of the invoices are scanned into the system and ready to view. If a customer calls the next day and says they were short a case of product, a customer service representative can easily look up any invoice on their computer screen and they can see a copy of the document the customer signed, stating exactly what they received. They then, at the customer’s request, are able to fax or e-mail the proof of delivery to them within seconds, while the customer is still on the phone.

It’s a much more streamlined process than having to page through thick reports to find the particular entry. Now, the customer service reps can simply type in whatever they know — the account number, customer name or the line item — and what they are looking for pops right up on their computer screen.

Although the process is light years ahead of what the company was doing three years ago, Householder says there is still room for improvement. In fact, he says the company envisions the day when it can go to the upper echelon of POD software and invest in electronic signature capture devices.

Electronic Signature Capture

Unlike other methods of POD software, the implementation of electronic signature pads allows a distribution operation to eliminate the need for paper. For example, HP Products, which invested in these devices for its delivery drivers within the last year, is able to upload its packing lists onto the electronic devices at the beginning of each day, says Willoughby.

So, as delivery drivers make their number of stops throughout the day, they are able to obtain a signed proof of receipt from customers on the device itself at the point of delivery. Drivers can also make notes with the device if they did not deliver all of the items to a customer or accepted a return item. Then, when they return to the office after the last delivery is made, the information — customer signatures and notes — are downloaded into the company’s computer system. This information is then automatically archived and can be retrieved via the company’s computer network.

HP Products is expecting a huge payback for these devices by reducing lost proof of delivery documents, meaning they no longer have to eat costs from customers who are not willing to pay for a disputed delivery. The company has also been able to reduce paper usage costs because the electronic method eliminates the need to print reports. HP Products also has eliminated most collection problems due to the ability to provide proof of delivery within a reasonable amount of time.

Although the streamlined electronic process may be enticing, most distributors have balked at implementing these devices due to their upfront cost, says Householder.

“There’s a substantial cost associated with these and that’s why we have to take one step a time, get the benefits, measure the benefits and then make a determination if we need to go to the furthest step and invest in signature pads,” he says. “We certainly see the benefits of having instant feedback like how UPS and FedEx does, but there’s a lot of cost and you really got to look at outside an organization like UPS and FedEx.”

While in a recession, distributors are looking to trim their operational costs. By investing in POD software, distributors may find that it is an investment that can have a great return.

“The key for most distributors is if they’re careful, most technology doesn’t have to be a huge investment,” says Householder. “If they do the research out there, there’s small steps to be made with relatively little investment that can have a big payback in this economy that we’re all weathering right now. Every bit counts.”