The chargeback process, especially in the Pharmaceutical and CPG industries, is plagued with inefficiencies, complexity, and an overwhelming amount of chargeback information – potentially thousands of line items a day. In many cases, the chargeback claims submitted include unauthorized chargeback requests, including discrepancies associated with duplicates, returns, and omitted reverse chargebacks, and concealed shortages.
At one point in time, it was thought that using Electronic Data Exchange (EDI) in the chargeback process would eliminate these inefficiencies since accounting, warehouse, and ERP systems cannot manage client relationships centrally. But problems still persist since EDI reports only provide a high level product identifier such as the National Drug Code (NDC) number in life sciences or the SKU in the CPG. The absence of a more granular unique identifier below the NDC or SKU makes it impossible to determine if an individual item is eligible for chargeback.
This problem has considerable effects on the revenue of a company. It is estimated that a typical pharmaceutical manufacturer spends 10-17% of annual sales in refunds back to the wholesaler.
An organization that can identify where the issues are and implement the solutions needed to address the problem will have positive results with their vendors and their bottom line. See how Acsis, Inc. solutions can help eliminate unnecesary chargebacks.
Be Proactive
In order to properly identify and address the issues associated with chargebacks, organizations need to have true product visibility at the lowest possible level. Two ways companies can successfully target this problem is to:
Automate their current process
By automating the shipping and receiving data collection process, accurate information can be collected and seamlessly integrated into existing ERP and IT systems in real time. This allows companies to achieve the “perfect order” – picking and packing the correct items, in the right quantities, to the correct order, with proper documentation and invoicing, by the date requested.
Append unique serial numbers at the item level
A manufacturer or contract packager can add a unique serial number to an individual item to track that item through the supply chain. Product is tracked by item, by pack, by case, by pallet, and by truckload via parent-child relationship tracking. This enables better traceability and identification and supports chargeback processing, recall management, and ePedigree requirements. It secures the supply chain and protects consumers and brand owners every step of the way.
Once these two processes are in place, the manufacturer will be able to identify what items were shipped to what customer and at what price. This will allow the manufacturer to have a much better picture of the business terms that a product was sold under in the event of a chargeback or a return.
To learn more about how we are helping companies identify and address their chargeback problems, call us at (856) 673-3000, Schedule a Demo Today, or Contact Us for more information.