Article 003 The Nightmare that is Returns / Reverse Logistics

One of the least focused areas in the supply chain of most retailers and manufacturers is returns / reverse logistics.

When a customer or consumer returns a product for whatever reason (ex: defective , taking advantage of a refundable returns policy…etc) .The manufacturer or retailer will have to put in place a process within their supply chain to manage the goods returned . This process will not only cover pick up , re-storage, scrapping/disposition and other liquidation methods but also potentially the recycling of packaging & containers also the refurbishing and reconditioning of goods returned .

In a competitive market ,most manufacturers and retailers have adopted very liberal returns policies to attract and maintain customers . This has inevitably led to a lot their distribution networks being over burdened when large volumes of returned goods go through their reverse logistics process .

In a bid to recover assets and revenue from within the supply chain , they are now beginning to shine a spotlight in this particular area . The first step to get better understanding of the their reverse logistics is to first understand what goods are being returned and why .

In addition to answering the what and why , you will also need to be able to recover lost revenue and resources . As such , you will need to consider returns logistics as a critical life cycle phase of your supply chain and will have to put in the right technology platforms to support it . One key technology platform you might consider is the adoption of a WMS with functionalities to manage effective reverse logistics .

Some key WMS functionalities that will go a long way in reverse logistics :

1. The ability to handle a separate workflow for inbound ‘Damage’ goods and automatically redirecting them to the correct locations within the warehouse while utilizing the same receiving team .

2. The ability to handle quick capture of ‘disposition’ of goods (EX: Damage Items, Damage packaging, Refurbish able ..etc) and automatically select the right workflow to sort the items and execute re-directions of these items to the subsequent process steps in the workflow .

3. Ability to track and trace the levels and types of returns

4. The ability to crossdock returned items (not damaged and non opened cases or containers) to other customers who have ordered the same item .

5. The ability to integrate returns data from the WMS back to the Order management system for refunds etc…

In Conclusion:

A sophisticated technology platform helps improve and fortify your reverse Logistics receiving processing while significantly increasing savings in labour cost leading to much faster processing turnaround times, which in turn also then leads to faster and higher cash generation on the returned assets .