Building A Successful Returns Process

A cost-effective reverse logistics program is key to success.

Like Picking, there can be a lot of variables in your Returns Process based on your industry, but here is a basic checklist of things you need to be doing to give yourself the best foundation for building a successful returns operation.

With the huge jump in facilities supporting Ecommerce from last year, the hiccups stemming from building the new capability in operations that were new to it are still ongoing. Individual vs. case shipping, single-item picking, and returns are some of the processes that have taken on a higher level of complexity and created difficult challenges for many facilities.

Before getting into the specific steps, understand what your company’s objectives and goals should be for “Returns” in general. What is the target return rate? How does it compare with the industry? Do you expect to maximise the return of product to inventory for resale? What about getting rebates or chargebacks to manufacturers who don’t meet quality benchmarks? Most of what you need to plan ahead for in Returns is a corporate-wide exercise – marketing, product management, operations, and more.

Firstly dedicated a Returns space

You’ll want to have a dedicated space set up and equipped for efficient processing of returns. Some factors to include when designing your space:

It should be near the docks, as the “intake” process will resemble Receiving in both the need for a bay and a putaway process.

It will produce a lot of waste from the packaging it arrives in, including many that did not come from your facility. Having large bins that can be quickly carted away and emptied will help keep working areas clear.

If your space is too small for a dedicated space, and the volumes justify it, consider “sharing” space with another process that might be time-sensitive. i.e. Your returns will likely arrive in bunches by a specific time of day, so you can choose what slot in the day you want to process them. For example, if your orders are all picked and sorted for packing by mid-afternoon, packing stations can be flipped to serve as Return processing stations. Assuming the returns for the day are all in-house by that time, you can assign staff coming off of picking based on that day’s numbers to assist with opening and sorting of Returns. Mobile Returns Stations could work too if the only space you have is something too far from Packing to make sense to double upon.

If your space limitations lead you to think “none of the above” for your facility, then look at using a 3PL partner dedicated to Reverse Logistics. Some of them now also provide refurbishment and resell services, so the product never has to return to your facility.

Reporting and labelling are key

Ensure your WMS or other system are providing the data you need at the macro level like Return Rate (overall and by product), restock percentages, etc. but you’ll want to chart ground-level KPIs as well that track the team’s productivity.

One process element not always accounted for is that Returns can sometimes be the most label heavy process in your facility, especially if you are prioritising recovering as much product as possible for resale. Labels to identify initial evaluation, others to mark a destination and another for replacing the product label and barcode that was on the original package from the manufacturer. Not all of these need to be printed, but you will want label printers.

Peak seasons can be a company’s downfall

Like most other warehouse processes, peak season will strain resources and fill your Returns team with the same adrenaline and stress as the other processes, but NOT at the same time. The big wave for returns starts crashing immediately after Christmas, so in one way it is easier to staff with extras you can move from other process areas. But the volumes also present opportunities for moving returned product back out to those who missed out on it earlier.

Training is essential to stay one step ahead

Training for Returns is unique in the warehouse. Depending on the products you are working with, staff may need anything ranging from “sniff” training (for clothing washed or laundered), to testing training (for basic electronics), etc. If you already have a Quality Control team that inspects merchandise coming in via Receiving from the manufacturer, then you already have a the core of a team that could do double duty in Returns.

Last but not least – technology will ensure you stay on top of Returns

Whether your company manages the distribution of its own products or outsources logistical services to a 3PL, the ability to provide return services is fully dependent upon the capabilities of your WMS. WMS cloud software provides the ability to process all types of returns with high speed modules—some even with specialised functions for goods such as clothing, publishing, spirits, and more.

Top Key Benefits of WMS:

  • Damaged goods can be quarantined and dealt with promptly for repackaging or disposal.
  • Essential for e-commerce businesses who need to manage high returns volumes.
  • Quickly identify re-usable stock so that it can be relocated for order picking.
  • Complete traceability – allows you to track and monitor the levels and types of returns.
  • Integrates with ERP systems to ensure credits, replacements are done promptly to maintain customer satisfaction levels.

A cost-effective reverse logistics program connects the incoming supply of returns with the product information and demand for repairable items or re-captured raw goods.

In Summary

In every supply chain process today, product returns is an important area that needs to be effectively dealt with. In today’s competitive business environment, companies can no longer focus only on forward supply chain management and ignore reverse supply chains.

Organisations that implement an effective returns management solution, in conjunction with a WMS system, is more likely to be able to improve customer service and response times; reduce environmental impact by reducing waste and improve overall profitability.

About us:

Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.

Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.

ClarusWMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.