Get your product returns back to market sooner with effective returns processes within your WMS.
Last week we talked about getting ready for the seasonal peaks of Christmas and Black Friday. Have thought beyond that? Do you have an effective product returns policy in place? Returns management, often referred to as reverse logistics is the management of returned items to your company. But do you know the importance of returns management?
Most supply chains will stop measuring the success of their goods once the product is shipped and is delivered on time. While this is can be an accurate measurement of customer satisfaction and profit, it doesn’t account for all cases.
What if your customer receives an incomplete order? What if they feel the item they ordered doesn’t match the product description? Or what if the customer just changes their mind about their purchase? In all three of these likely scenarios, the return of your product qualifies as reverse logistics.
How you manage product returns will influence the overall management of your warehousing and storage, inventory, depreciating goods and soiled items. Therefore, the bottom line will be the impact on overall profitability.
Managing returns is never quite as simple as putting items back on a shelf to be shipped off to another customer. Returns involve a quality control process. The reason for returning an item should be established as soon as possible once it has been returned, if not beforehand. Streamlining a process by which returns are then managed will prevent hindrance to outgoing logistics too.
Processing can become expensive if it isn’t efficient. Everyone participates in the returns process, not just the staff at inbound receiving. Sales staff need to recognise why items are returned and can be proactive in reducing the number of returned goods. Sometimes the item won’t meet the needs of the customer or the client needs to be better educated in how to use the item. Handling inbound return shipments quickly and efficiently increases value recovery.
Three key phases support returns management processes: speed, visibility, and control.
For fast and easy returns management, automate decisions about whether to generate return material authorisations (RMAs) and how to process returned material. Three tools to speed returns processing are:
- Automated workflows. The disposition of the return depends on data points scattered throughout the enterprise: the item’s value and materials, repair scope and cost, return source, and customer service contracts. Automating workflows drives repeatable processes and consistent routing that is efficient and measurably faster.
- Labels and attachments. Automated workflows validate RMAs, and generate labels and shipping documents. Accurately labelled shipments with required paperwork and pre-addressed, carrier-compliant labels experience fewer delays and create a predictable inbound return stream.
- User profiles. Profiles simplify user maintenance and permissions. User groups share attributes such as physical locations, payment terms, service contracts, and product return eligibility.
Handling inbound return shipments quickly and efficiently increases value recovery.
To improve visibility and predictability, information must be captured early in the process, ideally before the return is delivered to the receiving dock. Three of the most effective and easy-to-implement approaches to obtaining visibility are:
- Web-based portals. These online tools allow authenticated users to perform tasks from any location and time zone. Integrating Web-based portals with product data and financial applications provides consistent and accurate information across a diverse network of manufacturing locations, business units, and third-party service providers.
- Carrier integration. Linking RMAs to carrier tracking numbers provides shipment visibility, both within Web-based portals and through automated notifications.
- Bar-coded identifiers. Accurate inbound shipment information—including parts, condition, quantity, and dates—ensures the receiving dock and repair depot are stocked with the labour and equipment required to handle and process returns.
Synchronising material movements is a common supply chain management challenge, especially for returns. Manufacturers must pay close attention to receipts and reconciliation, and notify stakeholders of impending quality issues. Reconciliation enables enterprise-wide visibility and control.
Three control touchpoints to build into the returns management process for product returns are:
- Regulatory compliance. Compliance touches all aspects of the reverse logistics process. Workflows used to speed up the process also provide controls that minimise corporate liability.
- Reconciliation and final disposition. Labelling and enterprise data integration reconcile RMA information with physical shipment, value, and accounting data. Combining financial systems and exception-based reporting enables quick shipment variance resolution and accurate credits, maintaining both external customer satisfaction and internal financial control. Integrating with product engineering determines the raw materials’ resale potential and value.
- Quality assurance. Timely feedback helps teams address root causes of returns. Product engineering identifies quality control issues. Distribution centres review outbound shipment accuracy. Finance quantifies financial exposure and risks. Automated communication and metrics for each team improve quality throughout the enterprise.
Software solutions can help speed returns management by providing user profiles and workflows that define supply chain partners and processes; labelling and documentation that track the material; and Web-based portals and exception-based reporting to deliver information for timely reconciliation.
A return can be a future sale. Consumers are known to change their minds, and today’s consumers believe that they’re entitled to do so. When they do return a product, whatever the reason, the ease of the return process and how they are treated have a huge impact on repeat sales.
Many retailers have recognised this reality and have adjusted their returns policies to be hassle free. Some retailers even encourage returns and have made return shipments as simple as possible. Customer and brand loyalty contribute directly to the top line, and data from customer returns can help inform this strategy.
A reverse logistics strategy for product returns is much more than simply figuring out how to be more efficient in shipping and processing returns and cutting costs
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.
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.