Efficient Returns Management: From Challenge to Opportunity

Boosting Efficiency, Cutting Costs in Returns Management

Are you grappling with the complexities of returns management in your warehouse? Understanding the pivotal role of reverse logistics is crucial, as it influences everything from inventory accuracy to profitability. But handling returns doesn’t have to be a headache. With the right tools, such as specialised WMS cloud software, you can turn this challenge into an opportunity for efficiency and improved customer satisfaction.

In this concise guide, we’ll unveil the transformative potential of Warehouse Management Systems (WMS) and provide a clear, three-step strategy to streamline your returns process. Get ready to revolutionise your return approach and confidently drive your business forward.

Why is Returns Management so Crucial?

An efficient returns management process can streamline logistics, saving time and money. According to a recent study by Zebra, 87% of respondents agreed that managing returns is challenging. In response, many retailers are turning their stores into fulfilment centres to handle returns better, and 44% even plan to outsource their returns management to a third party.

The Three Stages of an Effective Returns Management Process

Phase One: Speed

To streamline your returns management process, it’s crucial to consider automating decisions about whether to generate return material authorisations (RMAs) and how to process returned materials. Here are three tools that can help speed up returns processing:

    1. Automated workflows: These can help drive efficient and repeatable processes, ensuring returns are consistently routed and processed quickly. Automated workflows can also help you make informed decisions by considering various data points, such as the item’s value and materials, repair scope and cost, return source, and customer service contracts.

    1. Labels and attachments: Automated workflows can validate RMAs and generate labels and shipping documents. Properly labelled shipments with the required paperwork and pre-addressed, carrier-compliant labels are less likely to experience delays and create a more predictable inbound return stream.

    1. User profiles: Having profiles for your users can help simplify maintenance and permissions. User groups can share attributes such as physical locations, payment terms, service contracts, and product return eligibility.

By handling inbound return shipments quickly and efficiently, you can increase the value recovery of your returns.


Phase Two: Visibility

To improve visibility and predictability in your returns process, capturing information early on is important, ideally before the return is delivered to the receiving dock. Here are three practical and easy-to-implement approaches for obtaining visibility:

    1. 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 enables you to provide consistent and accurate information across a diverse network of manufacturing locations, business units, and third-party service providers.

    1. Carrier integration: Linking RMAs to carrier tracking numbers provides shipment visibility, both within web-based portals and through automated notifications. This can help you track returns and stay informed about their status.

    1. Bar-coded identifiers: Accurate inbound shipment information, including details such as parts, condition, quantity, and dates, ensures that the receiving dock and repair depot are stocked with the necessary labour and equipment to handle and process returns. This helps improve efficiency and minimise delays.

Phase Three: Control

Synchronising material movements can be a challenge in supply chain management, particularly regarding returns. It’s essential for manufacturers to pay close attention to receipts and reconciliation and to notify stakeholders of any potential quality issues. Reconciliation helps to improve visibility and control across the enterprise.

To build adequate controls into your returns management process, consider the following three touchpoints:

    1. Regulatory compliance: Compliance is an essential aspect of the reverse logistics process. Automated workflows that speed up the process can also provide controls that minimize corporate liability.

    1. Reconciliation and final disposition: Labelling and enterprise data integration can help reconcile RMA information with the physical shipment, value, and accounting data. Combining financial systems with exception-based reporting can enable quick resolution of shipment variances and proper credits, helping to maintain both external customer satisfaction and internal financial control. Integrating with product engineering can also determine raw materials’ resale potential and value.

    1. Quality assurance: Timely feedback is essential for addressing the root causes of returns. Product engineering can identify quality control issues, while distribution centres can review outbound shipment accuracy. Finance can quantify financial exposure and risks. Automated communication and metrics for each team can help improve quality throughout the enterprise.

Software solutions can also help speed up 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 timely reconciliation information.

Software to the Rescue!

Our team at Clarus WMS recognised the challenges a client faced with their convoluted returns process. With an array of products requiring a unique return workflow, efficiency was being compromised. To address this, we set out on a three-step journey to transform their system:

First, we dived into understanding the nuances of their process through an intensive workshop. We identified the bottlenecks and implemented our scanning technology to design and build a custom workflow. This suited the diverse product returns and significantly sped up the entire process. What was once a tedious task was now a swift and streamlined operation.

Our next step was to tackle the lack of clarity on the warehouse floor. By creating intuitive screens and clear workflow directions, we gave the staff the visibility needed to navigate various returns efficiently. This level of transparency ensured that each return, regardless of its condition or type, was processed accurately and swiftly, reducing errors and enhancing staff confidence.

The culmination of increased speed and visibility gave our client unparalleled control over their returns process. Within a week of implementing our solution, they managed their returns more efficiently than ever. This newfound capability allowed them to scale their operations substantially, handling increased returns from their significant retail partners.

In partnering with us, the business resolved its immediate challenges and positioned itself for scalable, efficient future operations. Our approach of prioritising speed, visibility, and control in returns management turned a complicated process into a competitive advantage.

Wrapping Up

Product returns are an essential aspect of supply chain management that must be effectively handled. Focusing only on forward supply chain management and ignoring reverse supply chains is insufficient in today’s competitive business environment.

By implementing an effective returns management solution with a warehouse management system (WMS), companies are more likely to improve customer service and response times, reduce their environmental impact by reducing waste, and improve overall profitability.

Are you struggling with managing returns in your warehouse? Clarus WMS can help! Our advanced warehouse management system streamlines the returns process, allowing you to track and manage returned items efficiently. With real-time visibility into your inventory, you can quickly process returns and get the right products back on the shelf. Don’t let returns slow you down – try Clarus WMS today and see the difference it can make for your business!

Frequently Asked Questions

How can a WMS specifically address the issue of customer returns?

A Warehouse Management System (WMS) addresses customer returns by streamlining the entire process from return initiation to final disposition. It automates the generation of return material authorizations (RMAs), directs returned items to the correct location, and ensures accurate, real-time updates to inventory levels. The WMS can also provide detailed analytics on returns, helping businesses understand patterns and root causes, which can inform future inventory decisions and reduce the rate of returns.
Common challenges in returns management include lack of visibility, slow processing times, and errors in restocking or crediting customers. A WMS helps overcome these by offering real-time tracking of returned items, automated workflows for faster processing, and accurate recording of inventory. This not only speeds up the returns process but also reduces the likelihood of errors that can lead to customer dissatisfaction or financial loss.
Yes, a modern WMS can integrate with various systems, including ERP, CRM, and carrier software, to improve the returns management process. This integration ensures that all relevant information about returns is shared seamlessly across platforms, providing a unified view of the process. It enables better coordination, faster processing, and more accurate updates, ensuring that customers are informed and satisfied throughout the returns process.
A WMS ensures the accuracy and efficiency of the returns process through features like barcode scanning, automated sorting, and directed put-away. These tools minimise human error and ensure that returned items are quickly and accurately processed. The WMS also provides detailed reports and analytics, allowing managers to monitor the returns process and identify areas for improvement.
When choosing a WMS for returns management, businesses should consider the system’s integration capabilities, flexibility, and scalability. The WMS should easily integrate with existing platforms and be flexible enough to adapt to the business’s unique returns policies and processes. Additionally, as the business grows, the WMS should be able to scale accordingly, handling an increasing volume of returns without compromising performance. Considering these factors will help businesses select a WMS that meets their current needs and supports their future growth.

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