RL Magazine
Returning Thoughts
by Paul Rupnow

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Reverse Logistics outsource solution partners are developing skills and services at a rapid pace. There is a broad selection of excellent Reverse Logistics services now available to assist OEMs. As a result, many OEMs are now seeking best practices and better ways to work with Reverse Logistics outsource partners.

This article is a collection of tips assembled from conversations with OEM’s on the outsourcing decision, working with outsourced partners and on managing, monitoring the outsourced partners to improve Reverse Logistics.

Look for Your Points of Risk - even if you rely on a partner to help you with some aspects of your processing, ensure you understand the points of risk to your company. For instance your outsourced repair partner may be holding your work in progress, refurbished or parts inventory and you may wish to closely manage inventory levels to reduce the risk of excessive inventory levels.

The Market Should Yield Stronger Skills Than You Can Develop Internally – as reverse logistics outsource partners become increasingly sophisticated, there is significant additional reason to outsource certain aspects of your Reverse Logistics processing, since it is becoming increasingly difficult to develop the necessary skills quickly and cost effectively from within your corporate environment.

Reduce the Need for Information – while you still need to maintain control of risk areas, look for areas where too much time and energy is spent gathering, analyzing or managing data or processes. Do not let your staff “hide behind” the need for more and more data or IT issues. Seek to outsource these functions with your existing partners or with new partners. Develop a structure to remove yourself from the data or process and transfer the responsibilities to your partners.

Utilize Financial Incentives – provide a financial reward to your outsourced partner for success. For instance you may wish to pay more for a higher yield rate on repairs

Find Ways to Move Risk and Responsibility to Your Outsourced Partner – there may be much less risk to manage if you can transfer it to your partner. For instance, some OEMs are moving all responsibility for repairs to the original manufacturing partner. Many OEMs and outsourced partners are getting very creative in this area since the OEMs are often willing to pay additional amounts for the comfort, convenience or reduced management required for additional services. Work together with your partner to design a contract that is win-win for both parties. Monitor your partner to ensure they remain successful.

Good Luck!

Paul Rupnow - Director, Reverse Logistics Systems, Andlor Logistics Systems Inc.
(604) 687-1130

Editor - Reverse Logistics Professional Report
Business Insights and Strategies for Managing Product Returns

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