RL Magazine
Edition 41
Returning Thoughts
by Paul Rupnow

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How well are you managing your Reverse Logistics Operations? How do your operations people determine the best course of action for that pallet full of returned goods that just arrived?

Returns operations and processing is an emerging topic that has been neglected for a long time. There is no school for reverse logistics, no rules or methods, and no best practices or comparisons. How do we know WHAT we should be doing? How do we know HOW WELL we are doing?

Whether you are an OEM, a Retailer, a Distributor or a Third Party Service provider, there is significant opportunity for large gains for your customers and for your company by carefully understanding your entire Returns operations.

Processing a Returned item is much more complex and involves many more transactions than the forward supply chain. But, with a little attention, there are some big opportunities available to reduce costs, recover value and improve customer service.

7 Steps to Successful Reverse Logistics Operations

The following outlines 7 steps you can perform to improve your operations:

1. Centralize your Returns Operations
So many people, scattered across so many departments, at so many geographic locations, from several different companies, are all needed to process one returned item. Reorganizing all returned items, types, people and processes into one centrally managed group can be the cornerstone for change and success.

2. Appoint a Leader
Returns are a secondary responsibility for the department managers (i.e. customer service, warehouse, repairs, or finance). Returns are a small, annoying part of their group. Since most of the Returns process is “someone else’s problem” or fault, it is too easy to fall behind in processing responsibilities. A leader with senior management authority (and budget) to oversee and manage all aspects of Returns processing will drive significant change and improvements.

3. Develop Very Defined Business Processes
Turn around time is often very slow and difficulties often arise that add days to the processing of a Return. There are many types of Returns that need to be handled differently. Returns are complex, multi-process transactions. ERP systems do not handle Returns well, especially in a high volume environment. Good processes will enable you to quickly respond and resolve the customer Return AND recover the highest value possible for your Company from each returned item.

4. Link Your Business Processes
Difficulties arise with process hand-offs between groups, leading to significant problems with goods and data flows. With internal departments, outsourced providers and multiple data systems the staff is always searching and continually reconciling. Your processes and systems must be streamlined through each process AND between each group with “One Touch” and “Automated” handoffs for the items and the related data. These links will generate your largest processing savings, reduce issues or errors and significantly reduce reconciliation time between groups.

5. Gather Accurate Data
Poor data collection for a Returned unit with gaps and errors results in incorrect handling or costly guesses. Careful and detailed data collection through each step of a Return with a verifiable audit trial seems like extra work, but can result in big payoffs and good metrics to assess performance.

6. Ensure Real-time Visibility
Tracking the status of a unit in process can be very time consuming and difficult. Real-time Visibility to all processing groups, 3rd party service providers, managers, clients and customers enables immediate resolution of issues (without leaving your desk, sending an email or making a phone call).

7. No Firefighting
A stressful work environment is created by frequent issues that need to be resolved ASAP. Active monitoring of any firefighting, followed by immediate action to create a “One Touch” automated process will eliminate the stress and continually improve your system. Surprisingly, most fires have recurring patterns that can be automated (even without your ERP programmers).

Result: Manage the Business, instead of the Processes

Poorly utilized senior staff should be managing, not handling the numerous escalated issues and time consuming customer problems. Once you have completed some or all of the seven steps above, your senior staff will have more time, metrics and tools to rise above the day to day processing issues. They will be able to start managing and improving your Returns Operations.

Good workflow leads to good data, which leads to an ability to “Manage the Business, instead of the Processes”

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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