Edition 73
Returning Thoughts
by Paul Rupnow, Director, Reverse Logistics Systems, Andlor Logistics System, Andlor Logistics Systems Inc.

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Reverse Logistics Software Case Study at a Third Party Service Provider

Vivitech Solutions is a Reverse Logistics Service Provider (also known as 3PSP or specialty 3PL). Vivitech helps consumer product manufacturers to process product returns from retailers with the main goal of recapturing the highest value possible from the returned inventory. Each day Vivitech receives thousands of mixed individual return items from big retailers. These returned items are typically open box goods in a variety of conditions that consumers have returned to the retail store, but could not be put back onto the store shelves. Vivitech must process each item to ensure its manufacturing clients have detailed data about the receipt to process a credit for the retailer. They will then stream each item to a special workflow to ensure they can assess and prepare the item to recapture the highest resale value. Their clients, the manufacturers, also require visibility of the inventory at each step as the items get processed.

Vivitech uses Reverse Logistics Management Software (an RLMS) to manage all of their returns processing. An RLMS is a special niche software application for best practices Returns processing. An RLMS typically provides modules for in depth handling for the key areas of returns management such as: RMAs, an RMA customer portal, “Smart” Receiving, disposition, sorting, refurbishing, repairing, shipping and inventory management. RLMS’s are designed for manufacturers, 3PL Third Party Logistics companies and 3PSP Third Party Reverse Logistics Service Providers. Many share data or work with corporate ERP or accounting systems to enhance the special needs and workflows of high volume returns processing. Some are web based so that all parties involved in managing the returns process can have instant knowledge with real time access and visibility.

Often, consumer product returns get bulked together by the retailer and sold as a batch either by the retailer or by the manufacturer at a low bulk price. This is often thought to be the easiest method to disposition returned items. However, with many higher value consumer products there is a much higher profit opportunity. Vivitech uses the RLMS to enable them to separate the bulk returns and stream each item down its highest value path, without much additional effort or cost. Depending on the condition and the data collected at the time of receipt or as the unit is tested or processed, the Vivitech business team can set up rules and workflows for each item, without the need for a programmer. These rules help guide the team to the best next step, so that some items will be sorted for repackaging, while others will be repaired, and others that may be a lower value or beyond economic repair can be just sold “as is”. “The net effect of these custom tailored workflows is a much higher selling value and profit for our clients” says Richard Chemel, VP of Business Development at Vivitech. “In addition, by processing the returned items, we are adding value to them and managing the optimal secondary market resale channels rather than liquidating them. As a result, our clients are also able to control their brand, since they can better control where and how the products are sold into the secondary retail market.”

“With the data we collect as the units get processed in the RLMS and with the real time reports and visibility, we can work together with our clients to continually evaluate the workflows for each product, to improve recovery and to reduce touches and costs. Our RLMS is an essential tool for the success of our Reverse Logistics operations.”
Paul Rupnow - Director, Reverse Logistics Systems, Andlor Logistics Systems Inc.

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

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