Edition 96
Protect Your Items, Protect Your Budget, Protect Your Brand
by Robert DiBella, Director Reverse Logistics, NEFAB

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Consignments are often damaged in reverse logistics supply chains. This can be costly, and can also have an adverse effect on your company reputation. This article explores ways to protect your items from damage, protecting your budget by removing avoidable costs, and protecting your brand, while reducing complaints.

Delivery of damaged items not only affects your brand, it also increases your costs. No customer wants to open their package to find the item inside is not serviceable, whether it is a field technician who has gone to site to replace a faulty component or a hospital that has received their latest MRI machine. If an item arrives damaged in some way the customer is frustrated knowing it will cost them time and money to rectify. Understandably they are not happy and the manufacturer often feels the irritation in the complaints, as well as the cost of dispatching a replacement and recovering the faulty item.



Attending to complaints and correcting what has gone wrong is often lost time, brand damaging and rarely results in anything positive. One reoccurring complaint that I received when I was running Global Hardware Services for a major communications manufacturer company, was related to replacement parts we supplied that were classed as DOA (defective on arrival). Irrespective of whether the part was faulty or not the company took the hit and replaced the parts. We were confident the parts were leaving the factories/repair centers in a serviceable state but something was happening during the transportation, warehousing, delivery or installation that was resulting in the technician reporting the received part as faulty.

Replacing items was an unwanted cost in a business that was under continual pressure to reduce cost. The additional expenses resulting from added logistics, administration, as well as full re-testing at the repair center, mounted up. We were also aware that even if the return did not have a fault when dispatched by the customer it may well have gained one as it travelled back through the chain, sometimes in poor standard packaging.

So where was the problem and how to fix it?
In fact, we never did find out exactly what the main problem was, and surely many companies struggle with this challenge. Logistic flows are not gentle on items and the more sensitive the item the more susceptible to damage. Have you ever watched baggage handlers at an airport loading cases or “fragile” items onto conveyor belts to get them into the belly of the aircraft? – and this even when they know they could be watched. The rough handling within transit points and by couriers as parts are fork-lifted, dropped, thrown, bounced around in vehicles, trains and planes is certain to test even the more robust items. To try to change behaviors along the chain would be very difficult and potentially costly as there are so many touch points, and since employees constantly change, any improvement may be short lived. One option that has been proven to reduce these issues is to ensure that the packaging used is sufficient to protect the items. Other advantages to be gained from getting the packaging correct for the items can be reduced freight costs, especially air, through weight and size optimization. Other benefits are reduced administration, less complaints and ultimately happier customers.



What do we need the packaging to do?
Protect The Item. This goes for all types of products, however it becomes essential when dealing with high-value and highly sensitive parts. Protective packaging should not sustain any significant outer damage as customers will immediately suspect the item inside is also damaged. It must protect against ESD, vibration, shock, contamination, climatic conditions, stacking, or anything else that may be a threat to the item. Therefore, it is important to test the packaging together with the items, thereby ensuring that the packaging does its job against all the potential threats. How much it shall protect against will always have to be a cost- versus risk call, as it may not be economical to protect 100% against all threats. Additionally, if damaging problems are suspected somewhere along the flow then there should be the option to add trackers with sensors to record what the package is being subjected to along the flow. This could be valuable information to share with customers showing them the measures you are taking to ensure their items are arriving in as near optimal condition as possible. This is a good indication of the value you place on them as customers.

Protect Your Budget. The packaging should reduce your logistics costs, not increase them. It must protect your item, thereby preventing costly returns and complaints. It should also be of an optimal size and weight to enable the required protection, while keeping freight costs down. Packaging storage should also be a consideration to prevent warehouses filling with many shapes and sizes of empty packaging material. The pressure to reduce costs and to deliver more with a reduced budget is a reality many live with year after year. Therefore, ways to reduce the total logistic spend need to be found.

Optimal Size and Weight. Yes, size and weight is important. It should be as light as possible if freight is charged on weight, or sufficiently small enough if it is charged on volume. Over-packing might provide additional but unnecessary protection and will certainly increase cost. Air freight can be quite costly, but may be needed to meet lead times and reduce inventory, so every effort should be made to limit these costs by finding the optimal size and weight of the package. Stackability needs to be considered for large or heavy items, especially when they are stored in warehouses. Standard sizes are another major consideration ensuring that packages can be nested and configured to meet standard pallet sizes and prevent stretch wrapping of oddly shaped consignments that should only be transported as top loads, but all too often are not. Don’t forget testing, as the packaging needs to prove it can protect the item. The best way to do this is by testing the item in its packaging in a certified test laboratory.



Reducing administration. This is often overlooked. In reverse logistics flows it is common to have many types, sizes and strengths of packaging. Many times there are hundreds of packages for thousands of parts. The aim should be to reduce these to more manageable and flexible options with tens of package types instead
of hundreds. Finding the sweet spot is always a challenge and requires much discussion and innovation to achieve it.

Easy to pack, unpack and re-pack. This must be easy to do without damaging the item or the package, thereby enabling the protective packaging to be reused multiple times, especially for returns. Instructions may need to be printed on the package to ensure it is used correctly and to avoid damage. The package may need to be secured, tracked, or even locked. If the cost of the packaging is high it may need to be pooled and cycle through refurbishment stations within a closed loop.

Protect Your Brand. Every company wants their items to be the well-received. You are in business to meet the needs of your customers. Any distraction from that is unwanted. The impression a customer should be left with is the quality of the item they receive – its professional look and full functionality. It does not matter how many good items are delivered, it is the bad ones that the customer remembers and complains about. Anything we can do to reduce this is worth
the effort.

No matter what industry you are in, if you have high value, high tech or highly sensitive items, then you need to be on top of your packaging challenges. Increasingly companies in industries such as electronics, telecommunications, automotive, mining and healthcare are looking beyond 3PLs to manage their reverse logistics packaging.

To make your job easier and less stressful I recommend engaging with a professional packaging and logistics company to examine better ways to protect your items, protect your budget and protect your brand.

This article is written exclusively for Reverse Logistics Magazine
RLM
Robert DiBella is the Director Reverse Logistics at Nefab – a provider of sustainable packaging solutions and logistics optimization. Rob has wide experience in the logistics field and previously ran the global hardware services operations for a major communications manufacturer for over seven years. His passion is in transforming supply chains to reduce cost, increase customer satisfaction and minimize environmental impact.

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