While many organizations are committed to an optimal forward chain, they often forget their return flow, so they only play half the game.
What is often missing is that many companies actually have little insight or knowledge about their returns process. You often hear complaints that transport or warehousing is overloaded or that there are an excessive amount of costs. It is also often a crime for planners to integrate returns into existing routings.
So there are many barriers that make the return flow the most annoying boy in the class. These are often poorly designed processes, lack of internal communication and with customers. But also inadequate software and web applications that hinder a good return flow.
The first step is that the Reverse Life cycle management should be considered an integral part of the supply chain strategy. Organizations must have a clear vision of how and why returns fit into their supply chain and what value that adds. In consultation with their suppliers, they should also integrate this strategy into the end-to-end chain.
The second and least important step is communication forward in the chain. Both to retail and to customers. Ensure that there are clear processes and agreements with other chain participants. It must be clear what is meant by returns, what is accepted, authorizations, costs and fees, freight handling and warehouse procedures.
Especially system and information integration, as is the case with S&OP, offers significant advantages to integrate the return process. With integration, the number of errors can decrease drastically, less paperwork or lost goods. It is also better to manage the possible RMA flow properly towards the customer.
Warehousing Value added logistics
Warehouse processes play an important role. From receipt, independent inbound procedure, sorting to reintegration of the products in the chain. The Warehouse also plays an important role in the whole when it comes to refurbishment, relabeling and repackaging. These processes are essential to keep customer satisfaction and cost levels under control. A good WMS that has the capacity to handle returns properly and completely will be extremely valuable.
Source: RL magazine 2007