Enhance productivity with Returns Management Returns management is an important phase in the supply chain management process in which activities such as returns, reverse logistics, gate keeping, and avoidance are managed efficiently. Returns management is often confused with reverse logistics but in reality both are two different aspects of the supply chain. Let’s understand the fundamental differences between the two. The Reverse Logistics Executive Council defines reverse logistics as “The process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal.” While returns management is the “activities related to returns flow, reverse logistics, effective gate keeping, and returns avoidance. Returns management addresses the systematic value added approach to the entire backward flow of products from returns prevention through resale of product.” In simply terms returns management is the process of returning products and transforming products to reusable condition. The following are some of the common methods in return management process.
Detrash and destruction of returned materials (CDs packaging materials, etc.) Date code based warranty assessment Test diagnostics and repair Software and/or firmware upgrades Refurbishment Repackaging Warehousing and Distribution Legally compliant disposal (i.e. WEEE and SB2050)
Successful implementation of returns management process would bring in higher revenue for the enterprises. Most returned goods have hidden value and only those enterprises that realize this and bring the goods back to reusable condition can lower costs and increase revenue. For today’s enterprises, returns management is a significant challenge due to the new legal disposition requirements. Moreover, the lack of good distribution networks to manage products that come back from the field add to the woes of the enterprises as the boxes of returns wind up on warehouse shelves taking up valuable space and returning nothing to the supply chain solution. Hence, enterprises must outsource the returns management activities since third party solution providers have the expertise and experience to manage the returns process in a logical and efficient manner. They can refurbish a vast array of products in minimal time and get them back into the field tested and up to clients’ standards within 24 hours or less. Effective returns management can thus result in enhanced profitability, improved customer relationships, and increased compliance with waste management regulations. Also learn more about : supply base management