MHD AUTOMATION
REVERSE LOGISTICS: HOW TO MAINTAIN PROFITABILITY Jeff Hedges, OPEX Warehouse Automation President and Khurshed Mirza, OPEX Asia Pacific (APAC) Director, share the profitability of having an efficient returns management system that is powered by automation.
I
t’s Christmas time across the supply chain, but it’s only July? November is annually known as the beginning of the outbound inventory rush for retailers. Following a few weeks of holiday returns, distribution centres can take time to breathe after Christmas presents have been bought and returned. However, in recent times, the traditional set Christmas peak period is now a piece of cake compared to the volume of orders that fulfilment operations have been experiencing since consumers started panic buying in March. Everyday fulfilment centres are operating at maximum speeds and processing orders at rates never seen in the global supply chain outside the holiday rush. For today’s retailers, dealing with returned goods is one of the toughest challenges they face. During social distancing restrictions at the peak of the recent COVID-19 pandemic, more people were online shopping than ever before. Fashion retailers reported online orders were up an astonishing 450 per cent compared to the prior year, with many retail markets including fitness, grocery, home and garden recording similar figures. Unlike the holiday period, when companies can forecast orders and returns, the current situation is rapidly changing. Therefore, when returns volume is as high as it will be, a returns management system that is integrated in everyday 32 | MHD JULY 2020
Khurshed Mirza, OPEX Asia Pacific (APAC) Director. warehouse operations is essential. Jeff Hedges, OPEX Warehouse Automation President and Khurshed Mirza, OPEX Asia Pacific (APAC) Director, say returns aren’t a burden on operations with the right scalable solution. “E-commerce retailers are plagued by returns totalling anywhere from 25 percent to 30 percent of their orders. Many people will order three of the same pairs of shoes and send back the sizes that don’t fit,” Jeff says. For e-commerce and omni-channel retailers, there’s a direct link between the efficient handling of returns and profitability. Jeff says this is especially important in retail environments where free returns are encouraged as a strategic point of customer convenience differentiation.
Jeff Hedges, OPEX Warehouse Automation President.
FAVOURABLE RETURNS Jeff says not only is it favourable to have an efficient returns system, but it is also an important financial move to boost profits. “E-commerce and omni-channel merchants will need to re-evaluate and retool their DCs to efficiently handle a growing volume of returns and the expense dedicated to managing them,” he says. According to Jeff, most OPEX clients in the US have experienced a dramatic increase in e-commerce operations, even up to 300 per cent. As more orders get fulfilled, more returns have come back to the retail sender. He says companies have been forced to question automation capabilities, exploring solutions that process returns within the warehouse management system that is already in place.
