Tips to Ensure a Robust Reverse Logistics Process

Many supply chains stop measuring success once the product is delivered. While this is sometimes an accurate measure of customer satisfaction and profit, one key metric is missing – reverse logistics. Once a product has reached the market place, reverse logistics is the process of returning that product back to the manufacturing company. Getting products into the hands of paying customers is one thing; providing smooth logistical flow for the off-chance a product comes back, for whatever reason, is another. The planning and execution of this critical aftermarket process is Reverse Logistics. During reverse logistics, the product travels from the consumer in reverse through the supply chain network, and the manufacturer has to organize the shipping in addition to any necessary testing, dismantling, repairing, recycling, disposing, or reselling of the product.

In addition to satisfying the customer’s needs that were not initially met, it is very important for the manufacturer to recapture the value of the returned product. In order for reverse logistics to operate smoothly, strict procedures must be in place to handle things like returns management, warranty claims management, return merchandise authorization, and any remanufacturing, reconditioning, or refurbishing activities. Since many companies do not have the personnel and resources available to oversee a reverse logistics program, small and even mid-sized OEMs often outsource reverse logistics to partners, like RiverSide Integrated Solutions (RIS), to recapture product value efficiently. Not only do they get top-notch technical and logistical personnel to handle their reverse logistics, but these companies also gain peace of mind, allowing them to focus on product improvements, customer service, and new product launches.

The good news is that streamlining the way products move back through your supply chain results in huge benefits such as cost reductions, happier customers, and less environmental waste, and can make your company stand out among the competition. Also, the advantages of implementing a reverse logistics strategy far outweigh the implementation cost. Below are tips to ensure a robust reverse logistics process and avoid the excessive costs and missed revenue that often occur in this space.

  • Clearly State the Return Policy: this tip is often overlooked but it is so crucial – there is nothing more frustrating to a customer than an inefficient and confusing returns policy! The policy needs to be easily available to the buyer before the purchase as well as after the product arrives to the customer. A simple illustration of the various steps of the returns process is often useful for consumers. Lastly, follow your return policy as advertised without deviations.
  • Monitor Key Metrics: just like any other part of the supply chain, reverse logistics needs transparent monitoring in place to identify issues and take action pro-actively. OEMs must know why returns are happening – without this knowledge it will be impossible to reduce the volume of returns and optimize the reverse logistics process.
  • Organize the Warehouse: returned items should be stored in one section of the warehouse and categorized upon arrival, such as restocks or repairs. This will keep the reverse logistics program organized and more efficient. This will also get returned products back on the shelf more quickly, enabling them to be resold!
  • Utilize RMAs: RMA stands for Return Material Authorization. By instituting a smooth RMA process, you can determine the reason for the return which can greatly assist those downstream in the reverse logistics process who will have to quickly inspect, disposition, and possibly refurbish the returned merchandise. One of the keys to generating the most revenue out of your reverse logistics program is to minimize the amount of time and transportation costs invested in each returned item. When RMAs aren’t used effectively, every incoming return becomes a black box, requiring lots of time to determine how to process it.
  • Be Prepared for Cross Channel Returns: every robust reverse logistics program needs a plan for when a customer orders a product online, has that product shipped to a store, but then returns it to that store – this is an example of a cross-channel return. This form of return is becoming more common as customers rely more heavily on e-commerce. If it’s an SKU that the store doesn’t carry, you will need a fast and cost-effective way for dispositioning that item. In some cases, the best route will be to mark it down and sell it. In others, transporting it to a return center so that the maximum value can be extracted from the product will be the optimal path. Much of that decision depends on the demand—both local and global—for that item. To know that demand, you must have relevant data and make it accessible to all those who receive returns, regardless of channel.

RIS: Your Trusted Reverse Logistics Provider

The biggest issues our customers face is having a team and department set up to handle these returns and support in an efficient manner. It can be very costly to have these resources in place, so our customers turn to RIS for their reverse logistics management. Our program provides electronic and electromechanical repair, refurbishment and warranty services for products no matter the stage in the product life cycle. Whether its end-of-life product support or new warranty claims, our repair program keeps your products running. Our reverse logistics program is designed around the knowledge that most support is needed once your product hits the market place. Here is a few of the benefits of RIS’ reverse logistics program.

  • 100% Customized: our reverse logistics program is set up per customer specifications and is capable of handling all of your repair, refurbishment, and warranty work.
  • Returns: an effective repair program isn’t complete without an effective returns program. We can help establish a returns program customized to your needs.
  • Quality: repairs are completed in accordance with RIS-generated work instructions that meet our customers’ defined quality standards.

RIS is an advanced contract manufacturer providing robust solutions in circuit board assembly, product assembly, kitting, supply chain management, fulfillment, distribution, and reverse logistics. We employ more than 300 people and provide services to OEM’s across the world. We operate 3 state-of-the-art manufacturing facilities within the U.S, and as your one-stop-shop we have the capabilities, capacity, quality assurance standards, and resources to provide you with support for all of your manufacturing needs.

Contact us today at (507) 523-3220 to see how we can help with your reverse logistics process, or click here for a quote.

Tips to Ensure a Robust Reverse Logistics Process
Article Name
Tips to Ensure a Robust Reverse Logistics Process
Tips to ensure a robust reverse logistics program including data monitoring, clearly stating the return policy, using RMAs and organizing the warehouse.
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RiverSide Integrated Solutions
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