Returns Management In Logistics

Core logistics and supply chain activities play a big role in a company’s success or failure. There has been a lot of disruption over the last 12 months in regards to regular business flow, the pace has also seen dramatic slowdowns. As businesses look toward the future, it is also important to consider returns management when making plans for your logistics.

Taking care of the forward product flow has been difficult in the current climate. With most businesses either shut down or only opening for a limited number of hours, reverse flow, ie returns, is becoming a critical problem. Improper management of reverse flow can be the straw that breaks the camel’s back but efficiently managed returns can offer a positive impact.

The Importance Of Effective Returns Management

Effective returns management processes can allow your business to grow, even during a market slow down. In fact, a company that has a refined logistic system in place that allows suppliers and consumers to easily return products or shipments with fewer hassles will benefit from higher levels of trust. Instead of leaving a negative taste in the customer’s mouth, the easy returns and exchanges can spur additional purchases and aid further growth. Creating and maintaining relationships with customers is more than just offering a good product or service. It also entails meeting their needs effectively when they have a problem, such as a need for returns.

How Do Returns Impact A Business?

For the bottom line, returns require a negative adjustment to your sales figures. While this may seem simple, there is more than just the negative adjustment to consider. There are operational costs when it comes to processing returns. However, this starts from logistics and goes all the way to sorting and inspection. Oftentimes you find the costs in the overall cost of warehouse operation. There are transportation costs involved when picking up an item from the consumer. In most cases, customers receive a replacement product. In turn, this also incurs an additional cost. However, companies that don’t have an effective returns management plan in place, will end up paying a premium for logistics during every reverse flow transaction.

How Does Return Management Logistics Work?

An efficient returns management system will be handled by one company, or by a single company that coordinates with local shippers. They will handle picking up the project from the endpoint, be it a consumer or a retail chain. During each step of the process, the package will be tracked in a central database. This gives companies the ability to track the return in real-time. The package will be sent back to the warehouse, manufacturer, or to a central processing facility depending on the product. Once it gets back on the inventory ledger, it starts racking up inventory cost in addition to taking up space and using resources. Return logistical activities are costly above and beyond simply the cost of the item itself.

Improving Return Management Logistics To Boost Business

There is a customer service perspective to good product return processes as well. Returns are never expected, but when they do happen, it is a chance to improve or maintain good customer satisfaction and relationships. If the return is due to customer error, the processes should be pain-free, if the return is due to seller error, the process should also be pain-free. Instead of looking at returns as a failed service encounter, improve your return management logistics program to prevent client dissatisfaction. The last thing you want is for an unsatisfied customer to deal with hassles when making a return or exchange. Simplifying the process can turn a simple customer return into a loyalty-building moment.

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