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Returning Thoughts

Returning Thoughts

by Paul Rupnow, Andlor Systems

Reverse Logistics Magazine, Edition 62

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Looking for cash? Look at your product returns. Too many companies are still fumbling through reverse logistics processing without adequate software systems to collect data, supply visibility or provide the decision capabilities necessary for the special requirements of processing product returns.

Despite good intentions and a number of good reverse logistics software and IT solutions, the majority of manufacturers and retailers still lack good Reverse Logistics Management Software Systems. Few companies realize a small investment in reverse logistics can yield big cash and profit results by reducing returns, reducing logistics and processing costs, reselling returned goods for higher prices and improving customer service.

The real question is… can you afford not to have one?

Beyond Data Collection to Information, Knowledge and Wisdom
Reduce returns, resell returned items for more cash, validate credit requests, reduce logistics and handling… The list of opportunities goes on and on and on. Reverse Logistics is full of low hanging fruit – easy money and significant cash available to companies who use processes and systems to:

• gather Data to document and understand your returns

• generate Information by using the data to understand relationships

• collect Knowledge by analyzing and measuring the information

• create Wisdom by asking questions, developing conclusions, determining actions

While most transactional ERP, financial or manual systems can satisfy some of the basic data collection requirements of returns transaction processing, specialized Reverse Logistics Management Software System will enable an organization to gather all the necessary data and then go far beyond data collection by providing the ability to create information, knowledge and wisdom from the transactional data.

ERP vs. Reverse Logistics Systems: Fill the Gaps, Automate and Provide Decision Tools
Many companies start looking at Reverse Logistics Systems to fill the gaps not addressed in the corporate ERP systems. A Reverse Logistics system will cover the gaps, provide tools for visibility, automate processes and make decisions through all the unique steps, processes and activities necessary in the complex life of a returned item, from RMA return request, through receiving, processing and then to final resale and conversion to cash. Some key features of Reverse Logistics software are:

- Data - captured in all processes at all levels for analysis and decisions such as serial number capture upon receipt or failure analysis. All touches and data entry are time, date and user stamped for further analysis and specific to returns processing.

- Visibility – Visibility should be available internally, as well to partners and customers as required. For example:

o a full history in real time of an item by serial number through each stage of processing.

o Inventory visibility for RMA creation –a customer service rep should have visibility to all refurbished or new replacement inventory available as well as any backorder information or substitution options while on the phone with a customer.

o RMA status –a customer should be able to look up the status of an RMA, such as the defective has been received, but replacement has not yet shipped

- Real Time Decision Tools and Rules – rather than relying on manual spreadsheets, or out of date transaction data or day end reports, real time decision tools can streamline production, reduce touches or identify problems. The decision tools or rules are typically configurable to match your business or best practices. For example:

o Receipt Validation - a shop floor receiving process check to ensure a unit is valid for credit by matching all items present. Serial number validation can ensure the unit is in warranty when validated again a warranty database.

o Disposition Automation – a shop floor disposition process closely streamlined into the receiving process will reduce touches and handling by instructing the receiver where to put the item after it has been scanned into receiving, such as:

• Scan -> decision –> item is obsolete –> put away to scrap;

• Scan –> decision -> too much inventory –>put away to be harvested for parts;

• Scan –> decision –> enter visual defect –> scratched screen –> decision -> defect indicates level 2 repair required – >put away to be shipped to repair partner

o Directed Processing – a unit has just been tested and the system indicates to the user the next step or station required based upon the inputs of the test results. The steps can be configured or modified as required by a repair manager based on the special requirements to refurbish or repair each product.

- Time Lines – a full history of turnaround time from RMA creation, through the return cycle to final disposition cash collection. Speed can be a critical factor to a higher resale value and needs to be monitored at all stages, not just through the repair cycle.

- Alerts and a Dashboard – real time, configurable alerts and indicators to identify and highlight issues requiring attention. For example: early warning on an excessive number of defects

- Data Sharing – sending and receiving data about the RMA’s, Receipts, inspection, disposition, failures, test and repair activities is critical to managing and improving your Reverse Logistics, whether the activities are performed in house or with a 3rd party service provider.

- Business Intelligence for Reverse Logistics – yes, you likely have lots of BI and reporting tools, but they need to be specific to your Reverse Logistics operations, so you can understand and plan to improve your operations and processing.

Get a Best Practice Reverse Logistics Software System
Reverse Logistics Systems are designed to work within your organization and with your partner organizations by enabling you to centralize all data, decision rules and tools. They are also designed based upon the best practices, experiences and case studies of many companies. Specialty Reverse Logistics systems have matured well beyond the gathering of data for basic return transactions. If you have not done so already, it is time to get educated about the Reverse Logistics software systems available and start recapturing cash for your company. Your CEO will thank you!
Paul Rupnow - Director, Reverse Logistics Systems, Andlor Logistics Systems Inc.
Editor - Reverse Logistics Professional Report Business Insights and Strategies for Managing Product Returns
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