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Returning Thoughts

Returning Thoughts

by Paul Rupnow, Director, Reverse Logistics Systems, Andlor Logistics System, Andlor Logistics Systems Inc.

Reverse Logistics Magazine, Edition 71

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Use Smart Receiving to Convert Your Reverse Logistics Inventory to More Cash

The heart of Reverse Logistics is your Receiving process, but you need to ensure you also have a Smart Receiving brain. Smart Receiving will help you recover the highest value for each item, reduce processing costs and touches, avoid idle time and enable you to treat each item you receive for its own special attributes, needs and conditions.

What is Smart Receiving?
Unlike forward logistics, where everything arrives in a well labeled carton and immediately put-away, when items arrive at a warehouse for Reverse Logistics processing, the addition of a few quick extra receipt processing steps, may have a significant impact in the value that can be recovered from the returned item. In addition to creating a warehouse Receipt, these extra steps may include a linking or combining of data collection, condition assessment, credit entitlement and importantly, some minor activities like a quick test or a plug in to power up. Rather than treating all the returned items as a bulk group, Smart Receiving enables you to custom tailor an appropriate workflow for each individual item. This is important because returned products can be in many different conditions, requiring different handling in order to assist in quickly processing the item for maximum recovery value.

How Does Smart Receiving Work?
The trick to making Smart Receiving work for you is to predetermine the optimal workflow for each item you will be handling to meet the special needs of that unit in one of many different conditions. By planning and incorporating activities into the workflow as soon as possible, you can avoid further or unnecessary handling in the future. Smart receiving also requires special direction to the person handling the item, because depending on the information he just collected or provided, the unit may require a different next step or routing than the route he used for the last item he handled. Your software system may be needed to help create and manage the workflows, direct the user and monitor the data results for continuous improvements.

Why Use Smart Receiving?
Small amounts of time and effort in returns processing can yield very high returns. One of your objectives of the processing is to remove uncertainty for the purchasers of your returned goods. It is very easy to liquidate your unprocessed returns to an eager buyer, but in doing this, you may be passing easy profits to that buyer. By utilizing Smart Receiving, you can easily plan and manage specialized return processing workflows for your products, collect data and measure success and continually improve your workflow. This allows you to meet your Reverse Logistics goals of reducing processing costs, faster inventory turns to cash, and most importantly recover the highest possible value of each returned item you process.

Smart Receiving works well with your 3PL or 3PSP processing partners as well, since you can, together, determine the optimal workflows, monitor and manage the productivity and outcomes of these activities. By doing this you will know how each item that arrives at your Reverse Logistics warehouse will be processed, ahead of time, and how long the processing should take, as well as determine your expected re-sale value.

Your Reverse Logistics processing software should have Smart Receiving incorporated into your system. A Smart Receiving system will provide you with the tools to create and manage specialized workflows. It should also have easy to follow interfaces and instructions for your Reverse Logistics team to rapidly process each returned item for maximum recovery value.

Add a Smart Receiving brain to your Reverse Logistics process and start providing special treatment to each of your returned items. Your results will be even bigger (financial) returns.
aul 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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