5 Simple Steps to an Improved Reverse Logistics Management Program for Manufacturers
By Jim Schumacher, Chief Revenue Officer-DRS Product Returns
The ins and outs of a solid reverse logistics program can be complicated to say the least. Knowing that complexity adds costs to your operations, these 5 simple steps can improve your reverse logistics operations and take significant costs out of the equation.
1. IT STARTS WITH YOUR RETURN POLICY.
The Return Policy can be used to close gaps, prevent loopholes, and innovate your approach to managing your returns. How important is it to keep it updated and relevant? Ask those who don’t have an E-commerce aspect to their policies.
A well written policy allows you to be proactive in handling most circumstances that will arise. An incomplete or even no policy at all will force you to be reactive time and time again. This burns up valuable human capital resources and can also erode recovery values as well. It is important to remember that in addition to material costs, you are also managing time and opportunity costs when executing a reverse logistics program.
2. PRODUCT POSSESSION & DISPOSITION
Possession and Disposition are the cornerstones of any solid returns program. Preserving your brand identity and reputation can be very difficult if damaged or expired versions of your product are finding their way into the market.
Having control over what happens to your products and where they eventually end up will help you preserve the brand identity of the product and move you further away from the possibility of any returns related catastrophe.
3. IMPROVE YOUR PRODUCT’S PERFORMANCE IN YOUR SUPPLY CHAIN.
Prevention is worth a pound of cure. You can reduce the incidence of unsaleable products and unproductive inventory by implementing some level of supply chain research. A recommended first step would be to follow an order through your forward supply chain. By doing this you will be able to identify any key points of risk to your product’s performance in the supply chain.
4. LEVERAGE INFORMATION AND DATA TO YOUR ADVANTAGE.
Make sure that you have a full understanding of what products are coming back and why. Your Customer Service and Call Center teams can be a valuable source of information to harness the voice of your customer.
Benchmark your program to other manufacturers to identify where you have areas to improve your program.
5. TAKE YOUR REVERSE LOGISTICS PROGRAM SERIOUSLY AND MAKE IT A PROACTIVE PROCESS.
Are you causing unnecessary destruction and waste? Are you missing out on asset recovery proceeds and or donation credits? Use a better optimized reverse logistics program to improve your FINANCIAL performance. Don’t be passive about managing your returns. A well run, proactive reverse logistics program can save your company real money.
If you are thinking, “I don’t have the time, resources or even a basic understanding of how reverse logistics works”, do not despair. In this case, there is what I like to refer to as the “6th step”.
Hire an expert who can help you identify the strategies and action plans to address your needs, up to and including outsourced solutions that often time pay for themselves with the costs avoidance and recovery value you will experience moving forward. As I like to remind my clients, “if you are not winning at reverse logistics, you are losing money”.