The reverse logistics operations process is an important one for manufacturers. Without a solid system in place, millions of dollars could be thrown away at unnecessary shipping, replacements, and labor costs. Learning more about proper methods or even outsourcing could save money.

The amount of people returning items is higher than ever. With money tight with most United States citizens, and the Internet providing a common barrier between buyer and seller, there have been high returns all across the board. This means that there must be a system in place to handle excess returns, but also a system to solve the problem of why returns are occurring.

If a customer doesn’t receive a product, the business that shipped it just lost money on shipping and handling. That’s why the process of obtaining the address and organizing the business back end is important. Customers should always verify their address before placing an order, and the database of information should be well laid out, and able to flawlessly print out address labels onto packages. Outsourcing is a good option here for most businesses.

Return departments don’t always just replace a product. Instead, a product may become refurbished and sent back to the buyer. This is popular for heavy machinery such as riding lawn mowers, where replacing the entire machine would cost much more than replacing a simple part. As a result, your business may also need a repair department on staff.

Some of the most successful repair operations in reverse logistics work based on fixing products, and then shipping out refurbished products as new products arrive. This works best when there are few products that a manufacturer offers. An example would be with a router manufacturer: if a router comes in needing a repair, an already refurbished router of the same type can be sent immediately while the old one is fixed. Waiting times are drastically reduced.

Handbooks that are well laid out can work wonders for returns. Furniture companies can sometimes be notorious for including instructions that don’t make sense, or missing out on parts that should have been shipped. A manual will let the buyer know what they need and how they need to operate or assemble the product. If they become lost in the process, they are more likely to return the product and buy a different brand from a competitor rather than work it out.

Final Thoughts

Third party logistics companies have operations, software, and the man power ready to take on any reverse logistics operation. Medium and large businesses are better off outsourcing their operations, rather than attempt to do an in house logistics operation and cause a clear cut disaster instead.

Learn more on St Louis distribution and 3PL EDI services.

This entry was posted on Thursday, September 2nd, 2010 at 1:20 am and is filed under Finance.