A GENERAL VIEW OF RETURN PRODUCTS AND OPTIMIZATION IN REVERSE LOGISTICS
When a customer doesn’t like the product which was ordered by him, it can be returned back to the company. Here comes the reverse logistics. Shipping the goods from a consumer back to the company or a retailer is called Reverse logistics.
With the booming of e-commerce, there is more chance of returns of the products due to reasons like repair, cancellation, complaint or wrong delivery, not-liking of the product, size variations, damaged quality, wrong orders, etc. The returning process itself is an inconvenience and tiresome process. But your brand’s credibility will increase among the customers when this was handled wisely through transparent measurements while returning. A good return policy is also a key factor in customers’ satisfaction.
The customer starts a return and must be backed by a document called Return Delivery Note. The return of products is enclosed with freight distribution and outsourcing. Shipment tracking comes to aid for both the warehousing and industry in management.
BASIC OF REVERSE LOGISTICS
After returning the product, the retailer or the manufacturer sorts to either resell or destroy the product, by repairing/refurbishing, or recycling the item depending on its status of it. Also, the management deals with the customer, by rendering a refund or exchange, a store credit, or product repair. This whole process is known as Reverse logistics. This process also includes the delivery drivers returning to a sorting center with the return products from the customer or a failed delivery attempt, further it is sent back to a warehouse.
Other types of returns in reverse logistics
Returning of products can be due to other reasons like B2B returns of unsold items directly from logistics to distributor, returning the damaged parts or products by the driver, and products returned for recycling by many services providers with pickups and drop-offs at the same time. Reverse pick-up is the term used to return the delivery to the retailer itself.
1. Return to Origin
Return to Origin is a concept that happens when the customers reject the shipment received and asked for money back. Then the undelivered goods being collected are sent back to the fulfillment Centres again and handed over to the retailer.
Reasons for Non-Delivery of Packages
ü Delivery denied by the customer.
ü Customer not available during the delivery and failed re-attempt delivery.
ü The door/ premise/ office is closed.
ü Incorrect/ wrong information details of the buyer.
When the RTO is declared, the following protocol is made:
ü Reship immediately and either expect a return or not.
ü Wait for return and then to reship or cancel.
Shipping charges are levied on RTO orders taken into responsibility by sellers. The shipper and the courier partner deal with this process on a contract basis.
2. Return Manifest:
It is a concept proceeded when a registration of shipment that is couriered by the vendor himself that may be returned due to unavailability of the customer, unfound location, etc. to the warehouse.
Transportation Management in reverse logistics
Since reverse logistics is a complicated process, to be profitable at both ends of business tying reverse logistical operations to transportation management seems creditable. Cost management while moving, handling, and shipping returns, in affiliation with warehousing functions, is below par for some companies’ capability. So, freight management, logistics, and reverse logistics systems are implemented to optimize customer service and maximize potential profit.
1) Recovery of a product’s value with TMS
When a product to be returned is delayed for reverse logistical process, the value of the product will decrease and the product will likely be damaged while moving too. The transport management system provides the necessary measures to track the movements of components and measure the costs of returns to your company and supply chain members. And software specifically designed for TMS does the job with specifics like energy expenditures, average travel distance per item, etc. Also, the product’s information like cost, original purchase, whether the returned products are regulated for resale, moved to the secondary market, disposed of will be notified. TMS also manages to locate the return goods by continuous GPS tracking data. It also rectifies the causes of delays by routing adjustments for traffic, road construction, and convoluted routes for the same. It provides increased service locations per trip and schedules to avoid route crossovers too.
2) Reverse logistics tracking
The tracking of the returned package back to a warehouse, market or its point of origin/retailer/manufacturer is said to be Reverse logistics tracking. Both the customer and the companies need the information about the status of the returned goods, costing the logistics companies loss of time and expense as a part of customer service. Thus, for an efficient return process, reverse logistics tracking is used to lower the cost associated with returns.
Maximization of benefits in Reverse Logistics Systems
If a company is busy with e-business, the reverse logistics services of the company must offer features like return submission forms on your website, a good tracking system, etc.
1) Centralized Return Centers
Arranging a specific place to process only returns is the best way to subdue the loss of a company. Centralized return centers (CRCs) are warehouses and centers where the return goods are sorted for repair, resale, refurbish or recycling. They are totally separated from forward-moving distribution and handle solely in the flow of goods back up the supply chain.
2) Reverse logistics software
Nowadays, automation of machines and computerized system management does all the work for a company to obtain a successful result in terms of profit. With the help of reverse logistics software, shippers and LSPs plan the process of reverse logistics. Digitization and automation of the center, sync order numbers, pickup scheduling with dispatching software, give drivers good apps to work with, process returns, etc.
3) Website
Ø Desktop and mobile platform-oriented web service.
Ø Customized submissions of returns with custom text fields and/or dropdown menus.
Ø Bill of lading should be displayed after return approval.
Ø Compatible Entry fields for the type of return being submitted.
Ø Return Status tracking displays.
4) Driver app utilization
To manage failed delivery attempts, damaged goods, and other complaints, a driver app will be a handful for effective reverse logistics.
These apps can be used to upload information in the logistics system by the driver, or charting and routing a second delivery while the driver is on the run for current delivery by the company, etc. This app enables an easier sorting process in the sorting center.
5) Synchronizing different order numbers
A single entry of complete details about a product will enable the company to use it to manage many processes at different stages. This is made possible by using a tool to scan the order once, record the details and use the order numbers for multiple internal systems by synchronizing it.
6) Convert a returned product to a planned delivery run
With a good route planner app, the drivers will be able to change reverse logistics stops, and makeshift it to a planned delivery (pre-existing route) when they are updated with the help of information from dispatchers in the reverse logistics. This reduces the return goods bulking in the sorting center.
7) Returns processing
Data analysis of a product which is returned for processing in the warehouse and segregating the products for shipping either to a regional warehouse or from sorting center to the supplier, its fleet cost, shelf life, inventory availability, profitability rate is analyzed.
Data of the product must be scanned in the current warehouse for information like its previous delivery order, warehouse or store it came from, etc. for the resale of the returns.
8) Interlinking the reverse logistics, forward logistics, and inventory management systems as a network
Both inbound and outbound logistics must be and usually are synced. But making a network of interconnecting the logistics management software and TMS along with Inventory Management System, POS, and Warehouse Management System will give a better understanding of your inventory, and where it is needed. A returned product when scanned in the sorting center will be easily available for resale quickly if the reverse inventory is detectable in the supply chain.