Evaluate Your Return and Repairs Policy
Are your policies easy to understand? Do customers often complain about these processes or are they happy with them? How much money are you losing on returns? You should ensure that it’s easy for your customers to return or repair their products, but also focus on keeping costs down.
Use Data and Data Analytics to Optimize Processes
By collecting data on product returns, you can understand why customers may be returning products. Only then can make adjustments in sales, product design and forward logistics processes accordingly. Some example KPIs include:
Return Rate: Determine how often products are being returned and why. Using this information you can minimize the amount of returns.
Cost per Return or Exchange: If costs are too high, you can find different solutions to reduce this number. For example, charging a small fee for shipping returns.
Total Cost of Repair or Refurbishment: Same thing here–if costs are too high, you should find ways to reduce them.
No Fault Found Rate: This is the percentage of returned items that have no defects. These items are easier to put back in the inventory and sell as open box items or even as new items.
Scrap Rate: This is the percentage of returned products that need to be disposed of or used as scrap. The scrap rate needs to be kept to a minimum as this can be very costly to your business.
Sync Your Reverse Logistics, Forward Logistics and Inventory Management Systems
Tracking your products will help you make quicker and more informed decisions about what to do with your inventory. To do this, you must sync your inbound and outbound logistics, which helps you avoid data silos.
Your logistics management software and transportation management systems (TMS) should be integrated with supporting systems – including your inventory management system (IMS), POS, and warehouse management system (WMS) – in order to understand where your inventory is, and where it’s needed. If you can track exactly where your reverse inventory is across the supply chain the moment it’s scanned in your sorting center, it will be easy to identify where it should be transferred to get it ready for sale again.
You should also track parts forwards and backwards, not just finished goods. Linking raw materials to the finished good and the customer order allows you to trace ingredients in the event that you need to process recalls—instead of issuing them for entire lines, you can find the issue and selectively issue recalls. Doing this reduces costs and customer dissatisfaction.
With a centralized return center, it’s much easier to sort products and identify the best course of action for each item, thereby efficiently determining how best to reclaim product value. If you’re unable to have a separate returns center, consider dedicating an area of your warehouse or factory to returns.
Automate Your Systems
Make sure to streamline your operations with cloud software. On the business side, you can use an application(s) or software to:
For customers, they should be able to do the following through a website or app: