It’s quite possible that your forward logistics provider says they’re also handling your returns management. Or you may think you’re taking care of it in-house. Scratch the surface and you’ll discover a whole host of demons in the back end of your supply chain.
Scenario 1: Your forward logistics provider is taking care of it
It’s human nature for people to tell you what you want to hear, but the reality of the situation is often very different. A company which specialises in trucking huge consignments of brand new palletised product around the country won’t have the faintest idea about what to do with dribs and drabs of damaged product which have to go to any one of myriad destinations before being returned in working order to the retail branch they were originally collected from.
Just think about the nuts and bolts of the situation. If you give a broken TV, a few malfunctioning hairdryers and a defective fridge to the guy who has just delivered you a hundred laptops, there’s very little chance he’ll be very interested. They’ll sit in his big truck for a few days before being returned to a central warehouse and only then will anyone think about where they should go next. If you’re lucky…
Put bluntly, you wouldn’t go to a doctor to get a filling and you wouldn’t get an electrician to fix your toilet. Yet still many companies insist on using forward logistics providers for their returns management.
Scenario 2: Your returns management is done in-house
So, you’ve got your own returns department and a few two-ton trucks in Johannesburg, Durban and Cape Town. You process returns yourself and then make sure they are repaired, returned to the OEM or repurposed. At least that’s what your website or brochure says…
Returns management is so dependent on cutting-edge software on the one hand and forging relationships with third party providers on the other hand, that it is highly unlikely your in-house returns department is managing the process as effectively as they could.
Managing returns in-house is so prohibitively expensive that all the major retailers in the US and Europe outsource the entire process. Returns management experts such as Revlogs are able to minimise costs thanks to years of expertise.
Returns management in the USA: then and now
Even a decade ago, returns management was largely ignored in the USA. Just look at these quotes from an article published in 2002.
“Returns are a huge customer service opportunity that a lot of businesses are missing out on. These companies are just turning a blind eye to returns, and don’t want to pay a lot of attention to them.” – Geri Spieler, Gartner Research
“Most firms do not view reverse logistics as a core competence, but as something to be ignored as much as possible.” – Ronald Tibben-Lembke, University of Nevada
The current economic climate has forced the US market to change and nowadays even medium and small businesses there outsource their returns management to third party reverse logistics providers. One need only look at the figures to see why:
“Companies with best-in-class reverse logistics capabilities have, on average, a 12-percent advantage in customer satisfaction and returns cost manufacturers 9 to 14 percent of total sales. What other investment can potentially improve customer satisfaction by 12 percent, and improve profits by up to 5 percent of total sales?” – Curtis Greve, Reverse Logistics and Sustainability Council
You may think there’s nothing wrong with the way your business handles its returns management but closer inspection will reveal a very different picture.
- If your forward logistics partner says they’re handling your returns, you can rest assured that they won’t be doing it as effectively as possible.
- If you keep your returns management in-house it will be prohibitively expensive (if you do a good job) or not as effective as it could be (if you don’t).
- The only way to increase efficiency, reduce overheads and increase profits is to contract the services of a specialist provider.
Revlogs MD Craig Plowden has been in the returns management business long enough to see that the benefits of a streamlined returns process are far greater than one would initially assume. Give Craig Plowden a call on 011-608- 3968 (JHB); 021-934-2905 (CT); 031-700-5833 (KZN).
Revlogs offers a specialist returns management service which takes care of the entire process, from retrieving product from the retailer, through to repairing it or returning it to the OEM, and ensuring the new or repaired product is back in the retailer’s hands timeously to ensure the best possible customer service.