The reverse logistics is often neglected among retailers, even though it will almost certainly have an impact on the bottom line. Reverse logistics is the "process of handling products returned by customers"and can include your company's return policy, technology tools, Return Merchandise Authorization (RMA), third-party logistics providers (3PL), facility layout, item flow, etc.
Paul A. Myerson, managing partner, LPA, LLC and author of Lean Supply Chain & Logistics Management, emphasizes the importance of a well-run reverse logistics procedure, "Facilities that do not develop Lean procedures for returning, processing, repairing, and replacing products may create considerable waste. Efficiently managing the reverse logistics process, however, improves profitability and adds value for customers."
Here are six factors Myerson urges retailers to focus on when developing a reverse logistics process:
- Prevention. Minimize returns by using Lean tools and ensuring the quality of the product.
- Financial incentives. Avoid processes that cause RMA delays.
- Core competencies. Consider outsourcing your reverse logistics to a 3PL that can manage it efficiently.
- Suppliers. Review the returns handling terms you have established with vendors.
- Cycle times. Evaluate the entire returns process and identify potential sources of waste.
- Technology. Invest in the right tools to help you control and measure the reverse logistics process.
To find out more about reverse logistics, you can read Myerson's article, Putting a Lean Spin on Reverse Logistics, at InboundLogistics.com.