Most companies handle returns poorly. And when the returns are associated with Internet purchasing, the process becomes even more complex. Fortunately, reverse logistics--which encompasses product returns, service contract returns and product recalls--is an area that has been helped by new Internet-based tools and services. These offering can streamline both traditional and e-business-based returns.
Many companies have chosen to work with a third-party logistics (3PL) provider because they have concluded that logistics is not their core competence. The decision to outsource is particularly logical when dealing with specialized logistics, such as refrigerated products, hazardous materials, controlled substances and reverse logistics. With the proliferation of e-commerce, new companies have emerged to focus on various aspects of the Internet order return process. These companies include e-RMA Corp., Kirus, ReturnBuy.com, ReturnsOnline.com, Yantra Corp. and Genco Distribution Services.
Reverse Logistics
Product returns are the most common aspect of reverse logistics. When goods come into a returns center, they need to be assessed. Based on the condition of the returned merchandise and the manufacturer's (or merchant's) choice for disposition, the items are automatically routed to their final destination. Disposition options related to asset recovery include repair, upgrade, refurbishing (including repackaging), remanufacture, demanufacture (parts reclamation) and recycling (particularly of pallets and containers). Disposition logic also includes channel or routing logic, which means the returned items and components can be sent back to the customer, routed to a warehouse or sold in secondary markets.
For some companies, brand protection is paramount. A manufacturer of designer goods, for example, frequently wants to ensure that its goods are not sold in secondary markets and do not end up being sold in discount stores. In these cases, the disposition logic is disposal. Ideally, certified processes similar to those used for handling controlled substances are used to ensure that these goods are not stolen by employees and then sold.
Often, it makes more sense not to run a distribution center (DC) and returns center out of the same facility. Returned materials are not a priority and cannot be a priority for a DC manager. Furthermore, the very design of DCs and return centers needs to be different.
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