Coming out of recession, it would be easy for businesses to focus all their energies on winning sales and getting goods out of the door. But with an estimated US$9 billion in retail returns each year (and that’s just in the UK), understanding the impact of goods coming back is also important for operations and the finance function to understand.
The idea is gaining traction. In an Aberdeen Group global study conducted in February this year, 87% of the 164 companies surveyed said that the effective management of the reverse service supply chain was either ‘extremely’ or ‘very’ important to operational and financial performance – up from 74% in 2008, and 61% in 2007.
Understanding exactly how your reverse supply chain works is not easy. RL is not simply a question of handling the postage and packaging for faulty goods. For example, quality control issues in manufacturing will increase returns – as will poor customer support and even a badly designed instruction manual.
In many situations, those actions go way beyond traditional logistics solutions. A good example is the sale of satellite navigation units by UK-based Halfords, a large retailer of car parts, accessories and other travel related goods. The company was handling a large volume of ‘no fault’ returns – customers exercising their statutory rights to a refund, simply because the product ‘wasn’t right’ for them.
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