Reverse Logistics: Solving Your Returns Problems
So much focus is placed on the process of delivering a product that when it comes to handling returns, employees may find the reverse logistics cycle difficult to manage. But you should consider this: Returns pose an opportunity for you to demonstrate outstanding customer service and a commitment to your product. You can really set your business apart from the rest with helpful and efficient returns and warranty policies.
The challenge here is achieving efficiency and accuracy in your reverse logistics cycle. When it comes to the workflow, sending product backwards through the logistics cycle is a pain if you don’t have business software to help you manage the process. Three components of the reverse logistics cycle that can become challenging include honoring warranties, managing the returns process, and achieving accurate traceability. Let’s explore these issues and how they can be resolved.
Honoring Warranties in Reverse Logistics
The first step, of course, is to determine the disposition of the product in question. There is an opportunity here to diagnose the problem before the product is actually returned. Does a warranty apply to the situation? Having the customer, product and warranty data at your fingertips is essential to provide good customer service. Are repairs part of your process, and how do you manage the repair process effectively so that the fixed product is quickly sent back to the customer? Repairs involve tracking a service in connection with the product and customer.
Achieving a successful warranty program usually requires the right software to streamline the process. In most cases an Enterprise Resource Planning (ERP) solution is the best choice. See our case study about high volume distribution, where a client’s ERP success includes effectively managing a world-class warranty program.
Managing the Returns Process
Complexity in the returns process includes tracing numerous details and applying changes to your records. Some of the steps and issues to consider include:
- Managing Return Material Authorization (RMA) numbers and labels
- Will returns be made via courier collection, or will you provide freepost return labels?
- You’ll need to apply a sales credit to the customer. The original sale needs to be reversed, which also then adjusts your sales revenue and taxes.
- If the product isn’t being sent further back in the logistics cycle, you’ll need to determine what to do with it. Will it be resold at a reduced price or written off and discarded?
- How will you track the reduced value of the product?
- Does the product need to be sent further back in the supply chain to a vendor, supplier or manufacturer? If so, now you are dealing with their returns process.
The inherent complexity of returns, especially if you must manage returns in any volume at all, means that you’ll need an adequate business system to help your employees stay on top of the associated details and processes efficiently. Without a good system, your costs in employee hours spent on returns will get out of hand.
Accurate Traceability in Reverse Logistics
Traceability is one of the biggest benefits of an ERP system. With tremendous ease, your ERP system will help you keep track of all the data surrounding your products, customers, vendors, warranties, RMA numbers, and so much more. You’ll be able to scan a barcode or key in a string of numbers and immediately see all the data and history surrounding an item. You can quickly change the item status and move it along to where it needs to go. Next steps in return processes are prompted, sales credits are applied, and your customers are happy. And, best of all, happy customers give repeat business and referrals.
Additionally, your ERP solution will help you keep track of the reasons for returns. Being able to trace return issues means you can keep an eye out for opportunities to improve your products and services, as well as being able to watch out for fraudulent behavior and protect your business.
Business Software Solutions for Reverse Logistics
You can achieve the greatest efficiency in reverse logistics and returns management using an ERP solution. Trek Global delivers powerful and affordable business software with its enterprise solution, Trek Cloud ERP. You will be able to automate and streamline your business with Trek Cloud ERP’s comprehensive business software that helps you reduce your overhead while managing all your complex business tasks. We would be glad to talk with you about your needs – contact us today to learn more.