More and more companies are recognizing the importance of return management, and they take positive measures to save money and improve customer satisfaction. No one likes product returns, but the inevitable “tumor” of this supply chain is attracting corporate attention, and companies have recognized the importance of return management for customer relationships, brand loyalty and net income.
Especially in the past year, we noticed that more executives are concerned about this area, they want to know why it produces returns, the financial impact of returns, and how to reduce returns.
Return management is complex, including not only products that need to be quickly restocked and resold, but also products that need to be repaired and refurbished, often with warranty cards and products that require safe handling according to environmental requirements.
For the sales supply chain, the sales channels are multiplied according to different products; similarly, reverse logistics also needs to increase channels. However, because all returns cannot be handled in the same way, and returns account for 20% of all sold products, return management is still a tricky issue for most companies.
Manhattan Return Solution
To help consumers deal with different returns, Manhattan's partnership, a supply chain provider in Atlanta, USA, and other software providers have designed new solutions. Most companies have their own guidelines for handling returns, and many vendor rules are followed, but these are not simple. According to David Hommrich, senior director of reverse logistics in Manhattan, in fact, every company will have its own policy of returning products, but because of the different policies of each company and the unfamiliarity of operators, the policy of handling returns is made. The guide can only be shelved and nobody cares. Therefore, one of the goals of the Manhattan partnership is to make the return policy popular.
The Manhattan Return Partnership's “Return to Supplier” model incorporates all supplier return management policies into the program. For example, a DVD manufacturer requires 20 DVDs to be returned each time. That means the company has to put 19 pieces on hold until the 20th item arrives. However, Manhattan's "return to supplier" model can automatically generate a picking ticket and can transfer the ticket to the warehouse management system. In this way, Manhattan partnerships can avoid the problems that often arise in return management.
In addition, Manhattan's partnership return policy also has a "going gate" feature that prevents the return of non-compliant products. For example, a manufacturer may enter into an agreement with a wholesaler that allows only a certain percentage of returns regardless of quality issues. In this case, the company must master the quantity of the return in real time. Some companies only allow wholesalers to return goods once a quarter, while others return quantities related to the life cycle of the product. In either case, the "gatekeeping" function is involved. In accordance with the return processing policy, Manhattan partnerships dynamically resolve various situations and make decisions on the basis of relationships, products or environments.
CellStar Return Solution
Yantra is a supply chain executive in the town of Tewsbury, Massachusetts. The company also uses a return policy to manage warranty issues. The warranty issue is just one of many reverse logistics services offered by Yantra's customer, CellStar. CellStar is a logistics service provider for mobile phones in Carrollton, Texas, USA. A new service offered by CellStar, Omnigistics, is designed for mobile phone return processing. According to Chris Smith, vice president and general manager of CellStar, the company's forward logistics is very mature, but reverse logistics is very weak, most of them use electronic watchmaking software and other domestic software.
In addition, there are still many problems in the mobile phone industry. Different mobile phones have different structures and styles, different software technologies applied, and different warranty policies. Strictly speaking, countless mobile phones are returned from the client every month. These returned mobile phones must be inspected and evaluated to determine if the warranty and repair are economical. Especially when the customer returns the phone during the warranty period, the company has to give the customer another phone. The average sales price of the new mobile phone is $150, which is an expensive fee. The Omnigistics service offered by CellStar advocates repairing the mobile phone for the customer, rather than changing the new one, which can reduce the cost by 30% to 40%.
Due to the birth of Omnigistics, when the customer's mobile phone has problems and is under warranty, they will call the call center directly. The call center then records the information for the phone and electronically transmits it to CellStar for a copy of that customer's profile. The next day, CellStar will mail the customer a new phone with the same price and model. Upon receipt of this new call, the customer will return the problematic call with the package just received. When the customer first calls the call center, all information about the phone, including the product serial number, is entered into the Yantra system. The serial number also helps Omnigistics determine if the product is still under warranty. At the same time, when the returned product flows on the reverse logistics chain, its labor cost can also be calculated.
Omnigistics not only brings cost reductions and improved customer service levels, but also enables companies to obtain more information. CellStar reports the total number of repair tasks to retailers and manufacturers, and can obtain a wealth of valuable and valuable information that allows companies to take action in advance. In addition, CellStar's handling of returned products in accordance with environmental requirements has provided a lot of room for development. Because California will introduce a new law in 2005, the law requires mobile phone carriers and retailers to handle terminal calls in accordance with environmental requirements.
Toshiba's return solution
There are different problems with the return management of Toshiba computers, because the customer wants the computer that they used before and has all the information, and it is impossible to replace the computer. Therefore, two key factors for customer satisfaction are speed and first-time repair. If Toshiba ignores either of these two factors, customer satisfaction will decrease.
Toshiba uses Six Sigma to find solutions to reduce repair time. Toshiba wants to outsource this business, initially hesitating about the choice of partners – choose a repair company or a logistics company? In fact, for large-scale return processing business, there are few companies with dual functions of repair and logistics services. Finally, Toshiba chose the UPS Group's UPS Supply Chain Solutions, which has the ability to repair and, more importantly, is at the heart of the logistics arena. Toshiba pays more attention to logistics between logistics and repair services, because Toshiba firmly believes that repair skills can be learned and improved, and logistics models are difficult to imitate.
UPS's airstrip in Louisville, USA is also a big advantage. Toshiba's parts storage and repair center is located in Louisville. As a result, after the cooperation between the two parties, the inventory became very good, because the parts did not have to leave the factory. Moreover, the repair cycle has been greatly shortened, from the past 10 days to 4 days. UPS's well-developed store network contributes the most to shortening the repair cycle. Now, UPS no longer has to spend a few days mailing customers an alternative return product. Customers can go to any UPS store, the store will package the product for the customer and send it on the same day.