More and more enterprises realize the importance of return management, and they take positive measures to save money and improve customer satisfaction. No one likes product returns, but this inevitable "tumor" of the supply chain is causing concern for businesses, which have recognized the importance of returns management to customer relationships, brand loyalty and net income.

This past year in particular, we 've noticed that more executives are focusing on this area, and they want to understand why returns occur, the financial impact of returns, and how to reduce returns.

Return management is complex, including not only products that need to be quickly stored and resold, but also products that need to be repaired and refurbished, often with warranty cards, and products that need to be safely disposed of 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, since all returns cannot be handled in the same way, and returns account for 20% of all products sold, return management is still a thorny issue for most businesses.

1

Manhattan Return Solution

To help consumers handle different returns, a Manhattan partnership, a supply chain provider in Atlanta, USA, and other software providers designed new solutions. Most companies have their own policies for handling returns and follow many supplier rules, but these programs are not simple. According to David Hommrich, senior manager of reverse logistics of Manhattan Partnership, in fact, every enterprise will have its own policy for handling returned products. However, due to the different policies of each enterprise and the unfamiliarity of the operators, the policy guidelines for handling returned products can only be shelved and no one cares about them. Therefore, one of the goals of the Manhattan Partnership is to make the return policy popular.

The Manhattan Partnership's "return to supplier" model is able to incorporate all supplier return management policies into the plan. For example, a DVD manufacturer requires 20 DVDs to be returned each time. That means companies have to put 19 cases on hold until the 20th. However, Manhattan's "return to supplier" model can automatically generate a pick ticket and can transmit the ticket to the warehouse management system. In this way, the Manhattan Partnership can avoid the problems that often arise in return management.

In addition, the Manhattan Partnership's return policy has a "gate guard" feature that prevents the return of non-eligible products. For example, a manufacturer may enter into an agreement with a wholesaler to allow only a percentage of returns, whether quality or not. In this case, the enterprise must grasp the number of returns in real time. Some businesses only allow wholesalers to make one return per quarter, while others have a number of returns related to the life cycle of the product. In either case, a "gate-keeping" function is involved. The Manhattan Partnership dynamically resolves situations and makes its own decisions based on relationship, product or environment in accordance with its return processing policy.

2

CellStar Return Solution

Yantra is a supply chain executive based in Tucsbury, Massachusetts. The business also uses a return policy to manage warranty issues. The warranty issue is just one of many reverse logistics services that Yantra's customer, CellStar, offers. CellStar is a mobile phone logistics service provider in Carroton, North Texas. A new service offered by CellStar, Omnigistics, is specifically designed for mobile phone return processing. According to Chris Smith, vice president and general manager of the CellStar, the enterprise's forward logistics is very mature, but reverse logistics is very weak, and the vast majority use electronic watchmaking software and other domestic software.

In addition, the mobile phone industry has many problems. Different mobile phones not only have different structures, styles, different software technologies, but also different warranty policies. Strictly speaking, an infinite number of mobile phones are returned from clients every month. These returned mobile phones must be inspected and evaluated to determine whether they can be guaranteed and whether they are economical to repair. Especially when the customer returns the phone within the warranty period, the company has to give the customer another phone. The average sales price of the new mobile phone is 150 US dollars, which is another expensive fee. The Omnigistics service provided by CellStar advocates repairing the mobile phone for the customer instead of replacing it with a new one, which can reduce the cost by 30% to 40%.

Due to the birth of the Omnigistics, when customers have problems with their mobile phones and are within the warranty period, they will call directly to the call center. Then, the call center records the information of the phone and transmits it to the CellStar via electronic data. The next day, the CellStar will mail to the customer another new phone of the same price and model. Upon receipt of this new phone, the customer will return the problematic phone in the packaging they just received. When the initial customer calls the call center, all information about the phone, including the product serial number, is entered into Yantra's system. The serial number also helps Omnigistics determine whether the product is still under warranty. At the same time, when the returned product flows in the reverse logistics chain, its labor cost can also be calculated.

Omnigistics not only reduces the cost and improves the level of customer service, but also enables enterprises to obtain more information. CellStar reporting the total number of repair tasks to retailers and manufacturers, a lot of valuable and reliable information can be obtained, which allows the enterprise to take measures in advance. In addition, the CellStar in accordance with environmental requirements to deal with returned products for the company's development provides a lot of room for development. Because in 2005, California will introduce a new law that requires mobile phone carriers and retailers to dispose of terminal phones in accordance with environmental requirements.

3

Toshiba's Return Solution

There are different problems with return management for Toshiba computers, because customers want the computer they used before, which has all the information, and it is simply not possible to replace the computer. Therefore, the 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 adopted the Six Sigma method to find a solution to shorten the repair time. Toshiba wanted to outsource this business, and at first it was hesitant to choose a partner-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 Supply Chain Solutions, which has repair capabilities and, more importantly, a core position in the logistics sector. Between logistics and repair services, Toshiba pays more attention to logistics, 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 plus. Toshiba's parts storage and repair centers are located in Louisville. As a result, after the cooperation between the two sides, the inventory has become very good, because the parts do not have to leave the factory. Moreover, the repair cycle has also been greatly shortened, from the past 10 days to 4 days. UPS's developed store network contributes the most to the shortening of repair cycles. Now, UPS no longer has to spend days mailing customers a replacement return product. Customers can go to any UPS store, which will wrap the products for customers and deliver them on the same day.