Reverse Logistics for B2B & B2C Warehouse Management

Reverse Logistics in B2B and B2C Warehousing Operations

 
Reverse Logistics, or the returns process as it was previously known, has until recently been considered an unwanted process often confined to the shadows of the warehouse. Companies are now starting to appreciate the significant financial savings possible by applying a Reverse Logistics strategy. Alongside the financial savings, increased repeat orders and customer loyalty benefits, there are also growing demands on organisations to reduce waste and recycle goods and packaging.

“Reverse Logistics is the process of planning, implementing, and controlling
the flow of goods and related information backwards along the
supply chain, from the point of consumption to the point of origin”.

• Reverse Logistics affects B2B and B2C markets and its importance to both has greatly increased in recent years
• Returns cost the average B2B manufacturer between 9%-15% of total revenue*

Perhaps the greatest enhancements to Reverse Logistics have occurred in the B2C market. With exponential growth in eCommerce and online shopping, moving away from traditional bricks-and-mortar shopping, this trend has had a dramatic and revolutionary impact on the Reverse Logistics market.

• Significant cost savings across landfill/disposal, reduced space demand & increased stock availability
• Reduced customer churn and increased customer loyalty
• Packaging & Waste Electrical & Electronical Equipment (WEEE) directives
• Alignment with corporate sustainability & green initiatives

Organisations that have deployed Reverse Logistics processes can increase revenues by up to 5% of total sales*. This may be due to the fact that in eCommerce operations: shoppers’ experience reduces hassle with easy return policies (at least 30% of products ordered online are returned, compared to 9% in stores**); pre-printed return labels are shipped with the goods; and, contracts are in place with courier companies able to collect returns, with zero-cost to the purchaser.

Watch a short Video on Reverse Logistics,
the Circular Economy/Extended Producer Responsibility (EPR)

Old stock isn’t necessarily waste: Reverse Logistics and Extended Producer Responsibility (or the Circular Economy) represents a potentially highly profitable and environmentally friendly business opportunity. Resources or parts in products sold or transported today could be recycled, morphing into parts or resources for products you sell tomorrow!

In-DEX WMS Sample Returns Process

As warehouse Management experts we focus on the management of physical stock movements. Returns usually originate from uplift instructions, however, processes need to be in place to manage stock returned blind that doesn’t have an uplift instruction.

We generate a returns transaction, or electronically receive one from our customers’ ERP. Upon receipt of the physical goods, these are checked-in, with all traceable information recorded (e.g. best before dates, batch numbers etc.).

The new generation of hand-held devices includes integrated digital cameras. With In-DEX WMS technology, operators can simply press a button on the device, taking a photograph of the goods, which is instantly transmitted wirelessly so that the details are then held against the relevant transaction in the Warehouse Management System. As part of this process In-DEX also sends an email message to all relevant parties attaching a copy of the photograph, and provides real-time notification that the goods have been returned.

Damaged goods image capture via hand-held terminals

Usually goods are received back on a returns transaction. These can automatically be placed on QC (Quality Control) hold with operators directed to a returns goods area.
 

 
Daily, or hourly, approved staff need to physically review goods. Again, by using a hand-held terminal they can classify goods to be fit for resale/restocking in which case operators are directed, when scanned, to place items back into pickfaces. For alternative goods not fit for resale, operators can be directed to a disposal area and a stock write-off transaction generated.

In all instances each transaction is logged, date and time stamped and tracked to a user ID. As such, delivering full traceability and KPI reporting.

* Aberdeen Group report (2010), **Investp report

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