Reverse Logistics - The 5 Keys to a Successful StrategyReverse logistics isn’t something most companies relish and as a result is often overlooked, but if handled with the right care, it’s what gives a modern supply chain the competitive edge.

Of the many areas of a supply chain that get attention, reverse logistics is certainly an area amongst those that gets the least. It’s entirely understandable. Most companies focus on getting their goods to the consumer as opposed to getting those goods back. Nonetheless, it’s become critical for modern supply chains. Quality reverse logistics isn’t just about adding anther element of value to a supply chain, it’s it’s making sure it stays competitive in the future.

This article by Morai Logistics covers 5 steps companies should be taking in order to make their reverse logistics process more successful.

Figure out the why Behind Returns

Returns shouldn’t be a mindless process. They’re costly, and it’s up to supply chain managers to figure out why they’re happening. With the right approach, they can be turned from a cost to a benefit—an opportunity to improve. That improvement can come from a number of areas as the reason for the returns can stem from different places. Predominantly, they’ll be a consequence of an issue in the return policy or a product. As such, addressing this root issue is not only a cost-saving measure but a way to better understand the customer.

Have a Simple Return Policy

Make the process of returning as easy as buying. Customers are typically able to buy something online in the space of seconds. As a result, they expect the process of returning to be equally quick and simple. Not meeting this expectation leads to dissatisfied customers. Thus, it’s important to have a return policy that is both easy to understand but also straightforward to follow. Not only does this help your customers, it also helps your customer service team.

Make Sure Return Labels Come with the Packaging

Little things go a long way. In line with making returning easy, is the incredible value in ensuring return labels come with packaging. The benefits of this match that of having a simple return policy (happier customers and customer service team). However, they don’t stop there. A return label improves overall supply chain efficiency, as it allows for products to be returned quickly.

As this Supply Chain Brain article on reverse logistics, and return labels in particular, explains,

It can then be placed on a sticker that the customer can simply peel off and pop onto the product for a hassle-free return. Not only does this help the customer, but it also gets the product back to the seller much more quickly, improving the efficiency of the entire process.

Track Returns

At this point in time, it’s become apparent that having a high degree of visibility throughout a supply chain is vital to its success. That visibility should extend to reverse logistics. With that in mind, it’s critical that, in the same way monitoring systems are used for product deliveries, they should equally be implemented for returns. By doing this, companies can evaluate the treatment of their goods. Moreover, they can use this evaluation to see if any of their goods need fixing and if the handling of their product on returns is adequate.

Don’t Neglect the Right Technology

Finally, there’s the technological component of returns. As previously stated, reverse logistics is a key part of the supply chain. It can be seen as its final step. Hence, the same way in which the modern supply chain requires digitization, it then follows that so does reverse logistics.

The previously mentioned Supply Chain Brain article elabourates,

A transportation-management system (TMS) and warehouse-management system (WMS) allow for greater efficiency over the course of a reverse logistics operation. These applications combine to keep you in the know about where a product is, while always maintaining the correct documentation.

The current shortage of truck drivers is estimated at roughly 25,000. The turnover rate, which hit 96% by the end of 2014 is due to a multitude of reasons, including demographic, regulatory, and the fact that drivers are away from home for a period of time, among other factors.

This month, we thought it would be a great idea to take a look at these facts and figures!

12 Key Facts About the Driver Shortage and the Future of the Trucking Industry

Morai-Logistics-12-Key-Facts-About-the-Truck-Driver-Shortage

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

Morai-Logistics-Blog-Holiday-Planning

We are in mid November and for many people this means that it’s the best time to start to thinking about who they’ll be giving a gift to and what that gift will be. If organized, they’ll set a budget and a timeline so they aren’t scrambling at 11 PM the night before in a dollar store for the perfect gift.

If you are working in a distribution centre however, the planning and preparation stage for your building/company would have started about four months ago back near the end of July. You would now either be in the middle or very close to peak season, meaning that your building could see an inventory increase of over 40%.

Given how close the holiday season is, there is likely not much that can be done if your distribution centre is only just now scrambling to put together peak plans for your building. Rather than this be a list of tips for planning a successful peak, consider this a quick checklist to determine exactly how rocky a peak your supply chain may have. As the saying goes,

“the best laid plans of mice and men often go awry” – Robert Burns .

Filling personnel gaps

Does your distribution centre have the right people, in the right places, in the right numbers? Being in the peak season means that overall volume of your buildings will increase. The amount of items received and shipped will increase. The amount of items being stored and necessary space will increase. Quality control in your building’s processes will need to be increased. Even available security and janitorial personnel will need to increase in order to service the increase in personnel in other areas of the building.

What are your building’s plan for staffing needs? This is a question that should’ve been addressed early but now is a good time to review!

  • How many temps have been hired, and what sort of tasks are they handling?
  • Is there an incentive plan that pays bonuses for workers who excel during peak? If so, how has it impacted worker engagement thus far?
  • Is your building’s staffing plan calculated to meet your service goals (orders/boxes per hour per employee, lines picked per hour per picker, etc)?. How closely are those goals being hit?

Winter is coming…

The holidays not only bring cheer and a spike in products traveling through supply chains, but also bad weather (if you are in North America). Even if you are located in an area where snow won’t affect your distribution centre directly, it doesn’t mean that your vendors, carriers, and customers will be safe from it.

  • Does your building have a well-documented emergency plan in case of power outages?
  • Does your staff understand the expedited transportation options available such as time-definite ocean transportation, air-sea, sea-air, and team-driver trucking service?
  • Has your building tested Plan B carriers to see if there are any issues in utilizing them if your preferred carriers become indisposed during peak time?

Getting those evaluation sheets ready

No matter how well prepared and laid-out the plans for your distribution centre are, chances are there will be some area in which those plans fall short. It could be due to vendor mismanagement of inventory leading to out-of-stock of a hot item. Or underestimating the amount of returns and not having the staff post-holiday. Regardless of the shortfalls, it is important to have a system in place to track your performance and use labor statistics, order data, customer satisfaction scores, and inventory reporting to identify areas where you both shined and struck out.

This information will help you during future peak planning. Having an outside consultant come in and review the data with you post-peak. This help you think through necessary changes for next year’s peak season that you can begin working on as soon as the peak season has wrapped up.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!

Morai-Logistics-Blog-Reverse-Supply-ChainWith the hustle and bustle of the holiday season come and gone, many people are now returning to their normal work and home life. That is, if you in any fields that are not retail or logistics.

After the holiday season, and especially after Christmas, many shipping services, retailers, e-retailers, and 3PLs get inundated by deluge of unwanted or ill-fitting gifts that need to be returned to their retailer of origin in a process called reverse logistics.

By simply looking at some facts and figures from this Wall Street Journal article, it is clear that the post-holiday time presents major opportunities for many 3PLs, especially those with a specialization in reverse logistics.

  • 20 % of returns happen during the holiday season
  • The U.S Postal Service reported handling 3.2 million returns last year during the two weeks following Christmas
  • Returns policies are critical in driving purchase decisions. In a recent survey of 5,800 U.S. online shoppers, 82% said they were more likely to complete purchases if free returns via a prepaid shipping label or an in-store option were offered, according to comScore Inc., a data-tracking firm that conducted the study for UPS
  • About 66% of consumers now review a retailers’ return policy before making a purchase

The opportunities inherent in reverse logistics, stems from the current e-commerce boom. As demand for online shopping grows, so the does the percentage of customers dissatisfied with their purchases. A large number of retailers and e-commerce companies are ill equipped with the growing number of returns (which is up 15% from the holiday season only two years ago).

With reverse logistical networks being an inherent part of many 3PLs to varying degrees, it makes sense that they be the natural choice for providing the service for other businesses. In fact, the necessity to switch toward more customer-centric strategies (such reducing lead times, improving planning, improving fulfillment, and improving post-sales/returns capabilities) is the focus of an article on MarketWatch.

It is in this same spirit of reverse logistical capitalization that FedEx recently announced its forthcoming acquisition of GENCO, a leading third-party logistics provider in North America that specializes in end-to-end reverse logistics.

Through GENCO’s leadership position in reverse logistics, FedEx will be able to expand its North American presence in the e-commerce market as GENCO’s reverse logistics customer base includes some of the top companies in the technology, retail, and healthcare industries in North America.

An article in SupplyChain Management Review has very interesting information concerning best practice for reverse logistics when it quotes Gary Cullen, chief operating officer of 4PRL LLC:

“A growing trend of being “cheaper and nearer” seems to fit well within the cost sensitive and eco conscious reverse logistics chain of events.

Much efficiency can be found in near-sourcing third party service providers (3PSP) who specialize in the services of redeployment, repair, reuse, recycling, reclamation and resale. This appears to be a successful business model in today’s fuel conscious and green minded environment.

A closer country allows for use of cheaper modes of transportation as well as less overall time and movement.”

Efficiency and response time are the key terms to take away when discussing reverse logistics as the problem of potential value loss arises if items are delayed for too long, especially when it involves fashion items.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!