This is an excellent story of Forward Logistics Vs. Reverse Logistics. Let’s look at a ceiling fan; you may have one in your home. All the cartons are neat and orderly, shrink-wrapped on pallets for the forward logistics. Now let’s consider the reverse logistics, the fan was returned to one of your partners (Walmart, Target, or Best Buy’s retail location). The consumers’ challenge was the confusion with the wiring of the switch. Here is where it gets interesting; you’d be surprised at how often this happens. The fan is returned with blades still on the fan. Your retail partner has trained their employees’ safety first, so they will not disassemble the fan blades. The fully configured fan will be returned to the retailer return center with the blades attached; it’s not going to travel well. You can see the consumers’ confusion and frustration is with a SIMPLE switch that had created a scrap situation when it was received back at your return center. This product return was preventable.
This holds especially true for electronic products. However, it also applies to any product that requires assembly. Client service has vastly improved in order to assist consumers in overcoming any first issues with a product that may lead them to return it. At that moment, the goal is to save the deal. When you sell anything from power tools to consumer electronics or children’s toys, you need a “Stop” page with an 800 number for your consumers to contact if they have any problems putting it together. That one simple step can avoid frustration and allow the product to be more easily assembled. It saves the sale, the brand reputation, and it’s much better than having a frustrated consumer return it to the store. A simple and inexpensive way to resolve many of these issues is by creating a site with a VIDEO explanation which can go a long way toward teaching setup and user guidance. You can have both audible and video visuals as well as step-by-step written instructions. We know people learn in various ways; give them the means to do it correctly so that you see fewer returns.
I personally had difficulty setting up a Nest Thermostat in my new home. We had used Nest for years in our old home, with Oil/Hot water. This new home was Oil/Hot Air. It was frustrating, and even the tech on the phone didn’t understand why the fan wasn’t kicking on when the heat or A/C kicked on. They finally sent a technician out who ALSO had a great deal of trouble and frustration! He was here for hours and decided the NEST maybe didn’t work for HOT AIR. A ridiculous notion since it’s a thermostat! After much research on the community boards, we figured it out, and the technician reconfigured the NEST; we VIDEO RECORDED what he had to do to get the fan to sync with heat and AC. It was complex, but now we had it on video! Sure enough, after a hurricane and long-term power outage, the NEST did not reset correctly! The difference was THIS TIME; we went back to the video recording and reset it ourselves with little frustration. Video Works!
It irritates me that perfectly good product are often trashed or dismantled for component re-use, even when the issue that prompted the return had nothing to do with product performance. The greatest value of the unit may be recovered, and any future repair or refurbishment procedures can be made significantly more effective by ensuring the reason for returns is evaluated and corrected, thereby avoiding future returns.
Many businesses don’t have set procedures in place to regulate how refunds are handled. We can collaborate to develop regulations that will form part of a strong gate-keeping mechanism that collects data and performs rules-based processing as early as feasible in the return’s lifetime. Your business can route products to the right place from the start by automating some choices ahead of time, avoiding needless delays and transportation expenses. Refunds for goods or components with little or no value may also be avoided entirely. I think you’ll enjoy this story from a Reverse Logistics Director at Walmart, whom I consider a friend. He and his team traced the return of pallets of consumer electronics products, going through six different parties before being resold in the secondary market. The only one that profited from these inefficiencies was the freight companies. Painful!
Several businesses consider centralizing and isolating returns management from the forward supply chain to be ideal for increasing efficiency and avoiding competing priorities. Trying to perform returns and forward distribution in the same location is inefficient. A distribution center works like a powerful air conditioning duct blowing out the air in full velocity quickly and efficiently. Sending return goods back up that same ductwork simply doesn’t work. It goes against the flow. That’s why there is a need for return ducts.
Let’s work together and move to a business model of preventing returns before they happen. Currently, 8% to 30% of every product sold is returned. This costly problem is receiving more focus in reverse logistics programs.
Together we can keep products sold, consumers happy and cut the costs of having millions of dollars of returns to your company; it’s quite easy working with Cliff Locks from Reverse Logistics Solutions. The right consultant working on your behalf makes all the difference.
One more scenario for you. Let’s assume your internal components and sub-assemblies are often covered by multiple warranties, most often with electronic products. Assume it’s a multi-component product, such as a Play station or a computer. In such a scenario, you could have one business warranty the hard drive and another company warranty the memory. Then there’s the client’s front-end warranty, which makes things even more complex. Any business engaged in the process should automate with apps that can verify and monitor warranty claims and ensure that each channel is properly paid for services.
Delivering the best-of-breed solution and integrating it into the enterprise platform makes you and your team a hero with your CEO and CFO; real deliverable results are super easy to understand, plan, and implement.