Advertisement

Blog

Get the Most From Returns

Recently, high-tech manufacturers and service providers gathered at Interlog Summer 2011 in Los Angeles. This annual conference specifically focuses on the aftermarket and brings together after-sales service parts and reverse logistics professionals in high-tech industries to share their supply chain successes and challenges.

Interlog provided the opportunity for companies to come together and discuss the ins and outs of reverse logistics, especially since this area can lead to competitive advantages in the marketplace. A 2010 Aberdeen report on reverse logistics found that best-in-class companies were recognizing $1.8 million in year-over-year savings as a result of improved velocity of returns. In addition, reverse logistics and aftermarket services consulting firm Greve-Davis found that consumers across the United States returned $200 billion worth of goods last year — that’s more than the GDPs of 66 percent of the countries in the world.

And yet, despite the potential opportunities to improve the top and bottom lines, reverse logistics is a business area that is consistently overlooked by many companies. It is true that the returns and repair process is complicated, particularly for high-value products like computers or smartphones. However, the costs of failing to focus on this area go beyond lost savings opportunities: This supply chain breakdown also can impair the customer experience and damage brand reputation.

For high-tech manufacturers, the top business concern around reverse logistics has been “meeting customer expectations”; and the biggest supply chain challenge has been cited as “getting customers to comply with processes,” followed by “losing money” and “damaging brand reputation,” according to the 2010 Change in the (Supply) Chain survey of high-tech companies conducted by IDC and UPS.

To overcome challenges in reverse logistics and get more return on investments, high-tech companies must treat this area, not only as an integral part of their supply chain strategies, but also as an integral part of their business. This means appointing executives or managers to be in charge of reverse logistics and focusing on training for all employees who touch the returns process at any point in the supply chain.

Another critical success factor in returns is understanding exactly how the process is working (or not working) at one's company today and then developing a plan for how improvements can be made in the future. This involves supply chain analysis and mapping to identify best-practices around decisions such as: which transportation modes to use depending upon the urgency or value of the return; where to stock spare parts needed for repairs; whether to route products to different locations if they are being recycled rather than repaired; and how they will increase visibility for returns to help with inventory planning.

There are a lot of factors to consider, which can be a daunting process for companies that do it alone. UPS frequently helps high-tech companies with these supply chain assessments, and many companies benefit from a third-party assessment for outside perspectives and expertise.

There also are solutions targeted specifically toward returns available to high-tech companies today. During the Interlog conference, UPS announced the launch of a new combined pickup and delivery service called UPS Returns Exchange. The service is particularly well suited for manufacturers of high-value products, such as high-tech and electronics companies that want to control cost and improve the post-sales customer experience.

In short, reverse logistics has significant top- and bottom-line impact and should be a high priority for high-tech companies. Companies that see it any other way should quickly adjust their thinking.

9 comments on “Get the Most From Returns

  1. Nemos
    June 27, 2011

    (Please could you define the phrase “reverse logistics”.)

    “During the Interlog conference, UPS announced the launch of a new combined pickup and delivery service called UPS Returns Exchange.” Transport services play a serious and critical role in after sales management and in Service department, their costs in services and the response time in orders affecting the quality of the Service department. Because Service is quality plus repairing time.

     

  2. Daniel
    June 28, 2011

    Nemos, I think you are little bit experienced person in after sale service and quality issues.

  3. FLYINGSCOT
    June 28, 2011

    Now I am normally a big fan of Apple but I recently had an issue with an Iphone that was under contract to AT&T.  I damaged the phone and wanted to pay for the  repair myself as I damaged it.  AT&T seemed incapable of helping me but were very keen to sell me a new phone and a new 2 year contract.  I tried quite hard to get the phone repaired throught the official channels but they seemed incapable of helping me.  I will get the phone repaired through a third party but this experience has left me with a very bad impression of AT&T and Apple's reverse logistics.  Surely this cannot be good for future business.

  4. FLYINGSCOT
    June 28, 2011

    Now I am normally a big fan of Apple but I recently had an issue with an Iphone that was under contract to AT&T.  I damaged the phone and wanted to pay for the  repair myself as I damaged it.  AT&T seemed incapable of helping me but were very keen to sell me a new phone and a new 2 year contract.  I tried quite hard to get the phone repaired throught the official channels but they seemed incapable of helping me.  I will get the phone repaired through a third party but this experience has left me with a very bad impression of AT&T and Apple's reverse logistics.  Surely this cannot be good for future business.

  5. jbond
    June 28, 2011

    I for one hope this new service from UPS works out. I personally love UPS and they have always served my needs for shipping and even for returns to vendors. My problems with reverse logistics always seem to be with the individual companies I've dealt with. They need to get better systems into play to allow for a better flow. Maybe with a little time and UPS's new system in place these companies will improve their handling for returns.

  6. Houngbo_Hospice
    June 28, 2011

    “I will get the phone repaired through a third party but this experience has left me with a very bad impression of AT&T and Apple's reverse logistics.”

    Sometimes it is easier and advantageous for you to buy a new phone than to repair a broken one. You can get some bucks from selling your broken phone on Ebay spare yourself some frustrations as you might end up spending a lot of money to repair it. That is what I would do anyway.

  7. Nemos
    June 28, 2011

    Thanks Jacob.

  8. prabhakar_deosthali
    June 29, 2011

    In case of the reverse logistics , many times the manufacturers often keep the clause of the reverse logistics vague in the product warranties. The product if defective has to be taken or sent to the manufacturer and the customer has to bear the expenses. Many times there is not even the acknowledgement of the goods received for repair . The customer has no option to continously do a follow up to get the repair done or to get the replacement. This leaves a bad taste in the mouth for the harassed customers and indirectly leads to brand damage. The intermediate parties involved in the sale of the equipment often wash their hands of any responsibility once they have got their money from the sale.

     

    I had a good reverse logic experience a few years back while in US. I has purchased a Kodak camera and just after a month of use it stopped functioning.  I sent the camera by post to Kodak. To my pleesant surprise , i got it back repaired by post and along with that they sent me the postage stamps equivalant to the expenses i had incurred while sending it to them. No follow-up was required. I think that was one of the best example of a reverse logistics.

  9. mario8a
    July 26, 2011

    Hi

    I wonder if in that conference they mentioned anything related to MTBF ( Mid Time Between Failure) which is calculated for every single project, nevertheless every manufacturing should be running testing on Re-qual and conformity of their products and managing a CSI team ( customer sustaining issues) many improvements can be made to a release product, however not all the returns are related to customer experience, some times are simply returned for:

    * excess of inventory

    * incorrect handling and damaging the product during transportation

    * incorrect application

    * “no ask” policy for returns.

    Companys should be estimated and excpected field return rate based on design constrains and even more on historic data for similar products.

     

    just my opinion.

     

     

     

     

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.