I did not think of the title of this blog. It is the title of a James Tompkins American blog from November 2010. In this blog, Tompkins comes with a powerful summary of aspects highlighting the importance of reverse logistics. But at the same time, he relies on the reality in which return logistics is still a subordinate stepchild.
He positions the discipline return logistics as part of the service chain which starts a product and ends after the end of a product’s life. So far nothing new. But he also gives some concrete figures; The average return rate across all industries is 9.1% with a peak of 12.1% in the holiday season, returns as% of sales are 6-14% and the cost of return processes is such a Factor 2.7 higher than the processes of a regular outbound shipment.
In his blog, he then advocates for a number of points of attention. Thus, return logistics deserves attention from executive management, and the discipline needs to be largely aligned with other business disciplines. Thus he calls the alignment with demand planning & forecasting as an important one. And of course, that’s all right. Because regardless of the type of return, a return stream is a potential source of products for reuse in the forward chain.
Identifying and reducing the cost of return logistics is mentioned as an important focus. Here it comes down to minimizing logistics and recovery costs in relation to maximizing value by reuse. An open door but not so easy.
It’s very nice to simply reduce returns. “Zero returns” is now a buzzword at congresses. But it’s the question of whether this is the right solution in a customer-friendly environment, let alone this. A solution to reduce returns is the right marketing and communication of the functionality of a product. Managing the right consumer expectation can indeed contribute to the reduction of returns.
To maximize returns, it is essential to maximize the return chain speed. The ever shorter life cycle of a product only gives a limited opportunity for reuse. The speed of the return chain is an answer here but of course always in relation to cost and value. Fast is not always the right solution. I call a fast chain rather a smart chain. And in a smart chain, there is sometimes a slow return flow. Or sometimes a very short rather than a long flow.
One of the possibilities for cost reduction is the reduction of costs for the processes of an RMA. All in all. Too often this happens over many links or through expensive call center contacts. Smart ICT is a solution for automating any routine returns.
Finally, sustainability is called as an aspect to which the return chain must commit itself.
I think the Tompkins blog is a great summary of what we actually knew. Yet, I think the blog is valuable to continue to emphasize the importance of return logistics. If there are only people who come up with concrete initiatives then it should be okay.