Which digital solutions to optimize returns?

The issue of returns management, if not a new problem, is at least one of innovation, at the heart of changes in consumption and therefore of digital solutions developed by supply chain publishers. 🇧🇷 We want to support our customers by providing them with services, and returns are a perfect example of this leitmotif. “says Jean-Pierre Gautier, business director at Acsep. 🇧🇷 These are a mass phenomenon today, and logistics must not only be able to meet these needs, but must turn them into a competitive advantage. Service provision becomes a means of customer loyalty and a growth lever 🇧🇷

A significant economic weight

While return rates haven’t changed much in recent years, they’re still high: 16-17% for distributors, all industries combined, and even higher for e-commerce. 🇧🇷 On BtoB, you can play with store returns, organizing sales to limit them, for example. But on the e-commerce side, these flows suffer a lot. It is therefore an important concern for our customers to know how to deal with them in the most efficient way possible, around WMS solutions. », explains Rémi Coolen, Director of Business Solutions at Manhattan Associates. Especially because returns must accommodate the habits adopted by consumers for years, in view of free, advocated by some pure e-commerce players. However, if they are sometimes offered to customers, they continue to be an important economic burden for organizations. 🇧🇷 I have a feeling that free return, which everyone thought was great, will gradually evolve as awareness of its environmental impacts grows. notes Romain Louis, product owner at Hardis Group. An opinion shared by Rémi Coolen: “ Companies will move towards reducing returns, especially free of charge, due to CSR issues in transport, but also due to costs and externalities that they would like to avoid globally. This will include tools and services for the consumer: 3D assembly, better product photos, more detailed information when ordering, etc. 🇧🇷

Receiving and correctly qualifying returns

But if the sales teams can bet on their potential reduction, it is also up to the actors in the supply chain to juggle the specificities of managing returns. And for that, they have complete digital tools, which make it possible to encompass all these flows. 🇧🇷 There are two main types of returns. One that is planned, organized, with clear protocol, and then the wild return, which is not initiated by a company order, but by the customer or a carrier that has failed to deliver its goods. Behind these two scenarios, there is a wide variety of configurations, all managed by our WMS IzyPro », explains Jean-Pierre Gautier. And the stakes are crucial for the brand and its logistics players: “ It requires quick management, for two reasons: firstly, because it represents a fixed stock, which cannot be resold until it has been processed. But also to be able to quickly inform the end customer that their return has been received and that they can be refunded if it complies. “. However, these returns can be a headache when they arrive at the warehouse (heterogeneous packages, with transport anomalies, etc.) and cause congestion in the reception area. The first role of the digital solution will therefore be to help in the identification for processing.” We offer a multi-criteria search to find out where the goods come from: we can use the postal code, the sender’s name, the tracking number, to find an order and find out what was returned “. Obviously, the problems are smaller in BtoB flows, with very structured store returns, and it’s more e-commerce that will require real expertise.” There is a verification step. It is necessary to take each piece individually, and make sure of its condition: compliance with what is expected, quality (new or damaged), being aware of sensitive products. So smartphones can be checked for serial number. In case of a problem, an anomaly is declared and, in the tool, the employee can describe the new state of the product, take pictures related to that logistical operation to justify himself, define the defects and qualities that will allow triggering a certain type of treatment later, etc.🇧🇷 », Details Romain Louis for the Reflex WMS solution. A refinement also offered by Acsep’s IzyPro: “ Returns must first go through this administrative stage, where we acknowledge receipt of the goods and carry out an initial product qualification. IzyPro will then be able to send information back to customer service or the ERP to confirm whether a credit note can be edited. This is a delicate task for the trainer and we work on the ergonomics of the screens in this sense in order to facilitate the training and integration of the team. “, observes Jean-Pierre Gautier. Indeed, to carry out this treatment, the teams mobilized are often experienced people, faced with identification and verification processes that can be very precise, namely in certain activities and types of products. 🇧🇷 Fraud exists and can represent up to 10% of returns, with items that are not correct, etc. It is therefore essential to have experienced employees in these matters, who have real knowledge of the products in order to facilitate the return to stock. “, explains Rémi Coolen. For this, logistics can also rely on the work done upstream by the after-sales service and customer service, which provide elements to help with control.

Get back in stock and on sale quickly

Once the product has been identified and qualified, the next step is to put the merchandise back in stock so that it can be made available again. 🇧🇷 It takes a long time: making a return costs three to four times more than a standard preparation. We are therefore implementing tools to make operators’ work easier, reduce processing time and improve business. The question of return on investment for returns has many faces. Good management can save space, for example, avoiding the consumption of m² to store orders because we cannot manage the flow. The fact that the returns module is already integrated into IzyPro is also an asset, avoiding additional investment. At Acsep, we want to help in decision-making, being able to assess exactly how much a refund costs and what are the consequences of poorly calibrated treatment. », explains Jean-Pierre Gautier. Faced with the diversity of returns with many pieces, several strategies can be put into practice. 🇧🇷 Products can be returned to dedicated collection locations: they are heterogeneously stored in a priority area for preparation and shipping. In the same container, we will place cloaks and hammers to an area that will be prioritized in new orders, to be emptied first. This avoids having to replace the references in their specific locations in the warehouse: the rotation frequency is enough for all these products to leave in a few weeks. But this obviously does not prevent certain references from being replaced by the rest of the stock, in the case of a sensitive item, for example, that must go to a safe area: we then take advantage of this to consolidate the boxes that we will store in their respective locations per wave. In all cases, we can separate the goods in the Reflex tool and see which actions will be launched “, explains Romain Louis. The organization of the second life of returns is therefore closely controlled by the WMS, the key word being rapid re-use of products. 🇧🇷 The software will prioritize these returns as they are parts we want to return quickly. Some of our e-commerce customers may receive up to 30,000 pieces during peak periods: returns become your first supplier in a sense! If we want to avoid the depreciation of this stock, we must set up a reliable and fast industrial process. », sums up Rémi Coolen. But not all products will necessarily go to another order and the diversity of possible routes must also be taken into account by supply chain teams: some must be recycled or repurposed, sold to rebranders, others returned to the manufacturer or after-service teams sales for repair. 🇧🇷 Setting up a true return organization in logistics is a business project, which affects all departments: supplies, customer relations, administration, finance… Furthermore, the marketing teams are very interested in our approach, because they have everything to win », emphasizes Jean-Pierre Gautier.

The store and the second hand, new faces of returns

Another important topic is the insertion of the store network at the center of the reverse logistics strategy. Here, again, it is a question of seeing the return as a business opportunity and a way to limit the cost of treatment. 🇧🇷 With the functionalities of our Point of Sale solution, we can trigger the processing of a return in the store even if it is an e-commerce order, offering the exchange for a product on the spot, or even an immediate refund. to potentially save the sale. These are functions that can be very interesting and differentiating for the customer “, explains Rémi Coolen. But going back to the store is also an opportunity: instead of carrying the burden of processing to the warehouse, one can imagine putting the product back in the supply chain flow, offering it for sale directly in the online store, in the shipment -store. 🇧🇷 This way, we can sell this store stock, which is not necessarily in the assortment, for other online orders. It is a saving in the cost of transportation, processing, time. All managed from the same application “, details Rémi Coolen. At Manhattan Associates, returns management is not presented as a dedicated solution either, but rather as a set of functionalities at the heart of the WMS and OMS, the latter offering a view of all transactions and all channels, to centralize management of these flows. With the need to adapt to changes in consumption, including second-hand, which is experiencing constant growth. 🇧🇷 In the most diverse sectors, and even for massive brands that work with large volumes, we see that this subject arises. These used or even rental product deals cover the same returns qualification questions as to whether a product can be put back in the stream or should be rebranded and sold in another channel. This creates a real data challenge because you have to serialize these products, know their quality, how many times they’ve been rented, how many times they’ve come back, etc. “, anticipates Rémi Coolen. An attractive complementary challenge, but one that requires robust solutions for increased complexity: “ We can imagine second-hand products in the integrated network of a distributor, but also big brands that recover second-hand goods from private individuals and put them up for sale again. This means that we can multiply the number of suppliers by one hundred. You need to be able to provide as much detail as possible during return integration. The qualifying phase will therefore be very important. These flows can multiply receiving stations. You have to be able to offer workshops that can handle all the steps. It is up to us, editors, to imagine and anticipate these specific needs as much as possible, offering ad hoc functionalities. “Judge Jean-Pierre Gautier.

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