Some key considerations to master reverse logistics
Reverse logistics, i.e. returns management, is a problem that many companies fail to solve. However, it can offer great opportunities if fragmented systems and processes are connected to gain proper visibility into the overall supply chain. This is how mastering reverse logistics can be easier than it sounds.
Return flows have long been a major problem for companies, and thanks to online commerce, the issue is only getting worse. Moving this issue to the side instead of integrating it with the entire operation is no longer enough; leaving it unresolved is costing many companies more and more money. This is because they lack a visibility that is crucial to being able to manage returns efficiently. It is so that sometimes they don't even register that a return is taking place until it shows up in the warehouse. It is increasingly costly and time-consuming to manage returns if they are not reported. Although companies have instituted standard procedures, there are still hurdles to overcome when it comes to automating processes, tracking returns between steps, and coordinating between multiple parties.
The importance of efficient reverse logistics
Returns can be as complex or even more so than outbound flows. This is because they precipitate several new transactions and events. For example, there are returns processing centers that sort items, settlement services, carriers and warehouses. All of these exchanges are produced between a diverse network of subcontracted parties, and when there is no communication between them, when they don’t properly monitor and document, there can be errors, delays and loss of money that are unnecessary. Returns management is just as important as order delivery management to maintain a high level of customer service, and to maintain customer brand loyalty.
When it comes to B2B transactions, the issue of reverse logistics becomes much more complicated, due to service level agreement considerations, and due to the numerous potential processes that can be triggered when a defective or unwanted part arrives at the returns center. For example, there is the process of inspection, recycling, resale, shipment to distribution or repair centers, and so on.
Not all control towers are effective
Several companies use control towers, but in many cases these towers offer partial visibility, because they focus on the supply, or they leave out crucial elements such as repair centers and returns processes. The ultimate solution would not have to make companies decide which part of the operation they want to focus on.
When dealing with an operation that is global, that is spanning an extensive network of businesses in the supply chain, the transparency into the data that flows in real time, and the ability to manage exceptions are critical. A control tower that orchestrates the supply chain natively can achieve this by providing holistic visibility into the operation. This allows you to not only see all reverse logistics events and processes, but also allows you to control them. For example, Omnix is a SaaS platform, which can also be considered a control tower, but unlike others it does provide full visibility into the operation.
When users can see and act on all processes in a flow, such as manufacturing, repair and transportation, as well as inventory across all locations, they can systematically coordinate the most optimal and cost-effective movements along the entire supply chain. This includes reverse logistics management. You should look for solutions that automate these processes, thus tracking the steps of the operation and coordinating between multiple parties. Omnix also uses artificial intelligence to automate actions in operations. Thus, it is able to orchestrate flows of product recalls, reverse logistics, and not only outbound flows. One of the functions that Omnix enables is that, once the carrier notifies that the product to be returned has been picked up, it automatically generates a credit note and manages the return procedures.
In addition, it is important that the platform you choose as your solution is natively unified, because it offers robust API integrations with ERP, WMS and other ancillary systems to eliminate silos, increase operational processing speed, and converge inbound and outbound flows in one place.
By gaining a holistic view on how flows relate and affect each other, companies can gain unprecedented contextual insight. This is how they gain access to greater optimization opportunities through order splitting and consolidation, and master reverse logistics.