One of the most difficult operations in the supply chain is reverse logistics. After all, the supply chain was designed to run in only one direction from the suppliers to the end customers in the past.
However, rising retailer rivalry, shifting customer expectations, and a significant increase in online buying have made reverse logistics a common practice in the supply chain.
What Is “Reverse Logistics”?
When customers return things, this is referred to as reverse logistics. As a result, the orders must be returned to the provider. To put it another way, it’s the polar opposite of delivering orders to end customers.
Assume you’re the owner of a small online home appliance company and a customer has placed an order for a microwave. The customer decides to return the package after receiving it. After that, you’ll need to assign a driver to go back to the customer, pick up the item they want to return, and transport it to the warehouse or distribution centre.
This is a regular occurrence, as buyers today expect not only to receive their things quickly, but also to have the option of returning them for free.
As more firms enter the ecommerce sector and provide easy returns to entice clients, reverse logistics is becoming a crucial component of the supply chain process.
For many businesses, however, it still feels like clearing up after a party. It’s a time-consuming, tiresome operation that eats into their revenues as well.
If you’re having problems streamlining a cost-effective reverse logistics process, here’s a guide that includes three techniques for doing so.
#1 Take advantage of pick-up and drop-off (PUDO) services
Pickup and drop-off (PUDO) facilities can be set up in numerous places near your consumers.
This clever strategy is used by many companies to lower their reverse logistics costs. Amazon, FedEx, and UPS are among the companies that use this method to offset the expenses of reverse freight operations. They’ve struck partnerships with retailers to set up tens of thousands of PUDO points near their client bases.
Similarly, you can use your PUDO points to make agreements with retailers who have physical stores. Drop-off lockers can also be set up at supermarkets, malls, and grocery stores. In any case, you’ll save money by not having to hire a courier service to pick up your packages.
#2 Use a route-planning app
Reverse logistics typically has high operating costs if each return is picked-up individually. Instead, you can tackle your returns in one of two ways:
Create dedicated reverse logistics routes
You could use a route planner to create routes just for picking-up returns. You might set aside certain days for product returns to improve reverse logistics. On Mondays and Fridays, for example, you can collect things from clients. This allows you to collect more boxes at once while reducing travel time.
Insert return orders into your upcoming delivery routes
A route planner like EasyRoutes makes it easy to add already fulfilled orders, so you can just reuse the order you delivered and add it to your delivery route as a pick-up stop.
You’ll also need a routing app that can:
- Assist in determining the shortest and most fuel-efficient routes.
- Make provisions for last-minute adjustments, cancellations, and new pickups or drop-offs, among other things.
- Reduce late arrivals to increase customer satisfaction and loyalty.
- Reduce unnecessary overtime and improve the in-traffic behaviour of your drivers.
- Reduce accidents and liability concerns
#3 Make sure your products are packaged and labelled correctly.
Provide return packing and correct labelling to your consumers to make the reverse logistics process more streamlined and uncomplicated.
You should also provide specific information on how to return your items. This will relieve the pressure on courier services in terms of wrapping return merchandise, as well as save you money.
Doing this will make it easier to filter and segregate returned packages from forward orders once they arrive at the warehouse.
#4 Take preventive measures
The three tactics mentioned earlier can help you improve your reverse logistics operations. However, in order to truly secure profitability, you must also take preventative actions.
While it is critical to devise strategies to improve your reverse logistics process, you must also determine why returns occur in the first place and seek to reduce them.
It’s probable that some customers will take advantage of retailers’ and suppliers’ free and unrestricted return policies. You can use the following ways to prevent this from happening…
When a consumer requests a return, have them complete a feedback form explaining why they wish to return the order. To reduce returns, use the feedback to enhance your operations.
Identify and classify clients who return orders on a regular basis. Make a decision on how to deal with such customers. For example, you might have a conversation with your customer service representatives to figure out what the core problem is, or you may charge a particular amount if the number of returns surpasses a particular threshold. Users that make too many return requests, for example, are simply blacklisted by Amazon.
Providing information and solutions is another proactive strategy to reduce the burden of returns. According to a consumer survey, 41% of those polled claimed they occasionally order numerous things knowing they will return all or portion of them.
It’s not uncommon for consumers to order multiple varieties of the same item and then keep one while returning the others. Clothing and shoes, for example, are frequently purchased in this manner. The idea is to offer as precise measurements for each item as feasible.
Companies like Sephora are reducing returns from online shopping by utilizing technology such as artificial intelligence. Their virtual artist technology in the app allows consumers to try on different lip colours before purchasing them.
Although these tactics will not fully eliminate returns, they will certainly assist to reduce the numbers.
The easiest approach to cut back on reverse logistics expenses is to limit returns in the first place, then use the tactics listed above, as well as a multi-stop route planner.
Make a list of the topics discussed in this article that will assist you in strategizing and implementing sensible, cost-effective, and simple strategies to streamline and optimize your reverse logistics process.