One stop shop
October 1st 2009 Mark Hewitt, CEO of specialist logistics
company iForce,believes that combining
multi-channel returns processing within the
same centre as e-fulfilment will increase
efficiency and is the next big step in returns
management
Handling returns is an important part of the retail process,
no matter what the channel. Being able to offer such a
service will enhance the retailer's appeal but it comes
with complexity and a cost. Processing a return can be 2-3 times
that of an outbound shipment of the same item. That's why
returns can devour some 30-35 per cent of profits. However, as
between 70-90 per cent of the asset's value goes straight to the
bottom line, getting returns processing right can deliver some
very attractive cash flow possibilities, not to mention significant
customer service advantages.
Creating a returns processing operation that carries significant
appeal to retailers requires a solution built around a
technologically advanced streamlined processing system. Using
software to provide real time information gives retailers the
ability to pre-plan work schedules and agree disposition/delivery
routes before the items have been received at the returns centre.
It will also provide the visibility of what assets have been
returned and their location. This is important to avoid assets
being 'lost' in a store or a warehouse gathering dust and
diminishing in value. This is a particular problem in the electrical
industry where the WEEE Directive is also driving returns. Here,
the pace of technological development is so rapid that a TV
sitting in a warehouse for weeks can be superseded by newer
technology and its resale value is therefore reduces with time. In
such cases, time really is money.
Because returns operations will need the ability to handle
some big number throughputs, dealing with this specialist form
of logistics can present a retailer with a complex problem. But it's
one that can be resolved profitably. One way of dealing with the
issue is to outsource returns processing to a specialist that can
provide a scaleable solution, particularly if the specialist can
guarantee same-day processing with the returns centre delivering
cash flow via the agreed credit/disposition route while delivering
100 per cent on Key Performance Indicators (KPIs).
The outsource supply company can offer the retailer track and
trace from when the product is returned to the store all the way
to dispersal back into stock, on sale or disposal or recycling.
Returns processing is a significant aspect of the rapidly
growing online retail sector. Fulfilling online orders is also a
specialist practice and placing this operation together under the
same roof as returns processing - not just for online retail but for
a retailer's other channels, including retail stores, is an exciting
innovation that can drive efficiency even further. By managing
these processes in a single centre, the outsource supplier can
provide an efficient supply loop rather than having a disparate
service through a number of channels.
Take for example Sainsbury's new non-food online service.
The service iForce is providing is a first for the UK fulfilment
sector as it combines online fulfilment, online returns and retail
returns processing for Sainsbury's non-food goods under one
roof a the 250,000 sq ft depot in Corby, Northamptonshire.
iForce's multi-channel returns processing service consolidates
returns of non-food products bought from retail stores and
online. It does this using an in-house returns management
system, called ReSCU to manage the dispersal of the returns via
routing perfect condition goods straight back to stock or the
onward sale of raw returns and discounted lines via the Buy-
Force platform.
A further development that will add value to a returns solution
would be providing a platform that sells both single and bulk
pallets of all types of customer returns as well as de-ranges, over
stocks and end of line products to B2B customers and the general
public, such as the Buy-Force platform developed by iForce.
Of course some items cannot be sold on and it is also important
to have the ability also to recycle obsolete items in accordance with
regulations, such as the WEEE Directive, to all but eliminate waste
going to landfill. At iForce, for example, we have established a
strategic partnership with JBM International to recycle those
returns that no longer have economic value. Through its state of
the art processes JBMI can recycle the vast majority of elements
from the returns, thus saving iForce's customer's further expense
and reducing landfill to less than
1% of items. More articles from iForce Limited: | 
