Sustainability and waste reduction are contemporary approaches, especially in today’s situation. The market competition expanded exponentially, and with it, are piles of commodities as a result of mass production. Typical businesspeople worry about making huge profits without social and corporate responsibilities. The casual mindset is to sell; however, customers are not only consumers, and they have the right to demand every penny’s worth. Moreover, other than promoting mindless consumerism, a movement for reducing, reusing, and recycling became a trend. Thus, returns management ramped up as a means to address the problem while finding ways to turn it into good business.
What is Returns Management
Returns management is a logistics task that handles product backflows within the supply chain. This task caters to the multiple reasons your customers return your products, whether for repairs, refunds, or exchanges. All of these components comprise reverse logistics flow that also aims to include corporate and business responsibility. Other than merely profiting through a one-way flow, a company that spends efforts in return management cares for customer welfare and waste issues.
Single-Use Plastic Bottle Epidemic
There was a time when we drank our favorite soft drinks in glass bottles. The bottles differed in sizes and styles to match ergonomics, convenience, economics, and profitability. Plus, touching a chilled bottle adds to the savory experience before popping the cap for a satisfying sip. People would drink by the store’s premises for an easy return, and you have trucks coming by night for the collection. It was a logistical process that soon ended when a shift happened.
Glass bottles had their days, but now, the disaster of single-use plastic bottles plague the environment and impoverished communities. As megacorporations focus more on increasing the sales, they gave up on the return policies for the containers because collection, cleaning, and refilling were costly compared to using plastic. Since profitability is the game that needs stepping up, enterprises shut down on critical responsibilities and turned themselves as purely commercial. Plastic bottles are potable yet easy to dispose of compared to glass bottles; thus, corporations would not mind collecting any of them. Instead, they leave it all to the dumpsites and small community efforts for collection and recycling wherein you have people relying on less than a decent wage a day for that job. People are on the go, and an easy to carry bottle is convenient while creating a culture of waste.
The commercial innovation to resort to plastic is a big decision to cut costs on returns management. The trucks’ primary purpose is to deliver and never collect, which saves fuel, labor, and time. Shutting down recycling plants within the industry can give them more room for expanding the production process. Plus, plastic is easy to produce in colossal quantities rather than waiting for glass bottles to return. With this significant decision, plastic piles up on landfills, and sadly, there are tons of plastics floating at sea that look like huge islands. Thus, let us beg the question. How crucial is returns management in the business sector?
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6 Steps to Do Returns Management
Business logistics always aims at gaining profit by having a one-way path for their products. The supply chain is, most of the time, linear, and managing returns are costly. However, there are effective ways to handle return management, which is beneficial. So follow the simple list below to get going with managing reverse flows in the process.
Step 1: Have an Overview
Management assumes that managers have a bird’s eye view of the system. It is necessary to grab a comprehensive flow chart that can help you trace the end to end operations. Plus, thinking of key strategies demands extensive knowledge.
Step 2: Trace the Process
Although the overview gives you the much-needed view, keeping a close eye on the actual product flow is essential. Checking the diagram is one thing, but visiting the ground operations add up to the substantial details. List down the things that you can see and even include the customer’s end of the chain. And check the product return rates at the service centers, whether for repairs or refunds.
Step 3: Assess Costs
You need to gather expense sheets and a detailed inventory of the returned products. Storing products in the warehouse adds up to the storage expenses, lining them up for fixes increases the labor power, or cashing out refunds affects the earnings. Return policies open up the avenue for reverse cash flow. So, better make an analysis document to assess the costs.
Step 4: Enforce Gatekeeping
Too much product returns will incur huge deductions to your revenues. That is why it is vital to have a rigid return policy that is manageable and also profitable. Set some rules and criteria for the refund and repair process to limit additional expenses. However, do not create highly strict protocols as establishing decent customer relations encourages more sales. Anyways, who wants to buy a product when there are no return policies?
Step 5: Get the Right Staff
Having qualified personnel is essential to set the return services straight. Gather a competent staff who manages well with repairs and warehousing returned products. More so, those who know well how to minimize costs for both the company’s and client’s benefits. Thus, go over your hr documents and see the best people for the job.
Step 6: Maximize Profitability
Although having an excellent reputation for customers is a crucial marketing strategy, always check the status of your earnings. Be keen on keeping up with the revenue by having status reports and strategic plans for improvement. A perfect balance of profitability and good customer relations sums up a wholesome business.
Returns management is a critical process in the logistical process. Executing it for the betterment of the environment and customer care takes time and careful decision making. However, as private industries are in numbers, finding ways for continuing good business through returns management is a hurdle. And it does not mean that acting on it is not urgent.