How do you implement optimal returns logistics?

In this time of health crisis, many retailers operate both a physical store and an e-commerce website. 

These companies are faced with the challenge of omnichannel commerce.

While it's usually companies that send products to their customers, with the explosion of e-commerce distribution centres are facing a sudden expansion in the number of products returned.

This phenomenon is what we call reverse logistics.

Robotic solutions are increasingly the “weapon of choice” of logistics professionals in their endeavours to manage product returns. In this article, Scallog explains why, how, and how efficiently an automated  solution can reduce the costs of your reverse logistics.

Reverse logistics: definition and challenges

In reverse logistics, workflows move in the reverse direction (from the consumer to the supplier). 

© Returns boxes in a fulfilment centre

Various Covid-related restrictions have forced many businesses to close their physical stores.

These businesses turned to online sales, enabling their customers to shop: 

• without having to go anywhere,
  
• without spending time, 
  
• conveniently,
  
• at (sometimes) reduced expense (thanks to the many price offers and promotions available online),
  

According to the study  "Consumer sentiment on sustainability in fashion” de McKinsey & Company " by McKinsey, 43% of shoppers who did not buy fashion products before the crisis do so now. 

Businesses, many of which play the “free return (satisfied or your money back)” card, must adapt to the scale of these new consumption patterns. 

Customers no longer hesitate to purchase items online, test them, and return them to the company if they notice a defective or poorly sized product, for example. 

Mastering reverse logistics 

In their attempts to moderate reverse logistics workflows, many online retailers set deadlines after which returns are no longer admitted. This method has proved to be relatively efficient.

The administrative management of logistics flows and the activities associated with returns is most often performed with a  Warehouse Management Systems (WMS).

A WMS has a “reception of returns” option that manages returned products by identifying their  source - with zero disruption to operations in the rest of the warehouse.

Once items are shipped back to the company, the WMS manages all product arrivals at the distribution centre and automatically determines their destination according to their status: 

• regular stock
  
• repair zone
  
• recycling zone etc. 
  

If the WMS supports this aspect of reverse logistics, how do we organize the management of returned goods to spend as little time on it as possible and reduce the attendant  costs?

Reducing management costs in reverse logistics

While there is an undeniable upsurge in the phenomenon, product returns remain difficult to predict. Their random nature forces organizations to implement logistics procedures that provide flexibility as well as responsiveness. 

For distribution centres, returns involve particularly high costs and processing times. 

A 2017 study by  e-commerce consultancy Up My Biz found that: 

The average cost of a return for an e-commerce retailer is €25. Using an outsourced service, it drops to €15

High expenditure linked to the mobilization of operators in charge of:

•  reception of returned products
  
• checking the condition of the goods
  
• placing the products to storage before they are returned to sale or recycled.
  
  

For operators, reverse logistics means long journeys in the aisles of the distribution centre and endless product handling.

A robotized warehouse for better returns management

Warehouse robotics makes logistics processes both agile and fast. 

From sorting to control, robots assist operators as part of a goods to man model. 

Thanks to robotics, next-day delivery is now a reality. The same goes for returns, with next-day or even same-day processing! 

To help you manage reverse logistics while reducing the associated costs, Scallog offers a goods to man  robotics solution with a variety of benefits.

Manage your returns with Scallog

The Scallog solution allows you to easily reassign products to your storage zone and to track your stock in real time.

From the logistics point of view, the injection of returns is not much different from a normal restocking cycle:

• Scallog’s Boby robots bring shelf units with empty slots to the operator
  
• The operator  scans the product using an RFID reader, then also scans the tray containing the returned product to ensure its track and trace.

© An operator scans articles at a Scallog workstation

Automating your returns management with the Scallog solution can obtain an eightfold boost in productivity.

Scallog offers a customizable solution that enables you to:

• designate a specific zone for returns management in the warehouse location you already occupy, 
  
• or open a warehouse specifically dedicated to reverse logistics 
  

By optimizing the return management process, Scallog delivers substantial savings while ensuring maximum customer satisfaction.

In our increasingly online society, e-commerce is undergoing a meteoric expansion.

As a result, the returns management issue is emerging as one of the major new challenges for fulfilment centres.

To optimally integrate returns into your facility’s supply  chain, it’s essential to use systems and technologies that provide you with the necessary information in real time and in a reliable and accurate manner.

Thanks to Scallog, optimal management of your reverse logistics is now a reality.

Contact us to find out how to make your returns management processes a real competitive asset.