Reverse logistics, ‘boxification’ and processing returns

Reverse logistics offers many opportunities

Probably, you did not miss it. Recently we read in various media that several advisory bodies (such as the Dutch College of Government Advisors) warned the government about the "boxification" of the Netherlands. It appears that in the last five years the number of distribution centres in the Netherlands has increased by 25 to 43 percent. "The huge and usually bland buildings tend to be large warehouses where packages are prepared for transportation"; this was how journalists describe this horrible fact.

The Netherlands are often described as a "Distribution country". This positioning is good for employment, for every level of education, and gives us a competitive advantage. However, by now several consultants are concerned about the shortage, both in space and on the labour market. The adoption of mechanized or automated systems not only eliminate jobs, but is also generates new ones. IT specialists, maintenance engineers, managers and even photographers / designers for the web shop. That was what the Netherlands Distribution organization stated a few years ago.

https://www.logistiekprofs.nl/nieuws/meer-banen-in-logistiek-ondanks-inzet-robots

We would like to connect the term "boxification" to another phenomenon; the returns. These days, online ordering is almost more mainstream than going to an actual store and for many product categories (vacations, books, clothing) the online part is taking a significant share.

However, the large flow of orders also created an opposite flow; the one of the returns. Boxes go to the consumer (rise of the D2C channel or Direct-to-Consumer) and many boxes go back to the distribution centre where they came from. Here too, the Netherlands is once again at the forefront. A recent survey by carrier DPD shows that Dutch consumers return their purchases more often than other European shoppers. With an average return percentage of thirteen percent, the Netherlands is the European leader in sending items back.

The logistics manager is no longer considering reverse logistics as a cost. Yet many companies can still use these flows to improve their processes and customer satisfaction. We want to share with you these 3 examples:

1. Ensure proper communication with the customer.

This first point is essential for developing trust and brand loyalty. Customers can follow an order from the moment the order is placed, picked, packaged, shipped, routed through different hubs and finally delivered to their door. But .... they actually expect the same when the goods are going back!

 

That should start with the confirmation of the receipt of the returned package up to, most importantly, the confirmation of the crediting of their bank account. Customers want recognition and confirmation and these are issues that must be incorporated into a good return policy.

2. Make your return process more ECO-friendly

Analyse your processes to find used products, components and materials that can be used again. Consider to utilize shipping packages that are also suitable and designed to be reused as a return package. Boxes with a so-called "easy open function", such as a perforated tear-off edge, are less likely to be damaged during opening, making them suitable for reuse as return packaging. More sustainable packaging is often also used by the receiver for other purposes. Other idea: help the consumer in returning used products. For example, BoldKing, a supplier of razor blades and accessories, offers a special envelope for returning used blades. These are then also recycled. This will undoubtedly contribute positively to the image of this supplier of so-called "low-interest goods".

Finally, a good return policy is incomplete without a good strategy for preventing returns. Saving a customers’ sizes and preferences to ensure that the clothes will fit next time is a great example.

3. Use an efficient Warehouse Management System to process the returns.

Processing returns takes time and resources and therefore it is important to organize this process as efficiently as possible, so that a return shipment can be handled quickly and correctly. For example, after scanning the received goods, a WMS automatically assigns a location and the stock (as well as the web shop!) is getting updated in real time. Another example is to send a return form with a unique number during the initial packaging process. This number speeds up the processing of returns. These are just a few examples form a series of small steps you can make to process returned goods better and faster.

Of course, a WMS is not a stand-alone solution, but must be part of a (physical and digital) materials handling system for returns. And don't forget the earlier mentioned interaction with the customer!

Questions? Please contact us.

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