As long as you sell products, you are bound to have returns. Unfortunately, for several manufacturers, the entire process of handling returns is generally on ad hoc basis. Successful businesses have, however, streamlined the process of returns, popularly known as reverse logistics, and thus are saving unnecessary costs from warranty claims. After all, an efficient warranty administration thrives on an effective reverse logistics system.
Reverse logistics can reduce costs and improve recovery as well. This is possible with the introduction of better warranty claim management and effective automation. Reverse logistics can also help in improving customer satisfaction with better service and quicker repair or replacement of parts. Product returns no more mean petty cash; it is clear from the fact $100 billion are spent every year in the US, says the Aberdeen Group, a Boston-based research and analysis firm.
Reverse Logistics and Warranty Administration
Modern day business houses understand that reverse logistics is an essential part of an efficient warranty administration, besides policies management, setting rates and services, analyzing failures and grouping of dealers and service centers. It is therefore quite common to find professionals experienced in reverse logistics rising to the levels of vice presidents. That is not all. There has been a change in the organizational structure of businesses with reverse logistics solutions now forming a separate group. Of course, there are problems associated with return logistics, one of them being the difficulty in projecting the level of returns in the future. The challenge is greater when a company has to consider a major recall, bringing back tens of thousands of products on account of safety and other issues.
The Policy of Reverse Logistics
Today, there are warranty software solutions that can improve the efficiency of reverse logistics as well as the supplier recovery rate. A competent system ensures the following:
- Generation of a bar code for return of the product. This helps in tracking the product at all times.
- Since it is linked to warranty claim management, a notification for the return of part is generated following the submission of a warranty claim.
- A well-designed search framework that makes the system both easy and fast.
- Users are updated at all times regarding the status of the disposition of concerned part
- Segregation of returned parts in a way so it is possible to locate them with respect to accountability
- Return of the right part at the right time to the right place.
- It allows the shipper to dynamically add or remove any part from the shipment.
- The OEM can accept or reject the shipment and even amend the part number recorded. This gives the manufacturer total flexibility in the movement of the parts being returned.
- The work flow commences with the part return, to its inspection, analysis and final disposition while the return parts may be reclaimed, refurbished or repaired.
Preethi Vagadia is currently a Senior Business architect with the Service operations practice at a well-known IT Industry in Bangalore. She has worked in several process improvement projects involving multi-national teams for global customers. She has over 8 years of experience in mortgage technology and has successfully executed several projects in logistics management, logistics integration, reverse logistics, campaign management software solution, warranty claim management software and programmatic solutions.