As noted by Supply & Demand Chain Executive, “reverse logistics are costing supply chains a fortune” – $50 billion, to be exact, according to the Reverse Logistics Association. Return flows have long been a thorn in companies’ side and, thanks to e-commerce, the problem will only be getting worse. Relegating reverse logistics to the isolated and siloed back alley of the supply chain will no longer cut it.
There’s actually great opportunity to be gained from reverse logistics – but it first requires connecting fragmented systems and processes, converging flows, and gaining proper visibility and insight into the greater supply chain ecosystem. (Fear not, it’s far easier than it sounds).
The Supply Chain Complexity of Returns
Returns can be as or more complex than outbound flows, with each return precipitating several new transactions and events, such as returns processing (sorting) centers, liquidation services, carriers, and warehouses. Depending on the disposition, new transactions could expand to other parties as well.
All of these exchanges occur between a wide network of outsourced parties, and, if not properly communicated, monitored, or documented, can lead to unnecessarily mistakes, delays, and cost leaks.
Yet many businesses today lack critical visibility into the returns process, sometimes not even realizing a return is occurring until the item shows up at the warehouse.
I recently heard a Fortune 500 company executive stating that it is increasingly costly and time-consuming to handle returns when there is no notice of returns, not to mention the complexity when miscellaneous items show up on a pallets, containers, and trucks. Although companies have instantiated Standard Operating Procedures (SOPs), challenges continue to manifest in automating these processes, keeping track of dependencies between each step, and coordinating between multiple parties.
In the B2B landscape, returns are further complicated by SLA (service level agreement) considerations and the many potential processes (inspection, possible repair, recycle, reuse, resell, and back to stock actions) and further logistical actions that may be necessary (shipment to distribution centers, vendors, or repair centers) after a customer’s defective or unwanted part arrives at a return center.
Holistic Visibility & Control Helps Master These Complexities
Visibility and control are vital to all supply chain processes, and reverse flows are no exception. When you’re dealing with a global operation spanning an extensive supply chain business network, real-time transparency and the ability to manage exceptions are table stakes.
Most Control Towers will offer visibility, but they tend to focus on the supply side, and even those that seem to incorporate demand will often leave out crucial elements, like repair centers and returns processes. Businesses must typically choose which piece of the matrix they want the Control Tower to focus on. A natively unified supply chain orchestration platform offers holistic visibility and control, so companies no longer need to choose. The holistic solution offers a Control Tower with totalizing coverage over the entire supply chain, including every reverse logistics B2B and B2C event and process – as well as any new ones a business undertakes when it eventually needs to scale.
Look for ones that will further automate all these processes to seamlessly track dependencies between each step and coordinate between multiple parties.
A Natively Unified Platform Will Transform the Way You Do Business
A natively unified orchestration platform offers robust API integrations with ERP, WMS, and other ancillary systems to eliminate silos, boost operational processing speeds, and converge all orders and flows onto a single platform.
With insight into how flows affect one another, companies gain unparalleled contextual insight into how their different processes and flows affect one another, as well as access to greater optimization opportunities through order splitting and consolidation. When users can see and act on all potential milestones in a flow – such as manufacturing, repair, and transportation, in addition to inventory across all locations (with suppliers, distributors, forward stocking locations, and items in-transit), they can consistently coordinate the most optimal and cost-effective movements throughout the entire supply chain.
Reverse logistics is one of the most underutilized functions that holds incredible, untapped potential for driving customer loyalty, competitive advantage, and business growth. MPO offers the world’s only natively unified cloud platform for global, multi-modal, omnichannel order fulfillment and reverse management across all B2B, B2C, and D2C parties. The system is automated to streamline returns and advanced replacement order flows, optimize transportation and route selection with smart rating and labeling, send timely updates across the supply chain, and conduct cost analyses for all services. The holistic platform enables real-time visibility and unique, in-app control for outsourced depot activities, including inspection, repair, and disposal. Learn more about how MPO can serve your business by getting a free copy of our solution brief today.