Getting returns under control
Once returns handling becomes a systemized process, cycle times can be reduced from a week or much longer to less than a day.
By Jim Nelson, Accenture -- Modern Materials Handling, 6/1/2006
Returns can be ugly and often are. Too many DCs stack them in a corner, and process them only as a last resort or when staffing permits.
"I've seen as much as a 30-day backup in a returns area," says Jim Nelson, a partner in the supply chain management practice at Accenture.
As if that's not enough, returns often get overlooked in the capital expenditure process, too. But as Nelson explains, eventually the situation reaches a breaking point.
The drawing on this page details what that breaking point might look like. Returns are manually handled in a non-mechanized, paper-based data capture system. There is no software to manage the returns data. Depending on backlogs and physical log jams, the backup is at least a week, if not much longer. Excessive space is required for processing, manual tracking and inventory management. Merchandise is often damaged if not lost altogether. And needless to say, credits are tough to assess to customers.
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