Last time, we discussed the role in inventory management and parts delivery within the service parts supply chain or sometimes referred as the service supply chain. However, getting items to businesses and consumers represents one-third of the battle in maintaining a successful supply chain. Next, we must dive into a portion of the service supply chain inherent due to improvements in technology, changes in consumer and business needs, and problems in manufacturing: reverse logistics. When thinking of reverse logistics, think of order fulfillment processes operating in reverse. When a consumer receives an incorrect item, needs to return a malfunctioning item, or simply feels dissatisfied with the item, best business practices demand the company provide a means of making the consumer whole. Let’s take a look into how an effective plan will help you in the successful management of reverse logistics within the service supply chain.
Return of Defective Parts and Merchandise
In a perfect world, merchandise would never have a default, crack, broken circuit, or missing piece. Unfortunately, a perfect world is NOT a realistic world, and the modern world will always see an ongoing struggle between outgoing new items and incoming defective items. For this reason, many retailers have specific policies dictating the warranty of their products. For example, many computers may only be returned within a two-week period from the date of delivery. However, the items may be repaired at little to no charge within the first two years of use.
When an item fails to operate as promised, or possesses another defect, it represents a loss to the end-user. Losses result in poor customer satisfaction, irate rants against well-known and upcoming businesses via social media, and the inescapable demand for restitution. Returning these items to the manufacturers, especially items manufactured overseas, may require extensive costs and considerations for personal and proprietary information, as well as classified government information.
As a partner with Flash Global, your business will have the ability to simply identify the item as a return, which Flash Global will then process. This includes a variety of erasure, tracking, and refurbishing of such items. For example, a supercomputer’s drives may need to be erased to prevent violations of compliance and privacy laws in the US and other countries. Think of the countless healthcare providers’ computers with information that could represent a HIPPA breach. Additionally, you must consider how managing these returns will affect your daily work-load.
Management of Return Merchandise Authorizations
If you ask any large retailer about returns, they will tell you, “Returns are a nightmare and take valuable time away from our customers.” Depending on the number of employees in your business, you could be facing paying the salaries of one to two people to manage your returns. Fortunately, a service supply chain solutions company, like Flash Global, provides complete management of return merchandise authorizations (RMAs). Ultimately, an RMA provides the starting point for the return of defective merchandise. It also defines the beginning of the refurbishment process for outdated equipment and all other reverse logistics processes.
Some business owners may be apt to think a RMA is unnecessary; however, an RMA is the only way of ensuring the merchandise, or individual parts, planned to be returned aligns with is actually returned. For example, some consumers, albeit rare for it to occur in quantities large enough to frighten the market, may attempt to return old merchandise, outside of the repair and return period, to attempt to gain an advantage in having newer, better products without paying for them. As a result, RMA management is essential to maintaining a positive return on investment and minimizing SHRINK or lost revenue of merchandise.
During periods of increased business, such as November and December, all of your staff is needed to simply keep consumers flowing in and out of the store. With the encroachment of the holidays, comes a huge amount of pressure on the service supply chain. Will enough of a given item be available; what will we do with number of items returned by consumers; and how will the successful management of such returns affect our profit margins? Now, mistakes do happen, but increased oversight, such as that of Flash Global Account Managers, reduces the opportunities for errors within the return process. This includes ensuring serial numbers are recorded, merchandise is repackaged, reprocessed, and reshipped, and payment from the manufacturer is forwarded to the respective end-users.
As with our discussion on parts delivery, there may be extensive costs associated with the transport of merchandise and parts to different geographic regions and politically-charged areas. Flash Global simplifies these cross-boundary transport expenses and ensures business owners can continue operating, growing, and selling.
From return of defective merchandise to minimizing consumer dissatisfaction to the successful reclamation of valuable pieces from outdated equipment, Flash Global stands behind, as well as next to, business and consumers. By providing an all-encompassing, proven methodology of reverse logistics, Flash Global’s service parts supply chain processes propel businesses to the forefront of their competitive market. In our next post, we will take on the gravest, yet often forgotten, aspect of the service parts supply chain: repairs, technical assistance, and supply chain solutions engineering for a global frontier.