Best Practices for Warehouse Returns
Today, most industries have returns strategies capable of quickly assessing distribution networks when huge quantities of products undergo reverse logistics operations or processes. Frequently, the distribution warehouse bears the brunt of these expenses and other efforts related to returns. Fortunately, this area is likewise where a well-organized process, supported by cutting-edge technology and hardware, can yield a competitive advantage, positively influence the returns process and also attract new buyers.
In this post we discuss common issues that affect returns operations in the warehouse and suggest best practices remedies.
Common Problems That Affect Returns Operations
The warehouse returns area is generally loaded with a mix of open containers from various stock keeping units (SKUs) that ought to be sorted according to disposition. Through this sorting procedure, credits should likewise be issued and return-to-vendor tracking created. The combination of low priority of reverse logistics and process unpredictability typically implies that little consideration is given to enhancing the returns procedure.
Problems That Influence Warehouse Returns Processing:
- Poor process integration inhibits returned stock from instant disposition and shipment. Customer orders are regularly shipped short, while salable inventory is on the return dock.
- Lack of accountability and tracking for unsalable stock that is used to charge back the vendor.
- The process of tracking reasons for item returns is paper intensive.
- Lack of incoming merchandise real-time tracking does not allow cross docking.
- The work area is poorly laid out or too small, etc.
Customer Service Department Problems:
- Difficulty in identifying problems by warehousemen, sales teams, customers or truck drivers to eliminate misconduct.
- Slow credit processing and error-prone data entry due to the amount of paperwork from the returns dock.
- No connection between credit processing and data collection, resulting in over-crediting the buyer.
Best Practices Process for Warehouse Returns
Although the return operations are innately tricky, many industries have been able to gain competitive advantage by applying industry best practices. We want to examine a best practice process from two perspectives: data collection and flow and business processes.
1. Data Collection and Flow
Just as radio frequency equipment is essential in the warehouse environment, this tool is particularly significant in the return procedure. Frequency equipment (RF) screens ought to prompt for an RMA number, a UPC or SKU code, physical state of the merchandise, quantity and disposition.
Interface into WMS
Returns handling modules ought to be integrated into the WMS. The integration takes into account the following:
- Cross-docking to a shipping dock.
- Immediate inventory allocation.
- Real-time inventory control.
- Quick picking from the returns area.
- Cross-docking (a logistics procedure) to a delivery dock.
Interface into an Accounting System
Any information gathered about returned stock ought to be made accessible to the accounting system for credit processing. This data flow guarantees that credits are issued simply after stock is inspected. It additionally eliminates room for crediting errors.
2. Business Processes
Returns affect our physical inventory, accounting systems and electronic inventory. All items must be identified, assigned a disposition or assigned to a client, and afterwards sorted for processing. Since most of the item may be kept back for seller chargebacks or disposed of, not all stock enters inventory stock; some stock must be repacked and manually accounted for versus electronically.
Finally, credits are generally issued at a later time and regularly for just some part of a return, including unsalable or discarded products. This procedure is hard to automate with a non-specific, generic enterprise resource planning (ERP) package and exceptionally difficult with a simple paper process. Specialized returns systems, regardless of whether it’s a stand-alone or part of warehouse management system, can bolster good automation with proper setup.
The accounting process should be separated from the physical process, and take into consideration gaps between accounting and physical realities. Out of a returned pallet for example, some part of the returned pallet might be credited to the client and only part of it might be added to inventory.
Separate responsibility over client credits from responsibility over physical. Warehouse workers ought not to be worried with how and when a client will get credit. Credit processors uses the activities of electronic transaction log of return dock to release credits to the customers.
Distinguish Physical Disposition from Return Reasons
The return reasons depict why a client returned it. The physical disposition depicts physical condition of the merchandise. Credit clerks must know the reasons behind items return. The warehousemen must have full knowledge of the disposition.
Control the Returns Process
Try to control the process of the return through returns authorizations. This way, any returns that have been preapproved can be received on time, and along these lines accelerating the overall processing. To activate radio frequency (RF) verification and automation of equipment, the expected returns ought to be entered into the system before arrival.
Use Putaway Zones to Stage Salable Merchandise
The greater part of the returned stock is generally returned to the storage area in salable condition. To streamline the subsequent set away process, by destination, salable items ought to be organized on pallets.
Use a Bar-Coded Label to Track Unsalable Merchandise
According to Vendor guidelines, any unsalable merchandise that cannot be disposed of is generally stored. While a few vendors require an inventory report to issue credits, others will send an agent to inspect the items. An entire audit trail comprising return reason, customer name, date of return, date of initial shipment and so on will guarantee authenticity of the claim and enhance supplier relationships.
With reasonable and steady use of RF systems, streamlining of physical operations, and re-engineering of business procedures in line with industry best practices, warehouse managers can enjoy great accuracy and throughput while improvements drive the company’s bottom line.