Reverse logistics software is used for returns management. It facilitates the reverse flow of sold goods, backwards through the supply chain; from the consumer, to the sellers or manufacturers.
Reverse logistics software is designed to minimise the costs associated with processing returned products.
With the growth of ecommerce and online shopping, the rate of returns for most businesses has risen exponentially.
If you would like to work out a cost-effective method of managing your returns and learn more about how reverse logistics software can help you to build customer loyalty, read on.
What is reverse logistics software?
Reverse logistics software is all about determining the best course of action to reduce losses and maximise profit from returns processes.
Returns processes involve the reverse flow of products from their destination (the consumer, or customer), back to their origin (the seller, supplier, or manufacturer).
Products are returned for various reasons, such as shipping errors, product recalls and damages in transit. As a consequence, there are a number of processes that reverse logistics covers.
Most predominantly, reverse logistics is concerned with capturing value from customer returns, but it can also include product disposal operations, such as recycling or refurbishing.
Reverse logistics software helps to automate and track every step of reverse logistics, allowing managers to monitor and evaluate operational efficiency.
When the returns process runs smoothly, customers are satisfied with your service and are more likely to use it again.
How is reverse logistics software used?
Reverse logistics software is used to facilitate the return of goods to any stage of the supply chain. This could be from the store to the customer distribution centre; or from the distribution centre to the manufacturer’s warehouse.
Wherever the returned product ends up, it should be handled by a quality assurance department. After inspecting the item, the quality department determines if the product is covered by the returns policy and if the customer is eligible for a refund. It also identifies whether an item can be repaired or resold to recapture its value and create revenue.
Reverse logistics software identifies returned goods in your network and tracks their movement through the returns process. It creates the required paperwork and uses metrics to monitor the success of the whole operation.
In order to maintain operational integrity, reverse logistics software should be integrated with other management systems that you have in place, such as warehouse managements systems and field service management systems.
How does reverse logistics software work?
Reverse logistics software will work differently for different industries. For example, software in the beverage industry might focus on the reuse of containers and all the operations that this entails.
Reverse logistics in the construction industry might be geared towards moving and recycling salvaged materials. In the food industry it might be responsible for dealing with rejected food shipments and returning packaging materials.
By optimising processes like recycling, reuse and refurbishment of products, reverse logistics software helps to make your business more sustainable, positively impacting both the environment and your business culture.
What components does reverse logistics software have?
Depending on the reason why they were returned, products are dealt with by reverse logistics in different ways. There are several types – or components – of reverse logistics that focus on the various fields of an organization’s return policies and procedures (RPP).
Returns processes covered by reverse logistics software include:
Most companies want to avoid customers returning an item as much as possible, as it usually means refunding the item and losing profit. Reverse logistics software is partly concerned with helping businesses to avoid returns in the first place.
When a customer does return a product, reverse logistics helps to make the process as fast and transparent as possible, so that the customer is satisfied with the service.
In some cases, a re-return is made. This is usually where an item is returned a second time, perhaps having been bought on clearance and found faulty by the customer. The retailer might not accept a refund but will offer store credit.
Remanufacturing or Refurbishment
This process involves the repair, rebuild and rework of products. It can be as simple as adding a new label, or as complex as deconstructing, cleaning and reassembling parts.
Many customers don’t like buying a product that has been returned, so if a returned item goes back on the shelves, it can be sold as refurbished.
Packaging, containers and pallets are often able to be reused. Not only does this reduce waste, but it can also save on packaging costs as well.
If a retailer cannot sell goods to consumers, the unsold items may be returned to the manufacturers or distributors.
If a delivery address is not found or the delivery fails for any reason, products are often returned to sorting centres before being shipped back to the seller or manufacturer. Reverse logistics software can be used to help identify why a delivery failed and correct the problem.
Rentals and Leasing
Reverse logistics includes the remarketing, recycling, or redeployment of equipment that a company lets out on lease or rental contract.
Repair and Maintenance
Some products are sold with a warranty, or an agreement for the company to maintain and repair equipment if damaged. Sometimes repaired products can be resold.
It is beneficial for companies that sell products containing toxic components to be upfront about how to dispose of them when they reach their end of life.
Large household appliances, such as washing machines, are also difficult to dispose of for most consumers.
If your company offers a disposal and recycling service, you can not only make life more convenient for the customer by taking a problem off their hands, but you can retrieve materials from your products for reuse or resale.
Sometimes a manufacturer will issue a recall of a certain product following safety concerns. Past and future consumers will be warned of the fault and all related goods must be returned to the manufacturer for inspection to ascertain that they meet quality expectations.
Benefits of Reverse Logistics Software
- Develop a sustainable, circular economy
- Prevent waste
- Build customer trust and loyalty
- Cost and loss reduction
- Customer satisfaction
- Better service
- Elevated brand reputation
Reverse Logistics and ProSKU Warehouse Management Software
As with your human employees, your software systems need to communicate in order to provide an efficient service.
When looking at reverse logistics software, you should take into account other management systems you currently have in place to streamline your business operations.
You need to integrate your returns management with a capable warehouse management system (WMS) that can manage both inbound and outbound logistics.
A good WMS, like ProSKU WMS Cloud, will deliver analytics in real time to help your managers to track returns, monitor the movement of goods, and issue credits through the accounting system.
The ProSKU WMS offers advanced inventory management features that prevent the build-up of inventory to reduce your quota of unsold goods.
To learn how to integrate reverse logistics with ProSKU, please call us on 0800 170 1161 or contact us online.