Supply Chain Management Group

Presentation on
Returns Management
Group No 8
K.V.Vaidhyanatha Balaji
Dinesh Kumar
Rakesh.R
Ninuja.S
Abhishek Shankar
Zhu Yibin
Parthiban
Salma Banu
 Overview
• Introduction to Returns Management

• Types of Returns

• Strategic Returns Management Process

• Operational Returns Management Process

• Benefits of an Effective Returns Management

 RETURNS

• Sales - happy when a sale is made

• Logistics - happy when products are delivered

However, “Some day you will see your products back,

whether you want it or not, because of personal,
economical, marketing or legal reasons”
 Returns Management Past &
Present Scenario
In Past - “The management of all logistic operations related
to returns of products from their original user to their supplier
with the intention of a cost-effective recovery, while meeting
all legal obligations”

At Present – “Returns Management is that part of supply

chain management that includes returns, revere logistics,
gate-keeping, and avoidance”
Why Returns Management?
Returns are characterized by
•much uncertainty in timing when they come back,
•much uncertainty in product status, quality
•much uncertainty on administrative aspects (refunds,
VAT)
•large variety in handling

However, most management is occupied with optimizing

the standard forward logistics. Hence they have little time
for managing the returns!

As a result billions are lost

 What does Returns Management
Entails?
Structuring return organization, standardizing handling and treatment in
order to reduce costs, increase product recovery and enhance
customer satisfaction

Structuring:
• Investigating return patterns

• Simplifying return administration

• Structuring return collection process

• Structuring return information process (tracking and tracing)

• Structuring and shortening return handling process

• Increasing product recovery options

 Types of Returns
• Consumer Returns

• Marketing Returns

• Asset Returns

• Product Returns

• Environmental Returns
 Returns Management Process

• Strategic Returns Management Process

• Operational Returns Management Process

 Strategic Returns Management
Process – Part 1
• Goal and Strategy

• Avoidance

• Gate-Keeping

• Disposition
 Strategic Returns Management
Process – Part 2
• Network and Flow Options

• Credit Rules

• Secondary Markets

• Framework of Metrics
 Operational Returns Management
Process – Part 1

• Returns Request

• Routing

• Receiving Returns
 Operational Returns Management
Process – Part 2
• Selection of Disposition

• Crediting Customer/Supplier

• Analysis of Returns and Measurement of

Performance
Returns Management Examples
• IBM - returns of old computers to EU DC. Recovery of
valuable spare parts

• Xerox - recovery of used photo-copiers. Disassembly,

use of recovered parts in manufacturing new copiers.

• Kodak - recovery of parts of their single use cameras

 Returns Management in Xerox
• Many photocopiers are leased and come back in a
reasonable state after some time. Several components
do not really wear out in the copier, like lenses, etc.

• Xerox collects the old copiers, sends them to a central

remanufacturing plant where they are disassembled and
the parts are re-used in the manufacturing of new
copiers.

• To facilitate this operation, Xerox and many others have

changed their product design for re-usability

• Without remanufacturing, copiers would be much more

costly!
 Benefits of an Effective Returns
Management
• Essential part of an integrated supply chain
management strategy

• Strengthens and enhances customer

relationship – both forward and backward

• Helps plan and balance the inventory

• Improved Firm’s profitability