How Returns Impact the Warehouse and What You Can Do About It
Returns have always been a challenge, but distributors today are experiencing a surge in returned items and orders. The cost of return deliveries in the United States will increase to $550 billion in 2020, according to Statista. That's up from $314 billion just four years ago.
Staggering as it may seem, that's just the cost to ship returns. That figure doesn't consider the costs associated with processing, restocking, and reselling these returned goods.
While it's easy to pass off returns as primarily an e-commerce or retail issue, the fact is it's a challenge all distributors face.
You're Doing What With Returns?
What's a distributor to do? Without a proper receiving process in place, returns and inbound items may get mixed up and processed similarly. Then salespeople must spend hours locating returned products: Are they on the shelf? Still in the returns pile? Already been resold? If your workers don't have visibility into the location and status of returns, you're wasting valuable time and energy that would be better spent filling other orders.
You can take some simple steps in the warehouse to streamline the returns process. A full-featured warehouse management system (WMS), for example, can make it faster and easier to identify and track returned items, providing complete visibility—so inventory is never lost—and control over the warehouse throughout the entire reverse logistics process.
Here's how a WMS can improve (and reduce) your returns process:
Sorry, wrong item. When you utilize an automated WMS to fulfill customer orders, you not only want to fill orders faster, but you also want to drastically reduce the number of errors. While errors are an inevitable part of warehouse order fulfillment, easy-to-use software encourages employees to do their jobs better, meaning efficiency improves and mistakes decrease considerably.
Few mistakes mean fewer customer complaints and fewer returned orders. Reductions in order returns have an obvious financial benefit, but can you put a price on happier customers?
Damaged goods. Whether the item was defective and slipped through quality control or damaged during delivery, someone needs to fix it without taking time away from their normal duties.
Using reason codes, a WMS can identify trends such as defective products or frequently returned items. While an ERP can likely provide this information as well, this is only the case once the return has gone through the entire—often slow and painstaking—process, which is typically why companies avoid it.
Too little, too late. A WMS with parcel shipping integration software simplifies warehouse shipping, package tracking, and route management to get products to customers quickly, securely, and affordably. What's more, it can prioritize expedited deliveries, so they are picked, packed, and shipped in the right order relative to others in the system. Get the order to your customer on time and you're less likely to see it as a return later.
Imagine the Possibilities
Instead of a returns area overrun with hundreds of untracked items, imagine the business gains that can come from streamlining the returns process and reducing returns in the first place.