Supply Chain

Ways to Reduce Returns, Focus on Top Priorities for the Service Supply Chain

Feb. 25, 2011

Although product returns are inevitable, wouldn't it be great for companies and consumers alike to avoid them whenever possible?

New developments in the service supply chain and reverse logistics areas are allowing companies to save money and customers to feel less inconvenienced.

For example, I recently came across a really cool blog post about innovations in how retailers are handling returns in the reverse supply chain. It was a post from The Operations Room, a blog from the Kellogg School of Management's Center for Operations & Supply Chain Management at Northwestern University.

The post explains how retailer Amazon.com has a program in the works that would allow its users to be notified when a gift was going to be sent to them. The user can choose to stop the shipment or choose a different gift instead.

It can also allow users to block whole categories of gifts from being sent to them, basically telling Amazon.com to never send a gift that's in the category of clothing, or DVDs, or jewelry.

The interesting issue that the blog post from The Operations Room pointed out was whether or not it was polite to refuse a gift and change it to something else. Or, as the Operations Room blog authors put it, "That's where operational efficiency smashes into social convention." Although returns cost businesses money, and unwanted gifts can be a nuisance to the consumer, you might never admit to actually using this service!

However, I can make a good case that it is a lot better than re-gifting, and it eliminates the hassle of returning a gift. By intercepting the order before it ships, customers get more satisfaction out of what they receive, and companies gain profitable growth from returns.

More priorities that are sure to emerge this year in the reverse logistics component of supply chain can be found here, in our Top 11 Priorities for Service Supply Chain in 2011.

Are reverse logistics a big part of your plan this year? How are you handling returns?

Jim
Tomkins Associates

About the Author

Jim Tompkins | CEO

Dr. James A. Tompkins is an international authority on leadership, logistics, material handling, outsourcing, and supply chain best practices. As the founder and CEO of Tompkins International, he provides leadership for Tompkins globally.

His 30-plus years as CEO of a consulting / integration firm and his focus on helping companies achieve profitable growth give him an insider’s view into what makes great companies even better. Listen to an interview of Jim Tompkins on the Business Leader Radio show.

As a high-level business advisor, his unique perspective prepares corporations and executives for the future.

To share his knowledge and provide up-to-date information on supply chain and business trends, he developed the GoGoGo! Blogand Global Supply Chain Podcast.

He has written or contributed to more than 30 books and eBooks, including Caught Between the Tiger and the Dragon, Bold Leadership, Logistics and Manufacturing Outsourcing, The Supply Chain Handbook, andNo Boundaries. Jim has been quoted in hundreds of business and industry magazines such as The Journal of Commerce, Supply & Demand Chain Executive, and FORTUNE, and he has spoken at more than 4,000 international engagements.

Jim has served as President of the Institute of Industrial Engineers, the Materials Management Society, and the College-Industry Council on Material Handling Education, and Purdue has named him a Distinguished Engineering Alum. He has also received more than 50 awards for his service to his profession.