Do not get stuck in reverse: When is it time to evaluate your reverse logistics practices?

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  Do not stay in reverse order: When is it time to evaluate your reverse logistics practices?

By Tom DeVroy, Senior Product Evangelist, IFS

Reverse logistics is becoming an integral part of operations for manufacturers and distributors and service providers to minimize revenue losses as products, parts and subcomponents re-stock , Statista's latest statistics show that returns in North America cost $ 246.3 billion a year and must include customers, service organizations, supply chains, receiving points, and even a repair shop or subcontractor. To minimize revenue losses, companies need to evaluate their approach to reverse logistics

Here I outline three common reverse logistics scenarios. If these truths are right, maybe it's time to evaluate whether your reverse logistics strategy will cost you time, money, and customer satisfaction.

1, Do you implement field technicians and support assets?

The field service process alone involves several reverse logistics steps. The technician removes a component from a repairable device at the customer and replaces it with a part of his vehicle inventory. In a situation where the technician has no spare part and can not, a warehouse order must be placed. The field technician will need complete transparency as to whether the part is under warranty or whether the customer is entitled to special prices due to a contractual obligation.

Without an integrated end-to-end service platform, you would rely on a technician to communicate with a separate field force, reverse logistics, warranty management, contracts, and installed base systems to get the answers he needs. [19659004] Obviously, some kind of communication between field service and reverse logistics software is necessary to only prevent trace of parts or components drawn from customer equipment in the field. But in these situations, there must be a seamless way to keep track of whether the part is being repaired or not, who owns the object, if it enters the reverse logistics process, if the part or repair is billable, and then the part has to be associated with a Return Materials Authorization (RMA) through the original field service contract.

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Regardless of whether an environment concentrates exclusively on reverse logistics or in the field, companies expect their software platform to transfer knowledge. A field technician should be able to access various repair processes, which in turn will make those with less experience more productive while increasing the initial correction rate. The reverse logistics software can now embed detailed videos into the workflow, which can be used to guide an employee on the repair bench in the workflow. The result – increased productivity and knowledge delivery in the hands of technicians, where and when they need it.

2. Are you dependent on a complicated supply chain?

In most companies, the process of traceability can be described by new products and returns after use. In an after-use environment, the reverse logistics process involves multiple parties. This means that a software product used to manage this value chain must encompass all, not some, of these stakeholders. Here is the reason:

The customer service generally authorizes the service and repair work via the call center or increasingly via digital customer portals, chatbots or even social media.

When a replacement part is due to be shipped, Customer Service Representative checks stock availability and may need to contact the purchasing department. If a build job is required to replace the product, the customer service representative might need to include departments for manufacturing or supply chain. Should the defect be received for repair, the logistics will be instructed to receive the defect and relocate it for repair. Each of the stakeholders has a role to play and everyone has to pursue their own specific process. This becomes even more complicated when there is a field service component for the reverse logistics process.

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During this process, there are a number of rules that must be followed. These rules include everything from the equipment or the product itself, which parts are sent to which repair facility or depot, whether the part is covered by warranty or contract, whether a customer has a replacement for the part in the inventory or whether you ship need one and much more. Clear communication, starting with the task of defining processes and ensuring that the correct business process is followed, perhaps with configured workflows, is very difficult without enterprise reverse logistics and repair software. Please check your.

3. Outsourcing of elements of your sales force?

The combination of reverse logistics with field service is a challenge when you rely on your own employees. But more and more organizations outsource field work to subcontractors for specific tasks or in times of high demand. Subcontractors introduce several new logistical steps in a reverse logistics process. Reverse logistics software must consider multiple subcontractor types and reimbursement policies to handle the complex situations caused by subcontracting.

To delegate tasks to a subcontractor, you must first set their availability depending on the time constraints and ensure they have the parts and the expertise needed for the job. The contractor must specify a cost that can not be surpassed, receive an order and carry out the work

But what if the subcontractor removes part of a customer's equipment for return? Here things can get very, very complicated. If you replace Part A with Part B, what happens to Part A? The subcontractor can send an invoice and pay for the part he used from his inventory. Depending on the agreement you have with the subcontractor, they can only be paid for the new part when you receive the returned original part. Or, if we have a stronger relationship and have built more confidence, the subcontractor can be paid as soon as a material return is authorized or when shipment confirmation is received from the contractors. All this can change depending on subcontractor, customer, product line or region.

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If the work and part are covered by a warranty, the subcontractor will bill the seller for the part. But if the part and the job is out of warranty and the subcontractor actually has the relationship with that customer as an independent service provider, as a reverse logistics organization, you can only get parts back if there is a core credit.

Looking Back on the Future

It is clear that reverse logistics operations involve a complex network of players, parts and, in some cases, organizations. If you meet these common challenges on a regular basis, it's time to rethink your approach to reverse logistics as a discipline. The next step is to see how enterprise software can mitigate the shortcomings of reverse logistics – the right solution should help manage large utility networks and reduce costs.

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