Whether you plan to handle manufacturing in house or with a vendor, an essential process that needs to be put in place is a streamlined Return Merchandise Authorization Management System. With out one there is no way to prevent returned items from falling through the cracks. For Premio, a streamlined RMA is a crucial part of identifying flaws in production process, allowing us to make corrections and, just as vital, allowing us to deliver optimal responses to our customers. Most manufacturers can move a product through the supply chain to the customer with some success, however many fall short in the reversal process that sees products returned to be fixed, refurbished or remanufactured.
Common issues we see with reverse logistics usually tie back to lack of process and infrastructure. This is the likely result of the large investment of time and resources it takes to establish an efficient reverse logistics program that actually works. This investment is compounded by the fact that, because each project is unique, every company a manufacturer works with requires a different setup. In order for us to remain flexible, we’ve had to adopt a wide range of components to help various types of customers implement the reverse logistics programs that fit their need.
The components include:
- Web Portal / IT infrastructure
- RMA process & procedures
- Documents Control via Agile
- Shipment tracking & notification
- Advanced replacement services
- Depot repair / Out of warranty repair services
- Refurbishment / remanufacturing
- Inventory management (Spare parts, consignment, and EOL management)
- Transportation / warehousing
- Failure Analysis / Quality Reporting
- Import / Export / Custom clearance
- Worldwide locations
- Scrap / waste management
With businesses expanding into the global marketplace, more attention than ever needs to be focused on the efficient operations of reverse logistics. More and more, companies are turning to a third-party vendor rather than keeping manufacturing in-house, for no other reason than it takes time and money to perfect a return processes and quality vendors already have them in place.
What a streamlined RMA Looks Like.
A dedicated in-house project team will ensure faster communications, repair cycle times, advanced replacement and warranty screening, shipping & receiving, import/export custom clearance, quality data capturing, RMA buffer inventory & EOL inventory monitoring and make certain critical components are available when and where they are needed most.
An integrated system will reduce duplicate manual efforts and improve data consistency. To understand how to make cost reductions that impact your bottom line, you need to understand your reverse logistics management metrics.
The Reverse Logistics Cost Equation:
Program Management Costs (Monthly fee)
(+) Processing Costs
(+) Logistics Costs
(+) Replacement Cost
(+) Inventory Depreciation
=
Total Reverse Logistics Costs
Maximizing Return on Assets
Improvement in the area of replacement or the asset depreciation can often result in much larger profit impact. The goal is obviously to keep the cost of replacing a defective item below the amount of the original item.
With an effective RMA process, manufacturers are also able to reduce overhead and labor expenses, allowing them to pass those savings along.
Gaining a Competitive Advantage
Having a deep and detailed understanding of the RMA processes can be a critical factor in a company’s ultimate success or failure. Our reverse logistics management capabilities make such an impact that Premio customers use it as a market differentiator. Our goal is to keep customers satisfied with their products and services, before, during, and after sales. The result is happy customers, who find themselves with an unexpected advantage over their competition.
