There are two primary goals for every return center: 1. Maximize the net asset value of inventory flowing through the reverse logistics pipeline; 2. Process reverse logistics inventory at the lowest possible over all cost to the organization, while maximizing inventory recovery value.

Net asset value is the value of returned goods realized after being processed through a returns facility, less the cost of processing.  In order to maximize net asset value, the reverse logistics leadership team should monitor a number of metrics. There are many activities that should be measured and monitored to ensure you are running a best-in-class operation.  There are countless variations, the complexity of which is dependent upon the returns process, the inventory, and a number of critical business decisions such as brand protection, sustainability concerns, liquidation options and the like.  Among the variations there are four critical metrics that you must pay very close attention to and they are:

1. Thru Put
2. Cost per Unit
3. Yield Rate
4. Recovery Rate

Before you start writing emails pointing out the need for quality, it should be said that quality is a given for each area of your operation and should be a part of every operation.  In order to achieve your primary goals stated above and to achieve the desired results for each metric above, a high level of quality is required.

In this podcast, Curtis Greve will discuss each of these metrics and why they are important pulse points for every reverse logistics operation.

RL Podcast #13 – 4 Key Reverse Logistics Metrics

This podcast is a recording of a presentation given by Curtis Greve to the DRS Customer Symposium on September 9, 2010.  The subject of Curtis’ presentation covered four external drivers that will impact every reclamation center and reverse logistics process in the world between now and 2015.

This presentation was directed toward CPG manufacturers but the drivers behind the future changes in the reverse logistics ecosystem will impact every retailer and wholesaler as well.

The DRS Customer Symposium was a great event with a lot of take home value for all attendees.  It was attended by over 40 manufacturers who are customers of DRS.  For more information on this symposium or about DRS services and solutions visit DRSReturns.com.

Well done UPS.

1. Dramatic increases in transportation costs and the resulting changes that will be required in supply chain networks
2. Reverse logistics networks and how companies can increase their bottom line profits by as much as 4%  or more
3. Continued demand for development of sustainable solutions and how sustainability can dramatically increase profits

Curtis points out that most companies will agree these three drivers are going to happen.  Business executive also realize that these elements will have a negative impact on their business if they don’t address the situation, yet few are doing anything about it.  How a company deals with these inevitable changes will determine if they will thrive or if they will find themselves at a significant disadvantage that could result in their ultimate demise.

In today’s podcast, Curtis Greve talks about how to develop an exit strategy for products and critical factors to consider when working within an organization to develop merchandise exit strategies.  Whether it is a seasonal item that is part of a guaranteed sales agreement, an item with a limited life span like a computer or fashion item, or if it is an item that is coming to the end of it’s life and is going to become obsolete, having a well thought out exit strategy could significantly improve that item’s contribution to the bottom line.

With imports growing, economic pressures increasing, and shareholder demands for more sustainable business practices continuing to build, developing liquidation capabilities is an effort that is well worth any executive’s time and attention.

In today’s Podcast Curtis Greve shares three tips that can help improve returns processing; improve relationships with key vendors, suppliers, and liquidators; and increase the bottom line contribution of your reverse logistics program.

Do you know how to eat an elephant?  One spoonful at a time.  Curtis will share his experiences and time tested best practices that will help you improve, one step at a time.

Like Alan Weiss says “If you improve 1% everyday, in 70 days you will be twice as good.”  Here is three percent to help get you started.

Consolidation fees are the fees that retailers charge to manufacturers to cover the costs associated with processing returns through a centralized return process.  A return authorization, better known as RA or RMA, is the mechanism used by manufacturers to “give permission” for their customers to ship to them.  It is also the means used to track specific inbound shipments and reconcile the associated financial transactions.

Many retailers and manufacturers leverage consolidation fees and the type of RA used to negotiate better return privileges.  Listen to today’s podcast and learn how you can improve the financial performance of your reverse logistics process, one claim at a time.

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