We’d like to think that once we ship and deliver a product to a customer, that product functions perfectly every time and never has an issue for the rest of its operational life. This unfortunately just isn’t the case 100% of the time. It’s a reality that there will inevitably be some products that malfunction, become damaged, or wear out with use and time. In addition, customers are always looking to extend the life of their equipment through repair and restoration as alternatives to completely replacing a product. Having an effective solution to manage product returns, repairs, and renewals is essential to maintaining the reputation for quality and service for OEMs or value-added resellers. For end users of hi-tech equipment, this becomes a prerequisite for undisrupted operations and better business results. Without the proper attention and resource investment in to these programs, one dissatisfied customer can quickly evolve from a small problem in to a major crisis.
As your company has grown, it’s likely that your concerns about the ability to effectively manage returns, repairs, and reconditioning have grown, too. Also known as ‘reverse logistics’, it’s a function that can be very resource-intensive, depending on the nature and complexity of the products you provide. Even with very low return rates, the costs of managing a return/repair program can be quite high, simply due to the necessary elements that must be provided. Let’s take a look at the essential components of a return and repair program, and how they can impact your business operations.
Essential Components of a Return and Repair Program
All return and repair programs must start with how the customers will contact your company when they need to return a product for a repair. This means that you will need resources in place that can handle this volume of requests, and process them in a way that communicates the essential information to all the parties involved along the way. Generally, these types of requests are either funneled through an existing customer service department, or a separate team specializing in returns and repairs is created to handle them.
Once the information has been gathered and the product is on its way back to you for service, replacement, or repair, you will need a location with dedicated personnel to receive the product and conduct the repair, or process and fill the replacement order. This also means that you will need to stock any parts and equipment needed for any of these repairs or replacement requests, and that takes up warehouse space, as well as some space to conduct repairs for the products that are not just a simple replacement.
After the repair or reconditioning has been completed, your team now needs to finalize the process by shipping the product back to the customer and updating the system with all the relevant details.
As you can guess, all these things add up quickly and result in a big investment in overhead, personnel, training, and supplies. Although many companies instinctively think that this type of program can and should be handled internally, for many of them pursuing a third-party option for returns and repair is a wise decision that results in cost savings, reduced turnaround time and higher levels of customer satisfaction.
Outsourced Reverse Logistics Services Explained
Third-party reverse logistics services take the pressure off of your company by managing some or all of these essential processes for you, based on the needs of your customers and the needs of your company. Everything from the initial customer service call, all the way to the final shipment of the product to the customer, can be managed by a third-party logistics partner.
Whether it be a phone call that is routed through a unique customer service number, a simple online form submission, or a personalized customer service website, your customers can contact the 3PL service provider directly and obtain a seamless experience as if they were dealing directly with your company. From there, the 3PL service provider delivers the necessary services every step of the way. Customer and product details are obtained and tracked in the system as the repair or reconditioning progresses.
Outsourced logistics service providers have the benefit of multiple physical locations to serve your customers, and are able to stock replacement products and parts for service in their dedicated repair and reconditioning facilities. In addition, Outsourced reverse logistics service providers can conduct salvage as well, saving parts and components from high-value products that are still perfectly functional for future use at a reduced cost and material savings. Recycling is also available as a 3PL service, where the logistics provider will conduct product disassembly or breakdown as required achieving the highest level of recycling and materials recovery from each product that is returned.
As an added benefit, outsourced reverse logistics and repair service providers also have relationships with many different OEM parts suppliers and resellers, which makes it even easier to source hard-to-find replacement parts and components. This increases the ability for your company to provide your customers options of extending the life of their product in the event that replacing the entire product is not the best solution for them. Providing affordable options for your customers helps improve customer retention and satisfaction, which yields big returns for your company in the long run.
Other Outsourced Reverse Logistics Considerations
Of course, some companies who have very simple products that rarely require repair or reconditioning may not find that third-party return and repair programs to be a viable option. For these companies, it may be easy to manage small volumes of returns themselves, without adversely affecting their bottom line or customer satisfaction. However, for mid-market and large organizations dealing with more complex products and customers across a wide variety of locations, 3PL repair services can provide a great deal of benefits. Ultimately, if your company is challenged with returns and repair programs that are falling short of your expectations, then a third-party logistics solution could be the answer you are looking for.
If your company would benefit from expanding your return, repair and reconditioning capabilities with reverse logistics from a trusted third-party expert, SCI is here to help. We provide complete end-to-end supply chain services (including return and repair) using our extensive network of locations across Canada.
Contact SCI today and one of our experts will be happy to assist you with outsourcing repair, renewal, or the full suite of logistics services.