Proactive reduction of returns : management and metrics

Abstract

Management of reverse logistics is becoming an important research area. Within this body of research, very little work has been done on proactively reducing returns. The current writing on returns management is almost exclusively efficiency focused. In essence, authors attempt to answer the question, how do we react well to errors and unaligned motivation in a system? A more proactive way of thinking of the problem is to ask how can we reduce errors and align motivation in a system so there is nothing to react to. This paper takes a first look at the opportunities of proactively working to reduce returns in a manufacturer distributor relationship. Findings suggest that returns come from both direct and indirect drivers. Direct returns come from linked causal relationships such as damages (DOA), incorrect shipments, and off schedule deliveries. Indirect returns are products returned at the discretion of distributors to minimize several different risks. Several methods of reducing returns are discussed and metrics are proposed.