Automating Reverse Logistics

DC Velocity

January 12, 2023

Robotics can help speed up the returns process—but only if you’ve laid the groundwork with a detailed, technology-enabled protocol for getting those surging volumes under control.

“Returns are a massive problem for the whole industry—because the volume is so high,” explains Gaurav Saran, founder and CEO of ReverseLogix, a developer of returns management software (RMS) for business-to-business (B2B) and business-to-consumer (B2C) clients. “And all indications are that we will continue the trend, with returns being exceptionally high every year.”

Retailers deal with an average 17% returns rate—also according to NRF data from 2021—but Saran and others say that figure can reach as high as 30% during peak holiday season. At those levels, reverse logistics is ripe for automation, but companies have been slow to apply it for a variety of reasons.

There are two main stages of the returns journey: initiation of the return on the front end, with the customer; and then processing the return when it arrives at the DC. For the most part, robotics come into play at the DC. Items often arrive piled up in gaylords—large cardboard containers the size of a pallet—from which they must be removed, inspected, and sorted.

“The retailer or brand has to look at how they make the front-end experience good, but when it arrives, they have to be able to process it in the most efficient and transparent way and then ‘apply’ the right disposition,” Saran says. “Robotics can help with the movement, but if you don’t have the right system in place to improve the overall process, it won’t matter.”

Sean O’Farrell, vice president of operations for Tompkins Robotics, agrees. Companies can program their IT systems to sort returns to a variety of locations from the DC—a repair area; back to inventory; to a wholesaler, charity, or waste bin; or back to the vendor, for example—and that information can then be integrated with a robotics system. Tompkins Robotics is applying its tSort robots to returns with a handful of customers who have those technological capabilities, which account for about 10% of the company’s business. O’Farrell says he expects that business to grow considerably over the next few years, primarily because of the accelerating volume of returns and because companies are increasingly outsourcing returns to third-party logistics service providers (3PLs)—often large players with sophisticated DCs that are looking for high-tech solutions for handling returns.

“Because of the accelerating growth on the retail side of the business, companies are pushing returns out to 3PLs, who have been quite successful in securing that business,” O’Farrell explains. “Returns are labor intensive, and that means a push toward automation.”

Read the full article here: https://www.dcvelocity.com/articles/56336-automating-reverse-logistics?utm_medium=email&utm_content=heSwjZ_vlXmXVGjPZHUSKGhahniER2eOrv8-Jpxm2Ltt4hGPqgFxtJpSOgLR7JyT