Efficient forward logistics processes are commonplace in Western supply chains; however, the reverse logistics processes are often overlooked and have been considered the poor relation in the logistics family. In the retail sector, this has created an opportunity for operational savings, particularly as internet shopping has increased year on year, which has resulted in an explosion of online returns. Approximately 80% of consumers in the US and the UK consider the returns policy before even completing the online purchase. Shoppers commonly order multiple sizes or colours, safe in the knowledge they have a convenient returns option if they don’t like it. But, that convenience comes at a cost to the environment and retailers alike.   

In 2019, it was estimated that returned purchases cost retailers in the US around $479bn (Statista, 2020). Typically, over 95% of returned clothing can be processed and made available for resale, however, sometimes the returns process takes too long and it becomes too dated to sell at full price. This wasted inventory has an environmental as well as economic cost - often ending up in landfill after being produced, delivered and returned, all of which are energy intensive processes. The same can be said for other returned items, although these often need more processing before they can be resold - a part may be missing or broken for example. 

A Reverse Logistics Toolkit has been developed by UK researchers at the Universities of  Sheffield, Sheffield Hallam, and Cranfield. It is designed to enhance returns processes, reducing costs and environmental damage and is available free to download. The Reverse Logistics Toolkit has been developed with and for companies within the logistics and retail sectors. It is designed to help an organisation self-diagnose the current state of their reverse logistics operations by identifying ways their performance can be improved. Using a traffic light system and a series of statements, the company is able to rate itself on how well they’re operating in a particular area. This could for example be Sustainable Distribution and Circular Economy; Avoidance of Product Returns; Customer Experience; and Cost & Performance Measurement.

The benefit of using the Reverse Logistics Toolkit is in its simplicity. It is designed around a traffic light system which allows users to categorise their agreement with a given statement. The result is a graphical representation of the problem areas, which is key when engaging with the workforce at all levels to implement operational changes. It can also be used iteratively, thus enabling companies to continually assess their approach to the returns management process. 

The Reverse Logistics Toolkit is now being used by companies across the sector, including third party logistics service providers, manufacturers, and leading retailers. A leading UK 3rd party logistics service provider has used the Toolkit with a range of its clients and have achieved a number of operational savings and efficiencies. An example being one client who was paying around £2m p.a. to process returns, involving repairs, parts salvaging, and preparation for re-sale. Within 6 months of using the Toolkit, the company was able to make these returns a cost neutral activity for their client.   

For a lot of companies, returns can be a costly process. The Reverse Logistics Toolkit is helping companies turn these costly processes into opportunities and income streams.

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Dr Erica Ballantyne (University of Sheffield, UK), Dr Jonathan Gorst (Sheffield Hallam University, UK), Associate Professor Mike Bernon (Cranfield University, UK), Dr Juliana Meira (University of Sheffield, UK) and Professor John Cullen (University of Sheffield, UK)