The middle child often gets forgotten, but in reverse logistics, the middle person is the most important part of the process. If you are in reverse logistics, you are the middle person. If you handle the entire reverse logistics process in house, you are a middle person. Or you may receive returns and then partner with a company that buys your returns in bulk, you still are a middle person.
Being the person in the middle, you may feel that you are not in control of what you receive in, right? Wrong, you are 100% in control of what items you receive back. Even though you are receiving returns and passing them along in the process, implementing these simple three steps to your process, can afford you an increase in revenue, to better offset losses from returned and retired items. Most importantly, putting the middleman in charge protects your profits in the reverse logistics process.
Action #1 - Update your QC Process to Include a Diagnostics Assessment
Many take back programs rely on the visual assessment of returned items and possibly, a surface level diagnostic of making sure the item powers on. However, it is vital to remember that a Diagnostics Assessment should be considered the silent D in QC (Quality Control). Imagine for a moment you’re taking back a piano to resell. Sure, it looks great on the outside, but if all the insides are missing, the value plummets. Instead of only reviewing the outside, you’ll want to look inside the piano to confirm if the piano wires and hammers are there, plunk down on the keys and see if the piano needs to be tuned (even the most unmusical people can tell when a piano is out of tune), and check if any of the keys stick or are missing.
This metaphor can be an example for your team to remember how doing more than a surface assessment provides us with all the information needed to take back an item that is returned. This will ultimately be accomplished by providing the intake team with a balanced checklist. When creating this checklist, be sure that you are addressing both visuals and functionality. This checklist will ensure consistency in process across team members and provide assurance that the returns you are receiving are of a known quality, and thus the highest possible resale value in relation.
Some suggested additions to your intake process:
Additionally, these steps will ensure that the point people receiving returns are well trained in diagnostics and QC. This will empower your team to make the best decisions for a positive impact on your revenue flow. Your QC process should be stringent enough that you’re not losing money and devaluing the returns, but not too complex that you are dragging down the efficiency of the process.
Action #2 – Create a Subdivision for Wireless Device Returns
Wireless devices are higher value buy back items. Create a return acceptance process that pulls wireless devices out of the mainstream returns flow and processes them separately from all other returns.
Making wireless devices a specific subset of your reverse logistics plan will yield a higher return value for selling just these items to a purchasing partner. When your resold items are a mishmash, spanning cheap and high-end items, the valuation will average out and you will receive an averaged payout.
Action #3 – Evaluate Your Intake Process Frequently
Frequent analysis of your process is imperative. In taking a frequent look at your process (quarterly is suggested at a minimum), you can identify areas in which you can make smaller changes to increase profit. In the book “Atomic Habits” by James Clear, the author speaks to the benefit of marginal gains. The author shares a story about British Cycling. After 110 years of what all considered failure in their field, they hired a new performance director, Dave Brailsford, who made small changes that in each area amounted to 1% shift in process or procedure. Brailsford said, “The whole principle came from the idea that if you broke down everything you could think of that goes into riding a bike, and then improve it by 1 percent, you will get a significant increase when you put them all together.” While 1% may not seem like much it adds up. Over a year of making small incremental changes, “here’s how the math works out: if you can get 1% better each day for one year, you’ll end up thirty-seven times better by the time you’re done.”(read an excerpt from “Atomic Habits” here https://jamesclear.com/marginal-gains)
BONUS 1: Pick a quarterly date and mark it on your company calendar.
Yes, here’s where you create a repeatable process performance evaluation plan. Suggested: in Q1, you’ll add 5 items to your QC process, and in Q2, you’ll add a few more, increasing your speed and accuracy over the year.
BONUS 2: Align with only certified industry support professionals.
Due diligence is vital. Research your prospective partners and make sure they are certified by their specific industry organizations. Alongside that research you can ask for references and check that your prospective partners are in good standing in the marketplace.
Remember: Your action items don’t stop here. These are just a few immediately implementable action items to kickstart your growth in reverse logistic profits. A [supply] chain is only as strong as its weakest link. Make sure you’re actively assessing ALL the links in your chain and making sure that they’re strong enough for you to rely on to increase your profit.
Yossi is always on the move – managing everything operations-related: programming, software development, processes, operations management and compliance. He is fearless at tackling complex logistical issues, setting up processes and back-end protocols to ensure that B2B Mobile Auction processes 60,000+ items a month efficiently, cost-effectively – and securely. His hands-on oversight includes all levels of fulfillment: purchasing, bookkeeping, receiving, warehouse, processing, testing, wiping, grading, shipping and fulfillment. Additionally, he spearheads the company’s Responsible Recycling and Software Flashing Solutions initiatives.
Find out more about us at www.B2BMobileAuction.com and www.Techsaferecyclers.com