Why is returns management so often an afterthought in designing the supply chain?
Mark HilinskiMost retailers simply view returns as a percentage of their business, and most only calculate it to be about 5%. They don’t think they should spend time worrying about such a small percentage. The problem is that they are almost always wrong about the cost of returns – it’s really more than that. If retailers understood the true cost of processing returns, it wouldn’t have such an insignificant position on their to-do lists. Retailers don’t treat returns like it is a big problem in terms of budgets or employees because they don’t consider the true costs involved with reverse logistics. Even the price of gas and the maintenance on a delivery truck should contribute to the cost of transporting a returned item from point A to point B. Why is there a need for a reverse logistics solution from a retailer’s perspective? Darren BienOnline returns alone are expected to reach 90 million in 2005. This is $5.8 billion worth of goods that will be going back to e-tailers just in the Un
