Supply Chain Management

Returns management is a neglected area in supply chain management, as the focus of firms has been only on how to move the products to the customer effectively. Now with increasing competition, changing customer preferences and more stringent government regulations, firms are also focusing on the management of discarded and returned products.

Returns management refers to the physical handling and disposition of returns. In this chapter we first discussed the need for an efficient returns management process. Then, we examined the strategic and operational returns processes. The strategic returns process involves devising returns avoidance, gatekeeping and disposition guidelines, planning transportation and facility networks to support the returns flow, developing credit processing guidelines and setting up performance metrics. The operational returns process involves receiving the return request, determining the routing of the product, choosing the right disposition option, credit processing and analyzing the returns and returns management performance. Next, we studied the challenges in the returns management process.