Reducing the Cost of Product Returns

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The continuing increase of ecommerce, which has accelerated during the COVID-19 pandemic, has meant a booming business for merchants selling online, but it has also led to a dramatic increase in returns .This is a costly prospect for warehouses and other facilities that need to handle the returned merchandise.

According to Statistica, return costs were already estimated to hit $550 billion this year before the jump in e-commerce generated by the pandemic, representing a 57% increase over the $350 billion in return costs in 2017. The supplier pays the cost of most ecommerce returns, including the return shipping  cost, processing, restocking, re-selling and other associated expenses. The cost to receive and process a return can easily run more than $10 per item when all expenses for postage, restocking, re-selling (or disposal), etc. are considered. 

The supplier who automates this process will cut much of the costs while also helping maintain a safe workplace for employees.

The Returns Process

Though each ecommerce fulfillment center will process returns a little differently, typically products will first come in to receiving, then from there move to inspection and sorting. Boxes and other packaging material are removed, then moved to a recycling area, while the products themselves will go to separate areas after disposition, depending on if they will be restocked, repaired or refurbished (then restocked),  sold at liquidation area or scrapped. 

Each step, if handled incorrectly or inefficiently, means loss of time, potential loss of product (i.e., a product in good condition is sent to liquidation rather than being restocked), and additional cost. 

Each step in the returns process involves moving material from one area to the next. There are a few different ways to handle the product movement.

Returns boxes in van

Human Labor: Historically, humans have handled much of the movement from place to place. But the growth in ecommerce has also meant a growth in warehouse and other shipping/receiving facilities. To save on shipping/receiving time and costs, the newest facilities are near transportation hubs. But those hubs aren’t always near a sufficient workforce to handle all of the movement of goods. 

Installed Conveyor Systems: Conveyors can handle much of the product movement, but they’re expensive and time-consuming to install. Additionally, a conveyor system is static – it is costly to move once installed, so it doesn’t permit flexibility as workflow changes. For example, if a supplier opts to change from repairing and restocking items and instead outsources that work to a third party, the conveyor system moving items to and from repair to storage would need to be scrapped or reconfigured – an expensive option – to move the products from inspection/sorting directly to shipping.

Automated Mobile Robots (AMRs)

AMRs can move products of various sizes and shapes from point to point and can be used in conjunction with humans and installed conveyor systems to increase      

efficiencies of returns operations in several different ways. Among the advantages:

Enable Social Distancing: By using AMRs for product and waste movement, companies can better minimize contact among shipping/receiving co-workers, enabling companies to operate efficient return operations while maintaining safe social distancing. Some AMR vendors have robots that connect to separate carts that can be fully disinfected 

without damaging the robotic equipment. There are also some robots that have touch screens that can be activated even while wearing gloves, so employees can handle choice based workflows easily while keeping their co-workers safe. 

Social Distancing Stick Figure

Better Flexibility:  An AMR can move a single item or a cart of items from point to point or can be deployed to move items from a point to multiple points. For example, an AMR with a cart from inspection/sorting could move some items to repair and others to restocking in a single trip, or different AMRs could be used, one between inspection/sorting and restocking another between inspection/sorting and repair – enabling a company use the workflow that works best for its situation. Other AMRs can be dedicated to moving cardboard and other waste material from inspection/sorting to disposal. AMRs can be outfitted with different tools for different tasks, like a multi-level cart for moving materials to different areas or a large bin for moving packaging materials to disposal. 

Returns/CC100

Improve Scalability: Historically, returns will peak shortly after the holidays as consumers return unwanted items, so a warehouse or facilities manager will want a way to quickly scale for an increase in returns. When deployed using a Robots-as-a-Service (RaaS) model, AMRs can be implemented quickly for various materials handling needs in the returns operation. Units can be redeployed from other areas of the facility – such as shipping – to receiving/returns as needs dictate, or new units can be added. New AMRs can be deployed across several facilities simultaneously, using no-contact drop-offs at each site. There is no need for a supplier to travel to, set up and deploy units at each facility. Similarly, program upgrades can be deployed simultaneously to all units in all facilities at a single time.

Returns Facility

Maximize Workforce Efficiency:  By employing AMRs to move packaging materials to disposal/dunnage and other product movement, human workers can concentrate their efforts on sorting/inspection. By focusing on inspection and sorting, rather than splitting time between moving materials and sorting/inspection, employees will make fewer errors, meaning better quality control.

Improved Employee Safety: The more an employee needs to move material or carts loaded with materials, the larger the risk of muscle strains and other potential injuries. By deploying AMRs to do the work instead, workers can limit their movements, promoting workplace safety as well as efficiency. 

Instant Hazard Avoidance: From anywhere on any device, a manager can instantly direct AMR away from an emergency incident, such as a failed conveyor line.

Conclusion

Efficient returns processing is essential for any warehouse or other shipping/receiving operation to reign in the costs of returns, from inefficiencies of human labor to the additional expense of a poorly designed workflow. Additionally, returns operations need to ensure they maintain healthy social distancing while handling an increasing number of returns. Automation, even if it’s static, offers many benefits that decreases the cost of the return process. Mobile robots offer even more benefits than static automation, including the flexibility to help a company use the workflow that best meets its needs in its returns operations, the ability to maximize social distancing and disinfection, and improved employee safety .

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