Inventory management grips the inventory habits so as to forecast future inventory needs and skip ordering more or running out. Managing Inventory is one of the most challenging jobs. With improper management, we have very little competence to analyze our inventory usage pattern. So forecasting future inventory needs becomes a problem…without available data it becomes very difficult to make those kind of judgments. Guesses, memory and going through the stock inventory by checking each and every stock invoice, bills of sale is very laborious. Moreover, things get even more complicated with returns.
What is inventory return?
Customers return products for many different reasons. Perhaps a customer was unhappy with the quality or performance of a product, or perhaps the product was legitimately defective. Returned inventory may be re-integrated into the pool of inventory available for order, or it may be discarded. But before that the returns are to be evaluated and registered in inventory.
For an efficient management and tracking of return, POS and inventory system is needed. The modern day retailer has given up relying on Pen and Paper or maybe Excel Spread Sheet.
Returns in any business can eat into your sine qua non if you don’t manage them well. In some businesses, returns are a major cost issue. Now, the major challenge that lies in front of us is how to manage inventory in such a way that we save unnecessary costs and maintain our profits.
What is Reverse Logistics?
Reverse logistics stands for all operations related to the reuse of products and materials.Most of the retailers take reverse logistics very lightly and overlook the opportunities to help return profits to accompany. And unless companies put systems and processes in place to regain a noteworthy piece of that cost, returns will have a dramatic impact on profitability. As per the experts, many companies are overlooking their reverse logistics supply chain and are missing opportunities to improve margins as well as customer satisfaction.
Here, technology including barcodes can play a major role to keep track of returns and in a systematic way so that repetition is avoided and a correct figure arrived at.
In addition, some companies are turning to innovative transport methods to help speed the receipt of goods. More and more company are believing in return coming back in larger shipments so as to reduce transportation costs by coordinating returns shipments with larger shipments.
Once the company has a returned product in their possession, the item can spend days, even months on a shelf waiting to be evaluated. Testing, sorting and grading is laborious . The process can be streamlined through sensors, bar codes, and other technologies to automate tracking and testing.
Peshwa Acharya, Marketing Head, Reliance Retail shares," It is mandatory for international retail operations, where as since in India, only 5-7 per cent retail is organised so only the big players opt for barcode technology. In Reilance Retail, everything is barcoded that includes even freebies, scratch cards and promotional stuff. Now, bar code can help you streamline efficiency and collect data regarding inventory management but it all depends on how far you can utilise it".
If you use some kind of inventory tracking system along with barcodes to manage outbound supply chain, the returns process may need special requirement.
But company should take into note the fact that the more complex the product, the more chances of its coming back because of several factors that may go wrong.
Therefore, before setting up a barcode system, review entire returns process, evaluate and take requirements into consideration.
Using a bar code where inventory control software tracks by an item number, the software can also track inventory items by serial number lot number, date code, and pallet. Items can be monitored on a PC or mobile device.
Rajat Mehta, Country Head – Emerging Business Unit, PSG India ,Hewlett-Packard India Sales Pvt. Limited said, “Reverse logistics represents one of the largest and most overlooked opportunities to help return profits to a company. Barcode Solution provide a good method to track and mange stock life cycle of returned products. Returned product should come back with bar codes that can be scanned to minimize handling and this will ensure that the return stock reflect in the inventory management system and also update the CRM database. As soon as the barcode is scanned a flag will be raised for company to inspect the goods ,repair and hence covert to sales stock as soon as possible as there is nothing worse than aging inventory or Dead Stocks in life of retailer who depend on cash flow and inventory turns.” He added, “Many businesses, from retail to manufacturing, have benefited from barcode systems to manage inventory. However to handle returns and avoid margin erosion due to the cost of returns, a retailer should make sure that barcode system is designed specifically to help manage returns as well.”
Bottom line: Lever returns and avoid margin corrosion due to cost of return by adopting specifically designed barcode to help manage returns.