Guest Commentary: Managing Returns: How a Transportation Management System Can Streamline the Process for You and Your Customers

The old return/repair process is often known as a Return Merchandise or Return Material Authorization (RMA) process. On paper, the RMA business process makes perfect sense; it’s clear, concise, and simple. The name alone, “RMA,” makes it sound simple and straightforward. You issue an RMA number and the customer returns the goods, right?

However, the reality is that the RMA process extends far beyond the simple act of issuing the authorization and a number, and hoping the customer actually proceeds with the return as instructed. Throw in replacements, repairs, sending empty boxes for the return, getting the return back from the customer (to the right location), processing any credits, keeping track of where your inventory is….and all of sudden, you realize the process is not so simple or straightforward. And further, the RMA process can have a very large impact on the overall customer experience and customer satisfaction.

The good news is that a Transportation Management System (TMS) can help to streamline the process and help you gain some unexpected “returns” along the way. Here are some tips for getting it done:

  • Incorporate the return process into the initial outbound shipment by including an authorization form and return carrier label with the package. While this is fairly standard practice in the retail industry for any shipment, it can be especially useful for other industries where the outbound item is a warranty replacement item or for use by a field service engineer. You will benefit by reducing calls from the customer for authorization/shipping information and by eliminating a separate step for producing and sending the paperwork and label. Additionally, your customer or field service engineer has clear instructions and knows what action to take, making the process as simple as possible.
  • Use the TMS to alert your customer that a warranty replacement shipment is on its way. This makes the customer aware of the intended delivery date/time and can reduce the number of inquiry calls. It can also help set the stage for the timely return of an item in need of repair. Not only is customer satisfaction improved through proactive communication, but you may also help influence the collection time for the item being returned (the customer is ready to place the return item in the empty box when the carrier gets there). This in turn helps to improve the overall turn-around time to/from the customer and minimizes inventory in the network.
  • Utilize package tracking functionality within the TMS to alert you when a customer has initiated a return. Knowing what is on its way and when it will hit your door can help your planning  purposes for staffing receiving and inspection departments, processing any credit due, as well as knowing what inventory is in-transit.
  • Mine that data! With all of the data covering both your outbound and inbound shipments in one central location (namely, the TMS), you can report on and analyze trends in the return process. For example, if you are in the business of repairing/replacing electronics, what is the total turn-around time to customers? Does it vary by carrier, by season (holidays /vacations), by region? Tackling delays in all legs of the process can result in reduced inventory in the network through improved return efficiency.

The value of using a TMS for the return process goes beyond just gaining efficiencies and related cost-savings. By using it to get real end-to-end process visibility, your awareness factor about outbound fulfillment, defective material in the field, collection efforts, total turn-around times to the customer, inbound shipments, and total inventory in your network is raised. Ultimately, this visibility can help you improve the customer experience, with a smooth and streamlined process for returns. What’s the bad news? You still have to work out the process that best suits your company and your customers. Process-flow charts included.

Linda Olster is the Marketing Manager for Precision Software, a division of QAD Inc. Linda joined Precision in 2006 bringing over 25 years of experience in the customer service, distribution and supply chain areas of the high tech/electronics industry. She holds a bachelor’s degree in Business Administration from SUNY Empire State College.