The strategic importance of managing return goods is gaining attention in the academic literature. Poorly managed processes can impact a company’s brand reputation, sustainability i mpact and profitability. Returns represent a business conundrum: on the marketing side, returns policies are part of the sales assurance process — promising liberal returns allowances reduces the purchase risk for the buyer, and thus enhances sales. But on t he operations side, liberal returns policies mean more returns, more processing, and thus more expenses incurred. Yet many firms fail to manage the reverse flow of products well because they do not understand the value - creating potential of effective and e fficient returns management. In exploring the cross - functional nature of returns management, we take a systems approach to evaluating the product, information and financial flows that encompass returns management. The Logistics literature has long highligh ted these channel flows in the forward supply chain, but has yet to assess the integration of these flows in the reverse supply chain. A qualitative methodology was employed, utilizing multiple sources of evidence including in - depth interviews, site visits , printed materials provided by the participating firms, and secondary sources. Six U.S. - based firms participated; all firms supply retailers and/or business customers. A total of 54 managers across the companies participated, reflecting diversity along mu ltiple dimensions such as function and job level, in particular. The results highlight the challenges firms experience in managing these three critical flows in the reverse supply chain, and simultaneously, how critically important an integrated approach i s to successful returns management processes. The results add to the emerging body of knowledge in the returns management, integration, and value creation literatures and suggest insights for both theory development and improved managerial practice
Integrating Product, In formation and Financial Flows in the Returns Management Process
RUSSO, IVAN
2013-01-01
Abstract
The strategic importance of managing return goods is gaining attention in the academic literature. Poorly managed processes can impact a company’s brand reputation, sustainability i mpact and profitability. Returns represent a business conundrum: on the marketing side, returns policies are part of the sales assurance process — promising liberal returns allowances reduces the purchase risk for the buyer, and thus enhances sales. But on t he operations side, liberal returns policies mean more returns, more processing, and thus more expenses incurred. Yet many firms fail to manage the reverse flow of products well because they do not understand the value - creating potential of effective and e fficient returns management. In exploring the cross - functional nature of returns management, we take a systems approach to evaluating the product, information and financial flows that encompass returns management. The Logistics literature has long highligh ted these channel flows in the forward supply chain, but has yet to assess the integration of these flows in the reverse supply chain. A qualitative methodology was employed, utilizing multiple sources of evidence including in - depth interviews, site visits , printed materials provided by the participating firms, and secondary sources. Six U.S. - based firms participated; all firms supply retailers and/or business customers. A total of 54 managers across the companies participated, reflecting diversity along mu ltiple dimensions such as function and job level, in particular. The results highlight the challenges firms experience in managing these three critical flows in the reverse supply chain, and simultaneously, how critically important an integrated approach i s to successful returns management processes. The results add to the emerging body of knowledge in the returns management, integration, and value creation literatures and suggest insights for both theory development and improved managerial practice
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