In this episode Tony Hines takes a look at the philosophy behind supply chains in our material world. We also look at the whole area of reverse supply chains with special guest Dr Regina Frei, Associate Professor of Supply Chain Management at Southampton University. We look at how some customers cost us more than others as well as how some suppliers are more costly to deal with than others and we have the usual news round up from round the globe.
The growth of internet retail has caused an increasing problem for the retail sector of processing returns to minimise cost and the impact on their bottom line. According to KPMG returns can reduce profits by 30 per cent. The average cost of returns is 10 per cent. Manufacturers and retailers are said to spend $100 billion on returns. In the UK alone retail returns are about £7 billion. A single return costs about £10 but remember this is an average figure. Some returns cost more. When it comes to returning products you are effectively reversing the supply chain process moving goods back from consumers to suppliers. There are many reasons why people need to return goods. It may be damage to products, wrong item delivered, not fit for purpose or simply that the customer changed their mind. It will depend on the returns policy how each business deals with returns. Dr Regina Frei is our special guest who will discuss this with us today. You can also read some of Gina's research by following the links here:
Product returns: a growing problem for business, society and environment in International Journal of Operations and Production Management:
No such thing as free product returns in The Conversation: