Increased traceability and improved reporting reduce lead time and inventory costs
One of kaastrup|andersen's customers, a production company, has streamlined its return processes: The throughput time on return flow and inventory levels have been reduced, traceability is excellent and valuable reporting is now available. A thorough effort across two return goods warehouses has created alignment and transparency, and it forms the basis for strengthening cooperation with the numerous wholesalers in the USA and Europe, the Middle East and Africa (EMEA).
The company cooperates with many wholesalers in the USA and EMEA, and regularly handles returned goods from the wholesalers. The goal is for the return processes to be clearly defined and documented. As a result, wholesalers will get a consistent and good experience of the collaboration. The company will also be able to track all items and a full overview of the warehouse, so that the flow can be monitored and measured.
The return processes in the company were handled differently in the US and EMEA, and it was therefore decided to launch a project that has 1. created a common process for handling returned goods, 2. established one system related support processes, 3. guarantees accurate reporting and 4. expanded the options for using mobile devices in the daily work at the returned goods warehouses. The company thus gets a faster throughput, which reduces both inventory and costs.
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The company's main challenge was that they had no common general approach to the return goods processes. It meant that:
- There were no coordinated clear guidelines and process descriptions for the returned goods process, among other things, the IT system was not used in the same way at the two warehouses
- The lead time was unsatisfactory
- There was a lack of reporting possibilities
- Information about the inventory levels was inaccurate
- There was a lack of traceability in the return flow
The list of challenges resulted in three specific business goals, which the project set out to fulfil:
- to create a common approach to the handling of returned goods from wholesalers
- to establish common, well-documented guidelines for returned goods, in the form of internal processes and requirements for information from wholesalers
- to reduce the lead time on returned goods
Work was done according to different processes at the two return goods warehouses in the USA and EMEA. The work was done in the same IT system, but the differences in the physical processes were reflected in their use of the IT system: for example, there was no uniform use of the system codes describing the reason for the return of the goods. Differences in the work processes may be necessary, for example due to physical conditions, but to ensure overview, traceability and reporting, the digital registrations in the IT system must be made in the same way and for the same purpose. Thus, the cost can be reduced based on the data available.
The design of the solution was therefore based on a series of clarifying meetings between the two locations. Here, employees exchanged experiences, reviewed their local work processes step by step, sparred with each other about 'best practice' and discussed both detailed workflows and more general processes.
The comprehensive work gave rise to a series of eye-opening experiences for the employees at the two storage locations. The outcome of the work was a joint process that meets the demands from both warehouses and ensures that many local differences are conserved where it makes sense.
At the same time, the development of the process and the IT solution focused on enabling extensive use of mobile devices to minimize the employees' need for access to a computer to register and follow up on the returned goods.
Alongside the development of the supporting IT solution of the process, the organization initiated a major change management initiative, which ensured that the affected employees understand the meaning of the changes and received the necessary training in the use of both system and process.
The work done in the workshops uncovering and defining the optimal processes and the ensuing consensus on a common approach and process has created efficiency and ease in the return flow and both management and employees have access to a full overview of the flows. The workflows are much more transparent and simpler for the employees and an expanded use of mobile devices has made the work much more flexible and efficient and it provides a better opportunity to collect valuable data in the daily work.
In short, the company now has general guidelines for returned goods from wholesalers, stakeholder management and precise communication throughout the return flow process - to the great delight of both employees and wholesalers. The business value is easy to spot: the return processes are now more efficient, lead time is reduced, traceability is excellent, reporting provides value, and at the same time, cooperation with the wholesalers is improved and identical in the USA and EMEA.
Does your company also handle returned goods? And are your processes so efficient that the return flow creates value for both your business and your customers?
kaastrup|andersen has helped many companies rethink and optimize processes and systems, strengthening their business, making them become more efficient and providing management with a solid basis on which to make decisions. Read about some of our projects that focus on overview and alignment and on consolidation and digitization.
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