Reverse logistics has become an area that retailers and manufacturers cannot ignore. With customer return rates varying between 5 and 50%, and total UK retail returns valued at around £6 billion per annum, effective return management has emerged as a key strategic issue for many firms. At the same time, the integration of online and bricks and mortar retail channels is now firmly embedded in many sectors, providing customers with a seamless shopping experience, but presenting new challenges for managing product returns. Despite the fact that managing these returns incurs substantial costs through logistics, inventory and disposal, many companies appear to employ inadequate processes for dealing with these returns. Many others have missed opportunities to reduce return rates by failing to execute an effective omni-channel strategy. Over the last 15 years, the reverse logistics team, led by Professor John Cullen, has undertaken research to understand these processes and investigate ways of improving bottom line performance, customer service, and reduced transport movements.
Our research shows that improved management of returns can have a significant impact on bottom line performance. There can also be a significant impact on environmental concerns as well, since reverse logistics operations can involve a large amount of lorry movements and consequential CO2 emissions. Given this opportunity to both improve bottom line performance and have a positive impact on environmental performance, our research team has been identifying best practice in returns management and launched the first of the Reverse Logistics toolkit in 2008.
Given recent changes to the retail climate, we have now updated to take account of the emergence of omni-channel retailing and the implications for reverse logistics operations in retailing. Further workshops and engagement with practitioners took place in the last few years and the team launched the revised version of the toolkit in March 2018.
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