Since its launch in 2008, the toolkit has been used by firms to audit their returns management activities and identify where opportunities exist to reduce costs and waste and improve customer service.
Halfords Case Study
As part of the development of the toolkit, we engaged with a number of companies in significant detail and Halfords, one of the companies involved in the project, has made significant improvements to their reverse logistics processes. Halfords’ business is made up of three key product categories: car maintenance, car enhancement and leisure. Returns were previously shipped back to distribution centres and then were ‘jobbed off’ at a cost to the company. Halfords now sell some of the safely saleable goods below a certain value as ‘manager’s specials’ in store, leading to a 40% reduction in the number of items flowing back through the supply chain. The provision of a technical helpline service has significantly reduced the returns by customers of some electronic goods and more complex products. This has improved customer service whilst at the same time reducing return costs. The success of Halfords WeFit service for customers, including set-up and demo for satellite navigation products, has also had a positive effect in reducing returns of many products.
A particularly good example of the use of quality costs centres around this treatment of satellite navigation systems. When they started to sell these products, the company found significant no-fault found returns (leading to an unacceptable level of failure costs) because the customers did not fully understand the product. As part of the changes introduced, Halfords incurred additional prevention costs in the forms of detailed instructions to staff (manuals) and increased expenditure in terms of time involved in taking customers through the installation process. Not only has this decreased the number of returns, but it has also become an attribute to the company in terms of customer service (WeFit). Returns avoidance is seen as an important key to reducing reverse logistics costs, increasing customer satisfaction and reducing the environmental impact of returns.
What they said…
“The reverse logistics project had a major influence on the introduction of new reverse logistics processes within Halfords. It helped to increase awareness of the issues and the large potential for improvement to both bottom line performance and customer service through the introduction of improved processes. The identification of new tools and the support provided by discussions at the workshops played a vital part in the implementation of change at Halfords”
Head of Quality & Cost Reduction, Halfords Plc.