Part 1
Course reading
Reverse logistics is the flow of goods from the customer back to the company or supplier: customer returns, wrong deliveries, damaged goods, warranty repairs, reusable packaging and end-of-life recycling. A good returns process recovers value, protects customer trust and stops bad stock from mixing with good stock.
The steps are: return authorisation (RMA number with reason code), receipt at a dedicated returns area, inspection, disposition decision and financial settlement. Disposition options are: return to saleable stock, rework or repack, return to supplier, sell as B-grade, or scrap. In SAP a customer return order (type RE) is followed by a returns delivery and goods receipt, often into blocked or quality inspection stock (movement 651 or 653 depending on setup) until inspection is done.
Reason codes are critical. If 40 percent of returns are 'wrong item shipped', the root cause is picking accuracy, not the product. If returns are 'damaged in transit', review packaging and the carrier. Track return rate (returned units / shipped units), average days from receipt to disposition, recovery value percentage and top reason codes.
Example: 2,000 units shipped, 60 returned. Return rate = 60 / 2,000 = 3 percent. Of the 60, 36 are wrong items. Fixing picking accuracy could cut returns by more than half. Never put returned goods straight back on the pick face without inspection: a damaged or expired unit reaching another customer creates a second return.