Reverse Logistics: Uncovering the Value in the New Age of Omni-Channel Commerce

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2 Reverse Logistics: Uncovering the Value in the New Age of Omni-Channel Commerce

3 Reverse Logistics: Uncovering the Value in the New Age of Omni-Channel Commerce Panelists: Charles Johnston : Director of Repair and Returns, The Home Depot Norman Haberl : Vice President Operations, Peapod Al Nin: Director Enterprise Solutions for Supply Chain Retail & Consumer Goods, Cognizant Business Consulting, Cognizant Facilitator: Stephanie Wiles: Assistant Director, Global Supply Chain, Reverse Logistics, Retail & Consumer Goods, Cognizant Business Consulting

4 Developing improved Reverse Logistics capabilities can have a significant financial benefit, impacting both the bottom line and the top line for Companies.

5 Developing improved Reverse Logistics capabilities can have a significant financial benefit, impacting both the bottom line and the top line for Companies. A survey conducted by the National Retail Federation revealed that, in 2015, retail returns are expected to be higher than in previous years, with a total estimate of $260.5 billion for that single segment. Across all Industry segments, it was found that product returns cost businesses more than $100 billion a year and caused an average profit loss of 3.8% to 9%.

6 Developing improved Reverse Logistics capabilities can have a significant financial benefit, impacting both the bottom line and the top line for Companies. A survey conducted by the National Retail Federation revealed that, in 2015, retail returns are expected to be higher than in previous years, with a total estimate of $260.5 billion for that single segment. Across all Industry segments, it was found that product returns cost businesses more than $100 billion a year and caused an average profit loss of 3.8% to 9%. According to a study conducted by the Aberdeen Group, Companies with best-in-class Reverse Logistics capabilities have, on average, a 12-percent advantage in Customer Satisfaction. for Consumers when they do return a product, the ease of the return process and how they are treated has a huge impact on repeat sales. What other investment can potentially improve Customer Satisfaction by 12 percent and improve profits by up to five percent of total sales?

7 Growth in Returns for Retailers and CG Companies UPS expects a 15 % increase in holidaypurchase returns, while FedEx projects a 28 % bump relative to its annual volume. R E T U R N S ASOS (UK based online-only fashion retailer) reports close to 30 % returns. Source: Reuters 59% of multi-channel retailers supported return to store vs. 52% last year Increase in online buying leading to increase in returns 41 % of consumers said they are more likely to buy an item online if the e-tailer offers free returns 7

8 The Challenge most companies face : Reverse Logistics is one of the most often overlooked elements of the complete operations cycle Let s face facts: Despite a significant impact on the bottom line, most retailers and manufacturers simply don t have policies, processes or infrastructure in place to manage returns well. (Dr. Dale Rogers, co-director Center for Supply Chain Management at Rutgers University).

9 The Challenge most companies face : Reverse Logistics is one of the most often overlooked elements of the complete operations cycle Let s face facts: Despite a significant impact on the bottom line, most retailers and manufacturers simply don t have policies, processes or infrastructure in place to manage returns well. (Dr. Dale Rogers, co-director Center for Supply Chain Management at Rutgers University). Reverse logistics typically crosses departmental boundaries and requires support from several functional areas, but many companies fail to dedicate sufficient internal resources to it. Usually, no single executive is empowered to manage all the processes associated with reverse logistics operations, so they fly under the radar and get little or no support until something goes wrong or the financials take a hit. For many companies Reverse Logistics remains an area of untapped opportunity

10 Executive level awareness and support Question # 1 for the Panelists: With the continued growth of Returns, due to Omni-Channel sales, what is the perspective that your company Executive team has on the impact to Reverse Logistics? What has been your companies response to this level of priority or urgency to equipping your operations in response to the growth?

11 Executive level awareness and support Question # 2 for the Panelists: What are the primary elements which you need to analyze when creating an effective Reverse Logistics Strategy?

12 Strategies being discussed Question # 3 for the Panelists: Responding to the increasing Costs and Opportunities relative to Reverse logistics, what Strategies is your company pursuing? Which ones are currently being considered now?

13 Challenges Question # 4 for the Panelists: As you consider the scope and multi-departmental involvement necessary in implementing any improvements to the Reverse Logistics operations, what types of challenges are you identifying? How is your organization preparing to manage these challenges?

14 Solutions Implemented Question # 5 for the Panelists: How are your companies Supply Chain Policies being affected by increasing costs in Reverse logistics? What compliance issues are arising? What variables are you now required to capture do deliver new Analytics and Reporting?

15 Recommendations : Lessons Learned so far Question # 6 for the Panelists: For the benefit of organizations, managers, technologists and Logistics leaders with us today: can you please share three most valuable Lessons your organization has learned during your pursuit of Improvements in the area of Reverse Logistics?

16 THANK YOU Thank you Panelists and Audience participants.

17 Our Vision for Returns Management Various influencing factors provide an opportunity for us to introduce a best in class Returns Management Solution which will be based on major driving factors of Maximizing the Value Recovery from Returns while Minimizing the Returns itself. VALUE RECOVERY THROUGH: Refurbish Stock transfers Order fulfillment SCALABILITY: Handle large data & transaction volumes FLEXIBILITY: Easily accommodate future capabilities, language and Compliance Rules and Regulations PRODUCTIVITY: Automating manual processes to handle increased volumes MINIMIZE PRODUCT RETURNS THROUGH: Feedback to manufacturers Channel decisions (eg: redirecting to outlets) 17