Reverse Logistics Process in E-commerce Industry

KPMG in a recent study (Ecommerce Retail Logistics in India; 2018) estimated that return constitutes up to 20% of total transactions in ecommerce logistics with Cash on Delivery (COD) orders going up to 40%. With online shopping slowly gaining currency in Tier II & III cities and bulk of orders expected to being COD-based, return to origin is expected to go further up. In the United States, return forms around 10% of total transactions (US National Retail Federation; 2018). 

Clearly, lack of standardization, impulse buying and sub-standard products are the major reasons for a picture like this. For a seller though, return up to 40% is a nightmare, no less. Apart from the cost of logistics, expenses incurred in rebranding, refurbishing, resale or simply disposal of return goods may further escalate the total cost. Embedding the cost of shipping, including 40% of expected return, will make the product commercially unviable and competition would ensure that seller doesn’t resort to this. Meantime, the shipper will be left wobbling.

Reverse logistics – the process of transporting goods back from the customer to the business, including for replacement, is integral to all businesses. It has been there for years, though for businesses and logistics companies it has become sort of a headache with the rise in online retailing, cross-channel returns and return of bulky goods like ATM machines, V-sats, furniture, etc. Reverse logistics is costly and labour intensive. 

It means spending time and resources on a product that’s no longer an asset. It is also unpredictable and complicated and puts fulfillment centres and warehouses under tremendous pressure. Returned goods lying indefinitely with logistics companies for the lack of a clearly laid down procedural roadmap of delivery, is a common sight. Clearly, what is unproductive is burdensome and little effort is made to address this systemic malaise.

Reverse logistics is a reality and importance that both manufacturers and logistics companies must accord to reverse logistics should be lost on no one. Apart from the usual stuffs like strengthening products and packaging, employing novel consumer retention techniques, discouraging impulse buying, etc., manufacturers must also engage the logistics companies for developing a clear-cut framework of return logistics management. For one, make the process of return management easier for consumers. 

Once a consumer initiates for return, auto-ticketing should ensure immediate response and a hassle-free pickup. Two, long-haul return process including return delivery should, to the extent possible, be the exact opposite of the forward movement. Three, ‘Customer is the king’ and in cases of return, customer satisfaction is ensured with return delivery only. Primacy need to be accorded to consumer satisfaction for, a satisfied consumer is also a loyal consumer. Four, in case of online retail, adopting a fully-integrated ecommerce platform will reduce the hassles of return management to a great extent. 

This can be done by encouraging consumers to choose replacement in applicable situations. Five, determining, sorting and categorizing return products for further action like replacement, repair, resale, refurbish, recycle or scrap ward; in every probability, the salvage value once acted upon quickly could still be higher. And six, keep inventory from piling up in all the scenarios. Inventory stuck is a collateral damage.

Obviously, businesses resell, reuse and recycle returned products. In a study published earlier, Gartner Research indicated that nearly half of returned goods are resold at their full price. Furthermore, there is value in finding the best option for returned items like discount sale. Needless to say, effective reverse  logistics can keep down any storage and distribution costs. In practice, there are two models of reverse logistics is visible. Some businesses separate their forward and reverse logistics while others find value in combining them. The relative success of combined or dichotomized models however depends greatly on experience and volume of return goods. For both the cases though, time is of essence.

5 Reasons Why Businesses Hire Logistics Consultants in India

An effectively organized logistics system is the key for any business to keep pace with changing consumer demands, and to retain a competitive edge among competitors.  It helps reduce time and cost spent to move products from one point to another. For this reason, logistics is one of the most crucial factors when it comes to maintaining the quality of any supply chain. 

It requires a lot of special knowledge, skills, and professional management to establish a good logistics system. Logistics consultants in India play an important role by helping various businesses fine-tune their supply chain to improve efficiency, by providing faster delivery of the product.

A logistics consultant works closely with clients to evaluate their supply chain and identify areas where it can be improved. They are also able to recommend solutions to help businesses optimize their supply chain and work with them to implement those solutions.  They make use of advances in information technology, strategic planning, and process re-engineering to improve the performance of the supply chain.

 

So, here are 5 different ways in which a logistics company in India helps clients:

 

1. Right expertise

 

A consultant can provide the right expertise as they are well-versed in their chosen field and also has varied experiences and solutions available to solve your logistic problems. A consultant is up to date with the developments in their field of expertise, and so, they are always ready to guide clients with what they need to stay competitive.

 

2. Unbiased opinion

 

When a consultant is hired to identify the bottlenecks in your supply chain, they can provide an unbiased solution for the problems, as employees might be too close to a problem inside a business to identify it. A consultant provides an objective, fresh viewpoint without worrying about what people in the business might think about the results and how they were achieved.

 

3. Availability of additional resources

 

A logistics consultant is hired as and when they are needed rather than hiring full-time employees, and thereby, money is saved as you don’t have to pay any additional benefits to consultants. Hence, a consultant can supplement the staff and it makes good economic sense to hire them.

 

4. Catalyst for change

 

Change is inevitable if you want to grow. But bringing about changes in businesses is difficult without worrying about the corporate culture, employee morale, or other issues that get in the way when trying to introduce a change. A consultant can act as a catalyst for change as they can do things without prejudice.

 

5. Improve Customer Service

 

A logistics consultant helps improve customer service operations and develop cost-effective solutions to help you handle your supply chain, warehousing, material handling, and distribution. A consultant can lend new life to a business as they are good at coming up with ideas that work.

 

Safexpress, one of the leading logistics company in India, with more than 24 years of experience and knowledge of best practices, is the right choice if you need the best quality service and logistics assistance for your business. Safexpress offers specialized consulting services tailored to the needs of customers that are targeted to strengthen the end-to-end logistics performance of their supply chains. You receive reliable expert advice, not just from a single consultant, but from 3000+ highly experienced professionals.

 

In Conclusion

 

Logistics consultants in India helps optimize supply chains by providing guidance and milestones along the way. The greatest value addition from a consultant is their proven problem-solving ability when faced with challenges in the supply chain.

 

Consultancy in Post-Pandemic World

Even before the Covid-19 pandemic stuck, the world was witnessing a quiet churning. Sino-American trade war was brewing in the midst of other geo-political tensions in South and South East Asia. In the middle of all this, the Covid-19 pandemic stuck in China. 

A supply shock that started in China in January and the demand shock that followed as the global economy shut down as the pandemic spread to engulf increasingly other parts of the globe, businesses, of just about every nationality and hue, were exposed vulnerabilities in sourcing and production strategies.

China being the manufacturing hub of the world, it was bound to be. And businesses, of almost every nationality and hue already confronted with rising tide of nativism, will be forced to take into account a host of such factors once the pandemic subsides and markets open in normal course.

Indian businesses, especially MSMEs apart from these larger issues are confronted with the issue of being afloat. More than 25% of them have closed down since the Lockdown was imposed last year. Many of these companies, including logistics, are grappling with the issues of survival, keeping afloat, credit availability and shrinking orders. 

Mahesh Vyas, Director and Chief Executive, CMIE suggests, “MSMEs have suffered as they are unable to survive the severity of pandemic, the sudden and prolonged lockdown and the consequent shrinking of overall businesses. Large companies are not only better placed to ride out of storm but also gain by cannibalizing markets of the withering smaller companies.” Logistics & distribution players are no exceptions. In the days to come, we shall see ‘stake sale’, ‘acquisition’ and ‘take over’ all too often. Darwinism is in real.

This is where the services of a consultant become very important. When a logistics company may hit challenges which for one reason or the other, is simply beyond its ability to resolve with internal resources alone, and has to seek the services of specialists, consultants and consultancy services. 

A logistics consultancy is a specialised service that does a cost-benefit analysis of the operative model of a company, study its logistics operations, use data as a tool for comparative analysis, and by employing the best model of information technology at structural level, come out with an efficient solution. Apart from this, it studies the prevailing scenarios in the world as the one described above and suggest measures or models that could provide for the necessary wherewithal, like

•   Integrating decentralized & flexible sourcing units in the value chain of manufacturing     companies;
•   Become a dependable partner for manufacturers and traders;
•   Build an infrastructure in trucking and space that could sustain for medium to long-term;
•   Build warehouses in strategically important sourcing and industrial cities and connect     them for end-to- end logistics;
•   Invest in skilling and retention of manpower;
•   Inventory control measures and controlling spillover and
•  Adopting technologically flexible infrastructure.

Despite everything that could be happening in Indian logistics and supply chain and in the world, a logistics consultant would need to keep in mind that there would be pressure on logistics to be efficient. Highly competitive environment would ensure that there is no unpalatable cost escalation – consumers would keep looking for value for their money. Apart from this, no two sizes fits all. 

A logistics consultancy service would need to understand the premise or context of operation. For example, India is challenged by poor integration of distribution networks that could hinder end-to-end logistics, warehousing & distribution facilities. This is compounded by a lack of adequate awareness and appreciation for IT infrastructure and a counter-productive regulatory environment. 

Importantly, manufacturing, 3PL & distribution partners would be forced to innovate and move to decentralizing their facilities so that in exigencies, their other units are operational.

Source: https://www.reddit.com/user/safexpress1/comments/nknqny/consultancy_in_postpandemic_world/ 

Is There a Demand for Virtual Warehousing Services in India?

The constantly evolving product demand has made suppliers choose virtual warehousing to deliver orders to customers as soon as possible. Decentralization of the supply chain is the key to meeting increasing consumer demand. Virtual warehousing allows inventory to be physically housed anywhere such as a distribution center, a temporary facility, or the back room of a store, and then distributed on an as-needed basis. 

Virtual warehouses are a type of distribution and fulfillment center. Distribution of products stored in these virtual warehouses is done through 3PL services to fulfill orders faster and meet customer expectations.

 

With virtual warehousing, all your distribution centers or fulfillment centers are considered as a network and this network is then considered for fulfillment. So, when an order arrives, the network is consulted, irrespective of where the product is stored to identify the best possible way to fulfill the order based on the geographical location of the customer, as quickly as possible. 

 

A virtual warehouse is made more efficient with the use of a platform that provides visibility to inventory assets in real-time. A virtual warehouse can be used to serve omni-channels and create a more efficient supply chain network. This helps to increase profit margins while reducing business costs.

 

Advantages of using virtual warehousing services

The warehouse is an integral part of any retail supply chain and its retail operations. The Indian Warehousing Market is expected to be an estimated $12.2 billion in 2020, growing to $19.5 billion by 2025.

·         Cost-reduction

The location of a warehouse is becoming increasingly important to facilitate free cargo movement and to ensure time-bound operations. By outsourcing to 3PL services, the need to maintain a physical structure, security, maintenance, permits, and many other costs, are avoided.

·         Efficient Logistics Supply

The shipping time and cost associated with a traditional physical warehouse are in efficient and expensive. Virtual warehousing enables faster fulfillment of customer orders because distribution centers can be built closer to customers. These methods reduce costs and ensure faster delivery times that customers expect from retailers.

·         Avoid Dependency on a Single Distribution Center

With virtual warehousing built on an inherently distributed network of inventory, retailers can avoid having a single point of failure. Retailers can, therefore, increase the pool of inventory available to them without the costly process of investing in more warehouses and buying more stock.

·         Inventory Flexibility

Frequent changes in product demand often lead to insufficiencies in available inventory. A virtual warehouse provides flexibility to access multiple distribution centers for the same type of inventory. With a virtual warehouse, it becomes easier to cope with fluctuating customer demands because you don't have to stock more than what is needed.

·         Sustainability

Virtual warehousing ensures an optimized supply chain by not holding unnecessary stock that may go out of season quickly, thus reducing waste. This is beneficial for the environment and to promote sustainability. With visibility and accurate inventory by location provided through virtual warehousing, decisions can be made for effective forecasting of inventory to counter erratic and seasonal demands.

Safexpress, one of the largest and fastest logistics companies in India, with its existing 42 3PL locations, is well-equipped to cater to the need for fast and efficient delivery fulfillment for their customers. With its multi-state warehouse and robust IT systems, operational efficiency and inventory visibility are easily achievable to promote fast last-mile delivery and order fulfillment.

In Conclusion

The Indian government, with its supportive policies, such as the establishment of logistic parks and free trade warehouse zones, is expected to spur the market growth for virtual warehousing services in India.

Logistics companies in Mumbai need to modernize last-mile delivery

Fast and effective last-mile delivery is the most crucial part of supply chain management.  Last-mile delivery refers to transporting products from the warehouse to the customer’s delivery address. For a logistics company in India, the last-mile delivery is the most expensive and time-consuming part of the process that amounts to about 53% of the total cost of shipping.

Mumbai’s infrastructure is a constant last-mile challenge for most logistics companies operating in the city. With its traffic snarls, congested roads, narrow by-lanes and lack of coordination among various government agencies, logistics companies need to think out of the box for solutions. 

Mumbai suffers from serious traffic congestion with the average speed on major city roads being less than 15 km per hour. So, you can imagine the amount of fuel wasted on travelling within the city. With various infra projects in the pipeline, hopefully, we will see a solution to the city’s congestion problems soon.

Some of the key last-mile challenges faced are:

· Lack of proper infrastructure

· Shorter delivery windows

· Cost of last-mile deliveries

· Unpredictability in transit

· Lack of transparency

· Embracing new technology

· Coping with seasonal demands

· Route optimization

Implementation of technology solutions such as online tracking, using data to process and optimize the route for last-mile delivery in a real-time manner and crowd sourcing help to increase the efficiency of last-mile delivery helps to some extent. Using technology, services such as automated notifications to customers on their delivery status,  coordination with drivers on route updates helps to improve service deliverables, turn-around times and increase customer satisfaction. 

Last-mile technology helps logistic companies to factor in many variables like delivery time windows, traffic congestion, location of stops, vehicle load capacity and many other parameters to map out the most efficient delivery routes.

Apart from this, implementing intelligent concepts such as automated delivery vehicles and aerial drone delivery can have a great impact on the future of the last-mile logistics industry. Many big logistics players are investing in electric vehicle mobility. The conventional modes of transport increase carbon footprint whereas e-vehicles are not only environment-friendly but also economical. 

Both the central and state governments are also offering huge discounts and lucrative offers to promote electric mobility. The Indian government has set a target of moving 50% of the vehicles plying on the roads to an EV-led mobility system by 2023 and switching to complete EV-led mobility by 2025.

Safexpress, a complete logistics solutions provider, offers door-to-door delivery service through their Safextension service, which can deliver to every possible place in India. Their services such as Campus2Home, Easy2Move, Sainik Express and SafeReturns cater to various types of customers, be it college students, people moving to new locations, soldiers or people participating in exhibitions and expos.

Benefits of modernizing the last-mile delivery

· Improves transparency

· Increase in first attempt delivery

· Automation of delivery operations 

· Delivery management tools to optimize the last-mile delivery

· Optimizes delivery routes

· Flexible deliveries

· Increases profitability

· Provides insightful data, reporting and analytics

· Improved performance and happy customers 

· Real-time supply chain visibility

In Conclusion

Mumbai is undergoing a major infrastructure transformation, giving a major impetus to connectivity. Logistics companies in Mumbai need to embrace technology to keep up the pace with the increasing demand of their customers. With the adoption of technology, contact less delivery and cashless payments has helped to make deliveries safe. Being innovative and using artificial intelligence to gather information will help logistic companies to stay ahead of their competitors.

Source:- https://www.reddit.com/user/safexpress1/comments/mn9tf3/logistics_companies_in_mumbai_need_to_modernize/