Glove Doesn't Fit? Return It.

Black Diamond Equipment, headquartered in Salt Lake City, Utah, is a worldwide supplier of outdoor recreational equipment. Occasionally, some of the products the company manufacturers are returned. To make sure the customers who bought those products stick with the company, Black Diamond gives them an easy way to return merchandise — often for full credit.

Black Diamond has satellite offices in Asia and Europe, and operates manufacturing, warehousing and distribution centers in Asia and North America to serve online, retail and wholesale customers. Its wholesalers also want a friendly returns policy, and Black Diamond does everything it can to respond.

“One of our corporate mandates is to be easy to do business with so we work closely with customers in our returns process,” says Alicia Ingersoll, logistics manager for Black Diamond. “We have sufficient flexibility in our supply chains and planning processes to be able to occasionally help-out our dealer base by taking back inventory — and then reallocating to other global markets, in case of localized overstock situations.”

On the consumer side, Black Diamond is trying to build its online markets to stay competitive. That means providing automatic return labels, whether with the shipment or e-mail generated. It is working with Motorola (www.motorola.com) and MSA Systems (www.msasys.com) to make best use of the former's “Enterprise Mobility Solution.” This solution uses a wireless LAN and handheld mobile computers to support MSA Systems' Accellos warehouse management system (WMS) and the Avalanche device management system.

Black Diamond has always handled returns processing through its ERP system, which meant returns came to its headquarters facility for warranty purposes before going to its DC for restock. In Ingersoll's words, returns were “all over the place.” With their new fulfillment system, returns are filtered through the DC's new WMS and the information about those returns is synchronized with Black Diamond's ERP system.

“Our company is growing very quickly right now and our direct-to-consumer business is expanding and that's a totally different entity in reverse logistics,” Ingersoll says. “We have to handle [all return streams] out of one facility and figure out how to scale that in order to meet the new demands of the business.”

Once a clerk scans returned items into the system, Black Diamond's DC gains visibility of what's coming in, when to expect it and what to expect. If managers see spikes in returns they can gauge labor appropriately. When returns were processed through the company's ERP system, it lacked that visibility. Black Diamond is working on improving that visibility even further by establishing bar coded links to the returns labels so returns can be tracked throughout its supply chain.

The system also helps Black Diamond determine the appropriate disposition of returns. Ninety percent of what is returned goes back into stock. If it's a quality issue, the company will usually seek to resolve the root cause of the problem and rework product as needed. However, there may be occasions where returned product cannot be reworked and the company seeks alternative methods for disposition.

“For example, if a returned glove is discontinued or not quite up to quality specs, we'll often find a local Salt Lake City donation channel and send them out to charity,” Ingersoll explains. “The system gives us visibility into the financial impact to determine what direction we want to take for disposition.”

The system also has the ability to assist in bringing back product from the market in the event that this sort of mass-return is required.

“Having visibility into what is shipped to specific customers allows us to contact those customers and request that product be shipped back” Ingersoll concludes. “Previously we didn't have visibility into exactly where the product went or how much shipped to specific places. Now we can pinpoint down to specific production orders, purchase orders or lots, what was affected and only request back what we need to.”

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