Labels Let Companies Plan Their Returns Processes

Jan. 1, 2006
Smart labels give a healthcare retailer visibility into its reverse logistics process.

A great feeling body starts with comfortable and healthy feet. A great feeling for warehouse managers comes from supply-chain visibility, including a clear view of returns processes.

Benchmark Brands, Inc. (Norcross, Ga.), a $75 million, direct-toconsumer retailer of healthcare products, was having problems managing returns. The returns process was becoming a more complex part of the supply chain, and worked against the company's efforts to retain customer loyalty. The company built its business on customer service and superior merchandise. It manufactures proprietary lower body healthcare products and comfort shoes, and sells them along with select healthcare products through its Foot-Smart catalog and website (

Visibility Needed
Benchmark Brands' poor returns visibility made it difficult to anticipate in advance the quantity of merchandise being returned and when. By not having information about the returned packages in advance of the return receipt, when the packages arrived at the warehouse, processing merchandise was slow and inefficient. It was unable to plan for the appropriate number of people required. Understaffing delayed the processing of returned merchandise and returning it to inventory, while overstaffing was an unnecessary expense.

When customers wanted to return an item, they had to drive to their local U.S. Post Office (USPS), or another shipping provider to return items on their own. Because of the disparity in logistics providers, transit times varied and Benchmark Brands did not have visibility to the inbound pipeline. By allowing customers to package items and ship them by any means they chose, returns were being delivered to its fulfillment center in Memphis, Tenn., by various carriers in all sorts of containers, which led to material handling issues and space management problems in the warehouse.

Visibility Found
In July 2005, Benchmark Brands implemented Newgistics' (Austin, Tex.) Intelligent Returns Management Suite to streamline its reverse logistics process. Benchmark wanted to make the returns process as hassle-free as possible. With Newgistics SmartLabels, customers can send back their returns using a pre-paid, pre-addressed label on the package that they can drop off anywhere in the USPS system, including from their own homes.

The label contains information relevant to that specific order and customer, and can be tracked and viewed by the retailer at any stage. Through a partnership with the USPS, the information in Newgistics' SmartLabel bar code lets packages bypass several intermediary stages that are part of the typical delivery process and reduces average cycle time to three business days—saving both time and money.

"Prior to implementing Newgistics we had zero visibility into the reverse logistics process; it was a problem that needed to be fixed— especially with our newly implemented returns policy that allows customers to return within one year for a full refund," says Howard Fox, executive vice president of operations at Benchmark Brands.

"Through excellent front-end and back-end integration, Newgistics worked closely with the various staff at Benchmark making the implementation period quick and relatively seamless. Immediately we saw an increase in the process speed of inbound returns. We now have complete insight into the pipeline of merchandise coming back, enabling us to plan appropriately with staffing and workload. We're also very impressed with how returns are tendered back to us, very organized and properly boxed for neat stacking and staging during the processing," Fox explains.

Now Benchmark has visibility into what inbound merchandise returns are in the pipeline and when to expect their arrival. It has seen faster, consistent transit time (generally three to four days) between when the item enters the Newgistics system and its arrival at the fulfillment center. By having visibility into the returns process, Benchmark can process more returns each day by understanding the incoming volume of merchandise. The data can be sliced by region, weight, and zone, which also helps with reporting. Benchmark's accounting group is also able to validate and process invoices more quickly.

The bar code on Newgistics' SmartLabel contains information about the order and customer. The return shipment can be tracked and viewed by the retailer at any stage.

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