Second chance for returns

The associated requirements are illustrated by the returns processing for a large retail company with 3,000 outlets in Germany. The tasks of pfenning logistics include the return of non-food articles of unsold goods from the food retail trade. The logistics services range from collection, sorting by item and set formation to repacking for secondary marketing. "We give retail products a second life," says pfenning logistics Managing Director Matthias Schadler.

360-degree logistics

After bundling via a retail warehouse, the returns are delivered to pfenning logistics' returns handling center in Heddesheim. Depending on the sales volume, up to a maximum of 150,000 sales units are handled there every day. Based on individually defined customer criteria, the incoming returns are checked, sorted and packed into new logistics units. Products that have passed the quality check without defects are integrated into the customer's current stock for remarketing. This also includes returns logistics for particularly sensitive goods. The network of 60 pfenning locations in Germany and a logistics center with a storage area of 128,000 square meters and 11 hall segments provide the structures for storing and processing products of different classes, from chemical to (non-)food and pharmaceutical products.

Transparency down to item level

Returns arrive at the pfenning logistics returns handling center in Heddesheim. There, the returns are checked, sorted and packed into new logistics units. Photo: pfenning logistics

An automated, software-based process makes returns plannable for the customer and ensures transparency down to item level. "In order to meet the requirements of 360-degree logistics, we have digitalized the management and communication processes along the supply chain as far as possible," says Schadler. The IT solution therefore acts as a control tower that can be used to track and control the processes from the moment of disposal through to return to the market. At the same time, the IT system forms the basis for credit notes and correct accounting. Thanks to the coordinated process organization, returns are given a second sales opportunity; they are fed back into the value-added cycle. "Whether a company makes a profit in highly competitive retail segments is often also a question of returns logistics. That's why we always look at the supply chain in contract logistics from its end," explains Schadler.

More security in the outlets

To enable customers to reduce their returns rate, pfenning logistics measures returns quantitatively and develops, applies and evaluates strategies to avoid them. Key questions help customers to optimize processes in advance: Are the goods packed professionally enough to protect them from damage? Has a quality check been carried out before delivery? Is the product description sufficient or is there an offer of assistance - for example, in the case of products that require explanation?