Secrets of Return Allowances

by Paul Rupnow

Despite good intentions, return allowances, if not done correctly, may not be a good solution to reduce Reverse Logistics costs. Return Allowances started out as a quick and easy way for a manufacturer to give an allowance to the retailer to manage its returned items, thereby reducing the reverse logistics costs of processing, logistics and transportation for both parties. The intention of a Return Allowances was to provide a quick and easy way to negotiate a win for everyone.

However, if not thought through carefully, return allowances can have negative results for both the manufacturer and the retailer. "Very often they are not saving anyone money", explained Tony Sciarrotta, Director of Returns Management at Philips.

To help you better understand return allowances, Sciarrotta, John Slothower, Manager of Innovation and Services at Best Buy and Curtis Greve, President of Retail Services at Genco Supply Chain Solutions have shared some of their knowledge, insights and secrets to achieving better return allowances.

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Micro Product Distributors, Totall Metal Recycling and Ryder Supply Chain Solutions recently joined or renewed their Gold Level RLA Membership.

ServoTerra, Inflatable Packaging, Inc., Round2 Technologies, Onelife Digital, Rehrig Penn Logistics, Choice Logistics each recently joined or renewed their Silver Level RLA Membership.

RLA Members can display the RLA membership logo on their website. Membership provides passes to RLA events and access to RL Quote and conference presentations. Go online for a complete list of membership benefits.

Standards for Reverse Logistics: A new RLA Committee

by Ken Jacobsen

At the beginning of 2007, the Reverse Logistics Association organized a committee on Standards. We became aware of certain concerns related to SEC reporting requirements that could have a serious impact on the budget reporting, and therefore the practice of reverse logistics. Most specifically, there has been a perennial issue related to warranty reserves--what is included or not included. There is no standardized definition of this function, and yet companies are required to track and report this nebulous figure.

The problem is complicated because the underlying components that are reported as part of the warranty reserve also lack a standardized definition. It would be difficult to define a term with undefined terms. Thus the ball of string unravels. It was decided to tackle the issue head on.

The first step is to develop a lexicon of terms used in the industry. The second is to chart how these roll up into a chart of accounts. The third step is to lobby for their adoption by the Federal Accounting Standards Board. More Info

A Free Service to OEMs, ODMs and Retailers

RL Quote provides OEMs, ODMs and Retailers a way to connect with 3PSPs. With RL Quote a Manufacturer or Retailer can send out RFIs anonymously to our worldwide database of suppliers, screen through the 3PSP responses and narrow down the prospects.

The Post RFI Button makes it easier than ever to post an RFI. One click takes you right to the data entry screen -- complete the form, submit and it's posted. It's as simple as 1-2-3.

RL Quote is available for all manufacturers and retail companies at no cost. 3PSPs that are members of RLA can respond to RFIs.

RFIs will be posted in the coming weeks, be sure to check back regularly. RL Quote provides OEMs, ODMs and Retailers a way to connect with 3PSPs. Get details at RL Quote.

Art Teshima recently joined DEX as Regional Sales Director, Supply Chain Solutions. He has held a variety of executive leadership positions in the technology, consulting and reverse logistics industries, including more than five years each with IBM and Deloitte. Art comes to DEX from Bell Industries, where he was Vice President, Business Development. He has been an active member of the Reverse Logistics Association for more than four years and currently serves on the RLA Wireless Advisory Committee.

Aberdeen Group, a Harte-Hanks Company, recently announced the appointment of William K. Pollock as Vice President--Principal Analyst and Group Leader for its Strategic Service Management research practice.

Pollock, who has more than 30 years of experience as a market research and strategic planning consultant to clients in all major segments of the global service industry, will focus on providing value to Aberdeen's customers through the development and management of relevant, topical, fact-based research and analysis. His Group's research offerings will focus on all key aspects impacting the service sector, including Integrated Service Strategy, Mobile Field Service, Field Scheduling/Route Optimization, Service Parts Management, Contract/Warranty Management, Intelligent Asset Diagnostics, Reverse Logistics, Contact/Call Centers, and more.

Compugen Finance Inc. (CFI), a wholly owned subsidiary of Compugen, Inc., one of the largest Canadian-owned IT solution providers and PC systems integrators, is pleased to announce the addition of Gord Manary to the firm in the new position of Manager of Asset Disposition.

Manary will be responsible for further developing CFI's ReCycleIT Asset Disposition Service offering and helping Compugen customers across Canada dispose of end-of-life electronic equipment -- commonly known as "e-waste."

MGM Grand Hotel
February 3-5, 2009

Over 100 Exhibitors -- More than 1,500 RL Professionals Representing over 700 Companies Attending!

Make plans now to join us for the 6th Annual Reverse Logistics Conference and Expo on February 3-5, 2009 in Las Vegas, Nevada.

Stay at the MGM Grand Hotel and Casino and get the group rate of $119 per night! Book your room now! Call +1 702-891-1111 and mention Group code RVL003.

Arrive early to have some fun before the conference starts. Super Bowl Sunday in Las Vegas -- no other city generates as much excitement around this event and no place does it better than Studio 54 at the MGM Grand. Entertain your clients at the RLA Football Party. For those who like one-on-one time with their clients, join us for the RLA Charitable Golf Tournament on Monday to benefit Kids on the Move.

The RLA conference kicks off on Tuesday with RLA Workshops and the RLA Industry Focus Group meetings. Wednesday will start with an industry overview and forecast followed by the keynote address--Kevin Winneroski is Vice President of Secondary Markets for Best Buy Company, Inc. Kevin is responsible for establishing the vision and goals for the company's end of life, closeout, and returned / refurbished products. You won't want to miss "Reverse Logistics: It's Not a Challenge, It's an Opportunity!"

Afternoon sessions include presentations by OEMs, retailers, academics and service providers including Dell, Canadian Tire, Siras, HP, WalMart, DEX and many more. Panel discussions will focus on cutting edge reverse logistics practices. The day concludes with an evening reception.

Thursday offers more of the same--Thursday's keynote by Bill Pollock of Aberdeen presents an analyst's report on the Reverse Logistics economy. Followed by a schedule jam-packed with sessions and panel discussions, you won't want to miss.

Be sure to visit the Exhibition Hall both days where 3PSPs will be showcasing their RL services and solutions.

If you are a Reverse Logistics professional, don't miss this event! For more information and complete details, visit www.RLAShows.com

Reducing your travel expenditures for the upcoming RLA Conference & Expo in Las Vegas might end up costing you more. Most OEM and Retailers are outsourcing at an accelerated rate and they are looking for RL solutions from 3PSPs to create best practices and a stronger bottom line than ever before.

That is why Eric Hemming, Director of Customer Services (NAM) for Sony Ericsson Mobile Communications says, "Our team is able to accomplish more in 2 to 3 days during the RLA event then at any other point throughout the year. Consolidating quarterly business reviews and other business sessions around the RLA event has proven to be a win-win solution for ourselves, our vendors, and our customers. Bottom line -- it's allowed us all to reduce travel expenses through prudent planning."

OEMs and Retailers are not letting budget restraints affect their ability to stay close to their vendors. Major retailers and OEMs like Best Buy, Philips, Cisco and Wal-Mart will conduct QBRs in order to reduce their travel budget. Not only is RLA encouraging companies to hold their QBRs at the conference as in the past, but to pull in their upcoming QBRs for the next 2-3 quarters. We're expecting over 700 companies, with more OEMs and Retailers than ever before.

Las Vegas is the most inexpensive meeting destination in the world. So save your travel budget and come to the RLA Conference & Expo. RLA will set up private meeting rooms and schedule your QBRs for OEMs and retailers.

Salt Lake City - December 11, 2008

During the second week in December, senior level reverse logistics thought leaders from Iomega, HP, Philips and DEX, just to name a few, gathered in Salt Lake City to benchmark and discuss the most pressing RL issues.

"No matter how little or how long you are involved in reverse logistics, you always gain valuable ideas and perspectives in this smaller meeting venue," said Tony Sciarrotta of Philips. "I appreciate the opportunity to have more direct communications with my colleagues."

During the thought provoking and interactive seminar presentations and panel discussion, attendees discussed the role of OEMs, retailers and 3PSPs on reverse logistics strategies, successful outsourcing strategies and the hidden costs of reverse logistics.

At the end of a constructive day, attendees were given a rare glimpse into one of the most efficient distribution centers in the world--The Church of Jesus Christ of Latter Day Saints Distribution Services.

The tour hosted by Mark Westover of Hoj Engineering & Sales Company focused on the system jointly designed and installed by Hoj Engineering* which includes:

• 4500 ft of conveyor
• Daifuku ASRS systems for 3 types of high density storage
  • 14,800 pallet storage system consisting of 9 cranes with 9 tiers per vertical position
• automated labeling systems to manifest orders

This system allows the LDS Distribution center to:

• store 25,000+ active SKUs including 750K+ microfilms
• process 8-10K pcs/avg day and 15-30K pcs/high volume season
• Recycle 200-220 tons of waste materials annually

For more information on the LDS system, visit Hoj Engineering.

RLA Seminars will continue to provide attendees across the globe the chance to engage in high quality discussions with their reverse logistics colleagues. For the complete schedule and more information, please visit, www.rlashows.com.

_{*with the exception of the ASRS equipment}