Returns are costly – in terms of money, capacity, and nerves. That is why online retailers are constantly striving to keep the returns rate as low as possible. There are plenty of suggestions as to how this can be done: Greater personalization in the shop, more accurate product descriptions using text and images, transparent shipping costs, fast delivery, and appealing packaging are just some of them. Yet even these ideas won’t prevent any company from having to continue to process returns in future.
What is needed are ways of keeping the workload and expense associated with returns management as low as possible. Since the volume of returns is very high for large online retailers in particular, despite all of the preventive measures, extensive automation of the process is the ideal way of reducing the cost of managing returns, although it will still be some considerable time before such an approach can be fully implemented. Here we would like to show you some options that are already heading in this direction.
Requirements for automated processing of returns in the warehouse
Automating warehouse, order picking, and shipping processes helps to cut staff costs and processing times. Yet a higher level of automation also has its problems:
- Less flexibility
- High investment costs
- A lack of opportunity for integration with existing processes or systems
- Long realization times
Due to the diverse nature of returned items, automated systems should also only be standardized to a limited extent in order to be able to manage the wide range of goods without having to make costly modifications. In contrast to conventional storage and returns strategies, which are often associated with a very high level of manual work, automated processing requires much higher investment in technology and software. Special demands are made on such systems to ensure that they pay for themselves:
- Lower staff costs
- High picking performance and precision
- Returns must be easy to identify and put back into storage
- Highly dense storage to reduce the amount of space required
- Scalable processes
If the aforementioned requirements apply to many investment decisions in the area of intralogistics, an automated returns process calls for a range of additional components:
- Efficient software for optimized returns management
- Good labelling of the goods, including a returns label that can be read by a machine
- All information should be scannable
- Control units equipped with scanning and image recognition systems to identify the goods
- Control units linked to the ERP system for reversing the transaction of returns as part of customer and inventory management (incl. preparing the goods for resale)
Besides manual handling, automated systems in the incoming goods department are useful for transporting the returns for further processing. With its Storpal system, Manuline, a French manufacturer of handling and transport systems, provides the option to automatically load and unload pallets and other bins weighing up to 1,500 kg. This involves three or four trolleys being towed by a tractor – directly from the truck, for example – and automatically transferred to the desired location in the warehouse. A semi-automatic or a driverless fully automatic version is available for the system.
Opening returned parcels without damaging the goods represents a major time and cost factor. Many manufacturers and online retailers ship goods in standardized boxes that are sealed by adhesive tape. As such, the strip of tape often only has to be cut to open these boxes. The manufacturer ALS Automatic Logistic Solutions has therefore developed the automatic parcel opener known as TOM (Tape Only Method) for incoming goods and returns. When boxes of the same height arrive at the warehouse, they are transported along a conveyor belt beneath a multi-blade head. This ensures that the parcel tape is precisely cut – even if it has been stuck at an angle – and the parcel is opened so that the goods inside can be removed. If parcels of different sizes arrive, the opener can be optionally equipped with a variable height detection system so that these parcels can also be opened. TOM can open more than 7,000 parcels per shift.
The same company also produces the Box Opening System (BOS), another automatic parcel opener that is capable of opening up to 600 parcels/boxes per hour (or 14,000 items per day) without any presorting. According to the manufacturer, savings of around 80 percent can be made by using this system instead of manually processing the boxes. The goods are then forwarded via existing conveyor technology to the next stage in the returns process – item unpacking and inspection.
Automated inspection of goods
At this stage, a decision is made as to whether the item is saleable without reservation and thus ready to be put back into storage (possibly after being repackaged, although this process is often also automatic nowadays). This stage remains the biggest barrier to a fully automated process, because the mostly very heterogeneous parts have to be reliably removed from the parcels and inspected. Besides the highly complex gripping process, the technical side of which can only be implemented with difficulty, the main problem lies in checking the goods for even the smallest defects that impair their value. Due to criteria that are often judged subjectively, this is an inherently difficult task for robots. Furthermore, if the goods show signs of use, they have to be cleaned. Parts that are heavily soiled and/or damaged must also be sorted out.
Even though there are now many different robots with sometimes very highly developed recognition Software, these systems are generally not yet ready to perform a sufficient quality assessment of the incoming returns. Yet given the rapid speed at which such technology is developing, it can be assumed in future that robots will be able to reliably perform tasks such as unpacking and independently inspecting the returned items.
Putting the goods back and preparing them for shipping again
Compared to unpacking and inspection, automation in the picking process is already more advanced. For example, with the help of Kado, a development of the Munich-based start-up Magazino, returned items at the picking station can be automatically removed from the conveyor belt and transferred to an automated storage system. Solutions such as dynamic storage lifts, paternoster systems, and carousel storage systems would be suitable here, depending on the type and extent of the product range.
The challenge here lies in reintegrating the saleable returns into the inventory. However, companies can overcome this hurdle relatively easily with efficient warehouse management software and the right units to go with it.
Due to the condition and nature of returned clothing, it is often considerably more difficult to store away than, for example, compact items with standard dimensions and a solid structure. The MonaLisa pouch Sorter manufactured by Dematic can help here. It is an automated hanging system for sorting and buffering hung and folded goods, slim items, or boxes. With the aid of this system, both returns and ordered goods from the warehouse are placed individually into the pouches of a sorter. These pouches are then fed into the hanging system where they rotate until the item has been requested again. This kind of buffering means that only a small proportion of returned goods must be sorted back into the warehouse. The MonaLisa is both scalable and expandable in any number of ways thanks to its modular design. Furthermore, the pouch sorter makes it easier to pick items and prepare them for shipping. Once the orders have been picked, they are gathered together and sent to the packing stations where they are packaged ready for shipping.
In conjunction with a dynamic retrieval system for smaller and/or manageably sized items, this solution is ideal for the automated storage and order picking process that ends with the goods being reshipped to the customer. This is another process in which humans must intervene at various points, but maybe soon the system will operate completely autonomously, unpacking and inspecting returned goods around the clock and preparing them for resale.
It is clear that considerable progress is being made in the area of automation. If robot technology can learn to reliably master the unpacking and inspection of returned goods, perhaps one day in the near future there will no longer be any humans working in the returns department.