Executive Update

Reducing Damage, Unsaleables and Returns

An industry effort to address unsaleables called the Reverse Supply Chain Improvement Project, explains that for decades, trading partners have discussed the shared responsibility of damaged goods, expired products and discontinued items. In the last few years, many initiatives have been designed to help trading partners make progress towards resolving unsaleables issues.

During this session, both retailers and manufacturers involved in the project shared real-life examples of unsaleables best practices.

 Ted Lechner, reverse logistics manager of H-E-B, explained that their stores are sometimes accountable for products that become unsaleables while in their stores.

In an effort to reduce the chain’s total unsaleables, as well as an incentive for stores to do a better job of reducing damage, if they exceed their given allowance for unsaleables, the stores are instructed that “if a product is shipped to you damage-free and if you damage it within your four walls, don’t rotate it or it goes out of date, there’s some accountability,” said Lechner.

Lechner was joined on the panel by Robert Rippley, executive vice president, logistics, Associated Wholesalers, Inc.; Pete Bannochie, vice president, DRS Products Returns, LLC; Jim Schumacher, senior manager, supply chain continuous improvement, Pfizer Consumer Healthcare; and moderator Dan Raftery, president, Raftery Resources Network, Inc.

The Reverse Supply Chain Improvement Project released a “best practices” report in July 2011, and is expected to release a follow-up report in 2012.