When Target Stores decided in 1991 to take a serious look at the back end of its supply-chain strategy -merchandise returns - their logistics team saw several key opportunities to improve efficiencies not only at the store operations level, but for its vendors and customers as well.
For example, adoption of a central return point would move messy, complicated processes from the back rooms of the individual retail stores, so store managers could more fully focus on filling their selling space with the right merchandise at the right time. The opportunity for theft and additional product damage while returned merchandise awaited disposition would be dramatically reduced. And vendors would be dealing with large, single shipments of merchandise returns from a central facility as opposed to a constant bombardment of smaller, sporadic shipments from each of the 700-plus Target retail stores.
The central return concept made sense as a general strategy, but the specifics involved in designing and executing a complex reverse-logistics program constituted uncharted waters for the Target team. The company turned its attention to a third-party operator concept and proceeded to evaluate skills and capabilities available on the open market.
From a select group of third-party logistics providers considered by the company, GENCO Distribution Systems emerged as offering the best solution. Pittsburgh-based GENCO was then developing a solid track record managing returns programs for the grocery industry.
Now, more than five years into the program, the Target-GENCO partnership revolves around a GENCO-operated Central Return Center (CRC) that uses a license-plate concept and sophisticated software to direct, track and trace all merchandise returns, from the minute customers arrive at the in-store service desk to the final disposition of each and every item.
|"When the product comes into the return center, we scan each license plate as the item comes off the pallet, SKU by SKU." |
- Curtis Greve
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