Due to increased consumer demands and preferences, ecommerce brands need more ways to stand out from the other brown boxes, which often comes down to the finer details in product delivery and order fulfillment. To help merchants meet these demands many fulfillment providers are offering more customizable services, known as value-added services (or VAS).
Value-added services come in all shapes and sizes, they can include projects such as specialized distribution, customized messaging, virtual bundling, or kitting projects. Rework and refurbishment are two VAS that only some 3PLs offer, but not all. Both often require specialty personnel to execute, additional space, standardized quality assurance, and sometimes specialty equipment as well. For brands interested in the re-commerce industry, selling previously owned products, it’s important to find a 3PL who has a very efficient returns management system.
Read on for the benefits of working with a 3PL who offers rework, refurbishment, and other related value-added services.
What is Rework?
When items get returned, they need to be sorted and inspected to either be updated for resale or disposed. For items that can eventually be restocked and resold, there are many steps needed to get them ready (there may be more or fewer steps depending on the type of product and why they were returned).
Rework is the process of inspecting and repackaging returned merchandise to go back into “good stock” for resale. This is sometimes a long and arduous process, requiring a thorough inspection, updating any flaws or damage, then completely repackaging. Items that are returned may not get back into the inventory cycle for days or weeks.
What is Refurbishment?
Sometimes used interchangeably, refurbishment is the process of adjusting a returned product for resale. Light fixes and mending are done, or in the case of consumer electronics, updates to ensure the repaired product is ready for a new owner.
Refurbishment is used primarily for returns, whereas a rework procedure can apply to outbound inventory as well. Here are two examples:
- Outbound inventory: if your product has firmware or software that gets upgraded regularly, you may need to ask your 3PL to test or perform these updates before products get boxed and shipped. Depending on your 3PL this project might still be considered refurbishment.
- Returns: if you sell refurbished products (whether they are used or returned in their original packaging), you need a process to ensure that returned merchandise becomes resell-able inventory in order to go to a new customer. With items like furniture this means cleaning the items and making sure there are no signs of wear or damage. For consumer electronics, this means wiping the device of the original customer’s information and reinstalling any software or programming—this is also called re-flashing.
Supply Chain Efficiency and Quality Assurance
There are a few aspects of rework and refurbishment that a fulfillment provider needs first in order to execute these VAS adequately.
One is supply chain efficiency. Because many rework projects are applied to returned merchandise, having great reverse logistics operations is imperative. Many people think of supply chain as just the “forward” logistics of getting products to customers, but smooth returns that equally important.
In order for rework and refurbishment to get successful, a 3PL needs good order tracking, inventory management accuracy to get products back into good stock, and communication with customers to alert them that their return has been processed.
Another aspect is quality assurance. Sending out refurbished goods comes with a big responsibility. You need to ensure no customer information is still on the device, and that refurbished items will hold up to the product requirements that new ones do.
There are a few operational standards that 3PLs can follow, such as the ISO 9001. The ISO 9001 is a quality assurance title, conducted by an international board, that denotes certain operational requirements and quality standards are met in that facility and by that team. There are other certifications such as ISO 900 and IATF.
Firmware testing and re-flashing is a great example of where quality assurance is required.
If you sell refurbished consumer electronics, there is a high likelihood of personal information remaining on a device. Say it’s a high-value smart camera. If photos remain on the camera from a previous owner, that new user won’t be very happy, and the camera company has a big liability on their hands.
A 3PL needs to be set up with the right equipment to adequately perform an IPC (initial production check) and re-flash products. There may be a simple device set up to plug into each product that will flash a green or red sign to tell the warehouse staff if it’s good or bad. More elaborate systems can be set up with the understanding that the more time they take, the slower they will be restocked and updated for resale.
Rework vs. Repair
Some merchants may think that rework can revive any broken or mishandled returns of theirs. This isn’t totally accurate. There is a big difference between rework and repair, but the two often get conflated.
- Rework is the process of aligning a product to its correct specifications. For example, fixing a flat tire on a bike. The rework process would be to pump up the tire to its optimal pressure.
- Repair is the process of servicing a product to make it acceptable for its intended use. In the same example of a bike tire, if it’s flat and it’s found that there is a puncture in the tire. The repair process would be to patch the tire so that it can inflate properly.
Many 3PL will do rework because it doesn’t mean fundamentally changing the product, only getting it back to its optimal state for resale. Repair requires specialty tools, and personnel with the expertise to reconstruct the product or components.
If you are seeking rework and refurbishment support for your ecommerce brand, this is one of many value-added services that DCL Logistics offers our customers. We work with companies with products in many different verticals and we provide customizable solutions to meet each of their needs.
Tags: Articles About Value Added Services
