Depending on how quickly the economy recovers, many companies are still at risk of potentially facing more labor reductions in order to maintain a viable business. This practice, while always difficult to implement, is generally accepted as a necessary consequence of a downsizing strategy.
Still, for some companies with a healthy bottom line, the subject of potential headcount reductions from either process improvement or automation presents many similarly difficult labor related challenges. In these companies it may actually be easier for them to shutdown an entire operation, putting everyone out of a job, than it is to admit that they are implementing this new automation and frankly will need substantially fewer workers.
Obviously, this makes getting an ROI from new investments in automation a lot more difficult.
That got me thinking about a client who wanted to automate their returns center. Their average rate for returns was about 35%, which could go higher during promotions. This level of returns was in part due to their liberal no-cost-no-questions-asked returns policy, and the practice of accepting apparel orders in an array of colors and sizes, knowing some would be returned.
As a result, every day the company received a mountain of returns packages that had to opened, inspected, sorted, credited, repackaged for re-stocking, or disposed of - a very labor-intensive process. Even though warehousing and distribution operations had been continuously upgraded to near state-of-the-art levels of automation, the returns operations had been left behind (as usual!) and was, as with most companies, a very manual process.
After several weeks of study and analysis, we developed an automated solution for receive the packages and systematically distributing them to hundreds of inspection stations for customer crediting, item evaluation, minor repairs, cleaning, repackaging, and restocking or disposal.
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