Reverse logistics involves the movement of returned goods back through the supply chain to its ultimate destination - its disposition. Returned goods can go back into store stock, to the supplier, be destroyed or go into liquidation.
Eria Odhuba, an analyst at research firm Datamonitor, said poor returns management processes can account for up to 20% of a firm's costs. "Companies have only just started to realise that they need good returns management to keep customers happy," he said.
The Consignia service, which was launched in February, uses the Direct Automated Returns Tracking (Dart) system from software supplier Return Logistics. The service is being rolled out to Safeway's 477 UK stores following a successful trial.
Consignia, formerly the Post Office, will assess all of Safeway's returned goods at its warehouse in Swindon.
Once each item has been accounted for, Safeway will be able to clear products quickly and efficiently through its various channels by maximising supplier guarantees, re-distributing, re-selling, refurbishing or disposing of the goods, Consignia said.
The Dart system allows Consignia to track and report every detail of the reverse logistics process, from the first scan to final disposition.
Ian Mayhew, network project manager at Safeway, said the reverse logistics service contributed to a number of cost and quality improvements during the trial. "We now have an end-to-end solution which offers a best-in-class service to our customers, stores and suppliers," he said.
Paul Bateson, managing director for logistics solutions at Consignia, said the service will have a major impact on the retail sector and lead to millions of pounds of savings each year.