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December 15, 2021Returning unused or unwanted products at your health system is unavoidable making a well-defined returned goods process an essential asset. Industry leading returns processes directly reduce millions of dollars in exposure to risk– $7 annually at health systems in the USA.
No health systems are alike making it difficult to design a one process fits all approach to the industry’s returned goods issue. However, there are several elements that are critical in a successful returns process including:
- Interdepartmental communication and accountability
- Clearly defined responsibilities and policies
- Ownership, accountability, and oversight
- Leveraged Technology such as a returned goods log
- Reconciliation
- Tracking of key information
Tracking of Key Returns Variables
Proactive returned goods management protects an organization from financial loss and requires diligent documentation from the multiple departments listed below. Regardless of the systems and technology your health system uses the same information should be tracked in a log and documented along the way.
What should be tracked and documented by Supply Chain?
- Vendor Name, number, and contact information
- RGA/RMA numbers
- Return numbers
- Item number of the returned product
- Quantity
- Price paid
- Original purchase order (PO) number
- Originating entity
- Expected credit amount
- Miscellaneous fees such as restocking fees
- Reason for the Return
What should be tracked and documented by Shipping and Receiving?
- Carrier information
- Tracking numbers
- Quantity validation
- Status of unopened, damaged, or opened?
- Date of return
What should be tracked and documented by AP?
- Statuses of outstanding returns
- Open and unresolved Returns
- Missing or incomplete return entries
- Returns completed outside of the return process/log
- Unrecoverable returns credits
What should be tracked and documented by department leaders?
- Key Performance Indicators (KPIs)
- Return volume metrics
- Days to resolve/reconcile
- Outstanding expected values
- Accruals
Returning goods is unavoidable and truly is an interdepartmental initiative that requires action and buy-in from multiple areas. Investing in an optimized returns process is an essential step towards protecting your healthcare system from loss, risk, and exposure.
Replacing a reactive and retroactive returns management approach requires proactive behavioral changes. The first step in fostering change is tracking and documenting key information as mentioned above.
Need help designing and implementing a returned goods process at your health system? We’re here to help. Message us now to get started.
*Averages and estimates provided were calculated using trends discovered at our clients’ health systems.
