DCSOLUTIONS
by Amanda Loudin
Bean There, Returned That
B uilding its business around high- quality outdoor equipment and clothing, L.L. Bean’s sales chan- nels include seven retail stores, one dozen outlet stores, the Internet, and its nearly 100-year-old catalog. But it’s not just the product that Bean built its reputation on – it’s also the retailer’s 100-percent satisfaction guarantee. The roots of that guarantee trace back to 1912, when Leon Leonwood Bean designed the Maine hunting shoe and advertised its benefits to hunt- ers by distributing a three-page flyer. While Bean quickly sold 100 pairs of shoes, the majority of customers returned them when the rubber bot- toms separated from the leather tops. Determined to make his customers happy, Bean refunded their money, fixed the problem, and forged ahead. The rest, as they say, is history. Today, L.L. Bean continues to guar- antee its products, allowing customers to return any item that doesn’t mea- sure up. It also works hard to make the returns process as quick and easy as possible, and lives by the philosophy,
“everything must go right.” While that kind of service makes customers happy, it also presents myriad challenges to the company’s logistics operations. L.L. Bean shipped 48 million units last year, of which six million were returned. During the hol- iday season, the returns department braces for an 18-fold increase in vol- ume. On its busiest day last year, the department processed 47,000 individ- ual returns. REACHING HIGHER L.L. Bean places such a high pri- ority on returns that it established a special reverse logistics center at its dis- tribution campus in Freeport, Maine. The facility, which measures 135,000 square feet, houses a staff of 500 pro- cessors who handle customer returns and exchanges. About 85 percent of returned items include a refund request, while 15 percent require an exchange. Returns services also include repairs. In 2006, L.L. Bean decided that the reverse logistics center’s 15-year-old materials handling and processing sys-
A new materials handling system helps L.L. Bean meet its 100-percent satisfaction guarantee and offer many happy returns.
July 2007 • Inbound Logistics 175
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