Buying Customer Scrap because of poor internal procedures

Buying Customer Scrap

  • Severe problem where I work.

    Votes: 0 0.0%
  • A problem where I work, but not severe.

    Votes: 5 62.5%
  • Not a problem at all.

    Votes: 1 12.5%
  • We are attempting to solve the problem.

    Votes: 0 0.0%
  • No one here cares about the problem.

    Votes: 1 12.5%
  • Customer is too powerful to contradict.

    Votes: 1 12.5%
  • Our internal procedures are weak and allow it.

    Votes: 0 0.0%

  • Total voters
    8

Marc

Hunkered Down for the Duration
Staff member
Admin
#1
How many of you feel you're buying at least some of your customer's scrap because of poor internal procedures for dealing with customer returns.

Be it poor or no marking to be able to identify (match) customer returns to specific returned items or whatever.

What are your suggestions to reduce such a problem?

<center>Multiple Choice</center>
 
Elsmar Forum Sponsor

Mike S.

Happy to be Alive
Trusted Information Resource
#2
Interesting thread. Over the years this has happened a few times that I know of for sure, a few times that I have suspected it, and who knows how often I didn't know of. No one in my current company's "leadership" has a clue or seems to care.

Most of our parts are sold unmarked, so it is sometimes very difficult or impossible to know what we are getting back. Most of the time I think the returns are legit. A few times I've seen our competitor's parts (marked) mixed in with ours but if it is only a few and I think it is an honest mistake I just tell the customer but give the credit anyway as a goodwill thing.

I once got a few thousand $ worth of unmarked "rejects" back that were clearly not ours -- I could tell by the machining marks on these particular parts. The customer was a relatively new one and I suspected they were trying to pull something based on the details of the deal. They did not get credit!

Several times I have also gotten in-spec. parts back from a customer who either didn't understand their own spec. or ordered the wrong thing and wanted free replacements! I don't think so!

I try to look at as much evidence as possible to verify the parts are ours and the defects are our fault, but most of the time I cannot be 100% sure -- but unless I can prove something pretty strongly we have to give the customer the benefit of the doubt.

Mike S.
 
T

tomvehoski

#3
Back when I was an inspector I was responsible for all field returns. We had a reputation of giving credit for EVERYTHING. I once had 15 year old parts returned when a customer who decided to clean up their spare parts room. Everything was obsolete, but we gave credit anyway. Even if the customer ran it over with the hi-lo, we gave credit. We even got a shop vacuum back one time because they threw all of thier junk into a crate and sent it back to see what we would give them.
 

Mike S.

Happy to be Alive
Trusted Information Resource
#4
tomvehoski said:

We had a reputation of giving credit for EVERYTHING.
_________________
I'm told a Home Depot Manager once gave a guy a refund for 4 steel-belted radials because the guy insisted they came from their store. I think maybe retail stores think such liberal refund policies help more than hurt, but in a commercial mfg. outfit I don't see it.

Mike S.
 
M

M Greenaway

#5
Must be honest and say that I have never had a problem with this.

All you need is a good clear returns policy, a good RMA process, and a good goods inwards area.
 
#6
I used to sit right in the middle of this.....

Good topic Marc.

In a previous job I was handling customer claims and returns for a construction equipment manufacturer. I worked at the spare parts depot, where we shipped an enormous number of parts all over the world.

A small percentage of the parts came back. A seemingly insignificant percentage of the returns were questionable. An even smaller fraction of these were unquestionably bogus returns.

If my pay had been based on the worth of the refunds we avoided in this way, I may have been able to retire early. That was some serious money... Scary, really...



/Claes
 

Mike S.

Happy to be Alive
Trusted Information Resource
#7
M Greenaway said:

Must be honest and say that I have never had a problem with this.

All you need is a good clear returns policy, a good RMA process, and a good goods inwards area.
____________________
I agree, mostly...IF you also have an easy way to positively identify your products vs. those of your competitors. This is very easy with certain products, but it can be difficult to impossible with some products. Otherwise, you may be getting returned parts that aren't yours, but you can't prove it.

Also, you must be able to identify the reason for the failure to be sure you aren't accepting back product that was damaged by the users negligence or misuse and not poor quality.

Mike S.
 
R

Randy Stewart

#8
All you need is a good clear returns policy, a good RMA process, and a good goods inwards area.
I have to strongly disagree here.
I don't remember if you have ever mentioned having one of the B3 as a customer or not MG. If you do or have, how did your process or policy keep them from shoving it down your throat?? We have unjustified charge backs and repair charges all the time. I just went through a major issue with one of the assembly plants. They were telling us a faulty product made it on a finished vehicle, I was at the plant 30 minutes after the report and they could not produce the problem or the vehicle. Two days later we were charged for the rework on the vehicle. Flat out - it didn't happen!
The problem is being corrected but it is a slow process. For the longest time no one would challenge the findings or accusations.:frust:
 

E Wall

Just Me!
Super Moderator
#9
Overview

The warranty returns we see (and test) 95% of the time are perfect...just near the golden 1 year date so the customer warehouses send them back, get free replacements, and we eat the cost. Because this doesn't amount to much $$ vs % we earn from the customers, it is overlooked with the belief that the customer is happier and will buy more.

Unfortunately we cannot 'fire-sale' these returns and they are then scrapped unless we have special testing we want to do.
 
M

Michael T

#10
Say what?!?!

E Wall said:

The warranty returns we see (and test) 95% of the time are perfect...just near the golden 1 year date so the customer warehouses send them back, get free replacements, and we eat the cost. Because this doesn't amount to much $$ vs % we earn from the customers, it is overlooked with the belief that the customer is happier and will buy more.

Unfortunately we cannot 'fire-sale' these returns and they are then scrapped unless we have special testing we want to do.
Wow Eileen...

This really leaves a bad aftertaste.... so to speak.

Aside from the unnecessary work this is creating (and the unnecessary expense your company is incurring) - there is the ethical consideration. Perhaps it is just me (and probably why I'm not in charge... :ko: ), but I would have second thoughts about doing business with someone who operated like that. Your customer feels that it is okay to cheat you out of product and the marketing people all look the other way to keep their business? Whew... :confused: Perhaps it goes on here too - I just haven't heard about it. I hope not...

I know... what am I doing discussing ethics in the same breath as business? :rolleyes:

Sorry - I just had to comment on that.
 
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