Returns Processing

Customer returns receiving, inspection, disposition, and restocking

Warehouse
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Lead Time

111.85h

Cycle Time

1.85h

Wait Time

110.0h

PCE

1.6%

Stages

6

Bottleneck

Parcel Received

Value-Add vs Non-Value-Add

Value-Add (VA)

An activity is value-add if it meets all three criteria:

  • The customer is willing to pay for it
  • It transforms the product or service
  • It is done right the first time

Examples: Assembly, diagnosis, treatment, coding, machining, testing

Non-Value-Add (NVA)

Activities that consume time or resources but don't add value from the customer's perspective:

  • Waiting — queues, approvals, batching delays
  • Transport — moving materials or information
  • Motion — unnecessary movement of people
  • Rework — correcting defects or errors
  • Over-processing — doing more than required

Note: Some NVA is necessary (compliance, safety). Target unnecessary NVA first.

Process Timeline

Value-Add vs Non-Value-Add

Bottleneck Analysis

Stage Efficiency

# Stage Cycle (h) Wait (h) VA Resource Defect % Efficiency
1 Return Authorisation 0.25 24.0 VA Customer Service 10.0% 1.0%
2 Parcel Received 0.1 48.0 NVA Dock Clerk 3.0% 0.2%
3 Inspection & Grading 0.5 4.0 VA Returns Inspector 15.0% 11.1%
4 Disposition Decision 0.25 2.0 VA Returns Lead 5.0% 11.1%
5 Restock / Refurbish / Scrap 0.5 8.0 VA Warehouse Worker 8.0% 5.9%
6 Refund / Credit Processing 0.25 24.0 VA Finance 4.0% 1.0%