Warehousing Metrics Glossary

Rate of Supplier Returns

Definition, meaning, and explanation of

Rate of Supplier Returns

What is Rate of Supplier Returns?

The rate of returns is the percentage of inbound shipments that are sent back to the supplier due to damages, errors, or other issues.

How to calculate Rate of Supplier Returns?

(Number of returned shipments / Total number of inbound shipments) x 100

What is the business impact of Rate of Supplier Returns?

A high rate of returns can lead to increased costs, damaged supplier relationships, create a sustained stock-out situation, and poor customer satisfaction.

Industry benchmark for Rate of Supplier Returns

On average, the rate is around 2%.

However, warehouses should aim to have it as close to 0 as possible.

How to improve Rate of Supplier Returns?

  • Implement a robust quality inspection process.
  • Build better collaboration and integration with Suppliers.
  • Provide better tools and training for warehouse staff in the inbound team.

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