Jason Heath was excited to begin the first day of his internship at the Lucky Jeans distribution center.His supervisor gave him his first assignment: " to review the returns processing operation and suggest methods for improving its efficiency and effectiveness."When Jason asked her what she meant by efficiency and effectiveness, she smiled, "Get the stuff out of here quickly, and get the most money that we can for it.Move it out before it is out of style."Jason entered the large area where returns were housed.It was mess.

There were jeans packed from floor to ceiling, all mixed together in terms of size, fabric, state of repair, etc.There was an area with a long table with a person sitting in front of a computerwith a pile of jeans to be processed.On the other side of the table were piles of packages- everything from plastic bags to corrugated cartons, waiting to be unloaded and sorted.The returns processing associate, Hector, explained to Jason, "Everyday shipments of returns come in a few times a day for processing.The bigger ones might come by truck or UPS, DHL, Fed-Ex, usually right from a store or a distributor.Then I get little packages in the mail, lots of other places--- sometimes with only one pair of jeans from a customer, other times a few pairs from a small store.They all get put over there." He pointed to the big pile of returned packages."I process the ones closest to the end of the table first, but sometimes they get mixed together, and old returns get lost for a while, and new ones get processed right away.I am probably about 7-10 days backlogged right now. That is probably about 250/jean per day, with a retail value of around $100 each,our value is probably $40/pair. Most of the things I just enter into the computer and then customer service issues credit or reships jeans.I have three piles over there," he explained, pointed at the mess that looked like one pile with three "lumps" of jeans to Jason."One pile is stuff that I think is good that can be resold.The second pile is defective stuff that is definitely ripped, damaged, etc, that we should probably dispose of.Sometimes people sort of help themselves to those- I don't say anything.The third pile is one for customer service to look at that I can't tell if anything is wrong with them, or they may need to have paper tags put on them. About once a every 2 or 3 days, someone comes in and looks at the pile for customer service and resolves those.About once every week, the other piles disappear.I think that the bad jeans get tossed out or donated, and the others go back to stock, but I am not sure."

Wanting to do the best possible job, Jason went back and asked his boss how the returns were accounted for.She explained, " The re-saleable jeans may come in without tags.Those are set aside and retagged.If we can't determine what the jeans are, we give the customer credit for whatever they say they are.They may be jeans we haven't made in years, or ones that are rip-offs of our brand.We are just trying to please our customers and maintain our service reputation.The jeans that are returned are not put back in our physical inventory count until they have the right tags, and are placed back on the shelf for resale.It's a nightmare, really.We have no idea how many pair of jeans are walking out the back door.We end up donating a lot of jeans to various shelters, but we know many of those are sold on the black market, on E-bay, etc.We are really looking for your ideas, Jason.That is why we went to an outstanding SCM program like Miami University.Let me know if you have more questions.I can't wait to see what you come up with."

1.Map this process in a meaningful way, so that we can assess inventory levels and inventory movement, cash flow, players involved, etc.

2.What additional information does Jason need?

3.Whose buy-in (support) does Jason need?

4.Develop suggestions for improving the process based on lean principles AND reverse logistics principles.

5.Map the improved process to the best of your ability

6.What is helpful about your process map, and how would you improve it?