Case Study

Optimizing Retail Returns for Factory Outlet Resale Channel

A Manhattan Active WMS Case Study

Customer Overview

Our client is a prominent, high-growth Global Athletic Apparel Retailer based out of Canada which primarily focused on premium activewear and lifestyle products. The company operates a complex, global supply chain that emphasizes product quality and omnichannel efficiency. Its operations span from sourcing high-tech performance fabrics internationally to managing a vast distribution network for both e-commerce and retail stores worldwide. Crucially, its supply chain requires highly sophisticated reverse logistics capabilities to efficiently process high volumes of retail returns, ensuring maximum value recovery through strategic inventory reclassification and resale across various exit channels.

Top Customer Objectives

Developing a system-driven, disposition-based returns process that reduces manual intervention while ensuring precise classification and efficient distribution of returned inventory to the Factory Outlet resale channel. The goal is to maximize the exit velocity of returned goods and enhance inventory accuracy and channel allocation.

Challenges Faced

1. Fragmented Returns Workflow

Clients struggled with unstructured returns processes, where returned goods lacked clear classification and routing. Without system-driven logic for disposition (resellable, refurbishable, discardable), teams relied on manual decisions—causing delays, inconsistent inventory reallocation, and higher rework costs.

2. Poor RMS-WMS Synchronization

The absence of automated integration between the Warehouse Management System (WMS) and Retail Merchandising System (RMS) led to frequent data mismatches. This forced associates into time-consuming manual reconciliations during returns processing, increasing operational overhead and error risk.

3. Inefficient Putaway and Space Utilization

Putaway decisions were judgment-based, lacking system-directed optimization. This resulted in underutilized storage zones, congestion in high-density areas, and inefficient recall workflows—impacting overall warehouse productivity and throughput.

ITOrizon Solution

Delivering Innovation Through Smart WMS Design

In a dynamic retail and supply chain environment, agility and precision are key. The solution was crafted with a clear focus on minimizing technical overhead while delivering maximum operational value. Here’s how the team brought creativity and innovation into every stage of the design and delivery process:

Strategic Customization with Minimal Technical Impact

The solution architect began by evaluating the feasibility of a top-up customization, a lightweight enhancement that achieved business goals without heavy technical investment. This approach ensured faster deployment and lower maintenance costs.

Flexible Inventory Type Management

To support diverse inventory categories, a Manhattan WMS extension was designed and deployed. This enabled seamless flipping between inventory types especially moving from Retail to Factory Outlet. This flexibility allowed the system to adapt to changing product conditions and business rules, all while staying aligned with the host system (RMS)

Smart Configuration for Operational Efficiency

The team configured:

New inventory types and condition codes
System-directed putaway logic to automate and optimize storage decisions

These enhancements improved warehouse accuracy and reduced manual intervention.

Streamlined Returns and Recall Management

Innovative flows were designed for Return Recall processes, ensuring smooth handling of returned goods. Additionally, an end-to-end Locate iLPN (License Plate Number) flow was implemented to enhance traceability and inventory visibility.

Factory Outlet Optimization

To support Factory Outlet operations:

Wave planning and cleanup strategies were developed to streamline order fulfillment.
Dedicated locations were configured for Factory Outlet inventory, enabling efficient allocation and picking.

This solution exemplifies how smart architecture, thoughtful configuration, and targeted innovation can transform warehouse operations. It not only met business requirements but also laid the foundation for scalable growth and operational excellence.

Key Benefits Achieved

1. Enhanced Inventory Visibility

The ERP system now has real-time insight into Factory Outlet inventory types (e.g., Factory Outlet, Like New, DeBrand), enabling better planning, forecasting, and decision-making across the supply chain.

2. Optimized Warehouse Operations

Dedicated locations and system-directed putaway logic streamline allocation and picking processes, improving efficiency and reducing handling time for Factory Outlet inventory.

3. Improved Reverse Logistics & Traceability

Return Recall and Locate iLPN flows provide end-to-end tracking of returned or reclassified items, ensuring accurate reconciliation and faster turnaround.

4. Agile Inventory Reclassification

The ability to flip inventory types dynamically allows the warehouse to respond quickly to changing product conditions or business needs, reducing waste and maximizing inventory utilization.

ITOrizon Inc., a global end-to-end IT supply chain ecosystem service leader based in Atlanta, with offshore locations in India and Dubai, has been helping clients ensure success for more than 10 years. We maximize the value of existing ecosystem investments while outpacing the competition with a human-first service delivery client experience. Industry analysts such as Gartner, ISG, and ARC Advisory have recognized us for our high-performance services team, built to scale and delivering strategic advisory, implementation/integration, digital transformation, and managed support services.