Reverse Logistics in Supply Chain Management

Reverse Logistics in Supply Chain Management

Reverse logistics is an important part of the supply chain and can be leveraged to improve your bottom line. Once you understand what is reverse logistics, you’ll be able to make the most of your supply chain process.

What is reverse logistics? Reverse logistics refers to the return of goods. You’ll find that reverse logistics happens after the point of sale. Reverse logistics might refer to the return of items sold. It also might refer to:

• The reuse of products
• Repairing/recycling
• The disposal of products
• Using expired or damaged products to create value

THE FLOW OF REVERSE LOGISTICS

In many cases, the flow of reverse logistics starts with the return of goods sold. There are many reasons a customer might return goods. The product doesn’t match the description, or it arrived after it was needed. Maybe the customer just doesn’t like the product.

In all of the above scenarios, the return of the product would start the return logistics process. It's important to think about how returns are handled at your company.

What are the steps you take for a returned product? In many cases, the steps might include:

• Shipping the returned product back to the manufacturer or warehouse
• Quality assurance testing of the product to determine the flaw or error
• Making note of problems, errors or flaws with the returned product
• Restocking, recycling, repairing or disposing of the returned item

The way you handle your product’s reverse travel back into the supply chain can help your company avoid making the same mistake twice. It can also allow you to recycle products and make the most out of your components.

Understanding the reverse logistics system can help your business make the most of returns and leverage your bottom line.

WHY REVERSE LOGISTICS IS IMPORTANT

Reverse logistics are an important part of E-commerce fulfillment. In fact, many consumers review an online retailer’s returns process before placing an order. Companies that don’t have streamlined return policies and reverse logistics procedures lose business.

There are many reasons why reverse logistics are important. These reasons include:

• Warehouse logistics: Reverse logistics should work seamlessly and efficiently, just like traditional warehouse logistics. Reverse logistics is about cutting costs, increasing efficiency and optimizing the value of returned items. Reverse logistics can cost more than forward logistics. Labor and shipping costs can increase the price. In many cases, returned packages are opened by hand, examined, sorted, repaired, repackaged and redistributed. Allowing a logistics partner, like R+L Global Logistics to meet your fulfillment, distribution and reverse logistics needs can save your business time and money.
• Sustainability: Many E-commerce returns happen because products arrive damaged. When the damaged item makes it back to the warehouse, it will be examined. Then it will be decided if the product can be refurbished or repaired or if it needs to be recycled or trashed. According to reports, about 5 billion pounds of returned items are trashed each year. This means that reverse logistics can have a huge impact on the environment. A solid reverse logistics process can increase your business’s sustainability and help you remain environmentally friendly.
• Customer service: Sometimes returns can’t be avoided. Modern shoppers depend on easy return policies. Some shoppers even buy multiple items with the intent to return some of them. Your business’s reverse logistics process is essential to providing solid customer service with the way returns are handled. One way you can provide outstanding customer service is making sure your product’s packaging is ready for the reverse logistics process.