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Returns labor, including processing, credit reconciliation, technical support, and vendor management.some companies combine replacement shipping with return shipping to reduce transportation overheads and provide heightened levels of customer satisfaction) Transportation/return shipping costs for both delivery and returns (i.e.Streamlined reverse logistics processes also allow for reductions in various cost areas. This additional revenue can be realized by refurbishing, repairing, and recycling goods, or selling off returned products or materials from them. Compounding this is the fact that proper handling and distribution of returned goods can result in additional sources of revenue and reduced losses.
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Proper and streamlined management of goods and materials traveling back up the supply chain can result in reduced losses as well as additional revenue.įor example, tailored return policies and error-free returns handling can save on returns related losses. Potential for Reduced Losses and Additional Revenue Well planned and thoroughly implemented reverse logistics processes are able to easily collect data on the reason for customer returns, as well as other useful data such as common product defaults and lifespans. This is crucial for the correction of existing issues that might be causing the return of products. One of the largest benefits of an effective reverse logistics process is that it can provide organizations with valuable product data. Reverse Logistics Can Provide Valuable Product Data However, effective logistics processes hold an invaluable list of benefits that can provide material value and gains to most businesses. Often largely neglected and ignored by companies, reverse logistics departments are even today working in widely acknowledged outdated formats, utilizing things like fax machines and spreadsheets.īack in 2001, almost 40% of participants in a published study reported stating that returns management wasn’t equally important to other areas and therefore gets less attention. Traditionally, reverse logistics hasn’t been anybody’s favorite area of supply chains. The Unsung Value of Effective Reverse Logistics
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Included in this definition is any re-manufacturing or refurbishment of goods. the manufacturer), to properly dispose of these or to recapture value. the customer) to the point of origin (i.e. The flow is from the point of consumption (i.e.
#ANOTHER WORD FOR REVERSE LOGISTICS FULL#
The full definition of reverse logistics, as according to The Council of Logistics Management, is the process of implementing, controlling, and planning the cost-effective flow of finished goods, raw materials, and in-process inventory. This can encompass anything from returned goods, inward disposal/recycling of packaging materials, the recycling/responsible disposal of materials from previously sold products, etc. Reverse logistics comprises of the sector of supply chains that process anything returning inwards through the supply chain or traveling ‘backward’ through the supply chain. Read on to familiarize yourself with one of the trickiest (yet vital) segments of supply chains. In this article, we will review what reverse logistics consists of, the existing key issues and hidden costs associated with it, as well as it’s undeniable value and possible innovations and changes that can be made in reverse logistics processes. Thanks to the far-reaching effect this often ‘pushed-under-the-rug’ supply chain sector has, anybody who is involved in management or entrepreneurship can benefit by becoming familiar with reverse logistics. In order to stay competitive (and even profitable), it is crucial that companies carry out innovation in this area and adapt to shifting market demands. However, growing market pressures, such as online retail and customer expectations, are increasing the strain on this area of supply chains. Reverse logistics has long been a neglected area. Within logistics as a whole lives the cumbersome process known as reverse logistics.