What is Reverse Logistics?


Moving Products is a Two Way Street – In More Ways Than One

Many businesses do not monitor the life of their products after they reach the end user. They leave it at that, and continue producing new products and pushing them into the market. In a world where sustainability is an issue, reverse logistics is an important aspect of any business.

What is reverse logistics? How can reverse logistics impact your business? Read on to discover more about reverse logistics.

  • What is meant by reverse logistics?

Many people reading this right now may be scratching their heads, wondering,“What is reverse logistics?” This is because it is a fairly new term, having been mentioned in a white paper for the first time in 1992 by James R. Stock.

According to Wikipedia, reverse logistics refers to the process of moving goods from their intended final destination back to the manufacturer for the purpose of capturing value or proper disposal.

Many companies experience the need for reverse logistics when a customer sends back a product.

Reverse logistics are also used for electronic devices, where refurbishment and remanufacturing are common practices. In essense, reverse logistics occur when goods are being sent backwards. 

  • What is green supply chain management?

Green supply chain management involves integrating environmental thinking into the supply chain process. Consumers are becoming more aware of environmental issues, and they want to buy from manufacturers that are taking care of the environment and using sustainable methods. 

  • How does reverse logistics work?

In the retail industry today, return policies are being used as a competitive element; this is when a company allows the consumer to send a product back to the manufacturer and get a refund or another product if it doesn’t work as they expected. The product is returned to the retailer, usually to a centralized holding facility. The product is assessed for problems; if it is repairable, it can be categorized as such and sent back to the manufacturer.

Large retail stores expect the manufacturers of the products they sell to have good return policies, to remain competitive by meeting customer needs.

Successful retailers now understand that it is imperative to have a working and well-managed reverse logistics system; customers are happy with retailers that have good return policies.

How can reverse logistics be improved? If you intend to use reverse logistics, or want to implement it in your company, here are some factors that can help improve your reverse logistics performance:

  1. Invest in durable packaging. The packaging should be able to protect your product on the trip forward and backward, so you avoid further damage to the items during the return.
  2. Repair, refurbish and resell damaged items. Reselling the returned items for a little less money can help you recoup money that would have otherwise been lost. There are many people looking for discounted products.
  3. Consider outsourcing your reverse logistics to a 3PL, so the process is handled effectively for you.
  4. Having a dedicated returns area can make it easy for you to process returns as quickly as they come in.
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