What is Reverse Logistics?

The term Reverse Logistics is not new if you are in the field of manufacturing and retailing. Most businesses tackle arbitrarily in managing the logistics flow of returned goods for decades afore, but still, some companies overlook this area when managing order fulfilment processes and forward logistics; unfortunately making them lose their customer trust and uneventfully demote themselves to lower market positions. Today we will be providing you with an educational piece on what and how you must manage your company’s reverse logistics.

Reverse Logistics are also termed as Retrogistics, Aftermarket Logistics or Aftermarket Supply Chain by some e-commerce dwellers. To elaborate more on its definition, Reverse Logistics- as the name suggests- is a set of activities that must be exerted after the product meets the end consumer when the consumer returns the product. This can be due to many reasons; a customer will return a product if:

  • The product is a defect.
  • The product is not up to the customer’s desired specification.
  • The customer no longer needs the product.
  • If the amount of product is not as mentioned in the site
  • If the delivery time was too long
  • The product needs to be serviced.
  • The product needs to be refurbished or recycled, and more.

Reverse logistics also monitor the lifecycle of the products, which may include actions like:

  • Assessing the potentiality of the products to be reused
  • The disposal of used containers of the products
  • Analysing ways to create value on expired products and more.
Since it encompasses a series of actions, a company’s reverse logistics activities must be managed, planned and executed after a series of analytical research. Reverse Logistics have a significant and direct impact on the customer’s perception of the company’s servicing capabilities, which can detrimentally influence the company’s bottom line.
Apprehending the importance of your company’s Reverse Logistics
Not many companies understand that Reverse Logistics even though it can be a daunting process can be capitalised to create potential profit for a company. Brushing your hands off once the product is delivered on time to your consumer would mean that you are neglecting to get an accurate assessment of the profit and your customer’s satisfaction on your service in most cases. Therefore, Return Logistics must be comprehensively studied, and the past reverse logistics experiences must be recorded and archived to reutilise the past knowledge to streamline your forward logistics and reverse logistics activities. For example, you will have to focus on the following actions:
  • Determining the shipping procedures of your returned goods
  • Undergoing Quality Tests to study the defect to identify what caused the damage
  • Proactively updated databases to archive information about the problems faced during reverse logistics
  • Also, you can predetermine the processes of repairing, disassembling, recycling or restocking the product returned by the customer using reverse logistics data.
  • Monitoring Reverse Logistics to capture resourceful data like:
    • The volumes of stock that are likely to be returned and why
    • The rate of sales lost due to returns
    • A comprehensive description of the after-condition of the product
    • Research data to recover lost financial values due to product returns and more
Technology and Reverse Logistics
Supply Chain Management (SCM) Systems are the technological solution that manages a company’s end-to-end logistics operations. Therefore, it houses modules to assess, control and manage the moving goods that are directed toward the manufacturer by the end consumer and all other product-related activities after the product reaches the end consumer. Cognitive SCM systems and modern e-commerce technological capabilities, such as CRM and ERP integration, moving product tracking technology, EDI technologies, Warehouse Management Systems, Warranty Management Software, and Advanced Analytical tools can now be merged to enable eventful Reverse Logistics Management. Therefore, the next time you consult a software vendor or a third-party logistics provider (3PL), you have to address the need for housing technological advancements on logistics systems, including reverse logistics operations.
Wrap  Up
It is crucial that you do not turn a blind eye towards your reverse logistics processes to refrain you from achieving your company’s operating excellence. You must be well-versed about three main points to improve your reverse logistics efforts, they are,
  1. You have to identify why your products have been returned or why they are ineffectively managed after it reached the end consumer,
  2. Secondly, you have to be well-apprehended on how to elevate customer experiences through eventful reverse logistics operations,
  3. Finally, you must carefully harness holistic visualisation on your reverse logistics processes to level up its efficiency.
The easiest way to exert efforts relating to all these points and remain competitive in your field of expertise is by adopting a competent SCM. An SCM can optimise the reverse chain to better manage the asset recovering processes and grant happy experiences for your customers while refraining from falling behind from the dynamic eCommerce trends of the new age.